United States Court of Appeals
For the First Circuit
Nos. 07-2193, 07-2255, 07-2759, 07-2777
CITY OF BANGOR,
Plaintiff, Appellee,
v.
CITIZENS COMMUNICATIONS COMPANY,
Defendant/Third-Party Plaintiff, Appellee,
v.
UGI UTILITIES, INC.; CENTERPOINT ENERGY RESOURCES CORP., ET AL.,
Third-Party Defendants,
BARRETT PAVING MATERIALS INC.; HONEYWELL INTERNATIONAL INC.; BEAZER
EAST, INC.; DEAD RIVER COMPANY,
Third-Party Defendants, Appellants,
v.
SOCIÉTÉ ROUTIÈRE COLAS, S.A.,
Fourth-Party Defendant, Appellant,
ROBINSON SPEIRS, JR.; JULIE ANN MACMANNIS; NANCY S. DAWSON;
ELIZABETH H. SPEIRS; MARY S. PRICE; ROBINSON SPEIRS,
Fourth-Party Defendants, Appellants.
STATE OF MAINE; MAINE DEPARTMENT OF ENVIRONMENTAL PROTECTION,
Appellees.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. George Z. Singal, U.S. District Judge]
Before
Lynch, Chief Judge,
Merritt,* Senior Circuit Judge,
and Howard, Circuit Judge.
Gregory A. Bibler with whom Paul E. Nemser, Francis G.
Kelleher, Christophe G. Courchesne, and Goodwin Procter LLP were on
brief for Honeywell International Inc.
Robert S. Frank with whom Harvey & Frank was on brief for Dead
River Company.
William B. Devoe with whom Eaton Peabody, W. Scott Laseter,
and Kazmarkek Geiger & Laseter LLP were on brief for City of
Bangor.
John S. Hahn with whom Jay C. Johnson, Mayer Brown LLP, Martha
C. Gaythwaite, and Friedman, Gaythwaite, Wolf & Leavitt were on
brief for Citizens Communication Company.
Mary M. Sauer, Assistant Attorney General, with whom Paul
Stern, Deputy Attorney General, and G. Steven Rowe, Attorney
General, were on brief for State of Maine and Maine Department of
Environmental Protection.
John P. McVeigh, David B. Van Slyke, and Preti Flaherty
Beliveau & Pachios LLP were on brief for Barrett Paving Materials,
Inc.
Michael Kaplan and Preti Flaherty Beliveau & Pachios LLP were
on brief for Société Routière Colas, S.A.
Jeffrey A. Thaler and Bernstein, Shur, Sawyer & Nelson were on
brief for Beazer East, Inc.
Samuel W. Lanham, Jr. and Lanham & Blackwell were on brief for
Robinson Speirs, Elizabeth H. Speirs, Mary S. Price, Nancy S.
Dawson, Julie Ann MacMinnis, and Robinson Speirs, Jr.
July 9, 2008
*
Of the Sixth Circuit, sitting by designation.
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LYNCH, Chief Judge. This case concerns responsibility for
the cleanup of the contamination of the bed of Penobscot River in
Bangor, Maine, known as Dunnett's Cove, under the federal
Comprehensive Environmental Response Compensation and Liability Act
("CERCLA"), 42 U.S.C. § 9601 et seq.
Specifically, we are being asked to overturn the district
court's approval, after nearly five years of litigation, of a
Consent Decree which allocates certain responsibilities among
defendant Citizens Communications Company, the plaintiff City of
Bangor, and the intervenor State of Maine (including the Maine
Department of Environmental Protection ("DEP")). City of Bangor v.
Citizens Commc'ns Co. (Bangor II), No. 02-183, 2007 WL 1557426 (D.
Me. May 25, 2007). The appellants are non-settling third and
fourth parties who are said to be potentially responsible parties.
We are also being asked to order the district court, which has not
ruled on the question of the non-settling parties' liability, to
enter judgment in favor of the appellants on a particular theory.
The United States, through the Environmental Protection
Agency, is not and has never been a party in this action, unlike in
most CERCLA actions. We consider whether the absence of the United
States affects the standard of review of the Consent Decree and
conclude that it does. We affirm the Consent Decree and other
orders being challenged.
-3-
I.
A fairly extensive discussion of the background of the
case is required.
