DISTRICT COURT, CITY AND COUNTY OF DENVER, COLORADO Court Address: 2 ndJudicial District Denver City & County Building 1437 Bannock Street, Room 256 Denver, Colorado 80202 Phone Number: (720) 865-8301 PLAINTIFFS: Sheep Mountain Alliance, Rocky Mountain Wild; v. DEFENDANTS: Colorado Department of Public Health and Environment (“CDPHE”), Jennifer Opila, in her official capacity; CDPHE Executive Director Dr. Christopher Urbina, in his official capacity; and, INDISPENSABLE PARTY: Energy Fuels Resources Corporation ATTORNEYS FOR PLAINTIFFS: Attorneys: Travis Stills, #27509 Energy Minerals Law Center Address: 1911 Main Avenue, Suite 238 Durango, Colorado 81301 Phone Number: (970)375-9231 Fax Number: (970)382-0316 Email: [email protected]Attorneys: Jeffrey C. Parsons, #30210 Roger Flynn, #21078 Western Mining Action Project Address: P.O. Box 349, Lyons, CO 80540 Phone Number: (303) 823-5738 Fax Number: (303) 823-5732 Email: [email protected]Attorneys: Matthew Sandler #37921 Rocky Mountain Wild Address 536 Wynkoop St., Suite 303 Denver, CO 80202 Phone: 303-546-0214 ext. 1 Fax: 303-454-3366 Email: [email protected]Case Number: 2013CV______ Courtroom: _________ COMPLAINT
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Piñon Ridge Uranium Mill lawsuit filed against CDPHE, May 24, 2013.
Sheep Mountain Alliance and Rocky Mountain Wild filed a complaint against Colorado Department of Health & Public Environment and Energy Fuels Inc. to overturn the state license for the proposed Piñon Ridge Uranium Mill in Paradox Valley, western Colorado.
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7/16/2019 Piñon Ridge Uranium Mill lawsuit filed against CDPHE, May 24, 2013.
Plaintiffs, Sheep Mountain Alliance and Rocky Mountain Wild (Plaintiffs), by and through their undersigned legal counsel, hereby state and aver the following as its Complaint for relief against
the Defendants, Colorado Department of Public Health and Environment (“CDPHE”), and
Executive Director Dr. Christopher Urbina, and Jennifer Opila, acting in her official capacity on
behalf of CDPHE.
1. This lawsuit seeks judicial review and invalidation of CDPHE’s issuance of
Radioactive Materials License No. Colo. 1170-01, Amendment Number: 02, Global Revision 3(“License”) to Energy Fuels Resources Corporation (“Energy Fuels”) on April 25, 2013.
2. Copies of the License and accompanying materials were served on Sheep MountainAlliance by CDPHE Public Affairs Officer Mr. Warren Smith mailing a DVD on or about May 2,
2013. Copies of the License were not served on Rocky Mountain Wild.
3. The License, issued with conditions, allows Energy Fuels to transfer, receive,
possess, and use radioactive materials at a uranium mill in the Paradox Valley of westernColorado. The License allows Energy Fuels to construct and operate a uranium mill and an
“11e(2) byproduct” waste disposal cell for the permanent impoundment of the uranium milltailings and the eventual interment of the radioactive remains of the mill itself.
4. It has been nearly thirty years since a similar license was issued in Colorado for thecontinued operation of the Cotter Mill in Cañon City, Colorado. After milling Colorado-mined
ore at the Cotter Mill proved economically infeasible, the operations switched to processing of
uranium-bearing wastes from various industrial and government sources. The Cotter Mill has been demolished and is now undergoing remediation and closure proceedings pursuant to
requirements of the federal Uranium Mill Tailings Radiation Control Act (“UMTRCA”) and Superfund.
5. Many of the other valleys in western Colorado, including the San Miguel River
corridor near Nucla and Naturita, have been contaminated by uranium milling and the permanentinternment of uranium tailings. Historically, uranium milling has never been carried out in the
Paradox Valley. The Paradox Valley is an area of Montrose County known for its agricultural
characteristics, abundant wildlife, and recreational opportunities.
6. The regional economy has managed to endure several disruptive and unsustainable
boom/bust cycles that characterize the uranium industry. Uranium mills provide hazardous and intermittent employment based on widely fluctuating international commodity markets.
7. On information and belief, Energy Fuels has not obtained financing to design or construct the Piñon Ridge Mill (“PR Mill”). Publicly available statements by Energy Fuels
indicate that a South Korean electrical utility recently became a dominant shareholder in Energy
Fuels through a complex 2012 transaction with Denison Mines, a Canadian Corporation. In
2012, Energy Fuels became the owner of the White Mesa uranium mill near Blanding, Utah. In2012, Energy Fuels announced it will halt all mining of Colorado Plateau ores due to the
relatively high cost of processing Colorado Plateau ores. A substantial portion of Energy Fuels’
7/16/2019 Piñon Ridge Uranium Mill lawsuit filed against CDPHE, May 24, 2013.
business activities now involves shipment of uranium-bearing wastes to White Mesa as an
alternative to disposal in a licensed low-level radioactive waste facility.
8. On information and belief, Energy Fuels does not plan to start construction of the PR
Mill in 2013. On information and belief, Energy Fuels has not obtained all necessary state and
federal approvals for the PR Mill.
9. This lawsuit is brought to invalidate the License and Environmental Impact Analysis
(“EIA”), both of which were issued without compliance with the substantive and proceduralrequirements of the Colorado Radiation Control Act (“RCA”), C.R.S. § 25-11-101, et seq., and
the federal Atomic Energy Act (“AEA”) and UMTRCA, 42 U.S.C. § 2011, et seq., which are
implemented within the State of Colorado by CDPHE. These requirements are designed toensure the decisionmaking process is open to informed public involvement and subjected to
rigorous procedural requirements of a formal adjudication and initial decision by an
administrative law judge, subject to an appeal by right to the Executive Director, before CDPHE
may issue a radioactive materials license for purposes of uranium milling and maintaining the
radioactive tailings until the property is deeded to the government for perpetual care.
10. Persons living in the Paradox Valley have repeatedly expressed their opposition and concern about constructing a uranium mill in the Paradox Valley, including the owner of the
now-closed Bedrock Store and owner of the relatively new Paradox Valley Inn. Neither CDPHE
nor Energy Fuels conducted a detailed analysis of the benefits of siting the PR Mill and tailingsdisposal in an already-contaminated area as an alternative to the Paradox Valley.
11. The material issues raised by Plaintiffs were not resolved by the administrative law judge during the License Hearing mandated by the Judicial Review Order setting aside the
previously issued license and remanding for CDPHE to provide a license hearing that conformswith Colorado law, including the rights of parties under the Administrative Procedure Act. Sheep
Mountain Alliance v. CDPHE , 2011CV861, Judicial Review Order, at ¶¶32-35 (remanding for
compliance with, inter alia, C.R.S § 24-4-105).
12. Plaintiffs raised material issues early in the proceeding, including lack of water
supply, waste containment and exposure pathways, toxicity and management of mill wastes,
supply, on and off-site pollution, air emissions, socioeconomics, wildlife, federally protected species, due process/procedure, and the failure of CDPHE and Energy Fuels to meet the statutory
burdens meant to avoid repetition of the notorious impacts caused by the ongoing failure of
uranium mill tailings impoundments throughout Colorado. Similar issues were raised throughwritten and oral public comments by persons living in and near the Paradox Valley and by those
who farm, hunt, hike, climb, bike, visit, and otherwise enjoy the Paradox Valley.
13. Plaintiffs substantiated its issues at the seven day hearing with expert witness
testimony of Connie Travers, Dr. Ann Maste, Dr. Tom Power, cross examination, and
documentary evidence. See Exh. 1 Sheep Mountain Proposed Findings of Fact and
Determinations of Law, Exh. 2. Wildlife Coalition Proposed Findings of Fact and Determinations of Law.
7/16/2019 Piñon Ridge Uranium Mill lawsuit filed against CDPHE, May 24, 2013.
14. CDPHE selected Judge Richard Dana (ret.) of the Judicial Arbiter’s Group to serve as
the administrative law judge on CDPHE’s behalf. The ALJ committed legal error, including therefusal to issue an “initial decision” and instead treated the License Hearing as an elaborate
public comment opportunity. Exh. 3 compare C.R.S. § 24-4-105(14)(“Each decision and initial
decision shall include a statement of findings and conclusions upon all the material issues of fact,
law, or discretion presented by the record and the appropriate order, sanction, relief, or denialthereof.”)(emphasis supplied). The legal error was not corrected when Plaintiffs appealed to
Executive Director Dr. Christopher Urbina. Exh. 4.
15. The ALJ’s failure to make findings of fact and law in an “initial decision” left the
resolution of all contested issues of fact and law to CDPHE staff. CDPHE was an adverse party
to Plaintiffs throughout the License Hearing.
16. The issuance of a radioactive materials license is a final agency action based on the
culmination of a statutorily required licensing process that is ripe and subject to judicial review.
For the reasons herein, Plaintiffs seek judicial review, and an order vacating the License and
remanding the matter to CDPHE with instructions to conform with any such order and allrequirements of state and federal law.
