Judge rules against state in Arco case

HELENA (AP) - The state of Montana cannot force the Atlantic Richfield Co. to pay for environmental damage to land near Anaconda because the damage occurred before passage of the federal Superfund law, a federal judge has ruled.

U.S. District Judge Sam Haddon of Great Falls said that while the Superfund law can force companies to clean up mine waste dating back a century or more, the law is clear that companies can't be forced to pay for restoration of environmental damages that occurred prior to the law's passage in 1980.

Montana's attorney general said the ruling this week could undermine future claims for millions of dollars in damages caused by decades of mining and smelting in the Clark Fork River Basin.

''We're very concerned about this decision and the impact it will have on the rest of (our) case,'' Attorney General Mike McGrath said late Tuesday. ''We'll have to study this ... and make a decision on where we go from here.''

Sandy Stash, a spokeswoman for Arco, said today the company believes Haddon made a sound ruling.

''From our perspective, the judge correctly interpreted the very clear intent of Congress, which was that companies like Arco can be ordered to do cleanup work, but we cannot be held liable for any restoration damages,'' she said.

Haddon's ruling concerns about 11,000 acres of land near Anaconda that the state said was damaged by years of smelting emissions. The areas are Mount Haggin south of Anaconda, the old smelter hill, and Stucky Ridge north of town. The state sought $47.5 million in damages.

Haddon, however, said language in the federal Superfund law states that natural-resource damages cannot be recovered for damage that ''wholly occurs'' before the date of the law's enactment.

The state argument that damage doesn't occur until ''a trustee incurs expenses to restore the resource or restoration costs are quantified by the court is unpersuasive,'' Haddon wrote.

However, Haddon noted there are conflicting rulings on when such damage actually occurs in Superfund cases, and that neither the U.S. Supreme Court nor any federal appeals court has ruled on the issue.

The state has argued that damage to natural resources by decades of pollution is ongoing to this day, McGrath said.

''The judge has gone the other way and said that's not how he interprets the statute,'' the attorney general said.

Haddon's ruling does not affect a 1999 settlement between Arco and the state, when the company agreed to pay $260 million for mining and smelting pollution in the Clark Fork basin.

But McGrath and Stash agreed it very likely will affect unresolved portions of the state's long-standing action against Arco, which bought the old Anaconda Co. properties in Butte and Anaconda in the late 1970s.

The state has outstanding damage claims for harm caused to the Clark Fork River and to the aquifer under portions of Butte.

The U.S. Environmental Protection Agency has released proposed cleanup plans for the river and is working on its review of the aquifer cleanup alternatives. After those processes are complete, the state would pursue its claims, McGrath said.