A. Original Complaint
The City of Bangor initially filed a cost recovery suit
in 2002 under the private plaintiff provisions of CERCLA, 42 U.S.C.
§§ 9607, 9613, against Citizens Communications Company. Citizens
filed a counterclaim against Bangor, claiming that the City was
responsible for some of the contamination, and filed complaints
against numerous third parties.
The City's complaint alleged Citizens is a potentially
responsible party ("PRP") for the contamination from the
manufactured gas plant ("MGP" or "Site"), which operated in Bangor
from approximately 1851 to 1963. In 1948 Citizens merged with the
Bangor Gas Company, then the owner of the MGP, and succeeded to and
assumed all liability relating to the MGP. Citizens sold the Site
to the Maine Utility Gas Company in April 1963. In 1978, the City
of Bangor took the property through eminent domain. The complaint
alleged that the City had expended over $1.125 million in
investigative and cleanup costs and had suffered from the
property's diminished value.
The complaint alleged the MGP discharged tar, tar-laden
wastewater, and other byproducts into the Penobscot River through
a stone sewer that ran beneath the Site and emptied into the river,
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and that various construction activities at the Site contributed to
the contamination.
The complaint alleged that those hazardous waste
discharges created a tar slick on the bottom of the Penobscot River
that begins at the outfall of the stone sewer and extends at least
1500 feet downstream. As a result, globules from the tar slick
periodically "bubble to the surface and coat boats, docks, bridges
and the shoreline in the vicinity . . . . These and other releases
from the tar slick emit hazardous and toxic chemicals that are
potentially harmful to humans and numerous aquatic species."
Hazardous wastes from the Site allegedly have also contaminated the
soil beneath an adjacent playground and other nearby properties.
The complaint sought cost recovery under CERCLA section
107, 42 U.S.C. § 9607, and a declaration that Citizens was jointly
and severally liable for all future cleanup costs. In the
alternative, the City sought a declaration under CERCLA section
113, id. § 9613, that Citizens would be responsible for an
equitable share of all future cleanup costs. The City also sought
relief under Maine statutory and common law.1
1
The City claimed that the Site constituted a public and
private nuisance under the State's nuisance statute, Me. Rev. Stat.
Ann. tit. 17, § 2701, and common law, and it sought injunctions
under both the statute, id. § 2702, and common law. The City also
asserted claims for strict liability for ultrahazardous or
abnormally dangerous activity and negligence, and it sought
declaratory judgment on its common law and statutory nuisance
claims and punitive damages of at least $50 million.
-5-
B. Early Proceedings and Complaints Against Third and Fourth
Parties
Citizens filed an answer on December 26, 2002, arguing,
inter alia, that because the City is a responsible party, it cannot
maintain any claims against Citizens under CERCLA section 107.
Citizens also filed a counterclaim, alleging that the City was
responsible for contamination of Penobscot River and qualified as
a "responsible person" under CERCLA, id. § 9607(a), and so was
responsible for an equitable share of response costs under CERCLA,
id. § 9613(f)(1).
Bangor filed an Amended Complaint on April 17, 2003 that
added the State of Maine to the case caption as a purported "party-
in-interest" and asserted additional claims against Citizens under
a provision of the federal Resource Conservation and Recovery Act
("RCRA"), id. § 6972(a)(1)(B).2 Citizens opposed adding the State
as a party, arguing that this "method of adding a new party was
completely improper" and that the State's inclusion "would merely
add confusion to the proceedings." The State sent a letter to the
court saying it had two interests in the litigation: from its
2
RCRA governs the "treatment, storage, and disposal of
solid and hazardous waste." Meghrig v. KFC W., Inc., 516 U.S. 479,
483 (1996). RCRA differs from CERCLA because its primary purpose
is not to promote the cleanup of toxic waste sites or to compensate
those involved in the remediation of such sites, but rather "to
reduce the generation of hazardous waste and to ensure the proper
treatment, storage, and disposal of that waste which is nonetheless
generated." Id. The provisions of RCRA are not at issue in this
appeal.
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regulatory authority over uncontrolled hazardous waste sites, and
from the State's property interest in the river bed on which a
portion of the tar plume rests. The State indicated that it
believed its status "is correctly denominated as a 'party-in-
interest.'"