PARTIES, JURISDICTION AND VENUE
17. Plaintiff SHEEP MOUNTAIN ALLIANCE (“SMA”) is a grassroots citizenorganization dedicated to the preservation of the natural environment in the Telluride Region and
Southwest Colorado, including the remote West End of Montrose County. The proposed Facility
would be built in the Paradox Valley, which is located at the far end of Montrose County and equal driving distance (approximately 70 miles) from the towns of Telluride and Montrose. The
Facility is sited 7 miles up-slope from the town of Bedrock, Colorado and the Dolores River,which runs across the Paradox Valley. Many of SMA’s members live downwind of the proposed
facility.
18. Plaintiff ROCKY MOUNTAIN WILD (“RMW”) is a non-profit environmentalorganization based in Denver, Colorado, that works to conserve and recover the native species
and ecosystems of the Greater Southern Rockies using the best available science. RMW was
formed in July 2011 by the merging of two organizations, Center for Native Ecosystems and Colorado Wild, and is the legal successor to both parties. Colorado Wild has worked for over a
decade to protect, preserve, and restore the native plants and animals of the Southern Rocky
Mountains. RMW members and staff recreate on and use lands that will be impacted by the proposed Pinon Ridge mill. RMW’s staff and members enjoy various activities on or near the
land proposed for development, including viewing and studying rare and imperiled wildlife and
native ecosystems. RMW’s members and staff plan to return to this area for these purposes inthe future.
19. In order to fulfill their organizational missions, Plaintiffs work to promote and protect
the health of regional ecosystems, wildlife habitats, watersheds, a sense of community, quality of life, and a diverse and sustainable local economy. Plaintiffs’ organizational interests and ability
to fulfill their organizational mission are adversely impacted by and aggrieved by the issuance of
the License without compliance with substantive and procedural requirements.
7/16/2019 Piñon Ridge Uranium Mill lawsuit filed against CDPHE, May 24, 2013.
20. Plaintiffs have members who live and own property in and near the Paradox Valleywhose property interests, interests in avoiding impacts of toxic and radioactive emissions, and
interest in the existing agricultural character of the Paradox Valley have been adversely impacted
and will be adversely impacted by the issuance of the challenged License. These members
regularly use and enjoy the benefits provided by the unique characteristics of the Paradox Valley.
21. The Paradox Valley is part of a public and private land complex which supports a
variety of activities, including tourism, recreation, enjoyment of wildlife, and agriculture whichare enjoyed by Plaintiffs’ members. Economic activity regarding uranium mining and milling
has not played a significant role in the region’s economy over the past thirty years, except the
economic activity generated by several uranium mine and mill closure, reclamation, and decontamination projects carried out by the federal Department of Energy’s Office of Legacy
Management, Bureau of Land Management, and Colorado’s Division of Reclamation and Mine
Safety.
22.
Unlike the San Miguel River Valley where the towns of Nucla and Naturita arelocated, there has never been a uranium mill in the Paradox Valley. Hundreds of millions of
dollars have been spent on disposal and still-ongoing remediation of uranium mill tailings and groundwater contamination near Nucla and Naturita.
23. The License involves a certain parcel of land that is not remote from the memberswho live in the Paradox Valley. The License is not sufficiently protective of the use and
enjoyment of the Paradox Valley by Plaintiffs’ members. Plaintiffs’ interests have been
adversely impacted and aggrieved and will continue to be adversely affected by the issuance of the challenged License.
24. The EIA failed to inform Plaintiffs, members, and the public of the impacts,
alternatives, mitigation measures, and cumulative impacts of the Energy Fuels proposal. The
protections provided by lawful preparation and publication of an EIA before notice of the
License Hearing is a federal statutory right which Defendants’ have denied Plaintiffs and their members.
25. Plaintiffs, through its staff and members, have exhausted the available administrativeremedies and participated extensively in all aspects of the license proceedings by making written
and oral statements and submitting detailed technical reports to address regulatory requirements
and the deficiencies in the application materials. Granting Plaintiff’s request for relief would remedy harms to the legally protected interests of Plaintiffs and Plaintiffs’ members which flow
from Defendants’ unlawful conduct during the proceedings below and in the issuance of the
License itself.
26. Defendant COLORADO DEPARTMENT OF PUBLIC HEALTH AND
ENVIRONMENT (“CDPHE”) is the Colorado regulatory Department with jurisdiction and
authority to implement the Colorado Radiation Control Act, C.R.S. §§ 25-11-101, et seq. TheColorado Radiation Control Act is the statutory mechanism through which the State of Colorado
implements the federal Atomic Energy Act, which sets forth the regulatory requirements for the
7/16/2019 Piñon Ridge Uranium Mill lawsuit filed against CDPHE, May 24, 2013.
processing of radioactive materials, and the disposal of 11e(2) byproduct materials, including
those activities proposed by Energy Fuels.
27. On behalf of the CDPHE, Defendant JENNIFER OPILA approved the issuance of
License No. Colo. 1170-01, Amendment No. 02, Global Revision 3 on April 25, 2013. On
information and belief, Ms. Opila was acting upon authority delegated from Dr. Christopher Urbina, CDPHE Executive Director. Dr. Urbina was Executive Director on April 25, 2011. Ms.
Opila conducted pre-hearing investigations into the application, attended the License Hearing,
and testified in the License Hearing.
28. On information and belief, Mr. Steve Tarlton prepared and approved the
Environmental Impact Analysis on behalf of CDPHE. Mr. Tarlton led and supervised theCDPHE investigations and review of the application, beginning with a 2007 site visit at the
request of Energy Fuels. Mr. Tarlton testified at the License Hearing. On information and belief,
Mr. Tarlton is Ms. Opila’s superior. On information and belief, Mr. Tarlton was acting upon
authority delegated from Dr. Urbina.
29. Defendant DR. CHRISTOPHER URBINA, CDPHE Executive Director, denied
Plaintiffs’ administrative appeal of the January 14, 2013 ruling (“January 2013 Ruling”) .
30. ENERGY FUELS RESOURCES CORPORATION (“Energy Fuels”), a wholly-
owned subsidiary of Energy Fuels Inc., a Canadian Corporation, is the entity that received theLicense. The management and ownership of Energy Fuels has radically changed since the
application was filed in 2009. The license decision lacks any information on actual control and
ownership interests of Energy Fuels. On information and belief, Energy Fuels relies entirely onits Canadian parent to fund its operations. On information and belief, Energy Fuels has not
generated any income from its Colorado uranium mines during the previous seven years. EnergyFuels’ Colorado Plateau mines are either inactive or in the process of going inactive. Energy
Fuels’ Whirlwind Mine has been allowed to fill with water after repeated exceedances of water
quality standards. On information and belief, at the time the License was issued Energy Fuels
Resources has not obtained the financing required to fully design and engineer the mill and associated tailings facilities. On information and belief, at the time the License was issued,
Energy Fuels had not obtained the financing required to build the mill or associated tailings
facilities. On information and belief, at the time the License was issued, Energy Fuels Resourceshad not obtained the financing required to decommission or close the mill and associated tailings
facilities. Energy Fuels’ financial statements are publicly available through the System for
Electronic Document Analysis and Retrieval (SEDAR.com). On information and belief, EnergyFuels now owns the White Mesa Uranium Mill near Blanding, Utah and has no current plans to
mine or mill uranium ore in Colorado.
31. This Court has jurisdiction in this case pursuant to the Colorado Administrative
Procedure Act, C.R.S. § 24-4-106. The Atomic Energy Act requires that licensing decisions be
subjected to judicial review. 42 U.S.C. § 2021(3)(A)(3). The Radiation Control Act requires a
quasi-adjudicatory administrative proceeding be completed before the issuance of a radioactivematerials license involving uranium milling and tailings disposal. C.R.S.§ 25-11-203(1)(b)(1).
All administrative remedies available to Plaintiffs have been exhausted.
7/16/2019 Piñon Ridge Uranium Mill lawsuit filed against CDPHE, May 24, 2013.
32. Venue is proper in this Court pursuant to C.R.C.P. 98(b), as this action is brought
against public entities whose offices are in Denver, and the decisions and actions at issue in thiscase occurred in the City and County of Denver. (See C.R.S. § 24-4-106(4)(“The residence of a
state agency for the purposes of this subsection (4) shall be deemed to be the city and county of
Denver.”).
STATUTORY AND REGULATORY FRAMEWORK
33. Colorado’s authority to license uranium mills and radioactive mill tailings disposal isderived from the Agreement State Program of the federal UMTRCA and Atomic Energy Act
(“AEA”). 42 U.S.C. §§ 2011 et seq.. The State implementation of the program is by regulation
(C.C.R. 1007-1) and statute. C.R.S. § 25-11-101, et seq.(Radiation Control Act (“RCA”)). Thestate must adhere to the Agreement State Agreement (as amended August 1982 to include
uranium milling and tailings disposal) and carry out its program in a manner which must be at
least as stringent as the federal program implemented by the Nuclear Regulatory Commission.
42 U.S.C. § 2021. Colorado laws implementing the Agreement State program designates
CDPHE as the primary regulator of radioactive materials in Colorado pursuant to the federallydelegated “Agreement State” program.
34. CDPHE lacks the necessary staff resources to implement the Agreement State
program. CDPHE has the power and duty to charge Energy Fuels and other licensees the full
cost of implementing the Agreement State program.
35. Colorado may adopt regulatory requirements that are more protective than the AEA.
Colorado cannot interpret or implement its regulations in a manner that is less stringent than thefederal program. 42 U.S.C. 2021(o).
36. Tailings and other wastes generated while milling uranium ore into yellowcake are
referred to as “11e(2) byproduct” based on the definition from the Atomic Energy Act, which is
codified at 42 U.S.C. § 2014 (e)(2). See also C.R.S. § 25-11-201(1)(adopting federal definition).
