Calculating Cultural Damages From Pollution Needs Legal Clarity

A recent federal appeals court ruling involving a Canadian mining company is an opportunity to align the natural resource damages regulations with the underlying statute and dramatically improve federal, state, and tribal governments’ ability to expeditiously restore injured natural resources.

The US Court of Appeals for the Ninth Circuit held that natural resource damages that had a cultural component could be considered as lost use damages under the Comprehensive Environmental Response, Compensation, and Liability Act. It reversed a decision granting summary judgment to Teck Cominco Metals Ltd. and remanded the case for trial on $653 million in claims from the Confederated Tribes of the Colville Reservation.

If Teck appeals and the US Supreme Court agrees to hear arguments, the case could represent one of the most important environmental damages cases to reach the justices in years.

A Broken System

Natural resource damages, or NRD, claims seek to restore the natural environment to its prior baseline condition and compensate the public for the lost use from the time of contamination until restoration.

As part of CERCLA’s enactment in 1980, Congress authorized natural resource damage assessment regulations to “identify the best available procedures to determine such damages, including both direct and indirect injury, destruction, or loss and shall take into consideration factors including, but not limited to, replacement value, use value, and ability of the ecosystem or resource to recover.”

Following decades of litigation and revisions, the US Department of the Interior issued regulations that arguably go beyond the intent of Congress. When determining compensable value for NRD, the Interior Department said that “compensable value can include the economic value of lost services provided by the injured resources, including both public use and nonuse values such as existence and bequest values.”

Interior defined nonuse value as “the economic value the public derives from natural resources that is independent of any direct use of the services provided.” In other words, the Interior Department decided that companies should pay retroactive compensation beyond cleanup and restoration costs, even if the public wasn’t using a natural resource.

The regulations provide that the mere existence of a natural resource can be monetized by simply asking people how much they would have been hypothetically willing to pay to have an uncontaminated natural resource, even if they were never planning to use it.

Unfortunately, but not unexpectedly, trustees’ claims for nonuse damages have led to extensive controversy and litigation, often delaying the very restoration that Congress was hoping to accomplish. This is no more evident than in the Teck case, where the Confederated Tribes are seeking hundreds of millions of dollars for nonuse losses on top of cleanup costs and actual restoration of the injured natural resources.

Supreme Court Bound?

While the Teck case is ostensibly about “cultural losses,” the real issue in our view is whether the Confederated Tribes may shoehorn nonuse damages into that category—not whether they should be entitled to restoration of lost direct uses of injured natural resources, which essentially is a settled and non-controversial question. Properly framed, the issue becomes interesting for the Supreme Court.

The question presented is simply this: When Congress authorized “use value” as a measure of natural resource damages, did they also authorize “nonuse” values? Or, stated differently, is a nonuse a use? It should be an easy case.

Today’s jurisprudence opens the door to align the NRD regulations to congressional intent.

Under Loper Bright Enterprises v. Raimondo, which famously overturned long-standing Chevron deference, courts won’t automatically defer to an agency’s interpretation of ambiguous statutes. Because of this, Teck may argue that the Interior Department’s regulations—an interpretation of CERCLA’s “ambiguous” statutory language—aren’t entitled to deference.

Although the Interior Department’s regulations partially came to be at the hands of court decisions such as Ohio v. Department of the Interior, those regulations could still be reviewed afresh.

It’s no problem that NRD regulations are decades old. In Corner Post v. Board of Governors of the Federal Reserve System, the Supreme Court extended the statute of limitations period for challenging an agency regulation to six years from when a plaintiff suffers harm. Thus, Teck’s challenge to the regulations is both ripe and timely.

And under the major questions doctrine, which asserts that “clear congressional authorization” is required to support an agency’s statutory interpretation when such interpretations are of “deep ‘economic and political significance,’” Teck would be able to argue that Congress couldn’t have meant to include nonuse value when it stated “use value” as a factor in NRD calculations.

Calculations of nonuse damages are often hundreds of millions of dollars or more and untethered to actual remediation or restoration costs. Paraphrasing the late Justice Antonin Scalia, this would be quite a large elephant to hide in the mousehole, especially when the actual words used by Congress are the diametrical opposite of the regulation.

There is, fortunately, a solution where everyone wins. The Interior Department should clarify that use value includes losses experienced by tribal members attributable to the direct use of the resource, but jettison its effort to define use value as encompassing nonuse damages.

The result: Cultural lost use claims, are cognizable. Nonuse damages are gone. CERCLA becomes infinitely easier to administer. The regulations align with congressional intent. And contaminated sites are restored across the country with far less litigation and delay.

The case is Confederated Tribes of the Colville Reservation v. Teck Cominco Metals, U.S., No. 24-5565, decided 9/3/25.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Brian D. Israel is a partner at Paul Hastings and co-chair of its environmental litigation practice.

Paisley Shoemaker is an associate with Paul Hastings’ complex litigation and arbitration practice.

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