Mining Mogul Robert Friedland Defeated

02.05.2008

DENVER - In what might prove to be the final chapter of the long history of Summitville Mine environmental litigation, Judge Robert Blackburn of the United States District Court for the District of Colorado recently granted summary judgment in favor of two subcontractors who worked at the infamous Colorado gold mine during the 1980s. One of the subcontractors, GeoSyntec Consultants, represented by Terence Ridley of Wheeler Trigg O’Donnell, performed quality assurance on the geosynthetic liner that aided in containment of cyanide leachate solution used to extract gold and silver from the ore at the mine. The cyanide solution eventually threatened to overflow the pond and endanger the Alamosa River Basin in 1990 when the mining company declared bankruptcy. The other subcontractor, TIC of Steamboat Springs, represented by Colin Deihl of Faegre & Benson, performed some trenching and other work for the ore conveyor system at the mine.

Clean-up costs at the mine were estimated in excess of $200 million. Robert Friedland, a President and Director of the Summitville Consolidated Mining Company, eventually paid the federal government over $20 million in 1996 [check] to settle the government’s CERCLA cost-recovery action. Despite this setback, Friedland went on to become one of the most successful mining promoters of all time, currently ranking 317 on the Forbes list of "The 400 Richest Americans."

Friedland sued GeoSyntec and TIC in 2004, seeking to recover approximately $12 million of that settlement. This suit followed a string of prior similar suits, in which Friedland obtained contributions from other subcontractors or their insurers.

GeoSyntec and TIC jointly moved for summary judgment, arguing that Friedland had received more via settlements from others than he had paid the federal government. Friedland countered that the amounts Friedland recovered should be allocated between response costs and legal defense costs and that, given such allocation, he still had compensable damages.

Judge Blackburn rejected Friedland’s argument, noting that the underlying settlement agreements made no allocation for amounts plaintiff agreed to pay in the cost-recovery action, on the one hand, and legal defense costs, on the other. The Judge ruled that permitting defendants full credit for the amount of any settlement applies in the absence of an express allocation in the settlement agreements themselves. The court stated: "when the statute sued under [CERCLA] expressly excludes recovery of defense costs, a settling party would be well-advised to ensure that his settlement agreement makes the intended variance from the statute absolutely pellucid."

Ridley said: "Geosyntec never should have been sued by Friedland. He sued for millions. He is used to winning these cases and getting his way. Justice was served for both GeoSyntec and TIC. It is just unfortunate that it took several years of hard-fought litigation before the order came down."