ELR Citation: ELR 20001
No(s). 92-1037 (10th Cir. Sep 24, 1993)

The court holds that a consent decree resolving a state's claims for natural resource damages and response costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and state law does not bar suit by private parties for injuries to purely private interests from the same site. Private parties sued the corporate successor of mining companies about property damage and economic losses related to mining activities and cleanup efforts. The plaintiffs alleged negligence, strict liability, nuisance, trespass, and misrepresentation and sought CERCLA response costs, damages, and injunctive relief. The site at issue is the subject of a consent decree between the state and the defendant. The decree provides for remedial action and payment to the state of natural resource damages, response costs, and costs of continuing oversight.

The court holds that res judicata bars a claim if there is: (1) a final judgment on the merits; (2) the prior suit involved claims identical to those in the present suit; and (3) the prior suit involved the same parties or their privies. The court first rules that the consent decree between the state and the defendant is a final judgment on the merits. A consent decree is afforded the same res judicata effect as any other judgment but is construed basically as a contract. Although a district court dismissed the state's state-law claims without prejudice, the consent decree resolved all claims raised by the state's complaints, including dismissed claims. Next, the court holds that privity may be established if the party to the first suit represented the interests of the party to the second suit. Although a state has a right to sue as parens patriae to prevent or repair harm to quasi-sovereign interests, it may not sue to assert private rights of individuals. CERCLA does not provide for recovery of private damages unrelated to the cleanup effort and CERCLA's natural resource damage provisions do not cover damage to private property except for Indian lands.

The state's consent decree resolved claims for injuries to the natural resources of Colorado. The court holds that to the extent that a state litigates common public rights, the citizens of that state are bound by the judgment. Thus, to the extent plaintiffs' claims are for injuries to interests that all citizens hold in common, the state's consent decree acts as a bar. But the court holds that claims for injury to "purely private interests," i.e., claims that the state had no standing to raise, are not barred. The court rules that some of the plaintiffs' claims clearly are for injuries to purely private interests.

The court reverses the district court's dismissal of the plaintiffs' claims and remands the case to the district court to determine which of the plaintiffs' claims are truly private and which are based on common public rights.

Counsel for Plaintiffs
Herbert A. Delap
Reinhart, Boerner, Van Deuren, Norris & Rieselbach
7800 E. Union Ave., Ste. 650, Denver CO 80237
(303) 770-8500

Counsel for Defendant
Neil Peck
Davis, Graham & Stubbs
370 17th St., Ste. 4700, P.O. Box 185, Denver CO 80201
(303) 892-9400