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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Williams Alaska Petroleum, Inc. and The Williams Companies, Inc. v. State of Alaska, Flint Hills Resources Alaska, LLC, and Flint Hills Resources, LLC (5/26/2023) sp-7658
Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER.
Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
corrections@akcourts.gov.
THE SUPREME COURT OF THE STATE OF ALASKA
WILLIAMS ALASKA PETROLEUM, )
INC. and THE WILLIAMS )
Supreme Court No. S-17772
COMPANIES, INC., )
)
Superior Court No. 4FA-14-01544 CI
Appellants, )
)
O P I N I O N
v. )
)
No. 7658 - May 26, 2023
STATE OF ALASKA; FLINT HILLS
)
RESOURCES, LLC; and FLINT HILLS
)
RESOURCES ALASKA, LLC,
)
)
Appellees. )
)
Appeal from the Superior Court of the State of Alaska,
Fourth Judicial District, Fairbanks, Warren W. Matthews,
Judge pro tem.
Appearances: David H. Shoup, Tindall Bennett & Shoup,
P.C., Anchorage, and Tristan L. Duncan and Mathew L.
Larsen, Shook, Hardy & Bacon L.L.P., Kansas City,
Missouri, for Appellants. Laura Fox and Steven E. Mulder,
Assistant Attorneys General, Anchorage, and Treg R. Taylor,
Attorney General, Juneau, for Appellee State of Alaska.
James N. Leik, Perkins Coie LLP, Anchorage, and Jan M.
Conlin and Mathew R. Korte, Ciresi Conlin LLP,
Minneapolis, Minnesota, for Appellees Flint Hills Resources,
LLC and Flint Hills Resources Alaska, LLC.
Before: Winfree, Chief Justice, Maassen, Carney,
----------------------- Page 2-----------------------
Henderson, Justices, and Eastaugh, Senior Justice.*
[Borghesan, Justice, not participating.]
CARNEY, Justice.
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
II. BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
A. Facts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
B. Statutory Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
C. Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
III. STANDARDS OF REVIEW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
IV. DISCUSSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
A. State's Statutory Claims Against Williams. . . . . . . . . . . . . . . . . . . . . . 17
1. The superior court did not err when it concluded that sulfolane is a
hazardous substance under AS 46.03.826(5). . . . . . . . . . . . . . . 17
2. The superior court did not err by awarding response costs to the
State and Flint Hills.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3. The superior court did not err by awarding damages for loss of
access to groundwater due to sulfolane contamination.. . . . . . . 38
4. It was error to issue injunctive relief by reference to supporting
documents, but the superior court did not err by granting declaratory
relief.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
a. Challenges to the injunctive relief. . . . . . . . . . . . . . . . . . 50
b. Challenges to the declaratory relief. . . . . . . . . . . . . . . . . 53
5. Williams's right to due process was not violated. . . . . . . . . . . . 56
6. Imposing civil liability for past releases was not an unconstitutional
taking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
B. Flint Hills's Contractual Indemnification And Statutory Contribution
Claims Against Williams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
1. Overview of the Purchase Agreement's indemnification and
remedies provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
* Sitting by assignment made under article IV, section 11 of the Alaska
Constitution and Alaska Administrative Rule 23(a).
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2. The superior court did not erroneously conclude that the Purchase
Agreement limited Flint Hills's liability. . . . . . . . . . . . . . . . . . . 69
3. The superior court did not err by concluding Williams retained
responsibility for offsite sulfolane.. . . . . . . . . . . . . . . . . . . . . . . 71
4. The superior court did not err by concluding that Flint Hills could
pursue contribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
5. The superior court's contribution allocations were not erroneous.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
a. The court did not err by allocating statutory contribution for
offsite sulfolane to Williams.. . . . . . . . . . . . . . . . . . . . . . 83
b. The superior court adequately considered DEC's earlier non-
regulation of sulfolane when it allocated damages. . . . . 83
c. The superior court did not penalize Williams for "defending
itself.". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
d. The superior court did not err by not allocating responsibility
to the State or by ignoring Williams's equitable defenses.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
e. The superior court did not err by failing to allocate
responsibility to the City of North Pole. . . . . . . . . . . . . . 89
VI. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
I. INTRODUCTION
Following the release of hazardous substances that contaminated local
groundwater, the State and the previous and current owners of a refinery litigated
contract and statutory claims for damages, contribution, and injunctive relief under
Alaska's environmental conservation statutes. The superior court rejected the previous
owner's claims against the State and the current owner, found the previous owner
strictly liable, and ordered it to pay damages to the State and make contribution to the
current owner for its remediation costs. The court also issued injunctions requiring the
previous owner to perform and pay for various ongoing remediation and cleanup efforts.
The previous owner appeals many of the superior court's findings of fact and
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conclusions of law. The previous owner contends that the superior court erred by
concluding the substance at issue was hazardous, awarding response costs to the State
and the current owner, awarding damages for loss of groundwater access, issuing
improper injunctive and declaratory relief, interpreting the purchase contract between the
former and current owners to hold the former owner responsible for the substances
released, and improperly allocating damages. The previous owner also contends that the
decision violated its right to due process and was an unconstitutional taking. We affirm
the superior court's decision except that we remand the grant of injunctive relief for more
specificity as required by rule.
II. BACKGROUND
A. Facts
Williams Alaska Petroleum, Inc. and The Williams Companies, Inc.
(collectively Williams) owned and operated a North Pole refinery beginning in 1977.
The refinery is on State-owned land which Williams leased. Williams began using
sulfolane as a purifying solvent in its refining process in 1985. Sulfolane is highly
soluble in water, meaning it can easily seep into groundwater when released onto the
ground and into waterways, and it has low volatility, meaning it will not readily
evaporate and instead remains in groundwater without attaching to the soil.
Williams allowed sulfolane to migrate into the groundwater at the refinery
through various means. Sulfolane was recycled to the extent feasible, but due to its high
solubility some remained dissolved in water from refinery processes and was diverted
into the wastewater system. Due to poor upkeep - with documented foot-wide tears in
wastewater lagoon linings and some holes "repaired" by "pulling [the] liner together and
punching with . . . pieces of lumber" - several wastewater storage units leaked sulfolane
into the soil and groundwater. There were also direct sulfolane spills. Williams had
multiple accidental releases of sulfolane-containing solutions, resulting in the release of
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----------------------- Page 5-----------------------
hundreds of gallons of solution with sulfolane concentrations ranging from 66% to
100%.
Sulfolane was detected in groundwater at the refinery in 1996 when
Williams's lab manager found sulfolane in groundwater samples in concentrations
ranging from 250,000-2,700,000 parts per billion (ppb). Williams did not report its 1996
detection of sulfolane in groundwater to the Alaska Department of Environmental
Conservation (DEC) until five years later in October 2001, when Williams's consultant
Shannon & Wilson prepared a report for Williams's 2002 Site Characterization and
Corrective Action Plan to address earlier environmental concerns about the refinery. By
2001 sulfolane was generally known in the scientific community to "exhibit[] low levels
of toxicity," but there otherwise was a dearth of available information about sulfolane,
and DEC did not regulate it as a hazardous substance. DEC advised Williams about this
uncertainty regarding sulfolane's toxicity and cautioned Williams about sulfolane's high
mobility in groundwater. DEC instructed Williams to continue sampling the
groundwater until it found the contamination source. DEC informed Williams it could
reduce sampling frequency if its data were not changing and it could not find a source.
Williams was not able to determine the specific source and stopped sampling altogether
in July 2002.
Williams also used aqueous foams as part of its fire response practices.
These foams at the time contained per- and polyfluoralkyl substances, commonly called
"PFAS."1 The PFAS in the foams included a wide range of synthetic chemicals; among
1 See 4 LAWRENCE G. CETRULO, TOXIC TORTS LITIGATION GUIDE § 48:1
(2022-23 ed.) ("Per- and polyfluoroalkyl s ubstances (PFAS) is a general t erm used to
describe a group of over 5,000 different synthetic chemicals that are used in industrial
and commercial applications throughout the world, most commonly to repel water and
oil, to combat high temperatures, and to reduce the effects of friction.").
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the chemicals were perfluorooctanesulfonic acid (PFOS) and perfluorooctanoic acid
2
(PFOA). Testing of the groundwater and soil at the refinery shows that, at the time of
trial, they contained several PFAS, including PFOA and PFOS.
On March 31, 2004 Williams sold the refinery to Flint Hills Resources,
LLC and Flint Hills Resources Alaska, LLC (collectively Flint Hills). The parties to the
sale signed an Asset Sale and Purchase Agreement they agreed would be governed by
Texas law. It contained detailed provisions about the assumption or retention of
liabilities related to all aspects of the refinery's operations, including environmental
liabilities. The parties agreed to hold harmless and indemnify each other for costs arising
from their respective retained liabilities. Williams agreed to retain most environmental
liabilities arising from its operations at the refinery, excepting specific matters listed on
a Disclosure Schedule.
In an effort to ensure more certainty about future indemnification
obligations, the parties included a limit on indemnifiable damages with a specific
Environmental Cap of $32 million. They further agreed that for claims "arising out of"
the Purchase Agreement, the remedies listed in the Purchase Agreement would be
exclusive, with certain exceptions including claims for equitable relief. Williams agreed
to purchase a $50 million environmental liability insurance policy and paid $2.4 million
in premiums.
The Purchase Agreement also specified that Flint Hills was responsible for
future sulfolane releases at the refinery beginning April 1, 2004. DEC informed Flint
2 Because the ingredients in the foam were proprietary information, the exact
compounds contained in the foams were not known at the time. An expert witness
testified at trial that, based on safety information provided by the manufacturer, the
PFAS presumably included PFOA. Williams admitted the foams contained PFAS and
PFOS, but stated it did not know whether they contained PFOA.
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Hills in October 2004 that it considered sulfolane a regulated contaminant and would be
adopting cleanup standards.
By April 2019 the sulfolane in the groundwater had laterally travelled,
creating a plume approximately two miles wide, three and a half miles long, and over
three hundred feet deep, and spreading offsite from the refinery. The plume then
extended into the City of North Pole's groundwater, and it is expected that sulfolane will
continue to flow from the refinery site. Flint Hills and the State have taken a variety of
steps to mitigate damages from the groundwater sulfolane plume, including providing
alternative interim water, well-testing, community outreach, and drafting site
characterization and corrective action plans. The most significant step has been
expanding the City's piped water system.
B. Statutory Background
The legislature passed the Environmental Conservation Act3
to "conserve,
improve, and protect [Alaska's] natural resources and environment and control . . .
pollution, in order to enhance the health, safety, and welfare of the people of the state."4
The statutes empower a court to issue injunctions and impose damages on violators.5
Alaska Statute 46.03.710 prohibits polluting or adding "to the pollution of
the air, land, subsurface land, or water of the state."6
Alaska Statute 46.03.760 authorizes
civil damages7
for violation of the Act or a DEC regulation, order, or permit. The State's
3 AS 46.03.010-.900.
4 AS 46.03.010 (declaring policy).
5 AS 46.03.765.
6 AS 46.03.710.
7 "Damages include but are not limited to injury to or loss of persons or
(continued...)
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available damages for a violation of the Act are limited to "$100,000 for the initial
8
violation" and "$5,000 for each day after that on which the violation continues."
Subsection .760(a) also provides that the assessments
shall reflect, when applicable,
(1) reasonable compensation in the nature of liquidated
damages for any adverse environmental effects caused by the
violation, which shall be determined by the court according
to the toxicity, degradability, and dispersal characteristics of
the substance discharged, the sensitivity of the receiving
environment, and the degree to which the discharge degrades
existing environmental quality;
(2) reasonable costs incurred by the state in detection,
investigation, and attempted correction of the violation;
(3) the economic savings realized by the person in not
complying with the requirement for which a violation is
charged.
In addition to the damages allowed by subsection .760(a), subsection
.760(d) allows uncapped liability in cases of oil pollution or releases of hazardous
substances for actual damages caused to the state by a violation of AS 46.03.740-.750,9
7 (...continued)
property, real or personal, loss of income, loss of the means of producing income, or the
loss of an economic benefit." AS 46.03.824.
8 AS 46.03.760(a).
9 AS 46.03.740 (prohibiting the discharge of "petroleum, acid, coal or oil tar,
lampblack, aniline, asphalt, bitumen, or a residuary product of petroleum, into, or upon
the waters or land of the state" except as permitted). Alaska Statute 46.03.745 prohibits
the uncontrolled release of a "hazardous substance as defined in AS 46.09.900." Alaska
Statute 46.09.900(4) defines "hazardous substance" as
(A) an element or compound that, when it enters i nto or on
(continued...)
-8- 7658
----------------------- Page 9-----------------------
including "(1) direct and indirect costs associated with the abatement, containment, or
removal of the pollutant; (2) restoration of the environment to its former state; (3)
10
amounts paid as grants . . . and (4) all incidental administrative costs." The statute
cautions that "actions under this section may not be used for punitive purposes, and sums
11
assessed by the court must be compensatory and remedial in nature." Section .780
provides that if a violation "causes the death of fish, animals, or vegetation or otherwise
injures or degrades the environment of the state," the violator may be additionally liable
up to the "amount equal to the sum of money required to . . . replenish a damaged or
degraded resource, or to otherwise restore the environment of the state to its condition
before the injury."12
To recover uncapped actual damages for a violation under AS 46.03.760(d),
the State must bring a civil action under AS 46.03.822, which provides for strict liability
for the release of hazardous substances.13 Subsection .822(a) holds persons strictly liable
9 (...continued)
the surface or subsurface land or water of the state, presents
an imminent and substantial danger to the public health or
welfare, or to fish, animals, vegetation, or any part of the
natural habitat in which fish, animals, or wildlife may be
found; or (B) a substance defined as a hazardous substance
under 42 U.S.C. 9601 - 9657 (Comprehensive Environmental
Response, Compensation, and Liability Act of 1980)
[CERCLA]; "hazardous substance" does not include
uncontaminated crude oil or uncontaminated refined oil . . . .
10 AS 46.03.760(d).
11 AS 46.03.760(b).
12 AS 46.03.780.
13 See AS 46.03.760(d) and AS 46.03.822.
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if they owned or had control over the hazardous substance at the time of release, or
14
owned or operated the facility where the hazardous substance was released or disposed.
For the State to recover damages under subsection .822(a), it must demonstrate that the
released substance is a "hazardous substance" as defined by AS 46.03.826(5):
(A) an element or compound which, when it enters into the
atmosphere or in or upon the water or surface or subsurface
land of the state, presents an imminent and substantial danger
to the public health or welfare, including but not limited to
fish, animals, vegetation, or any part of the natural habitat in
which they are found;
(B) oil; or
(C) a substance defined as a hazardous substance under
42 U.S.C. 9601(14).[15]
14 AS 46.03.822(a)(1)-(3).
15 42 U.S.C. 9601(14) defines "hazardous substance" under CERCLA as
(A) any substance designated pursuant to section
311(b)(2)(A) of the Federal Water Pollution Control Act [33
U.S.C. 1321(b)(2)(A)], (B) any element, compound, mixture,
solution, or substance designated pursuant to section 9602 of
this title, (C) any hazardous waste having the characteristics
identified under or listed pursuant to section 3001 of the
Solid Waste Disposal Act [42 U.S.C. 6921] (but not
including any waste the regulation of which under the Solid
Waste Disposal Act [42 U.S.C. 6901 et seq.] has been
suspended by Act of Congress), (D) any toxic pollutant listed
under section 307(a) of the Federal Water Pollution Control
Act [33 U.S.C. 1317(a)], (E) any hazardous air pollutant
listed under section 112 of the Clean Air Act [42 U.S.C.
7412], and (F) any imminently hazardous chemical substance
or mixture with respect to which the Administrator has taken
action pursuant to section 7 of the Toxic Substances Control
Act [15 U.S.C. 2606]. The term does not include petroleum,
(continued...)
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In addition to allowing the State to recover uncapped actual damages, AS 46.03.822
holds persons "strictly liable, jointly and severally, for damages, for the costs of
response, containment, removal, or remedial action incurred by the state, a municipality,
or a village, and for the additional costs of a function or service, including administrative
16
expenses for the incremental costs of providing the function or service."
The statute explicitly holds ineffective any "indemnification, hold harmless,
or similar agreement . . . to transfer liability . . . from the owner or operator of a
17
facility." However, the statute allows for indemnification and hold harmless
18
agreements between liable parties to shift financial responsibility. Once liability is
determined by the court, parties "may seek contribution from any other person who is
liable under (a) of this section."19 To resolve a claim for contribution, "the court may
allocate damages and costs among liable parties using equitable factors determined to be
appropriate by the court."20
C. Proceedings
In March 2014 the State sued Williams and Flint Hills seeking declaratory
15 (...continued)
. . . natural gas, . . . or synthetic gas usable for fuel (or
mixtures of natural gas and such synthetic gas).
16 AS 46.03.822(a). Subsection .822(b) which relieves persons from liability
if certain narrow conditions arise, is inapplicable. See AS 46.03.822(b) (releasing
liability if the release occurred solely because of an act of war; "an intentional or
negligent act or omission of a third party"; or an "act of God").
17 AS 46.03.822(g).
18 Id.
19 AS 46.03.822(j).
20 Id.
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relief, injunctive relief, and damages resulting from discharges of oil and sulfolane. The
State alleged that sulfolane is a hazardous substance as defined by Alaska's
environmental conservation statutes and administrative code. In its answer, Williams
denied that its sulfolane releases were unlawful; asserted various legal, equitable, and
constitutional defenses; and made counterclaims against the State. Williams claimed the
State was a responsible landowner under AS 46.03.822(a) and could not "transfer its
liability" to Williams because it had not regulated sulfolane during Williams's tenure at
the refinery. Williams also claimed that DEC was ordinarily and grossly negligent in
supervising the refinery during Flint Hills's tenure, allowing sulfolane to migrate off the
refinery property, which in turn resulted in damages to Williams that it should be able
to recover in contribution under AS 46.03.822(j).
Flint Hills similarly denied liability under the Act and asserted legal,
equitable, procedural, and constitutional defenses in its answer. Flint Hills claimed the
State and Williams were responsible parties under AS 46.03.822(a), and Flint Hills
counterclaimed against the State for contribution under AS 46.03.822(j). It also
crossclaimed against Williams seeking contribution under AS 46.03.822(j) and
indemnification under the terms of the Purchase Agreement, specific performance of the
Purchase Agreement, and declaratory judgment regarding Flint Hills's right to
contribution and indemnification from Williams. Williams in turn asserted crossclaims
against Flint Hills, claiming that Flint Hills had breached the Purchase Agreement, was
unjustly enriched by improperly seeking coverage from Williams's environmental
insurance policy, and was ordinarily and grossly negligent in allowing sulfolane
contamination. Williams sought damages for breach of contract, declaratory judgment
that it was entitled to indemnification under the Purchase Agreement, contribution under
AS 46.03.822(j), and application of the Purchase Agreement's Environmental Cap to any
potential liability against Williams.
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The City of North Pole also filed suit that year. Its case and a case brought
by a North Pole resident against Williams and Flint Hills in 2010 were consolidated with
the State's suit. After PFAS contamination was discovered at the site, the State and Flint
Hills filed additional claims against Williams.
In 2016 we ruled in Flint Hills Resources Alaska, LLC v. Williams Alaska
Petroleum, Inc. (Flint Hills I) that Flint Hills's claims against Williams for contractual
indemnification and statutory contribution under AS 46.03.822(j) were time-barred with
21
respect to onsite sulfolane contamination, but not offsite sulfolane contamination. We
also determined that because Flint Hills's claims against Williams for declaratory and
injunctive relief were "equitable remedies . . . identical to the legal remedies Flint Hills
sought in its statutory and contractual claims,"22 it had not been error for the superior
23
court to dismiss the equitable claims.
In February 2017 Flint Hills reached a settlement with the State and the
City, agreeing to partially fund an extension of piped water to affected residents. The
superior court accordingly dismissed with prejudice the State's and Flint Hills's claims
against each other.