37. A key objective of the licensing and regulation of milling and 11e(2) byproduct is to
prevent environmental contamination and to reduce on and off site release and exposures to
levels that meet the “as low as reasonably achievable” (“ALARA”) standard as it applies tolicensing of uranium milling and tailings disposal. See 6 CCR 1007-1 Part 18.
38. “The greatest potential sources of offsite radiation exposure (aside from radonexposure) are dusting from dry surfaces of the tailings disposal area not covered by tailings
solution and emissions from yellowcake drying and packaging operations. During operations and
prior to closure, radiation doses from radon emissions from surface impoundments of uranium or thorium byproduct materials must be kept as low as is reasonably achievable.” CCR 1007-1 Part
18 Appendix A Criterion 8.
39. The minimum procedural requirements which all Agreement States must follow whenconducing a licensing proceeding involving uranium milling and tailings/11e(2) byproduct
material are set forth in AEA. 42 U.S.C.§ 2021(o).
7/16/2019 Piñon Ridge Uranium Mill lawsuit filed against CDPHE, May 24, 2013.
40. Colorado may not lawfully issue a new milling and 11e(2) byproduct material license
until an administrative law judge issues an initial decision on all material issues raised by the parties to the formal hearing. See 42 U.S.C. § 2021(o) accord C.R.S.§ 25-11-
203(1)(b)(1)(requiring licenses be issued “in accordance with sections 24-4-104 and 24-4-105,
C.R.S.”).
41. The Colorado regulations implementing the RCA/AEA require that an opportunity for
formal adjudication be provided before a license may be issued.
There shall be an opportunity for public hearings to be held in accordance with the
procedures in 24-4-104 and 24-4-105, C.R.S. 1973, as amended, and RH 18.6, prior to the
granting, denial or renewal of a specific license permitting the receipt, possession or use of source material for milling or byproduct material as in definition (2) of RH 1.4.
6 CCR 1007-1 § 18.6.1(emphasis supplied).
42.
The notice of opportunity to request a License Hearing must describe the availabilityof a draft license and Environmental Impact Analysis (EIA) for review and use by the interested
and affected persons who may seek party status at the hearing. 6 CCR 1007-1 § 18.6.2.1.4. Thenotice must also include, “A description of the proposed licensing action and a statement of the
availability of its text from the [CDPHE].” Id .
43. The RCA does not allow incremental review and approval of a license application.
The RCA requires a license application be approved or denied “as a whole.” C.R.S. § 25-11-
203(3)(c)(I).
44. The RCA prohibits the commencement of formal proceedings on the license until suchtime as the Department certifies the application “substantially complete.” C.R.S. § 25-2-
3(2)(b)(I).
45. The RCA and regulations implementing the RCA are designed to ensure sufficienttime for RCA/AEA mandated formal hearings by requiring that where an applicant submits to the
Department an application that does not clearly and completely demonstrate how objectives and
requirements of Part 18 of the state radioactive materials regulations are met, that failure “shall be grounds for refusing to accept an application.” 6 C.C.R. 1007-1 §18.3.
46. The license must be issued, if at all, within a specific amount of time. C.R.S. § 25-11-203(2)(c)(V)(C). April 29, 2013 was the deadline for making a final decision on the license
requested by Energy Fuels. On or about April 25, 2013, Defendant Jennifer Opila issued the
License based on the 2009 application submitted by Energy Fuels. On information and belief,Ms. Opila approved the license with the oversight and approval of Mr. Steve Tarlton.
47. Colorado may not issue a radioactive materials license until all procedural and
substantive requirements of the AEA, RCA, implementing regulations, federal standards, and Agreement State Agreements are satisfied.
7/16/2019 Piñon Ridge Uranium Mill lawsuit filed against CDPHE, May 24, 2013.
48. Where the RCA/AEA requirements and the APA may conflict, the APA does not
eliminate the requirement of the more specific statutory scheme. C.R.S. § 24-4-107. The APArequirements are explicitly incorporated into the RCA. Judicial Review Order at ¶¶25, 32-34
(holding CDPHE failed to provide a C.R.S. §24-4-105 compliant hearing and harmonizing timing
requirements of RCA and APA).
49. A license proceeding regarding a tailings facility may not be segmented temporally.
Expected expansions of the facility must be analyzed and considered in the initial license
proceeding before a license may be issued.
The specifications shall be developed considering the expected full capacity of tailings or
waste systems and the lifetime of mill operations. Where later expansions of systems or operations may be likely (for example, where large quantities of ore now marginally
uneconomical may be stockpiled), the amenability of the disposal system to accommodate
increased capacities without degradation in long-term stability and other performance
factors shall be evaluated.
C.C.R. 1007-1 § Appendix A.
50. The permissible scope of CDPHE’s analysis of a license application concerning
uranium milling and tailings disposal is not limited.
All site-specific licensing decisions based on the criteria in this Appendix or alternatives
proposed by licensees or applicants will take into account the risk to the public health and
safety and the environment with due consideration to the economic costs involved and anyother factors the Department determines to be appropriate.
6 C.C.R. 1007-1 Appendix A (emphasis supplied).
51. CDPHE’s exercise of discretion during consideration of a license involving uranium
milling and tailings disposal must be documented and articulated in judicially reviewabledocuments entered into the Administrative Record. C.R.S. §§ 24-4-105, 106.
52. The need for Colorado’s implementation of the AEA Agreement State Program tomeet or exceed the requirements of federal law is explicitly recognized in the applicable
regulations, which requires CDPHE to prepare an Environmental Impact Analysis (“EIA”) which
is the equivalent to the Environmental Impact Statement used by the U.S. Nuclear RegulatoryCommission (NRC) to satisfy the procedural requirements of the National Environmental Policy
Act. See 6 CCR 1007-1 at § 18.4.1.
53. RCA regulations require that the EIA “shall be available to the public and for review
by the U.S. Nuclear Regulatory Commission at the time of public notice of hearing.” Id .
54. The establishment of cost estimates for decommissioning and long-term care and afully executed financial surety instrument to cover these estimates is a condition precedent for
application approval and issuance of the requested license. C.C.R. 1007-1 § 3.9.5.1.
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55. In addition to the regulations in Part 3 that apply to radioactive materials generally, the
regulations specific to milling and tailings disposal confirm that financial assurance beestablished as a condition precedent to license issuance:
Prior to issuance of the license, the applicant shall (1) establish financial assurance
arrangements, as provided by RH 3.9.5, to ensure decontamination and decommissioningof the facility and (2) provide a fund adequate to cover the payment of the cost for long-
term care and monitoring as provided by RH 3.9.5.10.
C.C.R. 1007-1 § 18.5.
56. In turn, section 3.9.5.4 lists the acceptable methods for establishing financialassurance. All forms of payment contemplate prepayment. Id. at 3.9.5.4(2). Section 3.9.5 does
not contemplate the establishment of financial assurance based on promises to pay on some
future date. “Self-guarantee” schemes are explicitly prohibited for uranium milling licenses. Id.
at 3.9.5.4(3)(c).
57. “The value of the financial assurance warranty must not be dependent upon the
success, profitability, or continued operation of the licensed business or operation.” Id at §3.9.5.4(8).
58. Where financial assurance is concerned, the Agreement State Agreement (as amended August 1982) explicitly requires CDPHE to adhere to federal standards established by the
Nuclear Regulatory Commission (“Commission” or “NRC”). The 1982 Amendment states, in
part: "B. Such State surety or other financial requirements must be sufficient to ensurecompliance with those standards established by the Commission pertaining to bonds, sureties,
and financial arrangements to ensure adequate reclamation and long term management of such byproduct material and its disposal site." These standards are found in federal statute,
regulations, and Guidance Documents prepared by the NRC. Defendants are bound by the
financial surety standards set out by the NRC in a regulatory document known as NUREG 1757.
59. NUREG 1757 provides the accepted federal standards and methodology for
establishing financial surety cost estimates. NUREG 1757 Vol 3 at 1-1 (guidance “applies to
financial assurance requirements for licensees under 10 CFR Parts 30, 40, 70, and 72, with theexception of licensees subject to criteria 9 and 10 of Appendix A to Part 40 (uranium recovery
facilities)”. Because Colorado regulations do not rely on the NRC-specific surety requirements
of Criteria 9 and 10 of 10 C.F.R. Part 40 Appendix A, NUREG 1757 provides applicable federalstandards for the financial assurance requirements in Colorado. Compare C.C.R. 1007-1 Part 18,
Appendix A Criteria 9 (transfer of ownership) and 10 (hazardous constituents).
60. Colorado statutes and regulations, on their face and as applied in this proceeding, are
less stringent than NRC standards.
61. The financial surety must be established before the license issues and must remain in place during the life of the facility. See also: 6 C.C.R. 1007-1 § 3.9.5.8 (“With the approval of
the Department, a licensee may reduce the amount of a decommissioning warranty as
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decommissioning activities are completed in accordance with an approved decommissioning plan
and/or to reflect current site conditions and license authorizations.).
62. Uranium mills in Colorado do not enjoy “reasonable investment-based expectations.”
Department of Health v. The Mill, 887 P.2d 993 (Colo. 1994)(“Given this regulatory
environment, it is unreasonable for The Mill to claim it had no notice of the significant risk of further regulation of the site.”).