On August 6, 2003, the district court granted Citizens's
Motion To Strike or Drop the State of Maine as a Party. The court
rejected Bangor's suggestion that the court use its equitable
powers to allow the State to participate as a "party-in-interest,"
holding that Bangor had not demonstrated any legal authority for
its doing so. The court suggested that if the State wanted to
participate, it should either intervene under Fed. R. Civ. P. 24 or
request to be included as an amicus curiae. Alternatively, the
court noted that the plaintiff, Bangor, could move to join the
State under Fed. R. Civ. P. 20. Bangor did not do so.
In the interim, on April 30, 2003, Citizens filed third-
party complaints, under Fed. R. Civ. P. 14, 19, and 20, against
Barrett Paving Materials, Inc.; the U.S. Army Corps of Engineers;
Guilford Transportation Industries, Inc.; Honeywell International
Inc.; S.E. MacMillan Company, Inc.; Dead River Company;
Northwestern Growth Corporation; UGI Utilities, Inc.; North
American Utility Construction Corp.; Beazer East, Inc.; and
Centerpoint Energy Resources Corp., seeking contribution and/or
indemnity for any environmental cleanup costs for which it might be
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held liable. On August 26, 2003, Citizens filed an additional
third-party complaint against Maine Central Railroad Company.
Various fourth parties were added.3 Bangor filed a Second Amended
Complaint on October 22, 2003, which did not seek to add any
additional parties.
C. Motions for Summary Judgment
On October 24, 2003, Citizens moved for partial summary
judgment under CERCLA section 107 on the grounds that the City was
a responsible person and therefore unable to bring a joint
liability claim under this provision of CERCLA.
On November 18, 2003, the U.S. Army Corps of Engineers
filed a motion for partial judgment on the pleadings, arguing that
Citizens had no claim for contribution against it because Citizens
was potentially liable only for its equitable share, and parties
facing only equitable liability cannot bring contribution claims.
3
On October 2, 2003, Dead River Company filed a fourth-
party complaint against Robinson Speirs, Elizabeth H. Speirs, Mary
S. Price, Nancy S. Dawson, Julie Ann MacMannis, and Robinson
Speirs, Jr., alleging that when these defendants sold Bacon &
Robinson Co. to Dead River Company in 1976, they covenanted and
warranted that they were responsible for any undisclosed
obligations of Bacon & Robinson Company.
On November 10, 2003, third party Honeywell International
Inc. filed a fourth-party complaint against Société Routière Colas,
S.A., asserting that Colas had agreed to indemnify Honeywell's
predecessor against environmental claims asserted after November
28, 1978.
Third and fourth parties Barrett Paving, Honeywell
International, Beazer East, Dead River Company, Colas, and the
Speirs parties collectively refer to themselves as "non-MGP"
parties because they had no connection to the operation of the MGP.
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On March 11, 2004, the magistrate judge recommended
granting Citizens's motion for partial summary judgment on the
ground that Bangor was precluded from obtaining a full recovery
under CERCLA section 107 because it was a PRP. City of Bangor v.
Citizens Commc'ns Co., No. 02-183, 2004 WL 483201, at *1 (D. Me.
Mar. 11, 2004).4
The magistrate judge also recommended granting the Army
Corps's motion on the grounds that Citizens was potentially liable
to Bangor only to the extent of its equitable share in the City's
cleanup costs and therefore had "no legal basis to seek
contribution from third-parties." City of Bangor v. Citizens
Commc'ns Co., No. 02-183, 2004 WL 483202, at *1 (D. Me. Mar. 11,
2004). The district court subsequently adopted these
recommendations. City of Bangor v. Citizens Commc'ns Co., No. 02-
183, 2004 WL 1572627, at *1 (D. Me. May 7, 2004).
D. Stay and Bifurcation of Third-party Claims
We spend some time on this matter because it directly
affects one of the appellants' key objections to the court's later
actions.
On March 30, 2004, the magistrate judge issued an order,
embodying an agreement by the parties, staying all discovery
deadlines relating to the third- and fourth-party actions,
4
This is no longer the law after United States v. Atlantic
Research Corp., 127 S. Ct. 2331 (2007), which held that PRPs can
recover incurred cleanup costs under section 107. Id. at 2236-38.