The State and Flint Hills added claims against Williams for offsite PFAS
soon after it was discovered in late 2018, but because discovery deadlines had passed the
21 377 P.3d 959, 973 (Alaska 2016).
22 Id. at 974 ("Flint Hills sought a judgment from the court declaring that
Williams must indemnify Flint Hills under the [Purchase] Agreement and that Williams
'is obligated to contribute to Flint Hills all [s]tatutory [d]amages that have resulted . . .
from the [c]ontamination.' Flint Hills also sought an order requiring Williams to perform
under the terms of the [Purchase] Agreement." (lowercase alterations in original)).
23 See Knaebel v. Heiner, 663 P.2d 551, 553 (Alaska 1983) ("One who seeks
the interposition of equity must generally show that he either has no remedy at law or
that no legal remedy is adequate.").
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parties agreed the court would refer the offsite PFAS claims to DEC under the doctrine
24
of primary jurisdiction. Williams moved to defer onsite PFAS issues to DEC under the
same doctrine, but the superior court denied the motion, finding it was "primarily made
for purposes of delay" and would not facilitate the "orderly and reasonable coordination
of the work of agencies and courts" after "five years of active litigation."
In June 2019 the superior court deconsolidated the State's and the City's
cases against Williams.
The State's case against Williams proceeded to a bench trial. Over 16 days
each side called lay and expert witnesses a nd admitted thousands of pages of exhibits
25
into evidence. The court issued a lengthy memorandum decision and final judgment,
concluding that sulfolane is a hazardous substance and that Williams is strictly, jointly,
and severally liable for its sulfolane release as well as for onsite PFAS and oil releases.
The court allocated 75% responsibility for offsite sulfolane costs to Williams and ordered
it to pay damages for that portion of the State's response and oversight costs, as well as
for natural resource damages caused by the loss of the public's access to groundwater
due to sulfolane contamination. The court held Williams responsible for 75% of future
State costs related to the piped water system and held further that the State could recover
from Williams that portion of "DEC's future oversight costs." The court a dditionally
ordered Williams to abide by Alaska statutes and DEC regulations related to monitoring,
reporting, and cleanup of offsite sulfolane and onsite PFAS. The court found that Flint
24 "Primary jurisdiction is a judicially created prudential doctrine that applies
'to claims properly cognizable in court [but] that contain some issue within the special
competence of an administrative agency.' " Seybert v. Alsworth , 367 P.3d 32, 39 (Alaska
2016) (alteration in original) (quoting Reiter v. Cooper, 507 U.S. 258, 268 (1993)).
25 We discuss the relevant aspects of testimony and evidence presented when
addressing each point on appeal.
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Hills was not responsible for PFAS contamination at the refinery.
The superior court then turned to Flint Hills's claims against Williams to
recover costs for responding to the contamination. The court determined that Williams
had retained liability for offsite sulfolane existing on the date Flint Hills acquired the
refinery. The court found that, although Flint Hills could not recover its costs for
responding to the contamination through the Purchase Agreement's indemnification
provisions, Flint Hills could obtain statutory contribution under AS 46.03.822(j). The
court granted Flint Hills recovery from Williams for its equitable share of past offsite
sulfolane response costs, as well as its share of future costs related to the piped water
system and other offsite sulfolane remediation costs. The court also ordered Williams
to indemnify, defend, hold harmless, and reimburse Flint Hills for all onsite PFAS-
related future claims and costs. And the superior court dismissed all of Williams's
claims against the State and Flint Hills.
Williams appeals, claiming the superior court erred on various points of fact
and law.
III. STANDARDS OF REVIEW
We review the superior court's factual findings for clear error.26
"Clear
error exists 'when "after a thorough review of the record, we come to a definite and firm
conviction that a mistake has been made." ' "27
Questions of law, which include whether
28
the superior court applied the correct legal standard, are reviewed de novo.
"We review a superior court's evidentiary rulings for abuse of discretion,"
26 Burton v. Fountainhead Dev., Inc., 393 P.3d 387, 392 (Alaska 2017).
27 Id. (quoting Laybourn v. City of Wasilla, 362 P.3d 447, 453 (Alaska 2015)
(quoting 3-D & Co. v. Tew's Excavating, Inc., 258 P.3d 819, 824 (Alaska 2011))).
28 Janes v. Alaska Railbelt Marine, LLC, 309 P.3d 867, 875 (Alaska 2013).
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29
reversing only "evidentiary rulings that are both erroneous and prejudicial." Under this
standard, we ask "whether the reasons for the exercise of discretion are clearly untenable
30
or unreasonable." We also apply the abuse of discretion standard when we review
31
grants or denials of injunctive relief and decisions to "stay or dismiss a claim" under
the primary jurisdiction doctrine.32
"The superior court's decision to allocate and apply contribution to a
damage award involves the interpretation and application of a statute."33
We apply our
independent judgment to questions of law, including "the interpretation and application
of a statute," as well as "[w]hether the superior court applied an incorrect legal
34
standard." "We interpret statutes 'according to reason, practicality, and common sense,
taking into account the plain meaning and purpose of the law as well as the intent of the
drafters.' "35
29 Id.
30 Burke v. Maka, 296 P.3d 976, 979-80 (Alaska 2013).
31 Lee v. Konrad, 337 P.3d 510, 517-18 (Alaska 2014); see also State v.
Galvin, 491 P.3d 325, 332 (Alaska 2021) (explaining that reviewing an order for
injunctive relief often also involves reviewing conclusions of law and findings of fact).
32 Seybert v. Alsworth, 367 P.3d 32, 36 (Alaska 2016); see also Matanuska
Elec. Ass'n v. Chugach Elec. Ass'n, 99 P.3d 553, 559 (Alaska 2004) (recognizing that
"primary agency jurisdiction doctrine is one of prudence, and not an absolute
jurisdictional limitation").
33 Oakly Enters., LLC v. NPI, LLC, 354 P.3d 1073, 1078 (Alaska 2015); see
AS 46.03.822(j).
34 OaklyEnters., LLC, 354 P.3d at 1078(quoting Guttchenv. Gabriel, 49 P.3d
223, 225 (Alaska 2002)).
35 Id. (quoting Native Vill. of Elim v. State, 990 P.2d 1, 5 (Alaska 1999)).
-16- 7658
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"The constitutionality of a statute and matters of constitutional or statutory
interpretation are questions of law to which we apply our independent judgment,
adopting the rule of law that is most persuasive in light of precedent, reason, and
policy."36
"Questions of contract interpretation are generally questions of law which
we review de novo; but fact questions are created when the meaning of contract language
is dependent on conflicting extrinsic evidence."37
"Where the superior court considers
extrinsic evidence in interpreting contract terms, . . . we will review the superior court's
factual determinations for clear error and inferences drawn from that extrinsic evidence
for support by substantial evidence."38
IV. DISCUSSION
A. State's Statutory Claims Against Williams
1. The superior court did not err when it concluded that sulfolane
is a hazardous substance under AS 46.03.826(5).
To impose strict liability on Williams under AS 46.03.822(a) for damages
caused by sulfolane releases, the superior court first needed to determine whether
39
It concluded that the sulfolane released by Williams
sulfolane is a hazardous substance.
36 Dep't of Revenue v. Nabors Int'l Fin., Inc., 514 P.3d 893, 898 (Alaska
2022) (quoting Premera Blue Cross v. State, Dep't of Com., Cmty. & Econ. Dev., Div.
of Ins., 171 P.3d 1110, 1115 (Alaska 2007)).
37 Afognak Joint Venture v. Old Harbor Native Corp., 151 P.3d 451, 456
(Alaska 2007).
38 Nautilus Marine Enters., Inc. v. Exxon Mobil Corp., 305 P.3d 309, 315
(Alaska 2013) (quoting Villars v. Villars, 277 P.3d 763, 768 (Alaska 2012)).
39 See AS 46.03.822(a) (describing extent to which persons are liable for costs
associated with unpermitted release of hazardous substances); AS 46.03.826(5) (defining
(continued...)
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40
satisfied all three statutory definitions of hazardous substance under AS 46.03.826(5).
Williams argues that the superior court misinterpreted the law when it found that
sulfolane met any of the three statutory definitions of hazardous substance. We disagree,
and affirm the superior court's determination that sulfolane is a hazardous substance
under the Act.
Several weeks before trial, the superior court issued a memorandum
tentatively adopting interpretations of "hazardous substance" used in AS 46.03.822(a)
and defined in subsection .826(5)(A). It later adopted those interpretations in its
decision. The court construed "imminent and substantial danger to the public health" to
mean "a reasonable medical concern about the public health where, given the modifier
'substantial,' the nature of the harm giving rise to concern is serious and, given the
modifier 'imminent,' the threat of harm must be present, although the potential impacts
may never develop or may take time to develop." The court primarily drew from several
federal circuit court decisions interpreting federal statutes with "imminent danger"
41 as well as our decisions broadly interpreting
requirements to cover "potential" harms,
39 (...continued)
"hazardous substance").
40 See AS 46.03.826(5) (defining hazardous substance as (A) a substance
which poses imminent and substantial danger to public health or welfare or natural
environment when released, (B) oil, or (C) a substance defined in CERCLA's definitions
section at 42 U.S.C. 9601(14)).
41 See Reserve Mining Co. v. EPA, 514 F.2d 492, 528-29 (8th Cir. 1975)
(interpreting phrase "endangering the health or welfare of persons" from Federal Water
Pollution Control Act to cover discharge of "potentially harmful" substance that gave
"rise to a reasonable medical concern over the public health"); Maine People's All. v.
Mallinckrodt, Inc., 471 F.3d 277, 296 (1st Cir. 2006) (holding that, under Resource
Conservation and Recovery Act (RCRA), "an imminent and substantial endangerment
(continued...)
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AS 46.03.822.42
The superior court relied on the evidence presented at trial to find that
sulfolane "presents an imminent and substantial danger to the public health" under its
interpretation of AS 46.03.826(5)(A) - that it "presents a reasonable medical concern,
the nature of which is serious, and the threat of which is present when sulfolane is
released in the environment." The State called Dr. Ted Wu, a DEC employee and expert
in toxicology and environmental chemistry who reviewed the evidence of contamination
at the refinery. He testified about a number of studies demonstrating sulfolane's toxic
effects when animals were exposed to it, which could indicate potential adverse effects
on humans. He testified that studies showed sulfolane exposure caused "convulsion[s]
. . . in squirrel monkeys and rats" and vomiting in squirrel monkeys, decreased kidney
and liver functions and white blood cell counts in guinea pigs and rats, increased
aggression in dogs, and increased fetal absorption and deformation in fetuses in rats and
guinea pigs. Dr. Wu explained that squirrel monkeys were more susceptible to sulfolane
than were rodents, suggesting that humans could be even more susceptible than squirrel
monkeys. Dr. Wu also testified that sulfolane is more toxic than about half of the
hazardous substances already identified in DEC's default groundwater cleanup level
table and that sulfolane travels in groundwater to drinking water wells and thereby
41 (...continued)
requires a reasonable prospect of a near-term threat of serious potential harm");
Simsbury-Avon Pres. Club, Inc. v. Metacon Gun Club, Inc., 575 F.3d 199, 210 (2d Cir.
2009) (discussing "imminency" as used in RCRA to require only "a showing that a 'risk
of threatened harm is present' " (quoting Dague v. City of Burlington, 935 F.2d 1343,
1356 (2d Cir. 1991))).
42 See Berg v. Popham, 113 P.3d 604, 609 (Alaska 2005) (interpreting
AS 46.03.822(a) to impose broader arranger liability than that imposed by CERCLA);
Kodiak Island Borough v. Exxon Corp., 991 P.2d 757, 765 (Alaska 1999) (adopting a
broad, flexible definition of AS 46.03.822(a)'s cost clauses).
-19- 7658
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creates a risk to the public.
The State also called Dr. Mary Beth Leigh, a professor of microbiology at
the University of Alaska Fairbanks, to provide expert testimony about her own
experiments that showed sulfolane was toxic to a bacterium commonly used as a
screening tool for toxicity to organisms. The State called former DEC Commissioner
Larry Hartig and former North Pole Mayor Bryce Ward to testify about sulfolane's
impact on public welfare and the factors involved in gauging public welfare. Hartig
testified that he understood the legislature's intent to be that public welfare includes the
people's "overall health and welfare," as well as their "economic well-being" and their
"opportunity to have a living" and "subsistence." Ward testified about the negative
impact sulfolane contamination had on the North Pole community, causing residents to
be upset and concerned about the amount of sulfolane to which they were unwittingly
exposed.
Hartig also testified that DEC considered sulfolane a hazardous substance
in order to address the sulfolane plume with funding from the Oil and Hazardous
43 Funds from the account are available
Substance Release Response Act Account.
expressly to cover State response costs in the event of oil or hazardous substance
releases.44 The definitions of "oil" and "hazardous substance" in the enabling legislation
are virtually the same as those in AS 46.03.826. To obtain funds from the response
account, the DEC commissioner must find that the oil or hazardous substance released
"poses an imminent and substantial threat to public health or welfare, or to the
43 See AS 46.08.005-.080; AS 46.08.005 (establishing fund available to
respond to release of oil or hazardous substance "to reduce the amount, degree, or
intensity of a release or threatened release, and for other related purposes identified in
law").
44 AS 46.08.040(a), .045.
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45
environment," a phrase that is virtually identical to the definition of "hazardous
substance" in AS 46.03.826(5)(A).
The State introduced Williams's written emergency medical care policy into
evidence. The policy described possible life-threatening effects of sulfolane if inhaled,
ingested, or in contact with the skin or eyes. It listed "[c]ardiac arrhythmias, respiratory
failure, pulmonary edema, paralysis, brain damage, liver damage, lung tissue and
stomach tissue damage" as possible side effects from sulfolane exposure.
Williams presented deposition testimony from Stephanie Buss, a former
DEC employee and toxicologist. When asked to identify "every single fact . . . that
would indicate that sulfolane is and presents an imminent and substantial danger to the
public health and welfare," Buss stated that "toxicity studies . . . indicat[ed] adverse
health effects" and proceeded to identify various studies. She also referred to studies
indicating that sulfolane posed dangers not only to public health and welfare, but also to
"fish and vegetation."
Williams also called James Fish, a DEC employee and project manager for
the refinery contamination area. Fish testified that the EPA had previously treated
sulfolane as a hazardous substance at a refinery in Puerto Rico. He testified that the
EPA's approach to the Puerto Rican refinery supported DEC's decision to consider
sulfolane a hazardous substance.
The superior court relied heavily on Dr. Wu's testimony to determine that
sulfolane is a hazardous substance under AS 46.03.826(5)(A) based on the danger it
posed to public health and welfare. It found Dr. Wu's medical concerns about sulfolane
were both "reasonable and serious" and that " [a]t a minimum, sulfolane exposure can
reduce white blood cell counts; at a maximum sulfolane exposure can cause death." The
45
AS 46.08.040(a)(1)(A).
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court also found it notable that, while operating the refinery, Williams itself treated
sulfolane in its emergency medical care policy as though it were life-threatening.
In addition to sulfolane's demonstrated toxicity, the superior court was
troubled by its chemical properties as well as the concentrations in which it had been
released. The court was not convinced that sulfolane concentrations found in the
environment after it was released were material to establishing whether sulfolane was
hazardous, but it was persuaded that the concentrations at the time of release "into the
subsurface land and water of the State presented an imminent and substantial danger to
the public health and welfare."
The court also found that DEC's treatment of sulfolane as a hazardous
substance under AS 46.03.826(5)(A) was entitled to deference. The court reasoned that
"Hartig accessed the [Oil and Hazardous Substance Release] [R]esponse [A]ccount
several times to address the sulfolane contamination," and each time he had to determine
that "the contamination posed an imminent and substantial threat" to the public health
and welfare or to the environment. The court found that these actions by DEC reflected
"the agency's conclusions both that sulfolane is a hazardous substance and that the
release at issue is posing an imminent and substantial threat to public health, welfare, or
the environment"; "DEC's determination that sulfolane is a hazardous substance is
reasonable, supported by the record, and not an abuse of discretion"; and DEC's
determination "is entitled tojudicial deference and it is therefore controlling in this case."
The court similarly concluded that sulfolane is a hazardous substance because it also
"presents an imminent and substantial danger to public welfare." In its underlying
findings the court specifically cited the testimony from former officials and scientists
about sulfolane's impacts on the public health and welfare.
In addition to trial evidence, the superior court relied on admissions in
Williams's pleadings to support its conclusion that sulfolane was a hazardous substance.
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The State's 2014 complaint alleged that "[s]ulfolane is a hazardous substance within the
meaning of AS 46.03.745, AS 46.03.900, AS 46.03.826, and 18 AAC 75.990." Williams
initially admitted that allegation, but denied that DEC "considered sulfolane to be a
hazardous substance under any statute or regulation at any time during [Williams]'s
ownership and operation of the North Pole Refinery." Williams later amended its
answer, retaining the sentence denying DEC's classification of sulfolane as a hazardous
substance, but instead asserting that the State's allegation that sulfolane is a hazardous
substance was a "legal conclusion to which no response [was] required." But Williams
did not withdraw an earlier stipulation agreeing that "Flint Hills is a liable landowner and
operator under AS 46.03.822(a) for sulfolane releases."
The superior court gave some weight to Williams's initial admission and
its stipulation. The court found that Williams's "first answer constitute[d] an evidentiary
admission that sulfolane is a hazardous substance, notwithstanding Williams'[s]"
amended pleading, finding support in Brigman v. State, which recognizes that "[c]ourts
often admit superseded or withdrawn pleadings in civil and criminal cases on the theory
46 The court also found that Williams
that they constitute evidentiary admissions."
admitted that sulfolane is a hazardous substance when it stipulated as to Flint Hills's
liability for sulfolane. The court reasoned that "Flint Hills could not be liable under
AS 46.03.822(a) for sulfolane releases if sulfolane were not a hazardous substance. If
sulfolane is a hazardous substance when released by Flint Hills, it is a hazardous
substance when released by Williams."
In addition to holding Williams strictly liable under AS 46.03.822 due to
hazardous substance releases as defined in AS 46.03.826(5)(A), the court held Williams
strictly liable under section .822 because many of the releases were sulfolane mixed with
46 64 P.3d 152, 166 (Alaska App. 2003).
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oil and because sulfolane wastewater constituted a "petroleum-related byproduct" under
47
AS 46.03.826(5)(B) and AS 46.03.826(7). The court found that sulfolane was
"released as a constituent of Williams'[s] oil spills" and that "Williams had numerous
spills of gasoline containing sulfolane at the refinery."
Finally, the court concluded that sulfolane is a hazardous substance under
AS 46.03.826(5)(C). Subsection .826(5)(C) defines as hazardous any "substance defined
as a hazardous substance under 42 U.S.C. 9601(14)," CERCLA's expansive definition
of hazardous substance that includes "any hazardous waste having the characteristics
identified under or listed pursuant to section 3001 of the Solid Waste Disposal Act [42
U.S.C. § 6921]" (a section better known as the Resources Conservation and Recovery
Act (RCRA)).48 The court found sulfolanemet the hazardous substance definitions under
AS 46.03.826(5)(C) because the EPA had treated it as hazardous waste under RCRA
when it was released at a refinery in Puerto Rico.
Williams argues that the superior court misinterpreted the law when it
found that sulfolane met any of the statutory definitions of hazardous substance in
AS 46.03.826(5). Regarding subsection .826(5)(A), Williams argues that the court's
definition of "imminent" does not comport with dictionary or judicial definitions of the
word. It contends that an "imminent danger" must be one that "threaten[s] to occur
immediately,"49 not one that may take time to develop. Quoting the court's
47 AS 46.03.826(5)(B) (defining "hazardous substance" to include "oil");
AS 46.03.826(7) (defining "oil" to include "petroleum-related product or by-product").
48 42 U.S.C. § 9601(14) (governing disposal of hazardous and non-hazardous
solid waste).