63. The amount of the financial surety must be based on Department-approved costestimates. CCR 1007-1§ 3.9.5.5. These estimates must be analyzed in the EIA.
64. A current Decommissioning Funding Plan is required by state regulation for allRadioactive Materials Licenses. C.C.R. 1007-1§ 3.9.6.
65. The control of radioactive materials is achieved through a license and specific
procedures, plans, and programs that have been lawfully reviewed and approved. The plans and
programs applicable to a uranium mill with a tailings disposal facility that are particularlyrelevant to this litigation include, but are not limited to, those found in 6 C.C.R. 1007-1 Part 18See also Id. Part 18, Appendix A: Criteria Relating To The Operation Of Mills And TheDisposition Of The Tailings Or Wastes From These Operations.
FACTUAL BACKGROUND AND GENERAL ALLEGATIONS
66. The lawsuit seeks review and invalidation of the License issued on or about April 25,2013 and review and invalidation of the Environmental Impact Analysis (“EIA”) that is a
condition precedent for a lawful License Hearing.
67. By failing to conduct a lawful Licensing Hearing based on a lawful EIA and
concluding with an initial decision, CDPHE, its staff, and agents have denied Plaintiffs’ state and
federal rights.
68. The claims involve the Findings of Fact and Conclusions of Law issued by Judge
Richard Dana (ret.) of the Judicial Arbiter’s Group on January 14, 2013 (“January 2013 Ruling”),the Executive Secretary’s Appeal Determination (“Appeal Decision”), the EIA, and other action
taken by CDPHE in support of issuing a Radioactive Materials License on or about April 25,
2013. (“License”).
69. The proceedings on remand failed to provide the procedural requirements explicitly
set forth in the Remand Order, including, but not limited to, statutory due process rights ( Id .at ¶¶12,22, 32) meaningful cross examination ( Id .¶¶12,19, 22), a “comprehensive EIA” ( Id . at ¶23)
at the time the hearing is noticed, and a requirement that the license applicant “clearly
demonstrate[] how objectives and requirements of [Part 18] are met” (18.3) within harmonized
timelines. Id . at ¶32.
70. Three agency persons played key roles in the License Hearing.
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71. Dr. Urbina is the agency person who made the Appeal Decision approving and
adopting the January 2013 Ruling on behalf of CDPHE.
72. On information and belief, Mr. Steve Tarlton was responsible for all aspects of the
agency’s review of the license application and CDPHE’s participation in the License Hearing.
On information and belief, Mr. Tarlton is the person who prepared and approved the EIA. Oninformation and belief, Mr. Tarlton is the person who prepared and approved the Decision and
Decision Analysis. On information and belief, Mr. Jerry Goad of the Office of Attorney General
assisted Mr. Tarlton in the drafting of the License, EIA, License Decision, and other supportingdocuments.
73. Ms. Opila signed the License. On information and belief, Mr. Tarlton has directsupervisory authority over Ms. Opila.
74. The License is based on CDPHE’s unlawful interpretation and implementation of
Colorado laws implementing the federal Atomic Energy Act.
75. NRC has informed CDPHE that CDPHE’s interpretation and implementation of
Colorado’s Agreement State program is not in accord with the rights of the public and thesubstantive protections provided by UMTRCA/AEA and federal regulations.
76. The required procedures were succinctly summarized by the Nuclear RegulatoryCommission (“NRC”) in a document not previously found in the administrative record. The
NRC letter stated, in part:
Of particular concern is 6 CCR 1007-1, Part 18.6.1, and whether this section provides for a
public notice announcing an opportunity for the public to submit comments and participatein a public hearing on the issuance of a new license after publication of the draft license
and environmental impacts analysis, as required pursuant to Section 274(o) of the Atomic
Energy Act of 1954, as amended (the Act) and the State of Colorado amended Agreement
with the NRC. See also, 42 U.S.C. §2021(o) and Section 274(b) of the Act.
CDPHE002881 (February 27, 2012 NRC Letter to CDPHE)(emphasis added).
77. A draft license is a mandatory feature of both the Agreement State and NRC
procedures for consideration of a license.
78. CDPHE provided no evidence regarding publication of a draft license. Id . at
18.6.2.1.4.
79. CDPHE provided no evidence to establish that an EIA was made available for NRC
review. Id . at § 18.4.1. On information and belief, the EIA and notice of hearing was not
provided to NRC for review and comment on August 6, 2012.
80. CDPHE, through the testimony of Steve Tarlton, conceded that the Colorado
regulations that implement the federal Atomic Energy Act do not comply with federal
requirements. Transcript at 950:25-951:2 (“Those deficiencies are because NRC said that the
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Colorado regulations do not meet the Atomic Energy Act requirements; is that correct?
[Answered by Mr. Tarlton] A: NRC has said that, yes.”).
Procedural History Up to Judicial Review Order Invalidating the 2011 License
81.
At issue in this case are Defendants’ actions (and inactions) in failing to adequatelymaintain or follow legally-mandated procedures to properly determine whether to approve, deny,
or approve with conditions, the issuance of a radioactive materials license. C.R.S. § 25-11- 203,
§24-4-105.
82. In early 2007, CDPHE began billing Energy Fuels for time spent working with Energy
Fuels on preparation of the application for a Radioactive Materials License.
83. In 2007, after a site visit by CDPHE, Energy Fuels selected and purchased a parcel of
land in the Paradox Valley for the purpose of constructing a uranium mill and radioactive tailings
cells.
84. During the ensuing two years, CDPHE staff conducted significant reviews and
provided preliminary approval to Energy Fuels’ site selection, studies, designs, and proposals.CDPHE staff that provided pre-application assistance to Energy Fuels included Jennifer Opila
and Steve Tarlton.
85. In November 18, 2009, Energy Fuels submitted a multi-volume application requesting
a radioactive materials license.
86. On December 15, 2009, Sheep Mountain Alliance sent a letter to CDPHE asserting
several grounds that indicated the Application was not substantially complete.
87. On December 18, 2009, without considering Sheep Mountain Alliance’s objections,
CDPHE issued its determination that the Application was substantially complete. CDHPE’s
completeness determination initiated the quasi-adjudicatory licensing proceeding required by theRCA/AEA.
88. After the application was deemed substantially complete, CDPHE allowed EnergyFuels to supplement the application with many thousands of pages of amendments, revisions, and
responses to CDPHE’s numerous requests for additional information which included formal
determinations that the application lacked information or failed to address substantial regulatoryrequirements.
89. CDPHE failed to maintain a complete record of the documents exchanged betweenEnergy Fuels and CDPHE staff. Agency records concerning the Energy Fuels application have
been destroyed by CDPHE.
90. Despite repeated requests during the license proceedings, CDPHE refused to answer technical questions regarding the application that were asked by Plaintiffs, its members, and the
public.
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91. Two opportunities for public comment were provided where official transcripts were
made. During meetings conducted in February and January 2010, CDPHE did not provide adetailed substantive presentation of the project, EIA, or a draft license to review. Energy Fuels
provided PowerPoint presentations of the project proposal on behalf of CDPHE.
92.
Sheep Mountain Alliance, its members, and the public requested an opportunity toquestion Energy Fuels and CDPHE personnel during the January and February 2010 meetings.
CDPHE declined the requests and the questions went unanswered. Cross-examination
opportunities were not provided at the January and February 2010 meetings.
93. No other on-the-record meetings or hearings were held during the license proceeding.
No opportunity to request a License Hearing was provided during the licensing proceeding. InJanuary and May 2011, an EIA was published concurrently with the now-invalid license. The
2011 EIA was relied upon during the proceedings on remand.
94. Sheep Mountain Alliance filed suit to remedy CDPHE’s failure to adhere to the
101. The basis for the License Hearing was Energy Fuels’ 2009 application. The
application was amended by unspecified documents submitted by Energy Fuels between 2009
and January 2011.
102. The entire license application can be found in the Administrative Record filed by
CDPHE in the previous litigation.
103. On information and belief, the entire hearing record was hand-delivered by Judge
Dana to Warren Smith’s home on or about January 12, 2013. Mr. Smith is CDPHE’s
Community Involvement Officer. With very few exceptions, the record was made and kept inelectronic form.
104. On information and belief, CDPHE staff considered additional material information
while making its License Decision that is not contained in the hearing record made by Judge
Dana.
105. Energy Fuels did not update or amend the application in preparation for the 2012License Hearing. Energy Fuels did not update or amend the application during the License
Hearing. On information and belief, Energy Fuels provided information updating and amending
the application after the close of the License Hearing.
106. Notice of opportunity for a License Hearing was provided on or about August 6, 2012.
107. CDPHE did not make a draft license available as part of the August 2012 Notice.
108. CDPHE’s August 2012 Notice did not describe a proposed licensing action or state
that the text of such description was available.
109. The August 2012 Notice vaguely referenced the 2011 EIA that had been produced for the invalidated 2011 license.
110. CDPHE did not update or amend its EIA in preparation for the 2012 License Hearing.
111. Both Plaintiffs submitted requests for party status.
112. SMA filed its Statement of Issues on September 9, 2013
113. On September 10, 2013 Judge Dana approved Plaintiffs’ request for party status and addressed several outstanding motions concerning the Notice and availability of the application
and EIA.
114. Other statements of issues and party status requests were filed and approved during thefirst two weeks of September 2013, including those of the Towns of Telluride and Ophir.
115. Energy Fuels provided a Statement of Issues on September 6, 2013.
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116. On September 20, 2013, SMA propounded written discovery on both Energy Fuelsand CDPHE.
