Esso Standard Oil Co. v. Rodríguez-Pérez

United States Court of Appeals
For the First Circuit
No. 05-1722

ESSO STANDARD OIL COMPANY (Puerto Rico),
a Puerto Rico Corporation,

Plaintiff, Appellee,

v.

CARLOS E. RODRÍGUEZ-PÉREZ; CARMEN ORTIZ-LOPEZ;
CONJUGAL PARTNERSHIP RODRÍGUEZ-ORTIZ,

Defendants, Third-Party Plaintiffs, Appellants,

CARLOS M. BELGODERE-PAMIES; JANET ROE;
CONJUGAL PARTNERSHIP BELGODERE-ROE,

Defendants,

ESTATE OF PAGÁN-PAGÁN,

Third-Party Defendant, Appellee.

ON APPEAL FROM A JUDGMENT OF THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO
[Hon. Justo Arenas, Chief Magistrate Judge]

Before
Lipez and Howard, Circuit Judges,
and Bowman,* Senior Circuit Judge.

Héctor M. Alvarado-Tizol, for appellant.
David P. Freeman, with whom Alexandra Rivera-Saez and O'Neill
& Borges were on brief, for appellees.

June 14, 2006

*
Of the Eighth Circuit, sitting by designation.
 LIPEZ, Circuit Judge. Esso Standard Oil Company brought

suit under the Comprehensive Environmental Response, Compensation,

and Liability Act ("CERCLA"), and the Resource Conservation and

Recovery Act ("RCRA") against Carlos Rodríguez-Pérez, his wife

Carmen Ortiz-Lopez, and their conjugal partnership; and Carlos M.

Belgodere-Pamies, his wife Janet Roe, and their conjugal

partnership (collectively, "Defendants"). The defendants filed

state law counterclaims. The parties consented to proceed before

a U.S. magistrate judge. On summary judgment, the magistrate judge

dismissed those counterclaims with prejudice.

Subsequently, with Esso's claims still pending, the

United States Supreme Court decided Cooper Industries, Inc. v.

Aviall Services, Inc., 543 U.S. 157 (2004). There, the Court held

that a CERCLA contribution claim, similar to the one asserted in

this case by ESSO, was subject to certain statutory requirements.

There is no dispute that Esso did not meet these requirements and,

therefore, could not maintain its CERCLA claim against the

defendants. The magistrate judge dismissed the CERCLA claim

accordingly.

The defendants now challenge the magistrate judge's

dismissal of their state law counterclaims, claiming that, in the

aftermath of Cooper Industries, there was never subject matter

jurisdiction over them. We affirm.

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 I.

A. Factual Background

Esso primarily sought two forms of relief: (1)

contribution under § 113(f) of CERCLA, 42 U.S.C. § 9613(f); and (2)

injunctive relief under § 7002(a)(1)(B) of the Solid Waste Disposal

Act, as amended by RCRA, 42 U.S.C. § 6972, for the response costs

that Esso incurred in remedying environmental contamination at a

gasoline service station located in La Vega Ward, Barranquitas,

Puerto Rico (the "Station"). Operated as a retail service station

from the mid-1930's until August 1998 when it was closed, the

Station sold gasoline, diesel fuel, automobile parts, and motor

oil. The Station's operators performed oil changes, greasing

operations, used battery recharging and replacement, mechanical

work, and the washing of vehicles on the premises. In 1971,

Rodriguez took over control of the Station's day-to-day operations

from his father. In 1979, Rodriguez leased the station from José

Domingo Pagán-Pagán. Rodriguez managed and controlled the Station

from 1979 until its closure in August 1998.

There was significant disposal of hazardous substances on

the premises during the Station's operation under Rodriguez's

management. Motor oil drained from automobiles was allowed to flow

into the Piñones River, a body of water located behind the station.

Similarly, used oil filters were found buried in large quantities

in the northern part of the Station. Gasoline and diesel used to

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flush dirt and grease from vehicles were rinsed onto the ground

and into the river using a pressure hose. As a result, the

premises became contaminated with a number of hazardous substances

including lead, chromium, benzene, ethylbenzene, toluene, and

xylene.

Belgodere began his involvement at the station in 1993.

In 1994, he conducted reviews of soil conditions and inventory

records in connection with a prior civil action brought by

Rodriguez against Esso. In 1995, Belgodere entered into a formal

agreement with Rodriguez to act as the latter's environmental

consultant and expert witness.

Under CERCLA, Esso sought contribution from Defendants

for the cost of cleaning up the hazardous substances on the

premises of the Station. Under RCRA, Esso sought an injunction

ordering Defendants, among other things, "to investigate, abate and

remediate any endangerment posed by the environmental conditions"

at the Station.

B. Procedural Background

The proceedings, as they are relevant to this appeal,

unfolded as follows:

-- After Esso filed its Second Amended Complaint, Defendants filed

counterclaims grounded in state law claiming: (1) lost income; (2)

lost future income; (3) lost gasoline; (4) slander; (5) attorney's

fees; (6) mental anguish; and (7) injunctive relief.