49 Quoting Meghrig v. KFC W., Inc., 516 U.S. 479, 485 (1996) (citing
WEBSTER 'S NEW INTERNATIONAL DICTIONARY OF THE ENGLISH LANGUAGE at 1245 (2d
(continued...)
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memorandum adopting a tentative definition of hazardous substance, Williams alleges
that the court improperly concluded that "imminent and substantial danger to public
50
health" meant only a "reasonable medical concern about the public health." Williams
argues that this definition of "imminent and substantial danger" has never been "adopted
by any court, applied by DEC, or advocated by any party during five years of litigation";
that it runs counter to the plain language of the statute; that it "threatens to deprive a
49 (...continued)
ed. 1934)).
50 This misrepresents the superior court's definition. The court did not
conclude that an "imminent and substantial danger" meant only a "reasonable medical
concern about the public health," but also that, "given the modifier 'substantial,' the
nature of the harm giving rise to concern is serious and, given the modifier 'imminent,'
the threat of harm must be present, although the potential impacts may never develop or
may take time to develop."
Moreover, the court ultimately made separate findings that sulfolane
presented an imminent and substantial danger to the public health and welfare.
Williams's opening brief primarily argues against the danger to public health finding.
Its arguments about the public welfare findings are limited to a single footnote in its
opening brief that simply incorporates "all the above reasons why sulfolane is not a
hazardous substance in the first instance." Williams's reply brief claims that the
arguments are interchangeable. Williams does not challenge the court's factual findings
about the impact on North Pole residents or its finding that residents' concerns about
"economic well-being [and] opportunity to have a living" are incorporated in the public
welfare prong of the definition, and fails to adequately address this issue. We thus
consider Williams's challenge to the court's finding waived. See Alaska R. App. P.
212(c)(1)(H) (requiring that argument section "explain the contentions of the appellant
. . . and the legal and factual support for those contentions, with citations to the
authorities, statutes, and parts of the record relied on"); Casciola v. F.S. Air Serv., Inc.,
120 P.3d 1059, 1062 (Alaska 2005) ("We do not consider arguments that are
inadequately briefed.").
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----------------------- Page 26-----------------------
defendant of the constitutional right to fair notice" under Stock v. State;51 and that it is
contrary to the legislative history. Williams also argues that because the concentrations
of sulfolane "had decreased dramatically and were nowhere near the ranges cited by the
court" by the time the plume reached drinking water wells, the court erred by finding that
sulfolane was hazardous at the time of release.
The State responds that Williams's proposed definition of "imminent" is
flawed because it would exclude substances causing delayed manifestations of harm,
such as birth defects or cancer. The State emphasizes that the statute uses the word
"danger" rather than "harm" to signify the possibility of harm, rather than the present
existence of harm. And it argues that, even under Williams's proposed interpretation of
AS 46.03.826(5)(A), trial evidence supports finding sulfolane is a hazardous substance.
The State points to the numerous studies demonstrating sulfolane's harmful effects on
animals. The State asserts that there is no legal support for Williams's contention that
"whether a substance is hazardous should turn on its concentrations in the environment
after decades of dilution."
Williams also asserts that the superior court improperly relied on evidence
from Dr. Wu and DEC employee Stephanie Buss because, although they indicated they
believed sulfolane was a hazardous substance, they did not state explicitly that it
"presents an imminent and substantial danger to public health." Williams argues that it
was error to infer that sulfolane is a hazardous substance, pointing to a ruling on the
parties' 2018 motions for summary judgment which discounted Dr. Wu's affidavit for
not using these statutory terms. The State responds that "[n]o rule of evidence says that
witness testimony 'must be excluded' and cannot be used to support a factual finding if
51 526 P.2d 3 (Alaska 1974) (explaining circumstances under which
environmental conservation statutes might be unconstitutionally vague). We address fair
notice and due process in part IV.A.5 below.
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it does not use particular words from a statutory definition." The State also points out
that Williams did not "cit[e] contrary evidence or explain [in its brief] why the studies
do not show that sulfolane is dangerous."
When we interpret a statute, we presume "that the legislature intended every
word, sentence, or provision of a statute to have some purpose, force, and effect, and that
52
no words or provisions are superfluous." We apply a "sliding-scale approach" to
interpret the language: "[t]he plainer the statutory language is, the more convincing the
53
evidence of contrary legislative purpose or intent must be." To the extent possible, we
"interpret each part or section of a statute with every other part or section, so as to create
54
a harmonious whole." Whether a substance meets the legal standard of "hazardous
substance" is a "question of law to which we apply our independent judgment."55
We are not p ersuaded by Williams's arguments. The two key issues are
whether "imminent" dangers under AS 46.03.826(5)(A) can include non-immediate
dangers and whether the facts support concluding sulfolane is a hazardous substance.
Turning to the first issue, we note that because the parties do not discuss the
legislative history of the statute,56 we look primarily to the plain meaning of the statute.
52 Kodiak Island Borough v. Exxon Corp., 991 P.2d 757, 761 (Alaska 1999)
(quoting Rydwell v. Anchorage Sch. Dist., 864 P.2d 526, 530-31 (Alaska 1993)).
53 State v. Planned Parenthood of the Great Nw., 436 P.3d 984, 992 (Alaska
2019) (quoting State v. Fyfe, 370 P.3d 1092, 1095 (Alaska 2016)).
54 Id. (original alteration omitted) (quoting Rydwell, 864 P.2d at 528).
55 See Burton v. Fountainhead Dev., Inc., 393 P.3d 387, 392 (Alaska 2017).
56 Williams alludes to its October 2019 response to the court's interpretation
of "imminent and substantial danger," when Williams did engage in a legislative history
analysis. However, it makes no arguments now on appeal beyond (1) asserting that
(continued...)
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The undefined use of "imminent" in statutes and treaties, across diverse subject areas,
57
has plagued legal scholars for decades. When the legislature enacted
AS 46.03.826(5)(A), Black's Law Dictionary defined "imminent" as something "[n]ear
at hand; mediate rather than immediate; . . . impending; on the point of happening;
threatening."58 It defined "danger" as "[j]eopardy; exposure to loss or injury; peril."59
Similarly, Merriam-Webster's Collegiate Dictionary defined "imminent" as "ready to
60 61
take place" and "danger" as "exposure or liability to injury, pain, or loss." While an
"imminent danger" is thus typically some harm that is threatening to occur immediately,
the fact that harm ultimately did not occur does not mean that the harm was not imminent
56 (...continued)
AS 46.03.826(5)(A) was enacted prior to subsection .826(5)(C) and thus could not have
been designed to expand subsection .826(5)(C); and (2) making conclusory statements
that the court's interpretation of imminent and substantial danger "finds no support in the
statutory text or the legislative history." "[A] party's briefing must contain its own
arguments and may not merely incorporate arguments from other documents."
McCormick v. Chippewa, Inc., 459 P.3d 1172, 1180 (Alaska 2020). We conclude
Williams's legislative history arguments were insufficiently briefed and thus waived.
57 See, e.g., Authority of the President Under Domestic and International Law
to Use Military Force Against Iraq, 26 Op. O.L.C. 143, 182-84 (2002) (discussing
ambiguities of "imminent" in international law, including temporal elements,
probabilities that threat will materialize, and magnitude of harm that threat would cause
such that immediacy is no longer required).
58 Imminent, BLACK'S LAW DICTIONARY (rev. 4th ed. 1968) (similarly defined
in current 11th edition).
59 Danger, id. (similarly defined in current 11th edition). Black's Law
Dictionary also provides a definition for "imminent danger," but it applies to the use of
self-defense and seems inapplicable to environmental harms.
60 Imminent, MERRIAM-WEBSTER 'S COLLEGIATE DICTIONARY (7th ed. 1963).
61 Danger, id.
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at one point. Federal case law cited by the superior court and both parties supports this
62
interpretation of "imminent danger." The court's interpretation of "imminent" - that
"the threat of harm must be present, although the potential impacts may never develop
or may take time to develop" - aligns with the plain definition of statutory terms as well
as federal case law interpreting like terms.
Williams's factual and evidentiary challenges to the hazardous substance
conclusion also fail to withstand scrutiny. Williams does not cite any case law or rules
of evidence to support its argument that expert testimony must exactly track the relevant
statutory text at issue.63
Alaska Evidence Rule 702(a) allows qualified experts to rely on
their "scientific, technical, or other specialized knowledge" to express opinions that will
"assist the trier of fact to understand the evidence or to determine a fact in issue." There
is no indication that it would be improper for the trier of fact to rely on expert testimony
if the expert fails to repeat verbatim the statutory language at issue while offering an
opinion. Dr. Wu's and Buss's testimony demonstrated that sulfolane, "when it enters . . .
62 See Meghrig v. KFC W., Inc., 516 U.S. 479, 485-86 (1996) (interpreting
RCRA's "imminent and substantial endangerment" provision as requiring threat of
danger to be then-present even if impact may not be felt until later); Reserve Mining Co.
v. EPA, 514 F.2d 492, 528-29 (8th Cir. 1975) (interpreting phrase "endangering the
health or welfare of persons" from Federal Water Pollution Control Act to cover
discharge of "potentially harmful" substance that gave "rise to a reasonable medical
concern over the public health"); Maine People's All. v. Mallinckrodt, 471 F.3d 277, 296
(1st Cir. 2006) (holding that, under RCRA, "an imminent and substantial endangerment
requires a reasonable prospect of a near-term threat of serious potential harm");
Simsbury-Avon Pres. Club, Inc. v. Metacon Gun Club, Inc., 575 F.3d 199, 210 (2d Cir.
2009) (stating "imminency" standard in RCRA "requires a showing that a 'risk of
threatened harm is present' " (quoting Dague v. City of Burlington, 935 F.2d 1343, 1356
(2d Cir. 1991))).
63 See Marcia V. v. State, Off. of Child.'s Servs., 201 P.3d 496, 508 (Alaska
2009) (rejecting argument that expert testimony must recite statutory language).
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----------------------- Page 30-----------------------
in or upon the water or surface or subsurface land[,] . . . presents an imminent and
substantial danger to the public health . . . including . . . to fish, animals, vegetation, or
64
any part of the natural habitat in which they are found." Dr. Wu testified extensively
about sulfolane's toxic effects on animals exposed to it. And Williams mischaracterizes
Buss's deposition testimony, alleging she concluded sulfolane was a hazardous substance
based only on studies showing that "sulfolane has the potential to have adverse effects."
(Emphasis omitted). But Buss also discussed a study showing "significant impacts of
high concentrations of exposure." Her deposition testimony indicates that she believed
sulfolane posed an imminent and substantial danger to the public health or welfare, but
she clarified that none of the studies to which she referred used those words so she
avoided saying that a study made such an explicit finding. That Dr. Wu and Buss never
expressly stated "sulfolane presented an imminent and substantial danger to public
health" did not preclude the superior court from making such a finding, especially in
light of the ample evidence suggesting that fact. The superior court did not err by relying
on Dr. Wu's and Buss's testimony when making its findings.
Other testimony from Dr. Wu further supports finding sulfolane presents
an imminent and substantial danger to the public health or welfare. He testified about
studies showing negative impacts on plants, earthworms, aquatic invertebrates, and fish
when exposed to sulfolane, including a study demonstrating impacts on embryonic
development in zebrafish when exposed to a range of sulfolane concentrations equivalent
to concentrations found in groundwater near refineries around the world. And the fact
that Williams itself treated sulfolane as a substance with life-threatening characteristics
while handling it further supports the court's hazardous substance finding.
The superior court also did not abuse its discretion by giving weight to
64 AS 46.03.826(5)(A).
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Williams's initial admission that sulfolane was a hazardous substance, which could shed
65
light on Williams's own beliefs about whether sulfolane was hazardous. Williams
failed to refute the inferences that could be drawn from its earlier admission, especially
when those inferences were supported by Williams's own sulfolane-handling practices
at the refinery.66
2. The superior court did not err by awarding response costs to the
State and Flint Hills.
Alaska Statute 46.03.822(a) imposes strict liability on those responsible for
the unpermitted release of hazardous substances for a range of costs, including response
costs. "Response costs" are defined by regulation as "costs reasonably attributable to the
65 In contrast to binding judicial admissions, "evidential admissions are words
or conduct admissible in evidence against the party making them, but subject to rebuttal
or denial." 29A AM. JUR . 2D Evidence § 769; see 2 KENNETH S. BROUN ET AL.,
MCCORMICK ON EVIDENCE § 254 (8th ed. 2020) (defining "judicial admission").
"Evidentiary admissions may also be made in pleadings that have been superseded,
amended, or withdrawn; answers to interrogatories; and other statements made pursuant
to the . . . Rule of Evidence governing statements by opposing parties." 29A AM. JUR.
2D Evidence § 769. Admissions constituting opinion, such as a conclusion of law,
normally include an application of a standard to the facts.
Thus, they reveal the facts as the declarant thinks them to be,
to which the . . . legal or moral standard involved in the
statement was applied. In these circumstances, the factual
information conveyed should not be ignored merely because
the statement may also indicate the party's assumptions about
the law.
BROUN, supra, § 256 (citations omitted); see also Cikan v. ARCO Alaska, Inc., 125 P.3d
335, 341 (Alaska 2005).
66 Because we affirm the superior court's conclusion that sulfolane is a
hazardous substance under AS 46.03.826(5)(A), it is not necessary for us to address the
extent to which sulfolane may also be defined as a hazardous substance under
subsections AS 46.03.826(5)(B) and (C).
-31- 7658
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site or incident" including "the costs of direct investigation, containment and cleanup,
removal, and remedial actions associated with an incident or site undertaken by the
department . . . as well as the costs of oversight."67
The superior court found that the State's and Flint Hills's plans to "provide
alternative water in the form of a piped water expansion project [were] reasonable and
not arbitrary or capricious." There was expert testimony that groundwater remediation
would likely cost at least $6 million more than expanding the piped water system, and
would take decades to achieve. The court found "Williams . . . liable for the estimated
costs of the piped water system, $72,228,154, as an appropriate response cost under
68
.822(a)." Other response costs included those incurred by Flint Hills to deliver bulk
and bottled water in the interim and to drill new public wells after sulfolane was detected
in the City's source wells. The interim water deliveries were part of a project costing
$27.67 million, and the new City source wells cost $4.39 million.
Williams argues that the superior court erred by awarding the State
response costs for the piped water system and new wells, claiming the piped water
system was unnecessary, not cost-effective, and unreasonable. Williams also argues the
superior court erred by awarding Flint Hills costs for bottled water to North Pole
residents, contending that new wells for the City and "providing alternative water to
residents on an interim basis" were unnecessary.
Williams points to several environmental conservation regulations to
67 18 Alaska Administrative Code (AAC) 75.910(b) (2021).
68 The court calculated expected cost for the piped water system -
$72,228,154 - based on "payments from escrow to date by the State of $11,599,681 and
$44,378,473 from Flint Hills; an additional $16.25 million is expected to be required to
complete the project." It then determined that Williams was equitably responsible for
75% of the State's and Flint Hills's future costs related to the piped water system.
-32- 7658
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support its assertion that "Site Cleanup Rules require those responsible for contamination
to take only those actions 'necessary to protect human health, safety, and welfare, and
69
the environment.' " But as the State points out, the standard in the site cleanup
70
regulations differs from that required by statute. The regulations mainly focus on what
the responsible party must do to remedy contamination it has caused, which could be
read to require only that the responsible party take the minimum protective actions
71
"necessary." But when considered in light of the policy behind the Environmental
69 Quoting 18 AAC 75.335 (requiring responsible party to generate site
characterization plans prior to hazardous substance cleanup), and also citing 18 AAC
75.345 (requiring cleanup to meet specific levels), .360 (specifying cleanup operation
requirements for responsible party), .380 (detailing responsible party's reporting and site
closure requirements), and .990 (chapter definitions, including "cleanup level").
70 See AS 46.03.822(a) (imposing strict liability on responsible parties for
damages resulting from "unpermitted release of a hazardous substance," including "costs
of response, containment, removal, or remedial action, . . . and for the additional costs
of a function or service, including administrative expenses for the incremental costs of
providing the function or service"); AS 46.03.824 ("Damages include but are not limited
to injury to or loss of persons or property, real or personal, loss of income, loss of the
means of producing income, or the loss of an economic benefit."); see also Kodiak Island
Borough v. Exxon Corp., 991 P.2d 757, 765 (Alaska 1999) (construing, in dicta,
"subsection .822(a)'s statement of specific compensable costs to be exemplary and
inclusive, not definitive or exclusive" and "adopt[ing] a literal and inflexible view of
subsection .822(a)'s cost clauses would be fundamentally inconsistent with what we
perceive to be the legislature's primary intent in enacting these provisions: to hold
responsible parties strictly liable for all provable spill-related harms").
71 See 18 AAC 75.990(17) (defining "cleanup" to include "removal of a
hazardous substance from the environment, restoration, and other measures that are
necessary to mitigate or avoid further threat to human health, safety, or welfare, or to the
environment" (emphasis added)); 18AAC 75.335(c)-(d) (describing requirements of site
characterization report submitted to DEC and allowing DEC to "modify proposed
cleanup techniques or require additional cleanup techniques for the site as the department
(continued...)
-33- 7658
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Conservation Act and its enabling regulations, it is more likely that the provisions
Williams cites operate to establish a baseline cleanup level for the responsible parties,
72
and not a ceiling for the State to respond to the contamination. The State incurred costs
as a result of Williams's hazardous substance releases and Williams is therefore strictly
liable for them.
Williams further argues that the piped water system was unnecessary
because DEC had not established a cleanup level required to make the groundwater safe
73
for human consumption and the court had not made findings that piped water was
71 (...continued)
determines to be necessary to protect human health, safety, and welfare, and the
environment"); 18 AAC 75.345(c) (allowing DEC to set more stringent groundwater
cleanup levels than those currently published if it "determines that a more stringent
cleanup level is necessary to ensure protection of human health, safety, or welfare, or of
the environment"); 18 AAC 75.345(d) (allowing DEC to "require a responsible person
to provide an alternative source of drinking water for the affected parties or implement
other institutional controls . . . until a cleanup level is established" when "toxicity
information is insufficient to establish a cleanup level for a hazardous substance or a
pollutant that ensures protection of human health, safety, and welfare, and of the
environment").
72 See 18 AAC 75.910(b) (holding responsible parties liable for "response
costs" and defining response costs as "costs reasonably attributable to the site or
incident" including "costs of direct investigation, containment and cleanup, removal, and
remedial actions associated with an incident or site undertaken by the department . . . as
well as the costs of oversight"); see also AS 46.03.760(d) (holding responsible person
"liable to the state . . . for the full amount of actual damages caused to the state by the
violation, including" costs for abatement, containment, restoration, and emergency
response costs); AS 46.03.780 (allowing for broad recovery when hazardous substance
release "injures or degrades the environment").
73 DEC had not yet set cleanup levels because of uncertainty about its toxicity
data for sulfolane. In 2015 the EPA recommended that DEC refrain from doing so until
the EPA had completed its own toxicity studies evaluating the health effects of sulfolane
(continued...)
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necessary for human or environmental health. For example, Williams claims there was
no evidence demonstrating that "the low levels of sulfolane in North Pole area wells have
caused adverse health effects." The State again points to the text of AS 46.03.822, where
the extent of liability and recovery is untethered to findings of "necessity" or "cleanup
74
levels." The State argues that Williams could have proposed a cleanup level and
Williams's failure to participate "in the regulatory process . . . puts it in a poor position
to now raise regulation-based objections to DEC's response." Furthermore, regulations
expressly allow DEC to require a responsible person to provide alternative water sources
when "toxicity information is insufficient to establish a cleanup level for a hazardous
75
substance or a pollutant." And, as discussed below, feasibility studies showed that
alternatives to the piped water system such as remediating the groundwater would be
costly, difficult to implement, uncertain to succeed, and could pose additional risks.
