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Regents of the University of Minnesota v. United States of America

United States District Court, D. Minnesota

July 12, 2018

Regents of the University, of Minnesota, Plaintiff,
v.
United States of America, and E.I. du Pont de Nemours and Co., Defendants.

          Rick E. Kubler, Esq., Richard C. Landon, Esq. and Gray Plant Mooty, and Daniel J. Herber, Esq., University of Minnesota, counsel for plaintiff.

          Phillip R. Dupre and Lauren D. Grady, DOJ-Environment and Natural Res. Div., Environmental Defense Section, and Friedrich A.P. Siekert, United States Attorney counsel for defendant United States of America.

          Stephanie R. Feingold, Esq. and Morgan Lewis & Bockus, counsel for defendant E.I. du Pont de Nemours and Company.

          ORDER

          David S. Doty, Judge United States District Court

         This matter is before the court upon the motion for judgment on the pleadings by defendant United States of America. Based on a review of the file, record, and proceedings herein, and for the following reasons, the court denies the motion.

         BACKGROUND

         This environmental dispute arises out of a contract between plaintiff Regents of the University of Minnesota (University) and the United States. During World War II, the United States operated the Gopher Ordinance Works (GOW), a facility “designed to produce smokeless cannon and rifle powder, oleum and other materials used in the manufacture of smokeless powder.” Compl. ¶¶ 3, 21. The GOW was located on 13, 600 acres of land in Rosemount, Minnesota (Site). Id. ¶¶ 2, 29. The GOW was designed, constructed, and operated by defendant E.I. du Pont de Nemours and Company (DuPont). Id. ¶¶ 4, 30-31. Between November 1994 and August 1945, the GOW produced “an estimated 29 million pounds of smokeless powder, 80 million pounds of oleum and 51 million pounds of nitric acid.” Id. ¶ 33.

         After the war, the United States determined that it no longer needed the GOW and transferred the Site to the University through two quitclaim deeds and corresponding contracts for sale.[1] Id. ¶¶ 6, 38. The first deed, executed in 1947, conveyed a 4, 687-acre parcel consisting largely of open space (1947 Parcel). Id. ¶ 43; Countercl. ¶ 28. The second deed, executed in 1948, conveyed a 3, 320-parcel that “contained most of the buildings, infrastructure, and equipment transferred to the University” (1948 Parcel). Compl. ¶ 43; Countercl. ¶ 28. The instant motion only involves claims and counterclaims relating to the 1948 Parcel. The deed conveying the 1948 Parcel (1948 Deed) contains the following indemnification provision:

By the acceptance of this instrument and as a further consideration for this conveyance, the [University] herein covenants and agrees for itself and its successors and assigns to assume all risk for all personal injuries and property damages arising out of ownership, maintenance, use and occupation of the foregoing property, and further covenants and agrees to indemnify and save harmless the ... the United States of America ... against any and all liability claims, causes of action or suits due to, arising out of, or resulting from, immediately or remotely, the possible contaminated condition, ownership, use, occupation or presence of the [University], or any other person upon the property lawfully or otherwise.

         Answer and Countercl. Ex. 2 at 5.

         The corresponding contract for sale (1948 Contract) includes the following provision:

The [University] acknowledges that the above-described property may be contaminated and it assumes all liability and responsibility which may arise out of the said contaminated condition, decontamination and use and occupancy of the said property. The [University] further agrees that it will perform at its sole expense any and all decontamination work or functions found necessary in order to render the above-described property free of any and all dangers of explosives and suitable for general usage.

Id. Ex. 5 at 4.

         Since the mid-1980s, the Site has been subject to numerous environmental studies and investigations, which have revealed the release or threatened release of hazardous materials at the Site. See Compl. ¶¶ 52-81; Countercl. ¶¶ 73-74. The Minnesota Pollution Control Agency has identified the University, the United States Army Corps of Engineers, and DuPont as “responsible persons” under the Minnesota Environmental Response and Liability Act (MERLA). Compl. ¶¶ 75-76. According to the University, it has incurred more than $3 million in “environmental investigation and other necessary response costs in connection with the release or threatened release ...


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