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United States v. Colorado & Eastern Railroad Co

United States Court of Appeals, Tenth Circuit

February 23, 2018

UNITED STATES OF AMERICA; STATE OF COLORADO, Plaintiffs,
v.
COLORADO & EASTERN RAILROAD COMPANY, Defendant-Appellee. NDSC INDUSTRIAL PARK, LLC, Intervenor - Appellant, DENVER ROCK ISLAND RAILROAD; UNION PACIFIC RAILROAD COMPANY; THOMAS Z. MARS, Intervenors - Appellees.

         APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO(D.C. NO. 1:98-CV-01600-WYD)

          Adam L. Massaro (Michael D. Plachy with him on the briefs), Lewis Roca Rothgerber Christie LLP, Denver, Colorado, for Intervenor-Appellant.

          Kathryn A. Reilly, Wheeler Trigg O'Donnell LLP, Denver, Colorado, Attorney for Union Pacific Railroad (Stephanie Loughner and Bethany A. Johnson, Moye White LLP, Denver, Colorado, Attorneys for Colorado & Eastern Railroad Co.; and William M. Schell, Opperman & Schell, P.C., Littleton, Colorado, Attorney for Thomas Z. Mars and Denver Rock Island Railroad, with her on the brief), for Defendant/Intervenors-Appellees.

          Before MORITZ, KELLY, and MURPHY, Circuit Judges.

          MURPHY, Circuit Judge.

         I. INTRODUCTION

         NDSC Industrial Park, LLC ("NDSC") appeals from an order of the district court dismissing its "Consent Decree Order Motion." The district court dismissed the motion because NDSC lacked standing to enforce the terms of the consent decree. On appeal, NDSC asserts the district court erred in concluding it (1) was attempting to enforce the consent decree, as opposed to seeking a limited declaration regarding the meaning of the consent decree; and (2) did not have standing to seek a declaration that a conveyance of property violated the terms of the consent decree. This court exercises jurisdiction pursuant to 28 U.S.C. § 1291 and affirms the district court's order of dismissal.

         II. BACKGROUND

          A. The Consent Decree

         In the late 1990s, the United States and the State of Colorado each filed complaints against Colorado & Eastern Railroad Company ("C & E") under CERCLA.[1] These complaints sought reimbursement of response costs associated "with the release or threatened release of hazardous substances at the Sand Creek Industrial Site located in Commerce City and Denver, Colorado." In an effort to avoid protracted litigation, the parties entered into a partial consent decree (the "Consent Decree") on April 13, 1999. Pursuant to the Consent Decree, C & E agreed to sell two parcels of land, the OU3/6 Property and the OU1/5 Property (collectively the "Properties"), and pay the net proceeds of the sales to the United States and Colorado.[2] The Consent Decree gave the United States a two-and-one-half-year period during which time it could identify a potential purchaser of the Properties and obligate C & E to sell to the identified purchaser. Although the Consent Decree allowed C & E to also seek out potential purchasers of the Properties during this time period, it prohibited C & E from selling or conveying "any Property without the prior written approval of the United States, unless the United States agrees otherwise in writing." Relevant to this appeal, the Consent Decree specifically provided that its terms "shall" not "be construed to create any rights in, or grant any cause of action to, any person not a Party" to the agreement. The district court approved and entered the Consent Decree on September 9, 1999. In so doing, the district court "retain[ed] jurisdiction over this matter for the purpose of interpreting and enforcing the terms of [the] Consent Decree."

         B. The Mars Transaction

         During the relevant time periods, C & E was a wholly owned subsidiary of Great Northern Transportation Company ("Great Northern"). C & E owned certain railroad rights of way, including the right-of-way over the Properties that would eventually become subject to the Consent Decree. Denver Terminal Railroad Company ("Denver Terminal") was also a subsidiary of Great Northern. Pursuant to a 1989 easement granted by C & E to Denver Terminal, Denver Terminal operated a railroad on approximately six miles of the right-of-way. In 1993, Great Northern entered into an agreement to sell Thomas Z. Mars all of Denver Terminal's stock and assets. Pursuant to the agreement, Mars would pay for Denver Terminal, in part, by a promissory note. Of particular relevance to the instant proceedings, the agreement specifically provided that upon payment in full of the promissory note, Great Northern would require C & E to convey fee title to the railroad right-of-way (i.e., the part of the right-of-way covered by the 1989 easement granted by C & E to Denver Terminal) for the payment of one dollar.

         A dispute arose between Great Northern and Mars over the payment of the promissory note and whether Denver Terminal actually owned all of the assets set forth in the purchase agreement. This dispute resulted in state-court litigation. That litigation was settled in June 2001, when the parties entering into an agreement which modified the amount remaining due under the promissory note to $100, 000; provided for a new payment period for the revised amount to be paid to Great Northern; and confirmed that upon payment in full of the revised amount, C & E would convey fee title to the right-of-way to Mars. After the revised amount was paid by Mars to Great Northern, the railroad right-of-way was conveyed from C & E to Mars by quitclaim deed dated November 2, 2001. None of the proceeds received by Great Northern from Mars were paid over to the United States or Colorado.

         C. Sale of Property Subject ...


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