Thus establishing a level to which groundwater concentrations would need to have been
returned was irrelevant in these circumstances. The superior court properly concluded
that the statutes did not require the State to prove that the piped water system was
76
necessary.
73 (...continued)
exposure.
74 See 18 AAC 75.345(b)(3) (allowing DEC to approve responsible party's
proposed alternative cleanup level).
75 18 AAC 75.345(d).
76 While Williams alleges that the State had ulterior motives in its pursuit of
the piped water system - to "save face with the public" and to remedy other non-
sulfolane contamination problems with well water - our review of the record reveals no
such bad-faith motives.
In contrast, Williams's argument borders on bad faith when it selectively
(continued...)
-35- 7658
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Williams next argues that the piped water system is not cost-effective, and
77
thus is not "practicable" as required by regulation. Williams alleges that "[n]either the
State nor Flint Hills offered any evidence that the piped water system was the most cost-
effective remedy" and that State witnesses conceded that this was not a factor DEC
considered. While the State mostly focuses on the absence of any statute requiring that
it prove piped water is the most cost-effective remedy, it also points to witness testimony
discussing the benefits of piped water over other alternatives. The State noted that its
permanency, cost, safety, and reliability made piped water superior to delivering bottled
water or to "restor[ing] the aquifer to its natural condition." Williams's sole proposal
besides doing nothing was to conduct air sparging, a form of remediating the aquifer that
DEC, as well as Flint Hills's environmental contractor, had already considered and
76 (...continued)
relies on a DEC employee's testimony to claim that the State sought "to remedy water
quality issues unrelated to sulfolane that make the well water 'unpalatable without
treatment.' " The employee, referring to aesthetic differences, said the water was "a little
unpalatable without treatment." And Williams's references to other contamination are
unsupported by the record and are irrelevant to assessing the response costs the State
incurred out of concern for the potential public health and welfare impacts from sulfolane
contamination.
77 "Practicable" is defined as "capable of being designed, constructed, and
implemented in a reliable and cost-effective manner, taking into consideration existing
technology, site location, and logistics in light of overall project purposes."
18 AAC 75.990(93). The definition "does not include an alternative if the incremental
cost of the alternative is substantial and disproportionate to the incremental degree of
protection provided by the alternative as compared to another lower cost alternative." Id.
Williams cites 18AAC 75.325(f)(1)(D) to support its assertion. In relevant
part, this section instructs a responsible person, "to the maximum extent practicable, . . .
[to] prevent, eliminate, or minimize potential adverse impacts to human health, safety,
and welfare, and to the environment, onsite and offsite, from any hazardous substance
remaining at the site." 18 AAC 75.325(f)(1)(D). Williams mischaracterizes this as a
requirement for DEC, rather than the responsible party.
-36- 7658
----------------------- Page 37-----------------------
determined would be costly, ineffective, and could pose additional risks to the
community.
Williams further asserts that the piped water system's cost was exorbitant
rather than cost-effective because "[o]nly 86 private wells . . . in recent years" recorded
measurements of at least 20 ppb of sulfolane. Williams therefore calculated the cost of
the piped water amounted to "over $837,000 per affected well." The State responds that
the statute imposes strict liability for actual damages and response costs rather than for
78
only the most cost-effective measures taken. Flint Hills points to trial testimony
tending to show cost-effectiveness for the piped water system was considered both in its
design and at trial. The record also reveals that the sulfolane plume is migrating and not
expected to degrade quickly, and that the uncertainty about effects of long-term exposure
to sulfolane justifies preventative measures such as the piped water system.
Even if the statutes or regulations required that response costs be
"necessary" and cost-effective, the State persuasively argues that the record supports
such a finding. The superior court found that the piped water system would be
"reasonable and not arbitrary or capricious" as an alternative water source because it is
a common solution for large-scale groundwater contamination, offers an effective long-
term solution, would require less maintenance, and would be more convenient.
Furthermore, testimony from Williams's own experts supports finding that the interim
bottled water deliveries and piped water system design were reasonable.
The record supports the superior court's decision to hold Williams liable
78 See AS 46.03.760(d) (holding responsible party "liable to the state . . . for
the full amount of actual damages caused to the state by the violation, including" costs
for abatement, containment, restoration, and emergency response costs); AS 46.03.780
(allowing for broad recovery when hazardous substance release "injures or degrades the
environment").
-37- 7658
----------------------- Page 38-----------------------
for the response costs for the piped water system, interim water provisions, new wells,
and public outreach. The court did not clearly err by finding they were reasonable
resolutions to the sulfolane groundwater contamination. We affirm the award of
response costs to the State and Flint Hills for Williams's sulfolane releases under
AS 46.03.822.
3. The superior court did not err by awarding damages for loss of
access to groundwater due to sulfolane contamination.
The superior court determined there was a "component of natural resources
damage" from sulfolane "that [was] not addressed by the provision of alternative water
supplies," i.e., "loss of the right of the public to have access to uncontaminated
groundwater." The court noted that some people might prefer using well water, and it
noted that if the sulfolane plume migrates - as is predicted - to areas beyond the piped
water system, the impact might create further burdens given the "inconveniences and
limitations" of installing water filtration systems for well water in those areas. The court
explained that, while in some instances it might not be strictly necessary for residents to
use groundwater since they might have alternatives, Williams's sulfolane releases had
affected people's access to groundwater due to pollution and this was an
"uncompensated 'adverse environmental effect' " per AS 46.03.760(a)(1) which was
"deserving of reasonable compensation." The court awarded $2,533,125 to the State for
Williams's 75% responsibility for the groundwater-related damages.
Williams claims that awarding damages based on the public's loss of "the
option to choose" to access uncontaminated groundwater was error. Williams argues,
first, that no such right to uncontaminated groundwater exists under state law and that
the c ourt based this right only on "its speculation that '[s]ome people may prefer well
water,' " for which there was no evidence. Williams further argues that even if a right
to access uncontaminated groundwater existed, it is held by the public; thus, the State is
-38- 7658
----------------------- Page 39-----------------------
not harmed and cannot recover damages.
Williams is incorrect that the superior court based the existence of the right
solely on residents' potential subjective preference for groundwater. The court noted
that preference but also considered other reasons why access to groundwater was
important to the public. For instance, areas not served by the piped water system would
have limited and costly means for access to clean water.
Williams is also incorrect that there is no basis in state law to award
damages for the loss of access to groundwater. Liability for such contamination is
explicitly laid out in AS 46.03.760. The statute provides that a person who violates the
Act is liable to the State for damages in the form of a civil assessment.79 Even if there
were no independent right of access to clean groundwater, the State could pursue
damages for harm to this natural resource based on Williams's violations of the Act.
Furthermore, Williams's argument that the State cannot pursue legal action
for harm to a right held by the public ignores the State's role as trustee of public trust
resources. As we have explained, "[t]he public trust doctrine provides that the State
holds certain resources (such as wildlife, minerals, and water rights) in trust for public
use, 'and that government owes a fiduciary duty to manage such resources for the
common good of the public as beneficiary.' "80 Alaska's Constitution provides that
"[w]herever occurring in their natural state, . . . waters are reserved to the people for
79 AS 46.03.760(a).
80 Kanuk ex rel. Kanuk v. State, Dep't of Nat. Res., 335 P.3d 1088, 1099-1100
(Alaska 2014) (quoting Baxley v. State, 958 P.2d 422, 434 (Alaska 1998)); see also
AS 46.03.010 (articulating policy of environmental conservation statutes to "enhance the
health, safety, and welfare of the people . . . and their overall economic and social well-
being," and to coordinate resource management "to the end that the state may fulfill its
responsibility as trustee of the environment for the present and future generations").
-39- 7658
----------------------- Page 40-----------------------
81 82
common use," articulating the public trust doctrine for Alaska's waters. "Waters"
83
comprising the public trust are broadly defined. Besides navigable waters, this includes
84
"public water," which is defined as "all other water, whether inland or coastal, fresh or
85
salt, that is reasonably suitable for public use and utility." Thus, groundwater is a
public trust resource over which the State serves as trustee.86
81 Alaska Const. art. VIII, § 3. These rights are subject to appropriation and
reservation rights. Id. at § 13. Alaska's Water Use Act, codified at AS 46.15.010-.270,
reiterates these provisions and regulates water appropriation and reservation.
AS 46.15.030.
82 See Kanuk, 335 P.3d at 1099 ("We have frequently compared the state's
duties as set forth in [a]rticle VIII to a trust-like relationship in which the state holds
natural resources such as fish, wildlife, and water in 'trust' for the benefit of all
Alaskans." (quoting Brooks v. Wright, 971 P.2d 1025, 1031 (Alaska 1999))). See also
AS 46.03.010(b) ("It is the policy of the state . . . to develop and manage the basic
resources of water, land, and air to the end that the state may fulfill its responsibility as
trustee of the environment for the present and future generations.").
83 Owsichek v. State, Guide Licensing & Control Bd., 763 P.2d 488, 492
(Alaska 1988) ("A careful reading of the constitutional minutes establishes that the
provisions in article VIII were intended to permit the broadest possible access to and use
of state waters by the general public." (quoting Wernberg v. State, 516 P.2d 1191, 1198-
99 (Alaska 1973))).
84 See AS 38.05.126 (recognizing constitutional right of public access to
navigable and public water).
85 AS 38.05.965(21).
86 Some other jurisdictions also recognize groundwater as a public trust
resource, such as Hawai'i, In re Water Use Permit Applications , 9 P.3d 409, 445 (Haw.
2000), and Vermont, Vt. Stat. Ann. tit. 10, § 1390(5). But some jurisdictions have not
extended the doctrine or have limited its applicability. See, e.g., Env't L. Found. v. State
Water Res. Control Bd., 237 Cal. Rptr. 3d 393, 402 (Cal. App. 2018) (holding public
trust doctrine applicable to groundwater extraction only where such extraction impacts
(continued...)
-40- 7658
----------------------- Page 41-----------------------
The trust relationship serves as a basis for the State's authority to manage
87
the use of and access to trust resources for "beneficial uses or public purposes." The
88
public trust doctrine has been used to restrain governmental use of public resources, but
it also enables the State to recover damages from third parties for harm to trust
89
resources. To make a public trust claim, the government must show that a party caused
unreasonable interference with the public's ability to enjoy a public trust resource.90
The superior court found that the public's ability to use and enjoy the
groundwater was affected by sulfolane contamination. The court noted that "[c]lean
water is critically important to the City" and "more than 7,000 people rely on the
groundwater for domestic and commercial water needs." The public could no longer
safely use the groundwater for these needs because of the sulfolane contamination.
86 (...continued)
navigable waterways).
87 State, Dep't of Nat. Res. v. Alaska Riverways, Inc., 232 P.3d 1203, 1211-12
(Alaska 2010); see also Brooks v. Wright, 971 P.2d 1025, 1030 (Alaska 1999).
88 See Kanuk ex rel. Kanuk v. State, Dep't of Nat. Res., 335 P.3d 1088, 1102
(Alaska 2014) ("[O]ur past application of public trust principles has been as a restraint
on the State's ability to restrict public access to public resources. . . .").
89 Owsichek v. State, Guide Licensing & Control Bd., 763 P.2d 488, 495 n.12
(Alaska 1988) (describing In re Steuart Transp. Co., 495 F. Supp. 38, 40 (E.D.Va.1980)
as illustrative of public trust basis for "federal and state governments to recover damages
for migratory waterfowl killed in oil spill"); see also Allan Kanner, The Public Trust
Doctrine, Parens Patriae, and the Attorney General as the Guardian of the State's
Natural Resources, 16 DUKE ENV 'T L. & POL'Y F. 57, 94 (2005) (citing case law from
New Jersey, Maine, and Maryland to support claim that "[t]he right of a state to recover
compensatory damages for the destruction of natural [resources] is well established").
90 Kanner, supra note 90 at 59 (citing WILLIAM H. RODGERS, HORNBOOK ON
ENVIRONMENTAL LAW 176 (1977 & Supp. 1984)).
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Although the exact nature of the risk posed by sulfolane remains to be understood, there
was extensive information in the record to support the superior court's conclusion that
it presented a danger to public health and welfare. There was also sufficient evidence
in the record that the contamination was caused by "unreasonable" conduct. Williams
itself treated sulfolane as a hazardous substance and was aware of potential, if not yet
established, environmental impacts. And at least by 1996, Williams was aware that
sulfolane was entering the groundwater. Yet Williams used inappropriate wastewater
treatment practices, such as directing sulfolane into the wastewater treatment system
despite being warned by the sulfolane manufacturer not to do so and knowingly using
corroded sumps and leaky wastewater lagoons. Williams unreasonably interfered with
the public's use of groundwater resources, and the State could properly pursue damages
for that interference.
Williams also argues that even if a right to uncontaminated groundwater
exists, awarding damages for its violation would result in an unlawful double assessment
of penalties. Williams points out that the superior court determined that imposing
damages for the cost of restoring the aquifer to its original condition in addition to
imposing damages for the cost of the piping system would be an "inappropriate double
assessment of damages." Williams contends that it would therefore be irrational for the
court to award both damages for the piping and damages to compensate the public for
the loss of the option to choose well water as that, too, would be an inappropriate double
assessment.
We disagree with Williams's characterization of the damages as a double
assessment. The relevant statutes provide for specific forms of recovery for violations
of AS 46.03. Subsection .760(a) provides for civil assessments within a determined
range to reflect "reasonable compensation in the nature of liquidated damages for any
adverse environmental effects caused by the violation," "reasonable costs incurred by the
-42- 7658
----------------------- Page 43-----------------------
state in detection, investigation, and attempted correction of the violation," and
"economic savings realized by" the violator due to their noncompliance. (Emphasis
added.) Section .780 allows costs for restoration following harm to natural resources,
providing for damages in "an amount equal to the sum of money required to restock
injured land or waters, to replenish a damaged or degraded resource, or to otherwise
91
restore the environment of the state to its condition before the injury."
The superior court explained that the piped water system "substantially
replaced the damaged aquifer" in "an economic usage sense," and for this reason
awarding the cost of restoring the aquifer in addition to the cost of the piping would be
a double recovery. The court also determined that awarding restoration costs twice,
under both subsection .760(d) and subsection .780(b), would be duplicative because
these were the same categories of loss.
However, the superior court found that the public's loss of its ability to
access uncontaminated groundwater was an independent harm that was not addressed by
providing alternate water supplies. We agree. The superior court explained that the loss
of access is an independent harm: the plume might migrate further to areas that do not
have piping and, consequently, alternatives would be inconvenient and limited. New
construction or uses - including subsistence uses like growing food - within the
existing plume but outside the piping area will be affected by the limited alternative ways
to obtain clean water. Furthermore, the damages awarded for loss of groundwater were
neither restoration damages covered by section .780 nor a cost expended by the State in
92 under subsections .760(a)(2) or .760(d); rather,
"attempted correction of the violation"
91 AS 46.03.780(b).
92 See AS 46.03.760(a)(2); see also AS 46.03.760(d) (detailing responsible
party's liability for state's costs "associated with the abatement, containment, or removal
(continued...)
-43- 7658
----------------------- Page 44-----------------------
the groundwater damages were compensation for a distinct "adverse environmental
effect[]" provided for in subsection .760(a)(1). Awarding damages based on the loss of
groundwater access was not duplicative or unfounded, and the superior court did not
abuse its discretion by awarding compensation for this loss.
Williams raises a third challenge to the superior court's award under section
.760. Williams contends that, even if a groundwater access right exists, it could only be
compensated as natural resource damages under section .780. Williams does not explain
why section .760 would not apply. The language in subsection .760(a)(1) allowing
compensation for "any adverse environmental effects" is broad and allows for recovery
related to the groundwater access issue.
Williams further claims that AS 46.03.760(a)(1) "requires a specific finding
on the 'degree to which [Williams's releases of sulfolane] degraded the existing
environmental quality.' "93 Williams contends that the superior court did not, and could
not, make such a finding. We have not had occasion to interpret whether this subsection
requires such a finding, or whether it is only one of many possible factors a court may
consider "when applicable."94 But it is unnecessary to decide because the extent of
92 (...continued)
of the pollutant" and "restoration of the environment").
93 Quoting AS 46.03.760(a)(1).
94 The statute provides that the sum to be assessed for a violation shall reflect,
when applicable,
(1) reasonable compensation in the nature of liquidated
damages for any adverse environmental effects caused by the
violation, which shall be determined by the court according
to the toxicity, degradability, and dispersal characteristics of
the substance discharged, the sensitivity of the receiving
(continued...)
-44- 7658
----------------------- Page 45-----------------------
degradation in this case was established: previously potable water had been determined
to be unusable for drinking and related purposes throughout the three-and-a-half-mile
long - and spreading - plume.
It is unclear why Williams claims the court "could not" have made a finding
on the degree of degradation. Even if true, that argument is unpersuasive because
Williams fails to understand the purpose of liquidated damages in redressing
environmental violations. As the superior court explained, liquidated damages may be
95
used when the measure of actual damages is uncertain. The uncertainty often inherent
in determining the environmental impacts of pollution is, in part, a reason that liquidated
damages were made available by the legislature. It would be nonsensical in this statutory
context to preclude an award of liquidated damages due to uncertainty as to the exact
degree of degradation. The civil assessment statute provides for liquidated damages
within a predetermined range, limited by a ceiling established by the legislature, to
enable an award for damages that are uncertain and difficult to value. The court's choice
of damages within that range was guided by factors listed in the statute and does not
reflect an abuse of discretion.
Williams adds that there can be no finding that sulfolane "contaminated"
the aquifer because 18 AAC 75.990(22) defines "contaminated groundwater" as water
"containing a concentration of a hazardous substance that exceeds the applicable cleanup
94 (...continued)
environment, and the degree to which the discharge degrades
existing environmental quality. . . .
AS 46.03.760(a).
95 See Henash v. Ipalook, 985 P.2d 442, 447 (Alaska 1999) (discussing
various r oles for liquidated damages, including as penalty to assist in deterrence or as
compensation for damages that are "too obscure and difficult of proof" (quoting
Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 583-84 (1942))).
-45- 7658
----------------------- Page 46-----------------------
level." It claims that because no such cleanup level has been set, there is no
"contamination" of the groundwater and instead the State was given a "free pass to
recover without an objective standard." This argument is unpersuasive. As discussed,
18 AAC 75 regulates and facilitates site cleanup. It does not purport to define or set out
the measures for all potential damages available under the environmental conservation
statutes. Thus, applying a definition of "groundwater contamination" drawn from these
cleanup regulations is largely irrelevant to determine whether the aquifer was
contaminated in violation of a provision of AS 46.03. The superior court correctly said
as much in its orders. Second, the provisions that are related to cost recovery in
18 AAC 75.910 were promulgated pursuant to AS 46.03.760(d) and AS 46.03.822 (as
well as other statutes not relevant here). To the extent that definitions from the
administrative regulations apply to damages assessments in AS 46.03, they would apply
only to the calculation of "actual damages caused to the state by the violation" associated
with remediation and restoration under AS 46.03.760(d), rather than to liquidated
damages for "any adverse environmental effects caused by the violation" under
96 Williams acknowledges as much, stating that "18 AAC 75.910
subsection .760(a)(1).
expressly covers claims under 46.03.760(d)."
As a final challenge to the access-to-groundwater damages award under
section .760, Williams argues that the assessment of liquidated damages against it,
covering the eighteen and a half years that Williams operated the refinery, is punitive
rather than "compensatory and remedial in nature" as required by the civil assessments
statute.97 Williams claims that punitive damages are not permitted and that it "lawfully"
96 And as the State points out, subsection .760(a) "does not even use the word
'contamination,' " and instead uses the term "adverse environmental effect."
