Kelley Drye Helps New Mexico Reach Settlement in Gold Mine Suit
June 30, 2022

The Governor of New Mexico, the New Mexico Attorney General, and the New Mexico Office of Natural Resources Trustee have announced a $32 million final settlement with the United States and the U.S. Environmental Protection Agency (“USEPA”) in the Gold King Mine litigation. Under the settlement, the U.S. will make cash payments to New Mexico of $18.1 million for response costs, $10 million for restoration of injured natural resources, and $400k for certain litigation costs. The U.S. has further committed to providing an additional $3.5 million to state water quality and cleanup activities through Clean Water Act and Superfund grants. Kelley Drye represents the State of New Mexico and New Mexico Environment Department as lead counsel in asserting claims arising out of the 2015 Gold King Mine Blowout.

On Aug. 5, 2015, USEPA and two of its contractors caused the release of millions of gallons of acid mine drainage and tons of toxic metals from the Gold King Mine in Colorado. The plume from the release caused the Animas and San Juan Rivers to turn bright yellow through Colorado, New Mexico and the Navajo Nation to Lake Powell in Utah. The release also forced communities to close intakes for drinking water systems, prompted many farmers to stop irrigating their crops, and drastically decreased recreational use of the rivers. Although the rivers are now safe for irrigation and other uses, the stigma associated with the event has had lasting effects on the region’s economy. In response to the release, Kelley Drye filed a lawsuit on behalf of the New Mexico Environment Department and the Attorney General in May 2016, against USEPA, the contractors, and certain mine owners, seeking recovery of response costs, damages, and injunctive relief. New Mexico and Kelley Drye have aggressively pursued these claims ever since, seeking to hold USEPA and others accountable.

Through this litigation, New Mexico has sought and recovered significant economic damages in the form of lost tax revenues due to the persistent, lasting stigma from the Blowout, as well as long-term monitoring and response costs and funding for a marketing plan to alleviate the lasting stigma in the region. Kelley Drye successfully defended against multiple early dispositive motions. Following discovery, Kelley Drye then successfully defended against another round of dispositive motions brought by the United States and its contractors based on claims of sovereign and government contractor immunity, respectively. Kelley Drye also brought a successful motion for sanctions against the United States, based on spoliation of evidence, resulting in an award of monetary sanctions against the United States, and successfully defeated attempts by the contractors to sever the trial as a result. Previously, New Mexico and Kelley Drye completed a settlement agreement with the mining companies that resulted in an $11 million cash payment. On behalf of New Mexico Kelley Drye continues to vigorously pursue the USEPA contractors, Environmental Restoration LLC and Weston Solutions, as the only remaining defendants who have failed to answer for the harm they caused.

Kelley Drye negotiated a settlement for New Mexico with the mining company defendants, which was announced in January 2021. Since then, Kelley Drye concluded extensive fact and expert discovery. New Mexico continues to pursue its claims against the contractors. The parties recently briefed motions for summary judgment, and a pre-trial evidentiary hearing is set for November 2022.

You can read the press release announcing the settlement here.