117. After discovery disputes were resolved, Energy Fuels produced responses and records,
all of which were proffered and entered into the hearing record by Judge Dana without objection.Many of the documents were filed under seal, over SMA’s objections.
118. CDPHE refused to fully respond to the discovery requests and withheld documentsresponsive to SMA’s requests for production. Motions to compel were filed, but these motions
were not fully resolved until December 2013, after the License Hearing concluded. CDPHE’s
discovery conduct and the unreasonably delayed resolution of the motions to compel precluded SMA from effective cross examination and presentation of its case.
119. Prehearing conferences were held, and all were transcribed by a court reporter. All
transcripts were made part of the hearing record.
120. The License Hearing was held in Nucla, Colorado beginning November 7, 2013 and
concluding November 13, 2013.
121. Post-hearing briefing was filed in December 2013 .
122. On January 14, 2013, a ruling was issued by Judge Richard Dana (ret.). Based on the
Judicial Review Order and schedule, Judge Dana’s January 2013 Ruling was meant to be the
C.R.S. §24-4-105 “initial decision” of the CDPHE. An “initial decision” is defined under Colorado law as “a decision made by a hearing officer or administrative law judge which will
become the action of the agency unless reviewed by the agency.” C.R.S. § 24-4-102 (6) accord 6CCR 1007-1 §18.6.7.2.
123. The January 2013 Ruling did not resolve the issues raised by Plaintiffs or the parties to
the License Hearing.
124. Instead, Judge Dana determined in the January 2013 Ruling that as a matter of law his
role in the License Hearing on remand was to merely serve as a hearing officer with the hisauthority limited to deciding what to admit into the hearing record for later consideration by
CDPHE. Exh. 3. Energy Fuels and CDPHE vigorously advocated against Judge Dana resolving
the legal and factual issues raised by the parties. Judge Dana’s limitation on the scope of hisauthority is legal error that denied Plaintiffs’ rights as parties.
125. The January 2013 Ruling failed to make findings of fact or conclusions of lawregarding numerous material issues raised by the parties and the public.
126. The January 2013 Ruling made no determination on whether or not Energy Fuels met
its burden of proof regarding any statutory or regulatory criteria necessary for issuance of alicense.
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127. By failing to provide a lawful “initial decision,” Defendants denied Plaintiffs, their
membership, and the public of their respective rights to have an independent adjudication and determination on all material issues raised during the License Hearing.
128. The January 2014 Ruling failed to make a determination on the question of whether or
not CDPHE has met the requirements of “§18.4.1 [which] requires that CDPHE make availableto the public a comprehensive Environmental Impact Analysis (“EIA”) at the time the 90-day
notice of hearing is sent.” Judicial Order at 9 ¶ 23 (emphasis supplied) citing CCR 1007-1 §
18.4.
129. Both Plaintiffs filed timely appeals of the January 2014 Ruling to CDPHE Executive
Director Dr. Urbina. Appeal of an “initial decision” is an appeal by right. Western Colo.
Congress v. Colorado Dep't of Health, 844 P.2d 1264, 1265 (Colo. Ct. App. 1992)(confirming
right of parties to appeal the initial decision issued by the hearing officer) accord 6 CCR 1007-1
§18.6.3.4 (“Parties shall have the right to […] appeal the decision of the hearing as provided by
the [APA].”).
130. CDPHE and Energy Fuels filed coordinated opposition to the appeal.
131. CDPHE Executive Director Urbina resolved Plaintiffs’ appeal.
132. On information and belief, Dr. Urbina’s decision was based on legal counsel and drafting assistance provided by Jerry Goad, the Assistant Attorney General who conducts day to
day regulatory activities regarding the application, represented CDPHE in the License Hearing,
and who prepared CDPHE’s opposition to Plaintiffs’ appeal. Dr. Urbina has no specialized training in the processing or handling of uranium or mill tailings. Dr. Urbina is not a lawyer.
133. On information and belief, after the License Hearing closed, CDPHE staff and Energy
Fuels exchanged communications not contained in the Administrative Record prepared by Judge
Dana.
134. On or about April 25, 2013 Ms. Opila signed the License on behalf of CDPHE.
135. CDPHE made its completed EIA available to the public for the first time on April 25,2013.
136. The License is the final agency action that makes the License, EIA, and administrative procedures on which the License and EIA were approved ripe for judicial review. C.R.S. § 24-4-
106.
137. The License was issued by CDPHE without benefit of an “initial decision.”
138. CDPHE made its decision on the license without benefit of an “initial decision”
139. An “initial decision” by the ALJ is required by the APA.
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140. On information and belief, CDPHE staff made all CDPHE determinations of fact and
law in the first instance when issuing the License in April 2013.
141. Plaintiffs raised material issues at each stage of the License Hearing. These material
issues were presented to Judge Dana by oral and written presentation of extensive legal authority,
expert witness testimony, and documentary evidence.
142. Defendants issued the License without benefit of an “initial decision” on material
issues raised by the parties to the License Hearing.
143. Because the License was issued without compliance with the basic standards of
administrative decisionmaking and in violation of Appellants’ rights as parties to the hearing, the proper remedy is to vacate the License.
144. No harm would befall Energy Fuels. Energy Fuels has merged with Denison Mines
and now owns and operates the White Mesa Uranium Mill near Blanding.
145. On information and belief, Energy Fuels has stopped production of uranium ore from
its Colorado Plateau uranium mining operations, including the Sunday Complex, Whirlwind Mine, and Energy Queen Mine.
146. In 2013, Energy Fuels sought and gained approval from Colorado Mined Land Reclamation Board to place all its Colorado uranium mines in temporary cessation of production
status for a period of at least five years. The temporary cessation of production request was
based on the economic infeasibility of mining and milling the Colorado uranium deposits.
147. In 2012, Energy Fuels came into possession of the uranium mill near Blanding, Utah.On information and belief, Energy Fuels is operating the Utah mill below capacity because of the
comparatively high costs of mining and milling Colorado Plateau ores.
148. No prejudice can befall Energy Fuels, who proposed and advocated the unlawfullicensing process and requested an unlawful result. Energy Fuels is not prohibited from re-filing
an updated application that reflects current conditions and plans.
149. Energy Fuels has a plan to seek amendments to the license shortly after issuance and
during the construction phase. The 2009 application vaguely identified for the License Hearing
is not an accurate representation of the current mill design, construction, and operation plan.
150. On information and belief, CDPHE received revisions and amendments to the
application after the License Hearing closed.
151. CDPHE procedures failed to provide Plaintiffs with the full rights of parties, including
an “initial decision” on issues presented by the parties’ Statement of Issues, in pre-hearing
motions, by objections raised at the hearing, and issues briefed during post-hearing briefing.
152. All issues raised by the attached briefing are incorporated here by reference.
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153. The federal regulation of uranium milling relies on procedural mechanisms to provide
substantive environmental protections. CDPHE used procedural mechanisms less stringent thanthose used in the federal program.
EXPERT TESTIMONY AND PARTY ADMISSIONS
154. Ms. Travers and Dr. Maest were certified in this proceeding to provide expert
opinions regarding the toxicity of the tailings, adequacy of the tailings cells, water supply,
groundwater, contamination pathways, based on their respective training and experience inhydro-geochemistry and hydrogeology, without objection.
155. In summary, Dr. Maest is a Boston University and Princeton University-trained Ph.D.with extensive educational and practical expertise in hydro-geochemistry.
156. Dr. Maest testified that the milling wastes (tailings) would be both highly acidic and
highly toxic with heavy metals as a result of the initial concentrations of contaminants in the
mined ore proposed to be processed at the mill.
157. Dr. Maest testified that despite presenting a contamination pathways analysis in themill application and the Environmental Impact Analysis, Energy Fuels and CDPHE omitted
entirely any analysis of potential contamination pathways associated with contamination of the
groundwater or surface water resulting from any spills or leaks from the evaporation ponds or tailings impoundments.
158. Dr. Maest testified that the tests done by Energy Fuels to characterize the acidity,radioactivity, and toxicity of the waste were not adequate to fully characterize the waste streams,
as those tests ignored significant data about the contents of additional mines that are proposed tofeed the mill.
159. Dr. Maest testified that the information submitted in the mill application materials
omitted highly relevant and important data necessary for a complete and adequatecharacterization of the mill waste.
160. Dr. Maest testified that the radioactive contaminants and the acidity readings of theomitted data demonstrated a more toxic waste stream than was presented in the mill application.
161. Dr. Maest’s opined that substantial additional characterization is necessary toaccurately present the true acidic and toxic nature of the mill wastes at the proposed PR Mill.
162. Dr. Maest testified that Energy Fuels and CDPHE also failed to fully investigate or adopt measures to ensure better protection of human health and the environment in terms of
neutralizing the mill waste to reduce its acidity and toxicity.
163. Dr. Maest testified that there are relatively easy and inexpensive methods to reducetoxic and radioactive concentrations to make uranium mill waste streams less toxic.
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164. Dr. Maest, as with every other witness, confirmed that the liner system is likely to
leak.
165. Dr. Maest testified that the PR Mill proposal did not include a robust liner design and
leak detection system that would reduce tailings releases to as low as reasonably achievable
standards.
166. Dr. Maest testified that changes in bird netting designs that reduced evaporation from
the tailings was not taken into account in the EIA. Energy Fuels conceded this error and claimed it would be recalculated at some later date. On information and belief, the evaporation rates have
not been recalculated and the evaporation ponds have not been redesigned in light a correct
evaporation rate.