97 AS 46.03.760(b).
-46- 7658
----------------------- Page 47-----------------------
used sulfolane because "DEC allowed Williams to leave it in the ground . . . and never
once told Williams it was violating the law by doing so." We are not persuaded. When
Williams reported it had detected sulfolane in the refinery groundwater, DEC experts
expressed uncertainty and some concern about the substance, for which there was a
paucity of toxicity information. DEC admitted its lack of information and advised
Williams to monitor its releases while DEC investigated the hazardous nature of
sulfolane. These actions are not equivalent to permitting sulfolane releases. Moreover,
as the State correctly argues, Williams's use of sulfolane may have been allowed, but its
releases into the soil and water were not; such releases would have required a permit that
Williams did not obtain.98
We note that CERCLA's regulatory scheme and analogous state statutes
such as AS 46.03.822 impose strict liability, even retroactively, and are constructed so
that polluters - not the public - bear the risk of uncertainty that the substances they use
99
or dispose of may later be considered hazardous and subject polluters to liability.
Holding businesses liable for pollution caused by activities from which they profited is
98 The superior court concluded likewise in an order denying summary
judgment to both Williams and the State for various claims: " '[U]npermitted' means
without 'the authority of a valid permit issued by the department or by the Environmental
Protection Agency.' Because [Williams] has conceded that it did not have a permit
issued by the DEC or EPA to release sulfolane, its release of that substance was
unpermitted." And testimony at trial demonstrates that Williams's employees knew they
did not have the requisite permits to release sulfolane. See AS 46.08.900 (defining
"release" and "permitted release").
99 See United States v. Ne. Pharm. & Chem. Co., 810 F.2d 726, 732 (8th Cir.
1986) (finding CERCLA applies retroactively); Kodiak Island Borough v. Exxon Corp.,
991 P.2d 757, 762 (Alaska 1999) (finding section .822 analogous to CERCLA in
imposing retroactive liability); see also Burlington N. & Santa Fe Ry. Co. v. United
States, 556 U.S. 599, 622 (2009) (Ginsburg, J., dissenting) (discussing CERCLA's
polluter pays principle).
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not punitive, but is rather a compensatory remedy to spread costs among responsible
parties so they are not borne solely by the public. For these reasons, it is not punitive to
assess damages over the entire period of Williams's refinery operations in North Pole.
In sum, the superior court did not err by assessing damages under
subsection .760(a) for the adverse effect of sulfolane pollution on groundwater and its
impact on the public's ability to access the groundwater for consumption. The superior
court also properly interpreted the scope of damages permitted by sections .760 and .780,
made the requisite factual findings without clear error, and properly exercised its
discretion when determining awards that were neither duplicative nor punitive.
4. It was error to issue injunctive relief by reference to supporting
documents, but the superior court did not err by granting
declaratory relief.
The superior court awarded injunctive and declaratory relief to the State and
Flint Hills under AS 46.03.765 for PFAS-related claims.100
The court found "PFOS and
PFOA are hazardous substances" under AS 46.03.822 and are "[t]he compounds
encompassed by the acronym PFAS." The court also found that no evidence was
100 AS 46.03.765 affords the court "jurisdiction to enjoin a violation of this
chapter . . . or of a regulation, a lawful order of the department, or permit, approval, or
acceptance, or term or condition of a permit, approval, or acceptance issued under this
chapter."
Williams also argues that the superior court erred when it chose not to refer
onsite PFAS claims to DEC under the doctrine of primary jurisdiction. When the
superior court properly has jurisdiction, its decision to refer an issue to an executive
agency is plainly within its discretion and is informed by factors such as judicial
economy and administrative expertise. See Seybert v. Alsworth , 367 P.3d 32, 39 (Alaska
2016). The superior court did not abuse its discretion, especially in light of years of
pretrial litigation of this issue and DEC's determination that Williams was responsible
for PFAS and other hazardous substance contamination during its tenure. Referral would
not have served the purposes of the primary jurisdiction doctrine.
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presented at trial that "PFAS-related products were used or PFAS releases occurred
during Flint Hills'[s] tenure at the [refinery]." It therefore declared Flint Hills was not
a responsible party under section .822 for onsite PFAS contamination at the refinery.
The superior court concluded in paragraph 3(a) of the judgment that Williams was
"strictly, jointly, and severally liable for sulfolane, [and] PFAS . . . releases, including
liability for the State's future response costs." It therefore declared in paragraph 3(b) that
the State could recover 75% of its future costs related to the piped water system. In
paragraph 3(d) of the judgment, the court further ordered Williams to "perform and pay
for remediation and cleanup efforts as directed by DEC with respect to sulfolane
groundwater contamination beyond the . . . Refinery property and with respect to PFAS
contamination at the Refinery property." And under paragraph 3(e), the superior court
ordered Williams to
i. perform monitoring and reporting of sulfolane
groundwater contamination beyond the . . . Refinery
property boundary required under [DEC] approved
plans;
ii. address PFAS soil and groundwater contamination at
the Refinery property in accordance with DEC
requirements, including characterization, monitoring,
reporting, containment, and cleanup; [and]
iii. otherwise comply with DEC's site cleanup rules,
including 18 AAC 75 and other applicable state laws,
for sulfolane contamination beyond the Refinery
property and PFAS contamination at the Refinery
property.
Additionally, the court ordered Williams to "indemnify, defend, hold harmless, and
reimburse Flint Hills for 100% of all future costs, expenses, claims, and damages
incurred related to [onsite] PFAS contamination."
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a. Challenges to the injunctive relief
Williams argues that awarding injunctive relief to the State was improper
because the State "failed to put on evidence that irreparable injury would result absent
injunctive relief." While we have recognized that irreparable harm and inadequate
101
remedies at law are required elements for common law injunctive relief, the State
argues that AS 46.03.765 grants the court "jurisdiction to enjoin a violation" of Title 46,
102
Chapter 3, negating the need for the State to show either element. In its reply,
Williams argues that AS 46.03.765 permits only "temporary or preliminary relief" and
is meant to provide DEC "with a tool to stop a polluter from continuing to release
contaminants until final relief may be obtained." But the statute does not prohibit
permanent injunctions; it merely provides additional requirements for temporary or
preliminary relief due to the reduced opportunity for due process in such situations,103
further indicating that permanent injunctions - which do not entail those same due
process concerns - are permitted. And even those additional requirements for
104
temporary or preliminary relief fall short of requiring irreparable harm. Williams's
101 Lee v. Konrad, 337 P.3d 510, 517 (Alaska 2014) ("Equitable injunctive
relief is an extraordinary remedy that is appropriate only where the party requesting relief
is likely to suffer irreparable injury and lacks an adequate remedy at law.").
102 See LeDoux v. Kodiak Island Borough, 827 P.2d 1121, 1123 (Alaska 1992)
("Where a statute specifically authorizes injunctive relief, the plaintiff need not show
either irreparable injury or lack of an adequate remedy at law." (quoting Carroll v. El
Dorado Ests. Div. No. 2 Ass'n, Inc., 680 P.2d 1158, 1160 (Alaska 1984))).
103 See AS 46.03.765 ("In actions brought under this section, temporary or
preliminary relief may be obtained upon a showing of an imminent threat of continued
violation, and probable success on the merits, without the necessity of demonstrating
physical irreparable harm.").
104 See id.
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arguments that the injunction should be vacated for failing to meet necessary elements
are therefore unpersuasive.
Williams next argues that paragraphs 3(d) and 3(e) of the court's final
judgment violate Alaska Civil Rule 65(d) for being too "vague" and "open-ended." Civil
Rule 65(d) provides in relevant part that "[e]very order granting an injunction . . . shall
set forth the reasons for its issuance; shall be specific in terms; [and] shall describe in
reasonable detail, and not by reference to the complaint or other document, the act or acts
sought to be restrained." First, Williams argues paragraph 3(d) of the judgment is
impermissibly vague because: (1) "it identifies no 'remediation and cleanup efforts' that
Williams must undertake and the Judgment refers to documents that did not yet exist";
(2) "the injunction's geographic scope to remedy and clean up sulfolane is apparently
limitless"; and (3) "there is no time limit on Williams'[s] obligations, which exposes
Williams to liability for future costs to remedy releases to which it played no part."
Williams challenges paragraph 3(e) of the injunction for similar reasons: it "broadly
purports to make Williams responsible forever for sulfolane contamination 'beyond the
Refinery property,' " and "incorporates all 'applicable' Alaska laws, without further
guidance or specificity" leaving Williams unable to determine exactly what conduct is
required.105
105 See Hughey v. JMS Dev. Corp., 78 F.3d 1523, 1531 (11th Cir. 1996)
(explaining Federal Rule of Civil Procedure 65 regarding injunctions "serves to protect
those who are enjoined" by ensuring "an ordinary person . . . should be able to ascertain
from the document itself exactly what conduct is proscribed" (quoting 11A CHARLES
ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL PRACTICE AND
PROCEDURE § 2955 (1995))); see also Fed. R. Civ. P. 65(d) ("Every order granting an
injunction and every restraining order must: (A) state the reasons why it issued; (B) state
its terms specifically; and (C) describe in reasonable detail - and not by referring to the
complaint or other document - the act or acts restrained or required.").
(continued...)
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The State argues that the order satisfies Civil Rule 65(d)'s specificity
requirements by drawing comparisons to an Idaho federal district court opinion - Idaho
106
Conservation League v. Atlanta Gold Corp. The State argues that, similar to Idaho
Conservation League, the court properly ordered Williams "into compliance . . . without
directing every step . . . because the duration of the contamination is indefinite and
Williams'[s] violations are longstanding and serious."107
The State next argues that the
"site clean-up rules - which the judgment refers to - are specific enough to put
108
Williams on notice of what it must do," a fact demonstrated after the judgment when
"Williams managed to twice submit - and gain approval of - monitoring and
characterization plans." Third, the State argues that the cases upon which Williams relies
in labelling the injunction as an "obey the law" injunction are distinguishable. Finally,
the State disregards Williams's concerns over the injunction's geographically and
temporally unlimited reach because the sulfolane plume is similarly unlimited. Williams
replies that the State fails to show that "the injunction meets Rule 65(d)'s specificity
requirements" and that the distinctions between the cases Williams cites and the facts at
105 (...continued)
Williams does not specifically challenge paragraph 3(e)(ii) of the judgment.
To the extent paragraph 3(e)(ii) is distinct from paragraph 3(d) - both require PFAS
cleanup but the latter requires PFAS "characterization, monitoring, reporting [and]
containment" at the refinery - we consider any argument against it insufficiently briefed
and therefore waived.
106 879 F. Supp. 2d 1148 (D. Idaho 2012) (upholding as proper under Federal
Rule of Civil Procedure 65(d) trial court's injunction directing defendants to comply with
existing Clean Water Act permits without more specificity because parties, not court, are
better placed to determine exact method of compliance).
107 Cf. id. at 1164.
108 See 18 AAC 75.325-.390 (describing in detail site cleanup rules and site
characterization plans).
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issue are immaterial.
We agree that the injunctive relief did not satisfy Civil Rule 65(d)'s
specificity requirements. Rule 65(d) requires that injunctions "describe in reasonable
detail, and not by reference to the complaint or other document, the act or acts sought to
be restrained." The paragraphs of the judgment that Williams challenges - paragraphs
3(d), 3(e)(i), and 3(e)(iii) - do not describe on their own, with reasonable specificity,
the remediation and cleanup efforts Williams will need to undertake. The court's
accompanying Memorandum of Decision includes more specificity, but the parties do
not discuss whether it is specific enough to satisfy Rule 65(d) or whether mere reference
to the Memorandum of Decision satisfies Rule 65(d). We remand the judgment for
injunctive relief for more clarity and to explicitly incorporate - not by reference - the
language from the Memorandum of Decision, statutes, administrative code, and other
documents to which the superior court refers.
b. Challenges to the declaratory relief
Williams next challenges the superior court's declaratory orders on PFAS
at paragraph 3(a) of the court's final judgment. Williams argues that the court
improperly declared Williams liable for PFAS generally when only PFOS and PFOA
were ever mentioned at trial; that "the State and Flint Hills only presented evidence that
Williams used a product that included PFOS," and that Flint Hills should shoulder some
of the blame for PFAS.109
109 As it did with respect to the injunctive relief discussed above, Williams
argues that the declaratory relief for PFAS improperly extends into the future. Because
the court's o rder holds Williams liable for future costs related to the PFAS it released
prior to the trial date, this portion of the court-awarded relief is sufficiently specific and
does not improperly extend into the future.
Williams also argues that the "declaratory relief in favor of Flint Hills . . .
(continued...)
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As Williams acknowledges, " 'PFAS' is not a single substance, but an
umbrella term referring to a diverse category of man-made chemicals," including PFOS,
110
PFOA, and more. At trial, Williams representative Randy Newcomer testified that
between 1991 and 2000 Williams used only one company's brand of aqueous foams in
its fire response practices, and he agreed that the foams contained "perfluoroalkyl
substances" including - but not necessarily limited to - PFOS. Dr. Wu also testified
that the company's foams marketed and sold during that time listed "organic
fluorochemicals" as an ingredient, another phrase for the "PFAS class of compounds,"
including "PFOS and PFOA." In addition, Williams admitted that "releases of . . .
perfluorochemicals occurred" during its tenure at the refinery. There was also
contemporary evidence of PFAS contamination more broadly, not just PFOS, in the soil
and groundwater at the refinery. Though Williams points to evidence suggesting that
Flint Hills could have used PFAS during its tenure at the refinery, Williams fails to
109 (...continued)
already was rejected because Flint Hills had an adequate remedy at law." For support,
Williams cites a 2017 pretrial order dismissing Flint Hills's "claims for declaratory
judgment and specific performance" against Williams as barred by res judicata in light
of Flint Hills I, 377 P.3d 959 (Alaska 2016). But the declaratory relief sought in Flint
Hills I concerned sulfolane rather than PFAS, did not involve State claims, and was
dependent on the availability of other legal remedies. Id. at 973-74. Williams does not
explain how these important differences would justify barring declaratory relief based
on res judicata and we see no reversible error on this issue. See Patterson v. Infinity Ins.
Co., 303 P.3d 493, 497 (Alaska 2013) ("A judgment is given res judicata effect by this
court when it is (1) a final judgment on the merits, (2) from a court of competent
jurisdiction, (3) in a dispute between the same parties (or their privies) about the same
cause of action." (quoting Angleton v. Cox, 238 P.3d 610, 614 (Alaska 2010))).
110 See supra note 1 (defining PFAS).
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identify any evidence that Flint Hills actually did use PFAS-containing products.111
Because the record shows that Williams released PFAS during its tenure,
the burden was on Williams to prove that it did not use particular PFAS chemicals or to
112
establish that another entity was also liable. The superior court did not err when it
declared that no evidence was presented demonstrating Flint Hills used PFAS during its
111 Williams does not raise the argument that Flint Hills should be liable under
AS 46.03.822 for PFAS contamination due to its status as current owner of the facility
from where PFAS was released. See AS 46.03.822(a)(2), .826(9) (assigning liability to
owner of facility from which hazardous substance is released and defining "release"
broadly such that PFAS "leaching" from the refinery could fall within definition); see
also AS 46.03.822(c) (maintaining liability for refinery owners that purchased property
with knowledge of earlier releases of hazardous substance).
On appeal, Williams points to several sections of the record purporting to
show that "Flint Hills used substantial amounts of 'PFAS' in fire-training exercises and
'hot work' at the refinery." Some of that "evidence" consists of Williams's own
proposed findings of fact and testimony from some of its own witnesses speculating
about the source of PFAS detections that occurred "upgradient" (i.e., in the opposite
direction of water seepage) of firefighting areas. Williams also cites a 2018 DEC report
detailing PFAS sampling at the refinery that indicates Flint Hills purchased firefighting
foams, but not that those foams contained PFAS. Williams additionally points us to a
lengthy 2013 environmental report without explaining its relevance, but that report was
excluded from trial on hearsay grounds and, in any event, it suggests Flint Hills
purchased foams without PFOS or PFOA.
To the extent there may have been evidence tying Flint Hills to PFAS
contamination at the refinery, we consider the argument waived for insufficient briefing
and failure to cite relevant evidence in the record. See Casciola v. F.S. Air Service, Inc.,
120 P.3d 1059, 1062-63 (Alaska 2005); Alaska R. App. P. 212(c)(1)(H).
112 See AS 46.03.822; Oakly Enters., LLC v. NPI, LLC, 354 P.3d 1073, 1079-
80 (Alaska 2015) ("The burden of proof is on the party seeking to avoid joint and several
liability . . . ."). Williams had access to the list of PFAS present in the soil and
groundwater at the refinery, and does not identify any place in the record where it
challenged or otherwise indicated it would challenge its liability for specific PFAS.
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time at the refinery, and that Flint Hills was not a responsible party under AS 46.03.822
for PFAS contamination.
5. Williams's right to due process was not violated.
Williams argues that DEC's enforcement a ction and the superior court's
finding of liability under section .822 and subsection .826(5)(a) violated the Due Process
113 114
Clause of the U.S. Constitution and article I, section 7 of the Alaska Constitution
because Williams did not have "fair notice" that its conduct was prohibited.
Williams implies that the hazardous substance statutes and regulations are
too vague to make it clear whether sulfolane fell within the definition and whether
Williams could be liable for its release. Williams claims it relied on agency statements
to understand its responsibility. Williams specifically contends that "DEC told Williams
that sulfolane was not a hazardous substance and not regulated" and that DEC actually
"allowed sulfolane to stay in the ground." As a result it claims that "DEC's actions and
communications gave Williams no notice that its conduct created a substantial risk of
actual harm." Williams also claims that the superior court's "eve-of-trial interpretation"
of the terms "hazardous substance" and "imminent and substantial danger" violated the
principles of fair notice because they were a "reversal" of DEC's initial position and a
prior superior court decision in the case.
Due process requires that a party be given fair notice before it can be
113 "No person shall be . . . deprived of life, liberty, or property, without due
process of law." U.S. Const. amend. V.
114 "No person shall be deprived of life, liberty, or property, without due
process of law. The right of all persons to fair and just treatment in the course of
legislative and executive investigations shall not be infringed." Alaska Const. art. I, § 7.
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115 116
subjected to liability, at least with regard to "criminal or serious civil penalties."
Williams's potential multi-million dollar liability and remediation duties qualify as
117
"serious civil penalties." Whether the constitutional requirements of due process were
118
met is a legal question that we review de novo, but factual determinations such as
119
those regarding the meaning of DEC's communications are reviewed for clear error.
Fair notice is a principle of "basic fairness" which requires that "a statute
115 See State, Dep't of Revenue v. Nabors Int'l Fin., Inc., 514 P.3d 893, 899
(Alaska 2022) (explaining that lack of fair notice, such as through statutory vagueness,
"violates the first essential of due process of law" (quoting Halliburton Energy Servs. v.
State, Dep't of Lab., Div. of Lab. Standards & Safety, Occupational Safety & Health
Section, 2 P.3d 41, 51 (Alaska 2000))).
116 VECO Int'l, Inc. v. Alaska Pub. Offs. Comm'n, 753 P.2d 703, 714 (Alaska
1988).
117 See id. at 706 (civil penalty of $72,600 imposed for alleged violations of
Alaska Campaign Disclosure Act considered "serious civil penalty"). The State argues
that this case does not require fair notice because the hazardous substance statute
operates remedially to impose "compensatory liability" rather than "civil or criminal
punishment ." We agree that sections .760, .780, and .822 are not intended to "punish"
but rather to compensate for environmental damage. See AS 46.03.760(b) (requiring that
civil assessments be "compensatory and remedial in nature" rather than punitive). But
a "penalty" can be narrowly or broadly defined. See Penalty, BLACK'S LAW DICTIONARY
(11th ed. 2019) (first describing a penalty as "[p]unishment imposed . . . for either a
wrong to the state or a civil wrong (as distinguished from compensation for the injured
party's loss)" but then broadly defining civil penalty as "fine assessed for a violation of
a statute or regulation"). We assume without deciding that the large statutory
assessments awarded against Williams may be considered "penalties" to which fair
notice requirements apply.