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 -- Both parties moved for summary judgment on the issue of

liability for contribution under CERCLA. Esso also moved for

summary judgment on the state law counterclaims.

-- The magistrate judge issued an opinion and order on the pending

summary judgment motions. The magistrate judge granted summary

judgment in favor of Esso on Defendants' counterclaims, concluding

that the state law counterclaims were time-barred. The magistrate

judge also ruled in favor of Esso on the CERCLA liability claim.

-- Defendants filed a motion for reconsideration, requesting the

magistrate judge to reconsider his summary judgment decision.

-- While the reconsideration motion was pending, Esso submitted an

informative motion advising the magistrate judge of the Supreme

Court's decision in Cooper Industries. As a result of Cooper

Industries, Esso could not maintain its contribution claim pursuant

to § 113(f)(1) of CERCLA.

-- The magistrate judge denied Defendants' motion for

reconsideration. The magistrate judge contemporaneously issued:

(1) a partial final judgment dismissing Defendants' counterclaims

with prejudice pursuant to Fed. R. Civ. P. 54(b) (which permits a

district court to enter final judgments as to one or more but fewer

than all claims in a case involving multiple claims and/or

parties); and (2) an order requesting Esso to show cause as to the

effect of Cooper Industries on its CERCLA claim.

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 -- In response to the magistrate judge's request to show cause,

Esso moved for voluntary dismissal without prejudice of both its

CERCLA and RCRA claims.

-- The magistrate judge entered an opinion and order dismissing

Esso's CERCLA claim with prejudice, based on the Cooper Industries

decision. The court also dismissed Esso's RCRA claim without

prejudice.

-- Defendants filed a motion to vacate judgment under Fed. R.

Civ. P. 60(b)(4) and 41(a)(2). Rule 60(b)(4) permits a district

court to relieve a party from a final judgment, order, or

proceeding if the judgement is void. Rule 41(a)(2) establishes a

framework for district courts to enter voluntary dismissals.

-- Esso filed a motion to amend or alter judgment pursuant to

Rule 59(e), requesting that the dismissal of its CERCLA claim be

without prejudice. Esso argued that because its CERCLA claim was

a contribution claim, the claim's dismissal should be without

prejudice in order to avoid res judicata and allow Esso to renew

the contribution claim on grounds other than § 113(f)(1) of CERCLA.

-- The magistrate judge issued a final order and opinion denying

Defendants' motion to vacate judgment. The magistrate judge

explained that while there never was subject matter jurisdiction

over Esso's CERCLA claim, there was jurisdiction over the case at

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all times because of Esso's RCRA claim.1 Therefore, it had

supplemental jurisdiction over Defendants' state counterclaims when

it ruled that those claims were time-barred.

-- In its final amended judgment, the magistrate judge, persuaded

by the reasoning in Esso's motion to alter or amend judgment,

dismissed without prejudice both Esso's CERCLA and RCRA claims.

Previously, he had dismissed the CERCLA claim with prejudice.

C. Standard of Review

We review a district court's ultimate conclusion on the

existence vel non of subject matter jurisdiction de novo because it

is a question of law. Skwira v. United States, 344 F.3d 64, 72

(1st Cir. 2003) (citing Valentín v. Hosp. Bella Vista, 254 F.3d

358, 365 (1st Cir. 2001)). Review of a decision made pursuant to

Rule 60(b)(4) is also de novo. M & K Welding, Inc. v. Leasing

Partners, LLC, 386 F.3d 361, 365 (1st Cir. 2004) ("Although orders

on some Rule 60(b) motions, such as those asserting mistake or

excusable neglect under subsection (b)(1), ordinarily are

reviewable only for abuse of discretion, a decision whether or not

a judgment is void under 60(b)(4) allows no room for discretion.

The review is de novo.").

1
We are not called upon to decide whether the CERCLA claim
should have been dismissed for lack of subject matter jurisdiction
under Fed. R. Civ. P. 12(b)(1), as the magistrate judge ruled, or
for failure to state a claim under Rule 12(b)(6).

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 II.

A. Cooper Industries

There is no dispute that Esso's CERCLA claim was not

properly before the magistrate judge. In Cooper Industries, the

Supreme Court clarified the circumstances under which a private

party may seek contribution under § 113(f)(1) of CERCLA. Section

113(f)(1), pursuant to which Esso brought its contribution claim

against Defendants, "allows persons who have undertaken efforts to

clean up properties contaminated by hazardous substances to seek

contribution from other parties liable under CERCLA." Cooper

Indus., 543 U.S. at 160. Section 113(f)(1) further specifies that

a party may obtain contribution "during or following any civil

action" under CERCLA § 106 or § 107(a).

The issue the Court decided was "whether a private party

who has not been sued under § 106 or § 107(a) [of CERCLA] may

nevertheless obtain contribution under § 113(f)(1) from other

liable parties." 543 U.S. at 160-61. The Court held that such a

party may not. Id. at 161. Because, like the plaintiff in Cooper

Industries, Esso had not been sued under § 106 or § 107(a) of

CERCLA, it could not maintain its § 113(f)(1) CERCLA claim and the

magistrate judge properly dismissed it.