167. Ms. Travers holds bachelors and masters degrees from Stanford University with
extensive educational and practical expertise in hydro-geology.
168. Ms. Travers testified that Energy Fuels’ and CDPHE’s assumptions and methodologies failed to establish an adequate water supply for safe operation of the mill and
maintenance of the tailings.
169. Ms. Travers testified that no attempt was made to establish water availability beyond a
five year time horizon where the PR Mill has a proposed 40 year operating plan.
170. Ms. Travers testified that water levels in the wells from which the company proposes
to extract water for its mill operations has been dropping over the last several years,demonstrating that Energy Fuels’ assumptions of constant recharge back to the aquifer are simply
not justified.
171. Ms. Travers’ testimony confirmed that Energy Fuels’s application and the EIA
University and has served on the faculty for the University of Montana in the economics
department for 40 years, among other substantial expert credentials.
177. Dr. Power testified that the EIA failed to account for or include basic principles and
methodologies required for a competent socioeconomic analysis.
178. Dr. Power testified that the socioeconomic study relied up by CDPHE do not provide a
scientifically valid basis to compare the costs versus the benefits of the project.
179. Dr. Power testified that the socioeconomic analysis prepared for this project failed to
consider site-specific issues associated with the geography of the area.
180. Dr. Power testified that Energy Fuels and CDPHE failed to properly account for the
fact that the domestic uranium mining industry has a long and well-established history of going
through dramatic booms and busts with regard to operations and employment, resulting in a gross
skewing of the analysis.
181. Dr. Power testified that it was “startling” to see CDPHE fail to take any credible,
serious look at the stigma issue in its socioeconomic analysis based on actual data from theParadox Valley and surrounding region.
182. Dr. Power asserted his expert opinion that the socioeconomic and cost-benefitanalyses conducted by Energy Fuels and CDPHE failed to reach the threshold of a professional,
or even competent, scientifically-based analysis.
183. During the License Hearing, Energy Fuels admitted the 2009 application and the EIA
relied upon in the August 2012 notice of hearing are outdated and deficient.
184. During the License Hearing, CDPHE admitted it lacked the resources to carry out its
duties.
185. The CH2M Hill partial design and plans (filed under seal) that formed the basis of the
2009 application were abandoned in September 2011in favor of a new, low cost, confidential
alternative provided by Lyntek. EFPH0144741, accord Id . at 144705-14470 (numerousconfidential documents addressing same).
186. Nothing in the design changes made by Lyntek were addressed in the EIA published on August 6, 2012. When the hearing was noticed, CDPHE was aware of Energy Fuels was
relying on a new Lyntek set of partial designs and plans.
187. On August 6, 2012, CDPHE was aware of substantive problems involving the
calculation of the “action leakage rate” which involves the margin of safety associated with
leakage rates related to the design and construction of the tailings impoundments, the materials to
be contained, and the response actions where a leak exceeds the capacity of the liner system.
188. There was no ability to present expert testimony or to cross-examine Energy Fuels
witnesses, Mr. Tarlton, or the other CDPHE personal regarding serious problems with the tailings
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impoundments that were known to the agency on August 6, 2012, but which was not included in
the EIA, nor made public in any way until the December 2012 document release.
189. Due to deficiencies in the application, CDPHE sent many hundred requests for
information (RFIs) to Energy Fuels. Some RFIs remained unresolved as of April 25, 2013. Many
of CDPHE’s RFIs were addressed by Energy Fuels’ “conceptual” responses. For some RFIs,CDPHE deferred resolution until after the license issues.
190. Energy Fuels made no attempt to amend or update the November 2009 application thatdescribed construction of a 500 ton per day capacity mill. Energy Fuels’ admitted that “the mill
is still designed to produce with a production capacity of a thousand tons per day.”
191. Energy Fuels has prepared a written plan for an incremental expansion to a 1500 ton
per day operation.
192. Energy Fuels has actually foreseen the need to build reservoirs and pipelines to divert
water from the Dolores, San Miguel, and distant groundwater wells due to water shortages.
193. Four alternative sources of water along with a pipeline were analyzed internally byEnergy Fuels after the application was filed, but were not included in any updated alternatives
analysis because Energy Fuels considered them a part of a 1000 ton per day operation, and not
the 500 ton per day operation described in the application.
194. Energy Fuels admitted that any groundwater extraction must await the results of the
National Environmental Policy Act analysis required by the Bureau of Reclamation due to thefederal action involved in obtaining the conditional right to deplete the Dolores River. On
information and belief, Energy Fuels use of water at the PR Mill requires federal approvals thathave not yet been obtained.
195. All new water depletions from the Dolores and San Miguel Rivers must receive
federal approval due to the Endangered Species Act protections for what are known as the “four listed Colorado River fish.”
196. Briefing on the testimony of Plaintiffs’ expert witnesses and the material issues presented for an “initial decision” can be found in the attached post-hearing briefing and is
incorporated here by reference.
PLAINTIFFS’ CLAIMS FOR RELIEF
FIRST CLAIM FOR RELIEF:
Unlawfully Issuing a Radioactive Materials License
Without Benefit of an Initial Decision on Issues Raised at the License Hearing 197. Plaintiffs incorporate by reference each and every allegation contained in all other
paragraphs of this Complaint.
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198. This claim seeks declaratory and equitable judicial relief to invalidate the Radioactive
Materials License Numbered Colo. 1170-01, Amendment No:02, Global Revision 3 (“License”),which was signed by Jennifer Opila on behalf of CDPHE on April 25, 2013.
199. The purpose of the remand was for CDPHE to notice and convene the License
Hearing that is required by state and federal laws governing uranium milling and byproductdisposal, including the Radiation Control Act and Administrative Procedure Act. See Remand
Order at 11-12 ¶¶32-34, 19-21¶¶ 1-8, Litigants’ Stipulation at 1 (“ The procedures will be based
on the Court’s order of June 13, 2012, Colorado law and regulations, including theAdministrative Procedure Act (“APA”) section 105, the Radiation Control Act, section 203,
Radiation Control Regs. section 18.6, and the Colorado Rules of Civil Procedure.”).
200. The APA includes the following provision:
Each decision and initial decision shall include a statement of findings and conclusions
upon all the material issues of fact, law, or discretion presented by the record and the
appropriate order, sanction, relief, or denial thereof.
C.R.S. § 24-4-105(14)(a)(emphasis added). This provision is applicable to the “initial decision”made on the License Hearing and the “decision” issued by CDPHE. 6 CCR 1007-1 §18.6.7.2,applied by Western Colo. Congress v. Colorado Dep't of Health, 844 P.2d 1264, 1267 (Colo. Ct.
App. 1992)(holding that “the decision and order of [CDPHE’s] hearing officer or administrativelaw judge is an initial decision” subject to appeal).
201. In order to satisfy the requirements of the Atomic Energy Act, the License Hearingmust conclude with the issuance of “a written determination which is based upon findings
included in such determination and upon the evidence presented during the public comment period and which is subject to judicial review.” 42 U.S.C. 2021(o)(3)(iii).
202. A new milling and 11e(2) byproduct material license may not be issued until and
unless an opportunity for License Hearing is provided. See 42 U.S.C. § 2021(o) accord C.R.S.§25-11-203(1)(b)(1)(requiring licenses be issued “in accordance with sections 24-4-104 and 24-4-
105, C.R.S.”). CDPHE issued the License without benefit of a lawful License Hearing.
203. If a License Hearing is requested, it must be initiated by CDPHE publication of notice,
which notice must include an EIA. Order on Judicial Review at ¶23 (“§18.4.1 requires that
CDPHE make available to the public a comprehensive Environmental Impact Analysis (“EIA”)at the time the 90-day notice of hearing is sent.”). The Order on Judicial Review requires
CDPHE to prepare, and hold a hearing based on a “comprehensive EIA.”
204. Plaintiffs timely sought and received party status. Plaintiffs participated in all aspects
of the License Hearing, including presentation of issues, discovery, pre-hearing motions practice,
and presenting witnesses, evidence, and conducting cross-examination at the License Hearing.
205. All filings presented by Plaintiffs can be found in the Administrative Record and/or
hearing transcript prepared by Judge Dana.
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206. In December 2013, Plaintiffs’ filed post-hearing briefs which presented numerous
procedural and substantive issues for resolution in an “initial decision.”
207. In its brief, CDPHE specifically requested the hearing officer make a determination
“that state and federal procedural requirements applicable to the Application have been satisfied
[…]” and “that the Application is complete and, along with the administrative record, sufficientfor CDPHE to make a decision on the application.”
208. Response and reply briefs were also filed.
209. The ruling of Judge Richard Dana (ret.) was issued on January 14, 2013.
210. The January 2013 Ruling did not satisfy APA requirement that the ALJ provide an
“initial decision” of issues raised by the parties to the License Hearing.
211. Judge Dana did not issue an “initial decision” as contemplated and required by the
Colorado APA. C.R.S. § 24-4-105(14)(a). Instead, Judge Dana accepted Energy Fuels’argument that an “initial decision” was not required.
212. The January 2013 Ruling made no determination on whether or not Energy Fuels
satisfied the statutory or regulatory criteria necessary for issuance of a license.
213. By failing to provide a lawful “initial decision,” Defendants denied Plaintiffs, their
membership, and the public of their respective rights to have an independent adjudication and
determination on all issues raised during the hearing.