118 See Nabors Int'l Fin., Inc., 514 P.3d at 898.
119 Burton v. Fountainhead Dev., Inc., 393 P.3d 387, 392 (Alaska 2017).
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120
. . . give adequate notice to the ordinary citizen of what is prohibited." In other words,
a statute must not be so vague that people cannot know what they must do or are
prohibited from doing. We have explained that even if a statute might in some contexts
be too vague to give adequate notice, it "may still pass muster if: (a) there can be no
question as to its applicability to the particular offense involved, and (b) a construction
may be placed upon the statute so that in the future the type of offenses coming within
121
its purview may reasonably be understood." The regulation of economic activity -
such as through antipollution statutes - typically survives a vagueness challenge as long
as there is "legislative language which is not so conflicting and confused that it cannot
be given meaning in the adjudication process."122
In Stock v. State we analyzed whether the broad antipollution provision in
123 Section .710 states that "[a] person may not
AS 46.03.710 was void for vagueness.
pollute or add to the pollution of the air, land, subsurface land, or water of the state."
"Pollution" in turn is defined as
the contamination or altering of waters, land or subsurface
land of the state in a manner which creates a nuisance or
120 Stock v. State, 526 P.2d 3, 8 (Alaska 1974); see also F.C.C. v. Fox
Television Stations, Inc., 567 U.S. 239, 253 (2012) ("A fundamental principle in our
legal system is that laws which regulate persons or entities must give fair notice of
conduct that is forbidden or required.").
121 Stock, 526 P.2d at 8 (internal citations omitted).
122 Lazy Mountain Land Club v. Matanuska-Susitna Borough Bd. of
Adjustment & Appeals , 904 P.2d 373, 383 (Alaska 1995) (quoting Williams v. State,
Dep't of Revenue, 895 P.2d 99, 105 (Alaska 1995)); see also id. (explaining civil
penalties and economic regulation are "subject to a less strict vagueness test" than, for
instance, speech (quoting Vill. of Hoffman Ests. v. Flipside, Hoffman Ests., Inc., 455 U.S.
489, 498-99 (1982))).
123 526 P.2d at 7-13.
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makes waters, land or subsurface land unclean, or noxious, or
impure, or unfit so that they are actually or potentially
harmful or detrimental or injurious to public health, safety or
welfare, to domestic, commercial, industrial, or recreational
use, or to livestock, wild animals, bird, fish, or other aquatic
life.[124]
We acknowledged there might be borderline or de minimis cases when the application
of the statute might be unclear, but we refused to analyze the statute in so abstract a
manner to determine if it was void for vagueness.125 Instead, we looked specifically at
the act for which Stock was convicted: discharging raw sewage into a stream running
through residential areas.126 This act obviously fell within the statutory definition of
"pollution"; even Stock's counsel admitted that a reasonable person would know this.127
We acknowledged that the term "potentially harmful" in the definition of "pollution"
might be vague enough to require a narrowing construction, and we added an element
requiring foreseeability which would be used in future applications.128 But we affirmed
the superior court's finding that Stock had violated the provision because Stock's
124 AS 46.03.900(20) (formerly AS 46.03.900(15)).
125 Stock, 526 P.2d at 9-10 ("Courts have often recognized that the possibility
of difficult or borderline cases will not invalidate a statute where there is a hard core of
cases to which the ordinary person would doubtlessly know the statute unquestionably
applies.").
126 Id. at 10.
127 Id. at 9-11.
128 Id. at 9-10. We determined that "the statute prohibits acts which a
reasonable person would foresee as creating a substantial risk of making water actually
injurious to the statutorily protected interests." Id. at 10.
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129
conduct so clearly fell within the "hard core" of prohibited conduct. Additionally, we
explained that the need for environmental protection, the increasing number of laws and
regulations governing disposal of substances used during commercial activity, and the
need for the legislature to make broad statutes to balance economic growth with
environmental protection all supported our conclusion that the antipollution provisions
at issue were not unconstitutionally vague on their face and that S tock was clearly on
notice that discharging raw sewage into waterways was improper.130
In Williams's case, it is possible that the hazardous substance provisions
of section .822 and the statutory definition of hazardous substances in subsection .826(5)
could be vague in some instances. But the superior court's findings about sulfolane lead
us to conclude sulfolane falls within the "hard core" of the definition of hazardous
substance. And Williams itself treated sulfolane as hazardous. Furthermore, Williams
may have been allowed to use sulfolane, but it knew that it was not permitted to simply
dispose of the substance in any manner it wished. These facts indicate that Williams was
on notice of the potential for liability under a gamut of antipollution statutes, including
those related to hazardous substances. We conclude that the statute is not so
impermissibly vague that it violates Williams's right to due process.
We also disagree that DEC's communications or actions prior to litigation
resulted in a lack of fair notice to Williams.131 DEC's failure to pursue an enforcement
129 Id. at 9-10.
130 Id. at 12-13.
131 The superior court rejected this argument in Williams's cross-motion for
summary judgment because it determined that fair notice would be required only when
an agency "depart[ed] from its long-established regulations or adjudications." But fair
notice requirements apply even when there have not been regulations or adjudications
(continued...)
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132
action with regard to sulfolane was not "acquiescence" to or approval of Williams's
conduct. In its communications with Williams, DEC acknowledged that sulfolane was
not then regulated as a hazardous substance because very little was known about it and
there was a "lack of EPA reviewed toxicity data," and DEC said it first needed to gather
more information regarding sulfolane and the pollution issuing from the refinery. It
required Williams to conduct further monitoring and stated that it would follow up with
further clarification or action. Though Williams claims DEC's communications
constituted "written determinations" that sulfolane did not pose a hazard, DEC
communicated that sulfolane was not regulated at the time, not that it had ultimately
concluded it was not hazardous. We conclude the superior court did not clearly err when
it found DEC had not promulgated prior interpretations about sulfolane in legal briefs,
regulations, or adjudications that Williams might have relied on to claim sulfolane was
not hazardous.133
131 (...continued)
on point. The U.S. Supreme Court has recognized that while agencies have enforcement
discretion and interpretive latitude, if the statutory interpretations are unreasonable or if
the conspicuous inaction appears to be for no reason other than acquiescence, "the
potential for unfair surprise is acute." Christopher v. SmithKline Beecham Corp., 567
U.S. 142, 158 (2012). Agency actions beyond regulations and adjudications serve to
inform regulated entities and therefore are relevant to the fair notice inquiry. However,
as we discuss below, DEC did not cause Williams unfair surprise.
132 See id. (recognizing many reasons for agency lack of enforcement and
finding lack of fair notice where only possible reason was acquiescence).
133 The cases Williams cites as support for its argument are distinguishable on
several grounds, including their stricter CERCLA context that requires the listing of
substances EPA deems hazardous (whereas AS 46.03.822 does not), and their
conclusions that notice was lacking only when the court found the statute ambiguous and
official agency interpretations or guidance were conflicting. See Massachusetts v.
(continued...)
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Agencies are free to create and change policies for matters within their
purview, as DEC did when it decided to regulate sulfolane and treat Williams as a
responsible party. An agency should indicate that it is changing its position and
demonstrate good reasons for such a change, but it does not need to "provide detailed
justifications for every change" and it is not the court's role to ask whether the chosen
134
policy is better or best - only whether it conforms to reason. Based on the evidence
presented at trial, the superior court concluded that DEC reasonably determined sulfolane
to be a "hazardous substance" and that unpermitted disposal was a violation of the
antipollution provisions of Title 46, Chapter 3. We see no error with that conclusion.
Williams also argues that the superior court's own rulings deprived it of due
process because the court promulgated an "eve-of-trial interpretation of 'hazardous
substance' " and "imminent and substantial danger" under section .822 and subsection
.826(5) that contradicted "both the DEC position on sulfolane during 2001-2003 . . . and
the intervening decision of the same court." Williams does not cite case law to support
its claim, does not specify exactly how the superior court acted unlawfully, and does not
indicate how it was prejudiced. We consider arguments that are given cursory treatment
133 (...continued)
Blackstone Valley Elec. Co., 67 F.3d 981, 988, 993 (1st Cir. 1995) (denying, as violation
of fair notice, summary judgment to EPA in enforcement action based on EPA's
categorization of ferric ferrocyanide as " cyanide" under CERCLA, because unclear if
regulatory background indicated it should be so categorized and because EPA took
inconsistent official positions on categorization); Rollins Env't Servs. (NJ) Inc. v. U.S.
E.P.A., 937 F.2d 649, 654 (D.C. Cir. 1991) (concluding it would violate requirements
of fair notice to impose penalty on company because statute was ambiguous and EPA
gave conflicting advice to private parties about how to comply with statute).
134 F.C.C. v. Fox Television Stations, Inc., 567 U.S. 239, 250 (2012).
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135
without any support to be waived. And we do not see how the superior court carrying
out its obligation to interpret the relevant statute - issuing rulings on a matter of law that
was consistently contested throughout the proceedings - could have worked unfair
surprise on Williams or violated its right to fair notice.136
6. Imposing civil liability for past releases was not an
unconstitutional taking.
Williams argues that the superior court's interpretation of
AS 46.03.826(5)(A) is an unconstitutional regulatory or judicial taking under the U.S.
and Alaska Constitutions.137
Williams argues the judgment imposes severe,
unforeseeable retroactive liability, which it could not have anticipated because the
superior court's interpretation of the relevant statutes was a "change in law." Because
this imposition of liability is linked to an identified property interest and it was
accomplished for a public purpose, Williams argues it constitutes a compensable taking.
Williams's argument fails because it continuously characterizes the superior
court's interpretation as a "change in the law," when it is not. Williams merely disagrees
with the interpretation and the factual basis for concluding sulfolane is hazardous.
135 See Hagen v. Strobel, 353 P.3d 799, 805 (Alaska 2015). Furthermore,
"eve-of-trial" is a misleading portrayal o f the court's actions. The court i nformed the
parties eleven days before trial and approximately five weeks before the close of trial
how it planned to interpret the statute. Trial courts are under no obligation to issue such
memoranda about tentative interpretations of the law ahead of trial, and doing so could
only have assisted Williams in preparing its case.
136 See Christopher, 567 U.S. at 161 (explaining court's role in conducting
statutory interpretation when agency adopts interpretation of statutethat does not deserve
deference).
137 "[N]or shall private property be taken for public use, without just
compensation." U.S. Const. amend. V. "Private property shall not be taken or damaged
for public use without just compensation." Alaska Const. art. I, § 18.
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Similarly, Williams mischaracterizes DEC's communications as having previously
"expressly advised Williams that sulfolane was not a concern" but now determining it
to be a hazardous substance. As discussed above, the superior court made factual
findings that DEC never expressly authorized the releases, and these findings are not
138
clearly erroneous. Finally we note that Williams's irresponsible waste management
and sulfolane releases are not conduct linked to "reasonable investment-backed
139
expectations" that takings jurisprudence seeks to protect.
B. Flint Hills's Contractual Indemnification And Statutory Contribution
Claims Against Williams
Flint Hills sought indemnification from Williams under the terms of the
Purchase Agreement for the remediation and litigation costs associated with the offsite
140
sulfolane. Flint Hills also sought statutory contribution from Williams for those
138 Because there was no "change in law" and no retroactive liability imposed
here, we need not reach the arguments of Williams and the State concerning whether
retroactive liability under the hazardous substance statute effects an unconstitutional
taking.
139 State, Dept. of Nat. Res. v. Arctic Slope Reg'l Corp., 834 P.2d 134, 139
(Alaska 1991) (quoting Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1005 (1984))
(explaining that DNR's use of proprietary information from oil companies did not upset
reasonable investment-backed expectations because it did not affect company's actions
or investments); see Penn Cent. Transp. Co. v. City of New York, 438 U.S. 104, 124
(1978); see also Arctic Slope, 834 P.2d at 140-45 (further finding no unfair surprise
given statute authorizing DNR use and concluding regulatory statute was legitimate use
of state's police power for public welfare).
140 We again note that the hazardous substance statute holds ineffective any
"indemnification, hold harmless, or similar agreement . . . to transfer liability. . . from the
owner or operator of a facility." AS 46.03.822(g). But the statute also allows for
indemnification and hold harmless agreements between liable parties to shift financial
responsibility. Id.
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141
costs. The superior court determined that the Purchase Agreement terms barred Flint
Hills's claim for indemnification because it had contributed to the sulfolane pollution,
but that Flint Hills could seek contribution pursuant to AS 46.03.822(j).
Williams disputes the superior court's interpretation of the Purchase
Agreement. It first argues that Flint Hills assumed responsibility for the offsite sulfolane.
Williams also contends that the Purchase Agreement's indemnification provision is the
sole remedy available to Flint Hills and therefore the superior court erred by allowing
statutory contribution. Williams also argues that any award against it - whether
through indemnity or contribution - is subject to the Environmental Cap negotiated in
the Purchase Agreement. Because the superior court did not err when it interpreted the
parties' allocation of liabilities and the remedies in the Purchase Agreement, we affirm
the court's determinations regarding Flint Hills's claims against Williams.
1. Overview of the Purchase Agreement's indemnification and
remedies provisions
Article X142
of the Purchase Agreement contains detailed provisions
regarding financial liability between the parties for litigation or damages incurred
following the purchase. Article X cross-references Section 10.2(a)(iv) of the "Disclosure
Schedule" appended to the Purchase Agreement. That section of the Disclosure
Schedule, entitled "Known Environmental Matters," begins with a sentence fragment
stating, "Any and all costs of clean-up, monitoring, corrective actions and compliance
141 AS 46.03.822(j) enables liable parties to "seek contribution from any other
person who is liable under (a) of this section." To resolve a claim for contribution, "the
court may allocate damages and costs among liable parties using equitable factors
determined to be appropriate by the court."
142 The Purchase Agreement refers to articles using Roman numerals but
sections within using ordinary Arabic numerals. Thus it refers to the article as "Article
X," but sections within the Article as "Section 10.2," for example.
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with regulations incurred after the Effective Time with respect to contamination
specifically identified in the referenced figures, tables and text described below." The
following sentence adds detail, stating that "Buyer has agreed to assume full
responsibility for all existing, known contamination at the Real Property specifically
identified in the referenced figures, tables and text described below." The Disclosure
Schedule also provides that
Buyer understands and acknowledges that the levels of
Hazardous Materials measured in monitoring wells and
contained in the figures, tables, and text below will vary over
time, and that Buyer is responsible for such normal
variations, as well as any changes in such contamination
resulting from Buyer's actions or omissions after the
Effective Time. . . . [T]he Buyer further understands that the
data is representative of site conditions and can be used to
support reasonable conclusions about present contaminant
concentrations at the locations sampled and contaminant
contours outside those locations.
Listed in the Disclosure Schedule is a table entitled "Sulfolane Data (July 2001 -
September 2001) for North Pole Refinery." The table indicates varying concentrations
of sulfolane were detected at monitoring wells located on the refinery property, including
near the property boundaries.
Section 10.2(a)(iii) of the Purchase Agreement states that "Seller shall
indemnify, defend and hold Buyer . . . harmless, from and against any and all Damages
incurred by [Buyer] in connection with or arising or resulting from . . . the possession,
ownership, use, or operation of the Assets prior to the Effective Time."143 However, that
provision's general language is qualified by various exceptions. Specifically, that
subsection provides that
143 "Effective Time" refers to the closing date of asset transfer, March 31,
2004.
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Seller shall have no duty to indemnify under this Section
10.2(a)(iii) (A) with respect to Buyer's obligations under
[144]
Section[] . . . 10.2(b)(v)(C) [matters set forth on the
Disclosure Schedule] . . . , (B) to the extent that Damages are
caused or contributed to by Buyer's operations, actions or
omissions after the Effective Time and/or (C) with respect to
any Environmental Claim.
The latter type of claim is "covered exclusively by the provisions of Section 10.2(a)(iv)."
Section 10.2(a)(iv), which governs and serves to define "Environmental
Claims," states that Williams will indemnify Flint Hills for damages arising from a broad
enumerated list "except to the extent that Damages are caused or contributed to by
Buyer's operations, actions or omissions after the Effective Time." The matters listed
for which Williams retains responsibility include in relevant part:
[145] existing prior to the
(A) any Environmental Condition
Effective Time, at, on or under or arising, emanating, or
flowing from any of the Assets, or from the property
underlying the Real Property, whether known or unknown as
of the Effective Time [including damages to third parties
"arising therefrom."], . . . but excluding (i) any and all costs
of cleanup, monitoring, corrective actions and compliance
with regulations incurred after the Effective Time with
respect to the matters set forth on Section 10.2(a)(iv) of the
Disclosure Schedule. . . ;
144 Section 10.2(b) covers indemnification by the Buyer and states that "Buyer
shall indemnify, defend and hold Seller . . . harmless, from and against any and all
Damages incurred by [Seller] in connection with or arising . . . from . . . (v)(C) any and
all costs of cleanup, monitoring, corrective actions and compliance with regulations
incurred after the Effective Time with respect to the matters set forth on . . . the
Disclosure Schedule."
145 The Purchase Agreement defines "Environmental Condition" as "any
condition existing on, at or originating from, each property included within the Assets
which constitutes, (a) a Release on, at or from such property of any Hazardous Materials
or (b) a violation of any applicable Environmental Laws or any Environmental Permits."
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(B) [damages to third parties] arising out of or related to any
Environmental Condition to the extent (i) not located on the
Assets or the property underlying the Real Property and (ii)
existing prior to the Effective Time;
(C) payment of penalties and fines assessed or imposed by
any Governmental Authority arising out of or related to any
Environmental Condition existing prior to the Effective
Time; and
(D) any Damages that arise, directly or indirectly, from the
Release, generation, use, presence, storage, treatment and/or
recycling of any Hazardous Materials or Petroleum Products
by Seller or from the possession, use, ownership, or operation
of the Assets prior to the Effective Time, or by a third party
if any such Hazardous Materials or Petroleum Products were
generated or used by Seller . . . but excluding (i) any and all
costs of cleanup, monitoring, corrective actions or
compliance with regulations incurred after the Effective Time
with respect to the matters set forth on Section 10.2(a)(iv) of
the Disclosure Schedule. (Emphasis added.)
In an effort to ensure more certainty regarding the extent of future
indemnification obligations, the parties included a damages cap for indemnification, with
146 And we previously concluded that the
a specific Environmental Cap of $32 million.
Cap applies to all environmental liabilities.147
The parties further agreed that remedies provided in the Purchase
Agreement would be exclusive, with certain exceptions. Section 10.5 of the Agreement
states:
146 Section 10.4(b) provides that "the maximum amount of indemnifiable
Damages which may be recovered by [Buyer] from Seller . . . and by [Seller] from Buyer
arising out of, resulting from or incident to the matters enumerated in Section 10.2(a) or
Section 10.2(b) shall be the Environmental Cap with respect to any and all
Environmental Claims."
147 Flint Hills I, 377 P.3d 959, 976 (Alaska 2016).
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Except for (a) any equitable relief, including injunctive relief
or specific performance to which any Party hereto . . . may be
entitled, . . . the indemnification provisions of this Article X
shall be the sole and exclusive remedy of each Party . . . with
respect to any and all Actions or Damages arising out of this
Agreement from and after the Closing.
2. The superior court did not erroneously conclude that the
Purchase Agreement limited Flint Hills's liability.
The superior court considered both the language of the contract and
testimony regarding the circumstances of negotiation and determined that Flint Hills had
assumed responsibility only for sulfolane that was known and onsite at the time of
purchase. This meant that Williams had a duty to indemnify Flint Hills for offsite
sulfolane contamination - though this duty was potentially limited by Flint Hills's own
actions, the Environmental Cap, and the remedies provisions of the contract.
The superior court noted that the Purchase Agreement's Disclosure
Schedule was entitled "Known Environmental Matters" and referred to "contamination
specifically identified" in the Disclosure Schedule. The court also noted that the
Disclosure Schedule provided that Flint Hills would be fully responsible for "[a]ny and
all costs of . . . corrective actions and compliance with regulations incurred" after the sale
for "all existing, known contamination at the Real Property," which was specifically
identified in the Disclosure Schedule. The court found that "at the Real Property"
supported the interpretation that Flint Hills assumed solely onsite contamination.