B. Esso's RCRA claim

Defendants argue that Esso's RCRA claim, like its CERCLA

claim, was not properly before the magistrate judge. As a result,

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because there was no pending question of federal law, there was no

supplemental jurisdiction over Defendants' state law counterclaims,

and they could not have been dismissed with prejudice. See 28

U.S.C. § 1367(a) ("[I]n any civil action of which the district

courts have original jurisdiction, the district courts shall have

supplemental jurisdiction over all other claims that are so related

to claims in the action . . . that they form part of the same case

or controversy under Article III."); BIW Deceived v. Local S6,

Indus. Union of Marine and Shipbuilding Workers of Am., 132 F.3d

824, 833 (1st Cir. 1997) ("A federal court that exercises federal

question jurisdiction over a single claim may also assert

supplemental jurisdiction over all state-law claims that arise from

the same nucleus of operative facts.").

Defendants base their argument on 42 U.S.C.

§ 6972(b)(1)(B), which details one of the limitations on filing a

citizen suit2 pursuant to RCRA. It states that a citizen suit may

not be commenced "if the Administrator or State has commenced and

is diligently prosecuting a civil or criminal action in a court of

the United States or a State to require compliance with such

permit, standard, regulation, condition, requirement, prohibition,

2
A citizen suit is "[a]n action under a statute giving
citizens the right to sue violators of the law . . . and to seek
injunctive relief and penalties." Black's Law Dictionary, 8th ed.
(2004). Typically, citizen suits, where they exist, function as a
form of statutory enforcement in addition to, or in conjunction
with, enforcement by an administrative agency or other governmental
entity.

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or order." However, the plain language of the statute undermines

Defendants' position. While it is true that the Puerto Rico

Environmental Quality Board is prosecuting an administrative case

involving the Station, the statutory provision precludes a citizen

suit under RCRA only if the suit is "a civil or criminal action in

a court of the United States or a State." An administrative

proceeding does not take place in a "court of the United States or

a State." The RCRA claim was properly before the magistrate judge,

and there was supplemental jurisdiction over the state law

counterclaims.

C. Abstention

Defendants also assert that the magistrate judge should

have abstained from hearing and determining their state law

counterclaims. Defendants raised this argument for the first time

on March 14, 2005 in a reply to an opposition to one of their

motions for reconsideration. This demand for abstention came more

than three-and-a-half years after Esso's RCRA claim was first filed

in district court, and, more importantly, after Defendants had

litigated the state law counterclaims on the merits, culminating in

the magistrate judge's summary judgment ruling on those

counterclaims. Defendants did not raise their abstention argument

in a timely fashion, and we will not entertain it here. See

Marshall v. Marshall, 126 S.Ct. 1735, 1746 n.3 (2006) (upholding a

bankruptcy court's decision to reject a motion for mandatory

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abstention as untimely because the motion was filed eight months

after adversary proceeding had begun).

D. The merits

In their appellate reply brief, Defendants invite us to

review the merits of the magistrate judge's summary judgment

decision on their state law counterclaims. Defendants contend that

the magistrate judge was in error because their state law

counterclaims were not time-barred. In the proceedings below,

Defendants challenged the magistrate judge's dismissal of their

state law counterclaims solely on jurisdictional grounds; they did

not challenge the merits of the magistrate judge's decision. We do

not address any of these merits arguments because they were not

properly raised by Defendants before the magistrate judge. See

Boston Beer Co. Ltd. P'ship v. Slesar Bros. Brewing Co., Inc., 9

F.3d 175, 180 (1st Cir. 1993)("The law in this circuit is

crystalline: a litigant's failure to explicitly raise an issue

before the district court forecloses that party from raising the

issue for the first time on appeal."). Additionally, arguments

made on appeal normally cannot be made for the first time in a

reply brief. Aulson v. Blanchard, 83 F.3d 1, 7 (1st Cir. 1996)

("[R]elief from an appellate court, requested for the first time in

a reply brief, is ordinarily denied as a matter of course.").

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E. Rule 41(a)(2)

Finally, Defendants contend that the magistrate judge

could not dismiss the state law counterclaims with prejudice, while

at the same time dismissing Esso's CERCLA and RCRA claims without

prejudice. Defendants base this argument on Fed. R. Civ. P.

41(a)(2). Rule 41(a)(2), which provides for voluntary dismissals,

states in relevant part that:

[i]f a counterclaim has been pleaded by a defendant prior
to the service upon the defendant of the plaintiff's
motion to dismiss, the action shall not be dismissed
against the defendant's objection unless the counterclaim
can remain pending for independent adjudication by the
court. Unless otherwise specified in the order, a
dismissal under this paragraph is without prejudice.

This language does not support Defendants' position.

Esso did not move for voluntary dismissal of its CERCLA and RCRA

claims until after the magistrate judge had granted partial summary

judgment on Defendants' counterclaims. Because the state law

counterclaims were no longer pending at the time of the magistrate

judge's voluntary dismissal of Esso's federal claims, Rule 41(a)(2)

does not apply.

Affirmed.

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