214. The January 2013 Ruling failed to make findings of fact or conclusions of lawregarding numerous material issues raised by the parties and the public.
215. The January 2013 Ruling does not address authority from the Atomic Energy Act,
Uranium Mill Tailings Radiation Control Act, Radiation Control Act, Administrative ProcedureAct, or Colorado’s radioactive materials regulations to support any determination that may have
been made on issues raised by Plaintiffs.
216. A fair read of the January 2013 Ruling did not provide a reviewable determination.
217. Failure to provide a written determination that could be subjected to the ExecutiveDirector’s review or subsequent judicial review, denies Plaintiffs’s rights as parties to the
proceedings.
218. The single issue upon which the ALJ identified any basis in law was the self-serving
pronouncement that “[T]he hearing conducted as described in the record of these proceedings
fully satisfies the requirements of C.R.S. §24-4-105 . . .” January 2013 Ruling at 3 ¶1.
219. The ALJ’s conclusory statement did not address the procedural requirements that flow
from the Radiation Control Act and Atomic Energy Act and applicable caselaw.
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220. The hearing officer’s bare pronouncement regarding the lawfulness of the hearing is
due no deference, and is reviewed de novo by the district court as a matter of law.
221. Plaintiffs repeatedly and explicitly requested the hearing officer to make
determinations in an initial decision, thus squarely exhausting the issue. See e.g. SMA Brief at 5-
6, 11-13, SMA Burdens Brief (11/07/2012), Wildlife Coalition Brief (11/17/2012) at 1-2. Thisissue was presented to the Executive Director through a timely filed appeal.
222. This claim became ripe for adjudication under C.R.S. § 24-4-106 upon CDPHE’sservice of the License dated April 25, 2013.
223. This claim may be remedied by an order declaring the License invalid ab initio and remanding with instructions that CDPHE comply with all legal requirements in conformance
with any such order.
224. No prejudice can befall Energy Fuels, who alone advocated the untenable
“intermediate step” configuration based on the theory that the hearing officer lacked jurisdictionto determine issues of fact and law presented in the License Hearing by the parties and the public.
Second Claim for Relief
Due Process was Denied where the Hearing Officer Failed to Determine
and Adhere to an Explicit Burden of Proof
225. Plaintiffs incorporate by reference each and every allegation contained in all other paragraphs of this Complaint.
226. The issue of a burden of proof was not resolved by the hearing officer, despite the
central role played by such burdens in administrative hearings.
227. Energy Fuels, the applicant and the proponent of the license, bears the ultimate burdenof proof of demonstrating compliance with all requirements of state and federal law before a
license may issue.
228. Colorado regulations applicable to uranium mills clearly impose a burden of proof on
the license applicant. 6 CR 1007-1 §18.6.6.5 (“The proponent of any motion, order, or license
issuance bears the burden of proof .”)(emphasis added) accord C.R.S. § 24-4-105(7). Accord 6CCR 1007-1 § 18.3 (applicant must “clearly demonstrate” compliance with Part 18
requirements); § 18.3.6 (mill applicants have the affirmative burden to “clearly demonstrate”
how each of the requirements of Appendix A to Part 18 have been met).
229. The due process right of parties to administrative hearings was recently confirmed by
the Colorado Supreme Court:
The “procedural safeguards” attendant to an administrative action that can be classified as
quasi-judicial include the right to counsel, the ability to cross-examine, the ability to
present an opening statement and closing argument, the ability to put on witnesses and
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present rebuttal evidence, and the adherence to an explicit and predetermined burden of
proof.
Churchill v. Univ. of Colo. at Boulder, 2012 CO 54, P50 (Colo. 2012) citing Cleavinger v.
Saxner , 474 U.S. 193 (U.S. 1985).
230. Resolution of all issues presented by Plaintiffs at the License Hearing necessarily
turned on the assignment of the burden of proof. 6 CCR 1007-§ §18.6.6.5 (“The proponent of
any […] license issuance bears the burden of proof.”).
231. The burden of proof issue was repeatedly raised by Plaintiffs filings and during the
pre-hearing motions. The issue of Energy Fuels’ failure to meet a licensee’s burden wasextensively briefed and presented for decision.
232. Disputes concerning burdens applicable to CDPHE and any other party were not
resolved by the hearing officer nor by the Executive Director on appeal.
233. Failure to resolve and assign the burden of proof is reversible legal error that cannot be
remedied by the reviewing tribunal.
234. Prejudice flowing from the failure to determine the burden of proof is compounded by
the failure to apply that burden to factual determinations based on the documentary evidence and live testimony presented during the hearing.
235. The January 2013 Ruling, Executive Director’s appeal decision, and the License wereissued without requiring Energy Fuels, as the applicant, to “bear[] the burden of establishing by a
preponderance of evidence that all of the conditions for the [license] have been satisfied.”Orsinger Outdoor Advertising, Inc. v. Department of Highways, 752 P.2d 55, 67 (Colo. 1988)
(holding that the APA requires the applicant to satisfy the burden of proof). This general
requirement is confirmed by specific regulations applicable to uranium milling. 6 CCR 1007-§
§18.6.6.5
236. By failing to provide “an explicit and predetermined burden of proof” during the pre-
hearing motions practice, and by failing to apply this burden to factual and legal determinationson issues squarely presented by the parties, the adjudicatory hearing was degraded into a mere
presentation of information to be packaged and sent to the CDPHE, a party to the hearing, for
further consideration.
237. Where the License was issued after a License Hearing that lacked explicit burdens of
proof and without requiring an applicant to provide proof that substantive protections of state and federal law have been met, the License is void ab intio.
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the Substantive Protections of Part 18 Regulations
238. Plaintiffs incorporate by reference each and every allegation contained in all other paragraphs of this Complaint.
239. Energy Fuels, the applicant and the proponent of the license, must “clearlydemonstrate” compliance with Part 18 requirements. 6 CCR 1007-1 § 18.3.
240. The plain language of the regulations specifies that Energy Fuels has an affirmative burden to “clearly demonstrate” how each of the requirements of Appendix A to Part 18 have
been met. Id . at § 18.3.6
241. Part 18 is the regulation most specifically applicable to uranium milling and tailings
disposal. Part 18 contains numerous provisions that guard against the hazards posed by uraniummilling and tailings disposal.
242. Appendix A to Part 18 has specific criteria that a proponent of proposed mill license
must satisfy.
243. The January 2013 Ruling accepted Energy Fuels’ argument that Part 18 of the
Colorado radiation regulations are not applicable to the License Hearing.
244. This erroneous proposition was directly contradicted by party admissions of Energy
Fuels. Transcript at 151:10-12 (Frank Filas testimony that “CDPHE's licensing requirements arefound in the Colorado Code of Regulations. Part 3 and Part 18 are the areas that we address.”).
245. Judge Dana committed reversible legal error by failing to recognize and apply the Part
18 Regulations to the evidence provided at the License Hearing. The error denied Plaintiffs’fundamental right as parties to the License Hearing.
246. At numerous points in the License Hearing, the parties disputed the issue of theapplicability of the Uranium Mill Tailings Radiation Control Act, Atomic Energy Act, Radiation
Control Act, Administrative Procedure Act, and Colorado’s radioactive materials regulations, but
these authorities were not applied in the January 2013 Ruling.
247. Part 18 of the Colorado regulations remain effective and control the outcome of the
“initial decision” on the License Hearing”, the Executive Director’s appeal decision, and thesubsequent CDPHE decision on the License.
248. The Judicial Review Order did reject various interpretations of Part 18 that did not
conform to the statute. Judicial Review Order at 8 -10, Id at ¶25 (“to the extent so interpreted, itis void.”).
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249. The Judicial Review Order confirmed the continuing application of the “minimum
standards set forth in §247o” of the federal Atomic Energy Act ( Id at 12, ¶22) and provided aninterpretation of the regulatory scheme that “harmonized” the timing requirements of state
authorities implementing the federal law. Id . at 11-12 ¶¶32-33 citing 42 U.S.C. §
2021(o)(codified version of §274o).
250. Despite the fact that Energy Fuels’ case in chief argued that the application met the
procedural and substantive standards of Part 18, none of these issues were addressed in the
January 2013 Ruling.
251. The following are among the Part 18 procedural issues that were not resolved by the
ALJ or the Executive Director appeal decision:
Failure to identify online location of application and EIA;
Failure to publish a draft license with the Notice;
Failure to include a description of the proposed licensing action and a statement of the
availability of its text in the Notice. Failure to provide a comprehensive EIA at time of Notice;
Failure to make an EIA available for NRC review
Failure to timely resolve discovery disputes;
Denial of Plaintiffs right to cross examine Energy Fuels on proofs offered to meet its burden.
252. CDPHE’ refusal to respond to reasonable discovery requests prevented Plaintiffs from
conducting cross-examination.
253. Energy Fuels did not meet its burden to provide substantial, admissible evidence that
its application satisfied the substantive standards of Part 18.
254. Plaintiffs’ provided extensive proof that Part 18 standards had not been met through
documentary evidence, and the expert analysis, opinions, and critiques presented by Dr. Maest,
Ms. Travers, and Dr. Power.
255. None of the substantive requirements of Part 18 or Part 18 Appendix A were
addressed by the January 2013 Ruling, even though they were raised repeatedly in nearly every
filing, during the hearing itself, and in the post-hearing briefs. See Exh 1 & 2 Post-HearingBriefing.