(Emphasis added.) The court added that the studies listed in the Disclosure Schedule
"did not identify contamination that was not 'at' the Refinery property - i.e., outside the
Real Property's boundaries."
The superior court also analyzed the language in Section 10.2(a)(iv)(A),
which referred to liabilities that Williams retained for "any Environmental Condition . . .
at, on or under or arising, emanating, or flowing from any of the Assets, or from the
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property underlying the Real Property," excluding the conditions on the Disclosure
Schedule. The court contrasted this subsection's language with that of 10.2(a)(iv)(B),
which referenced Williams's retained liability for harms arising from an Environmental
Condition "(i) not located on the Assets or the property underlying the Real
Property . . . ." The court concluded that the onsite and offsite specifications meant
subsection (A) referred solely to onsite contamination, and by extension, so did the
Disclosure Schedule. Therefore, the court concluded that Williams retained liability for
sulfolane contamination existing offsite at the time of the asset transfer, even if that
contamination was caused by migration of a pollutant that had originated onsite and was
disclosed in the Schedule.
Additionally, the superior court relied on trial testimony to clarify the
assumption-of-liabilities issue. Representatives of both parties described an "our
watch/your watch" approach where each party would retain responsibility for issues
caused during their operations, with the very narrow exceptions enumerated in the
Disclosure Schedule. Witnesses for both parties agreed that the Disclosure Schedule did
not explicitly refer to offsite contamination, and the court concluded that the intent of the
parties was that Flint Hills would assume liability for the sulfolane located onsite at the
time of purchase.
Williams argues that the court misconstrued the plain language of the
Agreement when it concluded that Flint Hills had not assumed liability for offsite
sulfolane. First, Williams claims the court incorrectly concluded that the contract
distinguished onsite/offsite sulfolane and that Section 10.2(a)(iv)(A) excluded offsite
matters. Williams argues that subsection (A) in fact applies to both onsite and offsite
conditions, because it refers to conditions "at, on or under or arising, emanating, or
flowing from any of the Assets or from the property." It argues that "arising, emanating,
or flowing from" would be superfluous if it related solely to onsite conditions, which
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would have been properly encapsulated by "at, on or under." Similarly, Williams points
to the broad definition of "Environmental Condition" in the contract - "any condition
existing on, at or originating from , each property" - to support its contention that a
disclosed substance might migrate offsite yet remain part of Flint Hills's assumed
responsibilities. Second, Williams argues that the superior court erred by relying on
extrinsic evidence to assist with the interpretation of the Purchase Agreement. Williams
claims that reference to extrinsic evidence violated Texas contract law governing the
agreement.
We conclude that the superior court's inferences about the parties' intent,
based on extrinsic evidence, were supported by substantial evidence. We further
conclude, from these inferences and from our de novo review of the contract language,
that the superior court did not err by determining Williams retained liability for offsite
sulfolane.
3. The superior court did not err by concluding Williams retained
responsibility for offsite sulfolane.
We apply Texas law to the interpretation of the Purchase Agreement; the
parties chose Texas law to govern the Agreement and neither party disputes its
148
application here.
148 See, e.g., Jarvis v. Aetna Cas. & Sur. Co., 633 P.2d 1359, 1363 n.5 (Alaska
1981) (declining to disturb parties' choice of law); see also In re Newport Plaza Assocs.,
L.P., 985 F.2d 640, 644 (1st Cir. 1993) ("When opposing parties agree to the source of
the substantive law that controls their rights and obligations, and no jurisdictional
concerns are present, a court is at liberty to accept such an agreement without
independent inquiry."); Schiavone Constr. Co. v. Time, Inc., 847 F.2d 1069, 1076 n.3 (3d
Cir. 1988) (permitting parties and lower courts' consent as to choice of law to control
when there is no reason to disturb that agreement); Tidler v. Eli Lilly & Co., 851 F.2d
418, 421 (D.C. Cir. 1988) (allowing court to assume choice of law was correct since
neither party raised the issue).
(continued...)
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The language in the Purchase Agreement is ambiguous. On one hand, its
definition of Environmental Condition and the language about such conditions in Section
10.2's indemnification provisions appear to be extremely broad; they could therefore
apply to both onsite and offsite pollution. The carve-out for sulfolane in the Disclosure
Schedule would, by extension, include sulfolane pollution that had migrated offsite prior
to the purchase date. On the other hand, the breadth of Section 10.2(a) might apply only
to Williams's retained liabilities, while Flint Hills's assumed liabilities are instead
narrowly tailored to those "matters set forth" in the Disclosure Schedule only for
conditions "at" the property. In that case, Williams's reference to the broad definition
of "Environmental Condition" and the language of "arising, emanating, or flowing from"
would not apply to Flint Hills's assumed responsibilities. Indeed, the Disclosure
Schedule refers to the matters set forth therein as "contamination" and not
"Environmental Conditions," possibly supporting this narrower construction. (Emphasis
added.) In other words, assuming responsibility for "existing, known contamination at
the Real Property" would not necessarily include assuming responsibility for the effects
arising or emanating from such contamination off the real property.
Because the contract language is ambiguous, it was proper for the superior
court to resort to extrinsic evidence. Though Texas law places greater restrictions on the
148 (...continued)
We see no obvious reason that applying Texas law to this case would
conflict with Alaska's choice of law approach, which follows the Second Restatement
of Conflicts. See Peterson v. Ek, 93 P.3d 458, 464 n.11 (Alaska 2004). As we discuss
below, it is unlikely that the resulting interpretations would differ under either Alaska's
or Texas's interpretive approach, as both would admit the extrinsic evidence which
informed the superior court's decision. See Tidler, 851 F.2d at 421 (permitting analysis
of claims under laws of two states).
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149
admission of extrinsic evidence than Alaska law, a court can use extrinsic evidence to
resolve patent and latent ambiguities as long as those ambiguities are present in the
150
text. In other words, Texas law "does not prohibit consideration of surrounding
149 Under Alaska contract principles, the court's duty is to "ascertain and give
effect to the reasonable intentions of the contracting parties." Flint Hills I, 377 P.3d at
975 (quoting Est. of Polushkin ex rel. Polushkin v. Maw, 170 P.3d 162, 167 (Alaska
2007)). The court need not initially determine that the disputed language is ambiguous
to consider extrinsic evidence; instead, the court can look holistically at the disputed
language, other language in the contract, relevant extrinsic evidence, and case law
interpreting similar provisions. Id. ; see also Nautilus Marine Enters., Inc. v. Exxon
Mobil Corp., 305 P.3d 309, 316 (Alaska 2013) ("We have expressly rejected the
'artificial and unduly cumbersome' two-step process used in other jurisdictions in which
'resort to extrinsic evidence can take place only after a preliminary finding of
ambiguity.' " (quoting Alyeska Pipeline Serv. Co. v. O'Kelley, 645 P.2d 767, 771 n.1
(Alaska 1982))). But extrinsic evidence cannot be used to add or contradict contract
terms. See Froines v. Valdez Fisheries Dev. Ass'n , 75 P.3d 83, 87 (Alaska 2003).
Texas law is more restrictive. It indicates that a court's "primary objective
is to ascertain and give effect to the parties' intent as expressed in the instrument." URI,
Inc. v. Kleberg Cnty., 543 S.W.3d 755, 763 (Tex. 2018) (emphasis added). "Objective
manifestations of intent control," and therefore courts should interpret language
according to its " 'plain, ordinary, and generally accepted meaning' unless the instrument
directs otherwise." Id. at 763-64 (quoting Heritage Res., Inc. v. NationsBank, 939
S.W.2d 118, 121 (Tex. 1996)). However, the Texas Supreme Court has explained that
the meaning of words often "turns upon use, adaptation and context." Id. at 764 (quoting
Heritage Res., Inc., 939 S.W.2d at 121). This context is not just gleaned from the
language and structure of the contract itself, but also from the "circumstances present
when the contract was entered." Id. (quoting Columbia Gas Transmission Corp. v. New
Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996)). Thus, while a court cannot look to
extrinsic evidence to add or modify contract terms - i.e., to introduce solely subjective
intent that has not been manifested objectively in the contract - it can use extrinsic
evidence where the contract language is inherently ambiguous. Id.
150 URI, Inc., 543 S.W.3d at 764-65.
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151
circumstances that inform, rather than vary from or contradict, the contract text." As
we discuss below, we conclude that the superior court adhered to Texas contract law's
requirements when it used extrinsic evidence to resolve the ambiguities of Article X.
Flint Hills Resources' Alaska President Allen Lasater testified that, based
on his understanding of the parties' intent at the time of contracting, Flint Hills did not
assume responsibility for offsite contamination. He stated that there was no offsite
sulfolane contamination then "known" and thus it was not included in the Disclosure
Schedule. Lasater essentially equated unknown to undisclosed, and therefore liability
for those unknowns "remained with Williams." He explained that this was a logical
intent because Flint Hills needed to know the extent of pollution in order to agree to
continue running the refinery's pollution remediation system consistent with DEC's
compliance orders.
Williams representative Randy Newcomer qualified references to known
conditions as "known conditions which were primarily onsite." (Emphasis added.) He
stated that Flint Hills took responsibility for "known cleanup" of "known contaminants"
as described in the Disclosure Schedule as of the Effective Date, after which Flint Hills
was responsible for additional pollution occurring on- and offsite during their ownership.
Williams thus remained responsible for the unknown conditions offsite "caused . . . by
Williams during its ownership." Upon further questioning, Newcomer stated that there
was a "your watch/my watch kind of . . . thing" specifically for offsite contaminants. He
explained that if a known contaminant offsite caused damage before the Effective Date,
Williams would take responsibility, but "[i]f it was something that Flint Hills caused
during their ownership of the [r]efinery," then Flint Hills assumed responsibility.
Newcomer admitted that, as he understood the contract, Williams would be obligated to
151 Id. at 767 (quoting Hous. Expl. Co. v. Wellington Underwriting Agencies,
Ltd., 352 S.W.3d 462, 469 (Tex. 2011)).
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indemnify Flint Hills for the portion of sulfolane that had migrated off the property when
Williams owned the refinery. But he said that further migration or contamination offsite
after the Effective Date would be the responsibility of Flint Hills. On cross-examination,
Newcomer emphasized that liabilities were defined by their known/unknown status
rather than onsite/offsite.
The Williams Companies Senior Vice President Phillip Wright, who was
involved in the refinery sale negotiations, similarly testified that "as a general matter, we
agreed to a your watch/our watch type principle . . . in which if the cause for a given
contamination was generated while we were the owner and operator of the Refinery, we
would be liable for those damages . . . and they would retain liability for anything
generated on their watch which was during their ownership and operation of the
Refinery." But he specifically stated that "those damages" Williams retained
responsibility for would not "include the cleanup costs associated with migration of
known characterized contamination." He testified that it was Williams's intent,
expressed through the language of the contract, that if the sulfolane migrated off the
property, it was Flint Hills's responsibility. He further added that "[i]t wouldn't have
been possible for [Flint Hills] to assume" the sulfolane "would be retained on site . . .
because it was [in] the groundwater" and not in a "vessel." He stated that Williams
representatives "assumed we were dealing with a sophisticated player that understood
these matters and understood groundwater hydrology."
Testimony from representatives of both parties presented competing
interpretations of the contract. Ultimately, the determination of the parties' intentions
and representations during negotiations are issues of fact properly within the province
of the superior court. The court did not clearly err when it concluded as a factual matter
that the parties intended for Williams to retain responsibility for its portion of offsite
sulfolane, and for Flint Hills to assume liability only for sulfolane contamination onsite
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and for any additional pollution it generated after the purchase date which might migrate
offsite. Therefore we conclude as a matter of law that the Purchase Agreement language
reflects that intent.
4. The superior court did not err by concluding that Flint Hills
could pursue contribution.
The superior court concluded that contractual indemnification was not
available to Flint Hills because it had "caused or contributed" to the offsite sulfolane
contamination. And the court concluded that because indemnification was not available,
Section 10.4(b)'s Environmental Cap did not apply.152
But the court determined that
Flint Hills could pursue contribution from Williams under AS 46.03.822(j). Exercising
153
its discretion to allocate equitable responsibility among the parties, the court
determined that Williams was required to contribute $52.5 million to Flint Hills's offsite
response costs, reflecting its equitable allocation of 75% of costs to Williams. The court
awarded $51.4 million for offsite sulfolane and $1.17 million for onsite PFAS
contamination, plus prejudgment interest on both.
No party disputes the court's determination that Flint Hills was barred from
pursuing contractual indemnity. However, Williams contends that the superior court's
assessment of damages for offsite sulfolane was erroneous because it exceeded the
Environmental Cap of $32 million. Williams claims that the Environmental Cap should
apply to all forms of damages, including statutory damages and contribution allocations,
152 In Flint Hills I, we determined that indemnification claims for
environmental liabilities would be subject to the Cap. 377 P.3d at 976.
153 See AS 46.03.822(j) ("[T]he court may allocate damages and costs among
liable parties using equitable factors determined to be appropriate by the court."); cf.
Lockheed Martin Corp. v. United States, 35 F. Supp. 3d 92, 122 (D.D.C. 2014)
(discussing court's discretion to allocate contribution in CERCLA context), aff'd, 833
F.3d 225 (D.C. Cir. 2016).
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154
rather than only to contractual indemnification damages. Williams further argues that
statutory contribution is not available to Flint Hills because the Purchase Agreement
made indemnification the exclusive remedy for environmental damages claims.
Williams argues that by failing to properly construe the exclusive remedies provision in
Section 10.5, the superior court "allowed Flint Hills to achieve an end-run around" the
indemnity bar. Williams asserts that, because money damages are not equitable relief
allowable under the Purchase Agreement and because we characterized contribution
damages under AS 46.03.822(j) as a legal claim in Flint Hills I, contribution should be
barred by the Purchase Agreement. We disagree.
The Purchase Agreement at Section 10.2(a) provides that Williams would
indemnify Flint Hills "(iv) except to the extent that Damages are caused or contributed
to by [Flint Hills's] operations, actions or omissions after the Effective Time." The most
natural reading of this language and the reading best supported by trial testimony is what
the superior court first concluded: "reflecting the joint 'my watch/your watch' concept
for liabilities, the parties' cross-indemnity provisions included language clarifying their
obligations to be limited to their own causes and contributions of Environmental
Conditions, excluding reimbursement and exempting each from holding the other
harmless for contributions or conditions caused by the other's conduct." However, the
superior court later determined that because Flint Hills contributed to some of the
sulfolane pollution during the period it operated the refinery, as a matter of law "[t]his
exception precludes contractual indemnity for sulfolane contamination." Because neither
Williams nor Flint Hills challenges the superior court's interpretation, we do not consider
154 Williams also argues that the superior court made two other errors when it
interpreted the Cap: the court determined that insurance proceeds paid to Flint Hills
were not relevant to the Cap, and it declined to enforce the Cap for public policy reasons.
Because we conclude that the Cap does not apply to the contribution claim, we do not
address these arguments.
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it further.
We agree with the superior court that, because Flint Hills cannot pursue
indemnification under the Purchase Agreement, the Environmental Cap does not apply.
Section 10.4's "Limitations on Indemnification" states in subsection (b) that "the
maximum amount of indemnifiable Damages" arising out of Sections 10.2(a) and (b) that
can be recovered by "Indemnified Parties" is a Cap "with respect to any and all claims
for indemnity." (Emphasis added.) This language makes clear that the Cap will apply
only to indemnification claims. Furthermore, Section 10.5 provides that "the
indemnification provisions of this Article X shall be the sole and exclusive remedy of
each Party," "[e]xcept for . . . equitable relief." (Emphasis added.) The Agreement
makes clear that both parties understood equitable relief is not governed by the terms of
155 It was not error for the court, when making
limitation in their private contract.
contribution allocations, to take into account the parties' intended contractual allocations
156
without being limited by their express terms - in this case, the Environmental Cap.
155 Oakly Enters., LLC v. NPI, LLC, 354 P.3d 1073, 1080 (Alaska 2015)
(discussing nature of statutory contribution remedy for recovering environmental
remediation costs and explaining "contribution claims essentially seek to allocate
damages equitably among those who share responsibility").
156 See AS 46.03.822(j). CERCLA case law supports this approach and
because Alaska's hazardous substance statute is informed by CERCLA, case law on that
federal statute is persuasive - though not dispositive - for resolving state law claims.
Berg v. Popham, 113 P.3d 604, 606, 608 (Alaska 2005); see Lockheed Martin Corp., 35
F. Supp. 3d at 123, 143-44 (explaining court has "broad discretion" to make allocation
determinations in CERCLA context and "the predominant concern in equity is the intent
of the parties"); Halliburton Energy Servs., Inc. v. NL Indus., 648 F. Supp. 2d 840, 877,
880-81 (S.D. Tex. 2009) (explaining that even inapplicable indemnification provisions
can be considered to determine intent of parties to allocate contribution responsibility);
Kerr-McGee Chem. Corp. v. Lefton Iron & Metal Co., 14 F.3d 321, 326 (7th Cir. 1994)
(considering parties' intent as expressed in their contractual arrangements to determine
(continued...)
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Finally, the superior court did not err by concluding that Flint Hills could
pursue statutory contribution under AS 46.03.822(j). In Flint Hills I, we referred to Flint
Hills's indemnification claim and its statutory contribution claim under subsection
.822(j) as "legal claims," in contrast with its "equitable claims" for declaratory judgment
157
and specific performance. We did not, however, reach the question whether statutory
contribution constitutes a legal or equitable remedy. Contribution is an equitable
158 159
remedy. This is so regardless of whether it is provided for by statute. Thus a claim
for statutory contribution is not barred by the Purchase Agreement's exclusive remedies
provision.
Williams's argument that contribution achieves an "end-run around" the
indemnity bar is unpersuasive. The parties agreed they would still be able to pursue
156 (...continued)
equitable contribution allocations); Beazer E., Inc. v. Mead Corp. (Beazer II), 412 F.3d
429, 447 n.20 (3d Cir. 2005) (explaining that indemnification provisions that do not
apply directly are still factor to consider in contribution claim).
157 377 P.3d 959, 973-74 (Alaska 2016).
158 See McLaughlin v. Lougee, 137 P.3d 267, 275-79 (Alaska 2006)
(recognizing common law contribution need for fairness purposes); Oakly Enters., LLC,
354 P.3d at 1080 (explaining contribution claims aim to equitably allocate damages
among responsible parties); Deal v. Kearney, 851 P.2d 1353, 1355-56 (Alaska 1993)
(agreeing that "claims for contribution, indemnity, or subrogation are . . . claims
grounded in equity"); Fellows v. Tlingit-Haida Reg'l Elec. Auth. , 740 P.2d 428, 432
(Alaska 1987) ("Contribution is an equitable doctrine adopted to remedy the unfairness
of the common law rule allowing one of several tortfeasors to bear responsibility for the
entire loss.").
159 See Benner v. Wichman, 874 P.2d 949, 956 (Alaska 1994) (implying now-
repealed contribution statutes provided for "equitable contribution"); Arctic Structures,
Inc. v. Wedmore, 605 P.2d 426, 430 (Alaska 1979) (discussing former contribution
statute AS 09.16.020(3) that expressly provided "principles of equity applicable to
contribution generally shall apply").
