In a June 27 ruling, the U.S. 9th Circuit Court of Appeals overruled a decision by a federal district court saying the Shoshone-Bannock Tribes on the Fort Hall Reservation in Eastern Idaho could enforce a consent decree between the U.S. government and FMC Corp. as a third party beneficiary.
Before FMC’s elemental phosphorus plant west of Pocatello was shut down in December 2001, the company extracted phosphate ore from the reservation’s Gay Mine, which was started and run for decades by the J.R. Simplot Co. The plant was adjacent to Simplot’s phosphate fertilizer plant and within reservation boundaries. Waste tailings tapped from FMC’s four electric furnaces were stored in ponds there.
In late 1997, the U.S. Environmental Protection Agency contacted FMC about its concerns regarding potential violations of federal environmental laws, including the Resource Conservation and Recovery Act of 1976. After negotiations in which the Shoshone-Bannocks participated, FMC and EPA reached an agreement. FMC and EPA entered into a 100-page consent decree, which they presented to the federal district court for approval. The district court approved it, and the 9th Circuit affirmed it. The decree set forth detailed requirements, duties, and rights.
The Shoshone-Bannocks were mentioned several times in the consent decree, which stated FMC must notify the tribes before a change in the plant’s ownership. The tribes were entitled to access the plant for certain purposes, including observation, monitoring, and investigation, and were to receive copies of technical reports, data, and documentation upon request.
Coinciding with the EPA/FMC negotiations over federal environmental laws, the Shoshone-Bannocks told FMC that tribal law required FMC to obtain certain tribal environmental permits. FMC settled the tribal permit dispute by agreeing to pay the tribes $1.5 million per year, beginning in 1998. FMC paid the fee each year from 1998 through 2001.
In 2001 FMC ceased some of its mining operations, stopped making its annual payments to the tribes, and didn’t apply for certain tribal environmental permits. In 2005, after negotiations between the tribes and FMC broke down, the Shoshone Bannocks sought enforcement of the consent decree in district court. The tribes and FMC disagreed as to whether their agreement required payments to continue after the plant shut down, and negotiations ensued. A key dispute was whether FMC’s operations remain subject to tribal jurisdiction.
Federal Judge B. Lynn Winmill on May 6, 2006, heard case arguments in Seattle. He ruled the tribes could enforce the consent decree as third party beneficiaries and the consent decree required FMC to apply for tribal permits. He rejected each of FMC’s arguments against the tribes’ motion. He found the consent decree conferred at least six different benefits on the tribes. He concluded EPA and FMC made it clear the tribes were an intended, not merely an incidental, beneficiary. FMC appealed. The 9th Circuit determined the tribes lacked standing to enforce the consent decree and, therefore, vacated the district court’s orders and remanded the case with instructions to dismiss the action.
In a closing note, justices said that pending the appeal, FMC began the process of applying for tribal permits, which was the main relief the tribes sought in this action. During oral arguments, the Shoshone-Bannocks expressed concern that if the 9th Circuit were to hold they lacked standing to enforce the consent decree, so FMC would withdraw its permit applications and undo the progress made on resolving the dispute.
In response to questioning from the court, FMC’s attorney said FMC understands it has the obligation and will continue with tribal proceedings to their conclusion. “We accept that statement from counsel as binding on FMC,” the court stated in an opinion written by Justice Susan P. Graber. Costs on appeal were awarded to FMC.