256. The proper remedy for the failure to conform to Rule 18 procedural requirements and to made factual and legal determinations on contested Rule 18 substantive issues is an order
vacating the License and to remand the matter to CDPHE with instructions to conform with any
such order and all requirements of state and federal law.
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Socioeconomic Omissions Require Denial of the License Request
257. Plaintiffs incorporate by reference each and every allegation contained in all other
paragraphs of this Complaint.
258. Colorado requires a careful analysis and consideration of socioeconomic factors when
making uranium mill licensing decisions. See e.g. 6 CCR 1007-1 § 18.3.5.3.
259. CDPHE has the power to deny a license application based on socioeconomic
considerations, even if all other technical considerations have been satisfied.
260. The January 2013 Ruling rendered a single finding of fact upon the evidence presented
“the absence of separate and distinct economic data for the west end of Montrose County”
prevented any conclusion on the socioeconomic impacts of the proposed mill. January 2013
Ruling at 3 ¶8.
261. This finding of fact cannot be disturbed by the Executive Director or district court and was not appealed by any party below.
262. The January 2013 Ruling constitutes reversible legal error where the ALJ did notissue a finding of law where the lack of economic data for the impacted region confirms a lack of
substantial evidence to satisfy Energy Fuels’ burden of proof on Part 18 regulations and the
Radiation Control Act. C.R.S. § 25-11-203(2)(c)(VI)(requiring analysis of economic and socialcosts and benefits).
263. The failure to resolve the socioeconomic issues in an “initial decision” or otherwise
can be remedied by an order vacating the License and to remand the matter to CDPHE with
instructions for conformance with any such order and all requirements of state and federal law.
264. As a matter of law, the absence of competent socioeconomic data regarding the
impacted community requires invalidation of the License and denial of the license application. 6
CCR 1007-1 § 18.3.5.3.
Fifth Claim for Relief
CDPHE Arbitrarily Relied on an Unlawful Environmental Impact Analysis
265. Plaintiffs incorporate by reference each and every allegation contained in all other
paragraphs of this Complaint.
266. 6 CCR 1007-1 §18.4.1 requires that CDPHE make available to the public a
comprehensive Environmental Impact Analysis (“EIA”) at the time the 90-day notice of hearing
is sent. The Judicial Review Order confirmed that CDPHE must prepare and make available a“comprehensive” EIA for use in the License Hearing.
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267. The purpose of the EIA is to fully inform the public and ultimate decisionmakers
about the impacts, alternatives, and mitigation measures of the proposed project.
268. The procedural requirements of an EIA must be at least as stringent as the federal
procedures that require the Nuclear Regulatory Commission staff to provide an independent
“hard look” at the proposal for the benefit of the parties and ultimate decisionmakers.
269. The EIA is a requirement of federal law that Colorado must implement in a manner at
least as stringent as the federal requirements.
270. Numerous issues were raised by Plaintiffs and other parties to the License Hearing
regarding the EIA. However, none were resolved by the ALJ. Order on Judicial Review at ¶ 23(“In addition, §18.4.1 requires that CDPHE make available to the public a comprehensive
Environmental Impact Analysis (“EIA”) at the time the 90-day notice of hearing is sent.”) citing
CCR 1007-1 § 18.4.
271. The deficiencies in the EIA were raised in the statement of issues and again during the post-hearing filings, including:
CDPHE’s EIA does not contain required analysis.
Viable alternate locations were not considered in the EIA.
Alternate tailings disposal methods were not considered
Impacts across Energy Fuels plans for alternate processing capacity and rates werenot analyzed.
The EIA relies on stale and inaccurate information in Energy Fuels’ 2009Environmental Assessment.
The EIA did not analyze the long-term impacts and costs of various
decommissioning, decontamination, and reclamation scenarios. Cumulative impacts were not analyzed
Energy Fuels improperly influenced the 2009 Environmental Report which was relied on in the EIA.
The EIA does not comply with minimum federal standards applicable to review of uranium milling and tailings disposal applications.
The EIA fails to adequately analyze impacts to wildlife.
The expert analysis, opinions, and critiques presented by Dr. Maest and Ms. Traverswere not addressed in the EIA, initial decision, or License decision.
Plaintiffs’ post-hearing briefing is incorporated here by reference. Exh. 1 & 2.
272. CDPHE did not contest or refute any issues raised by the parties or defend the EIAduring the hearing or in its post-hearing briefs.
273. CDPHE’s entire direct case in support of the EIA relied on the direct testimony of Mr.Tarlton, which lasted a matter of minutes. Transcript at 831:25-839.
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274. On cross-examination, Mr. Tarlton admitted numerous EIA deficiencies. Transcript at
839-1029.
275. Energy Fuels’ testimony admitted its application was inaccurate and stale when the
hearing was noticed in August 2012.
276. On April 25, 2013, CDPHE released a new EIA that was nearly identical to the EIA
relied upon in its August 6, 2012 Notice of Hearing and contained in the Administrative Record.
The deficiencies identified during the License Hearing were not remedied.
277. The January 2013 Ruling directed CDPHE to conduct a post-hearing consideration of
the information presented by Plaintiffs, the public, and other parties to the License Hearing.
278. The EIA issued on April 25, 2013 does not contain analysis or consideration of
evidence presented by Plaintiffs, the public, or other parties to the License Hearing.
279. Where none of the factual or legal issues raised about the EIA were resolved by theJanuary 2013 Ruling, and where the information provided by Energy Fuels as the basis for a
comprehensive EIA was admittedly stale and incorrect, the proper remedy is an order vacatingthe License and remanding the matter to CDPHE with instructions for conformance with any
such order and all requirements of state and federal law.
280. Energy Fuels cannot suffer prejudice where it knowingly promoted reliance on a
deficient EIA that did not reflect current conditions.
Sixth Claim for Relief
CDPHE’s April 25, 2013 Licensing Action and Decision
Violates the UMTRCA, AEA, APA, RCA, and Part 18 of the Implementing Regulations 281. Plaintiffs incorporate by reference each and every allegation contained in all other
paragraphs of this Complaint.
282. The violations in Claims One through Five, independently and collectively, also
prevent CDPHE from making a lawful decision to issue a License.
283. It is legal error for CDPHE staff, a party to the hearing, to make all conclusions of law
and findings of fact de novo in the April 2013 Licensing Action, including assessing thecredibility of the evidence and witnesses presented by the parties, without benefit of an “initial
decision” by an independent administrative law judge.
284. Where a draft license and lawful EIA were not provided with the hearing notice and
where findings of fact and conclusions of law were deferred to the CDPHE staff by Judge Dana,
Plaintiff were denied the procedural and substantive protections of a right to appeal the “initial
decision” to the Executive Director. Western Colo. Congress v. Colorado Dep't of Health, 844P.2d 1264, 1265 (Colo. Ct. App. 1992)(confirming right of parties to appeal the initial decision
issued by the hearing officer) accord 6 CCR 1007-1 §18.6.3.4 (“Parties shall have the right to
[…] appeal the decision of the hearing as provided by the [APA].”).
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285. Where the Plaintiffs’ rights of a party under APA § 105 were denied by CDPHE’sLicensing Action and Decision, the proper remedy is an order vacating the License and
remanding the matter to CDPHE with instructions to conform with any such order and all
requirements of state and federal law.
286. Where CDPHE and Energy Fuels advocated an unlawful result and denial of
Plaintiffs’ rights, neither can suffer harm by declaring the License invalid ab intio and entering
judicial findings of fact and law that the stale application and EIA cannot support issuance of alicense.
PRAYER FOR RELIEF
WHEREFORE, Sheep Mountain Alliance and Rocky Mountain Wild respectfully
requests that this Court examine the administrative record prepared by Judge Dana and all extra-
record materials created or obtained by CDPHE before issuance of the License and enter findings
that Defendants violated the requirements of the Administrative Procedure Act (C.R.S. § 24-101et seq.), Agreement State Agreement, Atomic Energy Act/Uranium Mill Tailings Control Act, 42
U.S.C. § 2011, et seq. and implementing regulations, Radiation Control Act (C.R.S. § 25-11-101et seq.), and the Board of Health Regulations (C.C.R. 1007-1) when conducting the Licensing
Hearing, when issuing the Environmental Impact Analysis, when issuing the Radioactive
Materials License Numbered Colo. 1170-01, Amendment No:02, Global Revision 3 (“License”),which was signed by Jennifer Opila on behalf of CDPHE on April 25, 2013, and enter further
findings that Defendants’ actions and failures to act cannot be sustained on judicial review
pursuant to standards set forth under C.R.S. § 24-4-106 , and based on such findings respectfullyrequest the court enter judgment providing the following relief:
1) declare that the License is void ab intio due to failure to satisfy all requirements of
federal and Colorado law before license issuance;
2) remand the matter to CDPHE with instructions to conform its further proceedings withany such order and all requirements of state and federal law;
3) hold unlawful and set aside the agency action and restrain the enforcement of allorders and rules under review, compel any agency action to be taken which has been unlawfully
withheld or unduly delayed, remand the case for further proceedings, and afford such other relief
as may be appropriate; and,
4) Sheep Mountain Alliance and Rocky Mountain Wild further pray that the Court grant
such other relief as the Court deems just and proper pursuant to its inherent equitable powers,including any injunctive and declaratory relief.
RESPECTFULLY SUBMITTED THIS 24th
DAY OF MAY, 2013,
S/Travis E. Stills
Travis E. Stills, #27509
Energy & Conservation Law
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