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equitable relief, "including injunctive relief or specific performance." The word
"including" indicates these examples are illustrations rather than an exhaustive list of
allowable equitable relief. Contribution falls squarely into relief allowed even under the
parties' own contractual arrangement. And Williams misconstrues our previous decision
when it argues that contribution provides a duplicative and thus ina ppropriate remedy
160
once indemnification is unavailable. In Flint Hills I, we denied Flint Hills declaratory
relief and specific performance because we determined that it still had an adequate legal
160 We do not decide whether contribution would have been available absent
the parties explicitly permitting the pursuit of equitable remedies. We have recognized
a common law contribution remedy, McLaughlin, 137 P.3d at 275-79, and a statutory
contribution remedy in the hazardous substance context, AS 46.03.822(j). But Alaska
does not have a general contribution statute, such as the proposed Uniform Contribution
Among Tortfeasors Act of 1955, that discusses the relation between indemnification and
contribution. And even CERCLA case law, though generally indicating that an
indemnification agreement encompassing CERCLA liability between responsible parties
will control, is not always clear about whether such an agreement displaces contribution
altogether or controls equitable allocation in a contribution action. See, e.g., Fina, Inc.
v. ARCO , 200 F.3d 266, 273-74 (5th Cir. 2000) (allowing claim for contribution only
after concluding that parties' indemnification provision did not cover CERCLA claims);
Kerr-McGee Chem. Corp., 14 F.3d at 326 (finding indemnity agreement between parties
remained applicable in CERCLA action, but that result of indemnification and
contribution would have been identical and therefore declining to reverse contribution
award; also indicating that equitable allocation informed by indemnification agreement
could be modified depending on parties' ability to pay to avoid shifting cleanup costs
onto public); Beazer E., Inc. v. Mead Corp. (Beazer I), 34 F.3d 206, 208-10, 218-19, 219
n.10 (3d Cir. 1994) (reversing dismissal of contribution claim because indemnification
claim did not cover CERCLA liability but implying that indemnification provisions,
rather than equitable apportionment, would control if applicable); Beazer II, 412 F.3d at
447 n.20 (revisiting issues between parties and interpreting Kerr-McGee to mean that
when "indemnification provision did cover CERCLA liability, . . . no equitable allocation
proceeding was required"); Olin Corp. v. Consol. Aluminum Corp., 5 F.3d 10, 16 (2d
Cir. 1993) (recognizing that applicable indemnification provisions should be followed
though they may incur "seemingly harsh result," but failing to specify whether sole
remedy available was indemnification or if contribution could be pursued, though result
would be under parties' indemnification provisions).
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remedy through indemnification or contribution - even if some of those legal remedies
161
might be time-barred by the statute of limitations. We noted that Flint Hills's equitable
claims sought identical relief to its legal claims, since its requests for declaratory
judgment and specific performance essentially asked the court to order Williams to pay
the same damages Flint Hills had requested in its indemnification and contribution
claims.162
We did not conclude in Flint Hills I that indemnification and contribution
were duplicative remedies or constituted identical relief.
Unlike its claims for declaratory relief and specific performance vis-Ã -vis
its claims for indemnification and statutory contribution, Flint Hills's contribution claims
are not duplicative of its legal indemnification claims. If available, indemnification
might have enabled Flint Hills to recover entirely for the offsite sulfolane pollution that
Williams caused or contributed to prior to the refinery purchase, without any equitable
163 By contrast, statutory
modifications, but subject to the Environmental Cap.
contribution requires the superior court to weigh equitable factors which, besides the
intent of the parties as evidenced by their contract, also includes the conduct of parties.
The parties' indemnification agreement, although inapplicable, served to inform the court
about the parties' intent, but it did not bind the court to the same result in its statutory
contribution determination as it would reach under its contractual indemnification
161 Flint Hills I, 377 P.3d at 974 (dismissing claims for declaratory relief and
specific performance of contract that duplicated its financial contribution claims); see
also Knaebel v. Heiner, 663 P.2d 551, 553 (Alaska 1983) ("One who seeks the
interposition of equity must generally show that he either has no remedy at law or that
no legal remedy is adequate.").
162 Flint Hills I, 377 P.3d at 974.
163 "An express indemnity generally is not subject to equitable considerations
or a joint legal obligation to the injured party; rather, it is enforced in accordance with
AM. JUR. Indemnity § 7 (2022).
the terms of the contracting parties' agreement." 41
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determination.
For these reasons, the contract language expressly allows the statutory
contribution remedy and doing so does not inappropriately provide Flint Hills an "end-
run around" its contractual arrangements or inappropriately award an equitable remedy
when a legal one was potentially available. The superior court did not err by granting
Flint Hills statutory contribution from Williams under AS 46.03.822(j).
5. The superior court's contribution allocations were not
erroneous.
A party liable for the release of a hazardous substance under
AS 46.03.822(j) "may seek contribution from any other person who is liable."164
During
a statutory contribution proceeding, "the court may allocate damages and costs among
liable parties using equitable factors determined to be appropriate by the court."165
After Flint Hills sought contribution from Williams, the superior court
made a series of findings regarding Flint Hills's contribution claims. In relevant part, the
court found: "Williams is strictly liable, jointly and severally, under AS 46.03.822 for
hazardous substance releases as an owner and operator of the [refinery]"; "the harm
caused by Williams['s] sulfolane releases is not divisible or reasonably capable of
apportionment" and thus Williams "is jointly liable for the entire amount of response
costs." Based on consideration of many equitable factors - including contractual
indemnity clauses, proportions of sulfolane releases attributable to each party, the degree
of cooperation by each party, and promptness of reporting sulfolane in the groundwater
- the court found "Williams is responsible for 75% of the [offsite] sulfolane response
costs, while Flint Hills is responsible for 25% of the costs, and the State is not
164 AS 46.03.822(j).
165 Id.
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166
responsible for any of the costs."
Williams appeals the superior court's statutory contribution allocation
under AS 46.03.822(j), arguing the court erred by (1) allocating anything for offsite
sulfolane to Williams because the parties "had allocated full responsibility for sulfolane
to Flint Hills under the Agreement"; (2) failing to properly consider DEC's non-
regulation of sulfolane prior to 2004; (3) penalizing Williams for defending itself;
(4) "failing to allocate responsibility to the State and ignoring Williams['s] equitable
estoppel and laches defenses"; and (5) "failing to allocate responsibility to the City."
a. The court did not err by allocating statutory contribution
for offsite sulfolane to Williams.
We have affirmed the superior court's conclusion that Williams retained
responsibility for sulfolane that was offsite at the time of the Purchase Agreement and
that Flint Hills could recover through statutory contribution in the absence of contractual
indemnification. The court therefore did not err by allocating responsibility to Williams
under the contribution provisions of AS 46.03.822(j).167
b. The superior court adequately considered DEC's earlier
non-regulation of sulfolane when it allocated damages.
Williams argues that the superior court erred when it "failed to compare the
relative 'culpability' of Williams and Flint Hills given the very different regulatory
environments in which each operated the refinery." Namely, because sulfolane was not
regulated as a hazardous substance when Williams released it, Williams argues the court
erred by not reducing Williams's culpability. Williams relies primarily on two cases for
166 The court did not allocate any costs to the City of North Pole, which was
not a party at the trial.
167 See OaklyEnters., LLC v.NPI, LLC, 354 P.3d 1073, 1077, 1082-83(Alaska
2015) (discussing and affirming broad, non-inclusive list of factors superior court
considered in allocating responsibility for damages under subsection .822(j)).
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support: Boeing Co. v. Cascade Corp. for the assertion that "[a] court should consider
the care a party exercised 'in light of the practices characteristic of the time' and may
168
reduce a party's share if no rules or laws prohibited the practices at the time"; and
Oakly Enterprises, LLC v. NPI, LLC for the assertion that "[a] court should also consider
which party 'knew or should have known' of the contamination and which party 'had the
ability to control the [cause]' at the time."169 Williams argues that, had sulfolane been
regulated before the Purchase Agreement, it would have been able to keep it onsite
because it "kept all regulated contaminants onsite during its tenure."
Superior courts have broad discretion over which equitable factors to
consider when allocating costs under both CERCLA and AS 46.03.822.170
A court may
choose to reduce a party's damages according to the party's practices and prevailing
circumstances at the time, but it is not required to. And as the State points out, neither
Boeing Company nor Oakly Enterprises supports Williams's position in this case. Even
though sulfolane was not yet regulated as a hazardous substance, it would have been a
pollutant under AS 46.03.900(20) and thus its unpermitted releases were prohibited
under AS 46.03.710. As Williams conceded at trial, releasing sulfolane regardless of its
official status as a hazardous substance was prohibited by law - a fact that counts
against Williams rather than in its favor. The record demonstrates that Williams knew
about the sulfolane releases during its tenure at the refinery due to its own negligence,
but failed to address the ongoing releases. Williams k new sulfolane was at least toxic
if not "hazardous." Yet the "care" that Williams exercised included storing sulfolane-
168 207 F.3d 1177, 1187 (9th Cir. 2000).
169 354 P.3d at 1077.
170 E.g., id. at 1078, 1080-83 (applying clear error standard of review to factual
findings and abuse of discretion standard to decisions whether to admit or exclude
evidence); Boeing Co., 207 F.3d at 1187.
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containing waste in a leaky, decommissioned lagoon, some of whose many holes were
crudely "patched" by nailing two-by-fours to the liner. Williams also unilaterally
stopped the monitoring that DEC requested to help identify and address the source of the
sulfolane leaks. That behavior was neither typical nor allowed at the time, and Williams
knew of and was in control of the cause of the contamination, supporting the court's
decision to impose statutory contribution against Williams.
c. The superior court did not penalize Williams for
"defending itself."
Williams argues that the court erred because its "allocation expressly took
into account Williams'[s] alleged 'recalcitrance' and 'refusal to assist' DEC." Williams
argues it was penalized for defending itself. Williams contends it was within its rights
to refuse to provide alternative water and to indemnify Flint Hills, and claims it would
be unconstitutional to penalize it for doing what the law plainly allows it to do.171
The State quickly and correctly dismisses this argument by pointing out that
"[a] party may be 'within its rights' to refuse to act until ordered by a court, but its
choices can still weigh against it in equity." Courts often consider the extent to which
172
parties cooperate with regulators in this context.
171 We agree with the State that none of the cases Williams cites for support
contradict the assertion that a party's refusal to act can "weigh against it in equity."
Williams relies for support on an incomplete quote from a dissent, without identifying
it as such, but omits the following paragraph of that dissent, which acknowledges
"CERCLA strongly incentivizes voluntary compliance" and refers to a case that
recognizes the court's ability to impose fines when a responsible party willfully fails to
comply with an EPA order without sufficient cause. McGinnes Indus. Maint. Corp. v.
Phoenix Ins. Co., 477 S.W.3d 786, 801 (Tex. 2015) (Boyd, J., dissenting) (citing Gen.
Elec. Co. v. Jackson, 610 F.3d 110, 114 (D.C. Cir. 2010)).
172 See, e.g., Oakly Enters., 354 P.3d at 1077 & n.6 (allowing superior court
to consider "the degree of cooperation by the parties with Federal, State or local officials
(continued...)
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Williams asserts in reply, without support, "that Williams cooperated in the
initial investigation" and that "six years after the refinery's sale, Williams was
participating and willing to continue doing so, until the State abruptly stopped
investigating and sued." Our review of the record confirms that Williams conducted
groundwater sampling for sulfolane for about a year before stopping the sampling
without having identified the source of the sulfolane leak, contrary to DEC's
instructions.173 And Williams attended meetings with DEC and offered to pay for and
conduct certain modeling, though it did not give the models to DEC. But Williams does
not point to anything in the record indicating that it cooperated with DEC. Williams has
not challenged the superior court's findings of fact on this issue, including its extensive
findings showing an overwhelming level of inaction by Williams even after it had
received notice in 2010 that DEC would be treating sulfolane as hazardous. The court
did not abuse its discretion by allocating costs against Williams in part for its lack of
cooperation.
d. The superior court did not err by not allocating
responsibility to the State or by ignoring Williams's
equitable defenses.
Williams argues that because the State admitted to being a "liable
landowner under AS 46.03.822(a)" as an owner of the refinery lands, the court erred by
not allocating some responsibility to the State under AS 46.03.822(j). Williams also
argues that "the court should have allocated some .822(j) responsibility to the State"
based on laches and equitable estoppel.
172 (...continued)
to prevent any harm to the public health or the environment," among other equitable
factors, when allocating responsibility for releases under AS 46.03.822(j) (quoting
Lockheed Martin Corp. v. United States, 35 F. Supp. 3d 92, 123 (D.C. Cir. 2014))).
173 Flint Hills I, 377 P.3d 959, 963 (Alaska 2016).
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174
Williams cites FDIC v. Laidlaw Transit, Inc. for support that the State
should be allocated costs for sulfolane contamination, but that case does not support its
argument. In Laidlaw we recognized that cleanup costs need not "be borne by all
potentially responsible parties equally" and that courts can "distinguish among
175
potentially responsible parties to avoid inequitable results." And AS 46.03.822(j)
expressly grants discretion to "allocate damages and costs among liable parties using
equitable factors determined to be appropriate by the court." Williams's argument
amounts to mere disagreement with how the court weighed these equitable factors.
When it found that the State was without fault as a landowner, the superior
court reasoned that "[n]o persuasive evidence was presented at trial to support an
equitable allocation" to the State. Williams points to several factors it suggests indicate
the State's culpability. For instance, it asserts that the State had a "but-for causal role in
allowing the sulfolane to remain in the ground throughout Williams'[s] tenure."
Williams seems to argue that, because it notified DEC of the sulfolane release in 2001
and DEC told Williams only to keep tracking sulfolane through sampling because it was
not then a regulated contaminant, Williams had no obligation to clean it up. But as early
as November 2000 a representative from the Department of Natural Resources176 met
with Williams and DEC to discuss the adequacy of Williams's spill prevention efforts
and the preparation of a characterization and corrective action plan. In that meeting,
DNR told Williams that it might be in default on its lease because of the spills.
Williams also alleges the State was indirectly responsible for sulfolane
174 21 P.3d 344 (Alaska 2001), abrogated on other grounds by Buntin v.
Schlumberger Tech. Corp., 487 P.3d 595 (Alaska 2021).
175 Id. at 349-50.
176 DNR was the State agency that managed the lease of the land underlying
the refinery.
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releases by allowing Flint Hills to turn off its pumping system in July 2017, which
Williams claims "caus[ed] the sulfolane to migrate offsite." Although the State did allow
Flint Hills to turn off the pumping system, sulfolane had already been detected offsite in
October 2009. Furthermore, the court expressly considered this factor and found it to
be outweighed by Williams's "other negative conduct," such as "mismanagement . . . of
its waste fluid treatment and disposal systems" and "cessation of testing for sulfolane
sources on the [R]efinery property." Williams does not argue that the court erred when
it weighed this fact about Flint Hills turning off the pumps in its equitable allocation
decision. We are not persuaded the court erred by not allocating financial responsibility
to the State as a landowner under these circumstances.
Williams also argues that the superior court "inexplicably ignored
Williams'[s] equitable estoppel defense and reasonable reliance on the State's repeated
written affirmations that sulfolane was not regulated and could be left in the ground."177
Williams alleges that the court "previously found this defense to be relevant to allocating
damages under .822(j)." But the court previously explained that equitable defenses
would be relevant, if at all, for allocation under subsection .822(j) rather than for
establishing liability under subsection .822(a) because that would undermine the strict
liability framework of the hazardous substance statute. And in any case the court did not
explicitly find that Williams's equitable estoppel defense was relevant for subsection
.822(j) allocation. As the State points out, Williams does not provide any arguments
undermining the court's discretionary decision not to consider Williams's defense of
177 "Equitable estoppel requires proof of three basic elements: (1) 'assertion
of a position by conduct or word,' (2) 'reasonable reliance thereon,' and (3) 'resulting
prejudice.' In addition, equitable estoppel 'will be enforced only to the extent that justice
so requires.' " Beecher v . City of Cordova, 408 P.3d 1208, 1214 (Alaska 2018) (first
quoting Jamison v. Consol. Utils., Inc., 576 P.2d 97, 102 (Alaska 1978); and then
quoting Mun. of Anchorage v. Schneider, 685 P.2d 94, 97 (Alaska 1984)).
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equitable estoppel.
Williams also argues that laches "should have comparatively reduced
Williams'[s] responsibility because" in earlier proceedings "the superior court found
laches barred Flint Hills'[s] claims for equitable remedies against Williams due to its
'unconscionable delay' in addressing sulfolane." Williams then states, somewhat
misleadingly, that the "factual findings upon which the court's laches decision was made
were affirmed on appeal" and should have preclusive effect. We earlier agreed that Flint
Hills "reasonably should have concluded 'long before May 10, 200[8]' that sulfolane had
178
migrated beyond the sampling disclosed in the Agreement." But we explicitly did not
reach the issue of Williams's l aches defense on Flint Hills's equitable claims because
these were not available in light of the legal remedies available by contract and statute.179
Williams also challenges the court's conclusion that Williams's delayed reporting of
discovering sulfolane in the groundwater was more problematic than Flint Hills's nearly
two-year delay in drilling monitoring wells. We see no abuse of discretion in allocating
more responsibility to the party that waited five years to report its discovery that a
relatively novel solvent had leached into the groundwater than to the party that delayed
drilling "recommended monitoring wells" for about two years.
e. The superior court did not err by failing to allocate
responsibility to the City of North Pole.
Williams next argues that "[t]he City was a significant source of sulfolane"
and the court should have allocated responsibility to the City. The court did not rule on
the City's liability and prevented Williams from presenting evidence implicating the
City's contribution to the sulfolane plume.
As both Flint Hills and the State point out, once the court deconsolidated
178 Flint Hills I, 377 P.3d at 973 (alteration in original).
179 Id. at 974.
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the cases in June 2019 the City was no longer a party to these proceedings. While the
cases were consolidated, Williams raised a contribution claim against the City, but the
court dismissed it as untimely. Though in the State's suit the court could have
considered the City's culpability as an equitable factor under AS 46.03.822(j), because
Williams is "strictly liable, jointly and severally" under AS 46.03.822(a), the superior
180
court did not abuse its discretion by failing to allocate costs to an absent party.
Williams also attempts to appeal the deconsolidation order. The Rules of
Appellate Procedure require that an appeal brief contain a "short conclusion stating the
181
precise relief sought" and that the argument section contain "the contentions of the
appellant with respect to the issues presented" as well as a "heading indicating the
subject matter" for "[e]ach major contention."182 Williams asks in its statement of issues
on appeal whether the superior court erred in deconsolidating the cases but does not
request that the deconsolidation be reversed on appeal, and omits any mention of the
order from its discussion heading. Williams claims it was prejudiced by deconsolidation,
but fails to challenge the court's detailed justifications for deconsolidating the cases.
Williams adds in a heading in its reply brief that the superior court "erred by sua sponte
deconsolidating the cases," but again fails to cite to a rule or case indicating how the
court erred. Williams waived its deconsolidation argument: we "consider as abandoned
questions set forth in the Points but not argued in . . . [the] brief,"183 and an appellant's
180 See Laidlaw Transit, Inc., 21 P.3d at 349-50 (contemplating absentee
responsible parties in AS 46.03.822(j) contribution claim and explaining how courts can
"distinguish among potentially responsible parties to avoid inequitable results").
181 Alaska R. App. P. 212(c)(1)(I).
182 Alaska R. App. P. 212(c)(1)(H).
183 Reilly v. Northrop, 314 P.3d 1206, 1212 n.4 (Alaska 2013) (alteration in
(continued...)
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reply "brief may raise no contentions not previously raised in either the appellant's or
appellee's briefs."184
VI. CONCLUSION
For the reasons stated above, we
AFFIRM the superior court's conclusion that sulfolane is a hazardous
substance under AS 46.03.822(a);
AFFIRM the superior court's award of response costs under AS 46.03.822
to the State and Flint Hills for Williams's offsite sulfolane releases;
AFFIRM the superior court's award of natural resource damages to the
State for the loss of access to groundwater;
AFFIRM the superior court's interpretation of the Purchase Agreement's
indemnification provisions;
AFFIRM the superior court's contribution awards under AS 46.03.822(j);
AFFIRM the superior court's decision not to refer onsite PFAS
contamination issues to DEC; and
AFFIRM the superior court's declaratory relief; but
REMAND the superior court's injunctive relief for further proceedings in
light of this opinion.
183 (...continued)
original) (quoting Wetzler v. Wetzler, 570 P.2d 741, 742 n.2 (Alaska 1977)).
184 Alaska R. App. P. 212(c)(3).
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