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including deadlines to make expert witness designations. On May
14, 2004, the magistrate judge ordered that the stay of discovery
would remain in effect as to third-party claims, and also noted
that "[t]he parties are not yet sure if one or more of them might
be opposed to bifurcation, and no final decision has been made in
that regard."
On July 6, 2004, the magistrate judge ruled on a second
summary judgment motion filed by Citizens, in which Citizens sought
judgment with respect to all remaining counts in Bangor's Second
Amended Complaint. City of Bangor v. Citizens Commc'ns Co., No.
02-183, 2004 WL 1572612 (D. Me. July 6, 2004). The magistrate
judge recommended granting the motion with respect to state law
claims involving private nuisance, strict liability for
ultrahazardous activity, and punitive damages, and denying the
motion with respect to all other claims. Id. at *11.
The magistrate judge's opinion recommended bifurcation:
[A]t the conclusion of the hearing counsel for [a
third-party defendant] expressed concern whether
the court envisioned that litigation between
Citizens and the City would be binding against
third-party defendants, who were essentially
sidelined from this litigation in connection with
the prior entry of judgment against Citizens's
third-party CERCLA action against the Army Corps of
Engineers and my order, entered by consent, staying
discovery of third party experts. . . . I would
recommend at this juncture that the court bifurcate
this case and proceed solely on the action between
the City and Citizens.
Id. at *10.
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The recommendation was adopted in whole by the district
court, without objection. City of Bangor v. Citizens Commc'ns Co.,
No. 02-183, 2004 WL 2823211, at *1 (D. Me. Oct. 14, 2004).
Discovery remained stayed as to third parties pending resolution of
the initial phase of the trial.
In a joint memorandum requested by the court and filed on
November 2, 2004, the parties agreed that the case would proceed in
three phases, not two. Phase One would be a trial between Bangor
and Citizens regarding Bangor's liability claims, Citizens's
affirmative defenses and counterclaims, and Citizens's equitable
share of responsibility. In Phase Two, the court would determine
"the appropriate remedy, if any, to address tar in the Penobscot
River." If a third phase were necessary, it would consist of a
trial to determine the third parties' liability to Citizens.
In this memorandum, Citizens also took the position that
findings and determinations in the first two phases of the case
should be binding in the third phase involving the third parties.
On February 17, 2005, the court declined to address any issues
involving the third parties, noting that "[t]his matter is
scheduled to proceed to trial in May on a bifurcated basis, without
participation by third parties. At best, the action remaining
against any third party is purely hypothetical in any event, given
the court's prior rulings. Therefore [Citizens's] motion all but
asks for an advisory order binding those potential third-party
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defendants in an action that cannot even be contemplated under the
current state of the record."
E. Phase One Trial and Findings
A twelve-day Phase One bench trial was held in September
2005. The third and fourth parties did not participate. On June
27, 2006, the district court issued its Findings of Fact and
Conclusions of Law ("Phase One Findings and Conclusions"). City of
Bangor v. Citizens Commc'ns Co. (Bangor I), 437 F. Supp. 2d 180 (D.
Me. 2006). See Fed. R. Civ. P. 52(a).
The district court made the following findings of fact
and conclusions of law. Bangor had incurred approximately
$1,000,000 in costs during the course of investigating the tar
contamination in Dunnett's Cove. Bangor I, 437 F. Supp. 2d at 196.
The primary source of the hazardous levels of polycyclic aromatic
hydrocarbons ("PAHs") in Dunnett's Cove is tar. Id. at 200. "[I]t
is more likely than not that during most, if not all, of its
operating life, the Bangor MGP discharged tar-laden wastewater into
Dunnett's Cove via the Old Stone Sewer . . . [which] contributed to
the PAH contamination in Dunnett's Cove." Id. at 201. The
operations of a nearby railyard, which occurred between 1854 and
1986, are more likely than not a source of the contamination in
Dunnett's Cove, and "[t]he City's use of and construction on the
Railyard property since 1996 has likely contributed to the movement
of PAH contamination from the Railyard property into Dunnett's
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Cove." Id. at 204. "[O]ther discharges via the Old Stone Sewer,
besides those from the Bangor MGP and the Railyard . . .,
contributed to the tar contamination and elevated PAHs that are now
found in Dunnett's Cove." Id. at 206. However, these discharges
are "likely consistent with what the experts referred to as 'urban
background' and, as such, these discharges more likely than not
account for only a relatively small portion of the tar and elevated
PAHs that will inevitably be addressed in any cleanup of the site."
Id.
The court concluded that Citizens was liable under RCRA
as a past generator of the solid waste now found in the intertidal
zone and the northern portion of Dunnett's Cove. Id. at 211. As
a result, the court noted that it could enter an injunction
requiring Citizens to abate any imminent and substantial
endangerment that exists in Dunnett's Cove, and also could award
Bangor any appropriate costs of litigation, including attorneys'
fees and expert witness fees. Id.
The court determined that Bangor was also liable under
RCRA because it "contributed to the past handling and disposal of
solid waste" in the intertidal zone and the northern portion of
Dunnett's Cove. Id. As a result, the court noted that it could
enter an injunction requiring Bangor to abate any imminent and
substantial endangerment and award Citizens appropriate costs of
litigation. Id. The court concluded that under RCRA, Citizens and
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Bangor were jointly and severally liable to carry out the
directives of a mandatory injunction that would abate the
substantial and imminent endangerment presented by tar
contamination in Dunnett's Cove. Id. at 219.
The court further concluded that the PAHs in Dunnett's
Cove qualify as "hazardous substances" under CERCLA. Id. at 211.
Because Bangor owns an intertidal zone portion of the Dunnett's
Cove facility and because it arranged for the disposal of tar into
Dunnett's Cove, the court found it liable under CERCLA. Id.
Because Citizens succeeded to the liability of the Bangor Gas Light
Company and Bangor Gas Works, the court also found it liable under
CERCLA. See id. at 212.
Having considered all of the evidence at trial and the
factors set out in In re Hemingway Transport, Inc., 993 F.2d 915,
921 n.4 (1st Cir. 1993), the court concluded, within the
limitations of the Phase One inquiry, that Citizens's share of
responsibility under CERCLA should be sixty percent and assigned
the remaining equitable share of forty percent to Bangor. Bangor
I, 437 F. Supp. 2d at 212. This ratio was to apply to previously
incurred as well as to future response costs. Id. at 213. The
court explained that
[t]here is a distinction between resolving the
question of whether the Bangor MGP is a source of
the contamination in question and the more general
inquiry of determining all of the sources for PAH
contamination in Dunnett's Cove. In the context of
this first phase trial, it was never contemplated
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that the parties or the Court would attempt to
definitively answer the latter, more general
inquiry, although it was inevitable that the Court
would make some findings that address this
question. Despite these related findings, further
discussion of the other sources is unnecessary and
inappropriate.
Id. at 214.
The court made clear that its finding that there were two
parties responsible for the contamination was limited and only
"[i]n the context of this first phase trial." Id. The court noted
that if it "were ultimately presented with each and every entity
that could be responsible for some amount of tar and/or PAHs now
found in the Cove, the complicated process of weeding out multiple
'de minimis' polluters and then making an equitable allocation
among all remaining parties would involve a complicated trial
involving many months, if not years." Id. at 224.
The court further explained that "[a] relatively small
portion of the City's share, five percent or less, reflects the
City's role in contributing to the Bangor MGP discharge . . . .
Another slightly greater portion . . . reflects the equitable share
that might be assigned to other potentially responsible parties
that the City has chosen not to pursue and for whom the City does
not serve (and has not served) as a subsequent owner of the
property. Finally, the bulk of the City's forty percent share
reflects its role as current owner of other properties that have
contributed to the contamination." Id. at 225. The court noted
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that although previous property owners might have played a more
significant role in causing the contamination, "the City has chosen
not to pursue these previous owners. Even if the City had pursued
these previous owners, the City would likely still be assigned some
equitable share for these properties . . . both because of its
current role as owner and because of its subsequent use and
construction on these properties." Id. at 225-26.
The court also discussed the possibility of assigning an
equitable share to each liable parent corporation of Citizens which
was responsible for operations of the MGP prior to November 1948.
See id. at 226-27. In doing so, it made clear that "although the
Court is now opening the door of potential third-party liability to
Citizens, it is doing so on a limited basis. The Court has not
assigned to Citizens any 'orphan shares' . . . . Thus, the only
third parties that might be liable to Citizens are those that are
proven to share in the responsibility of the operation of the
Bangor MGP some time prior to 1963." Id.
Significantly, the court stated that "no final judgment
will be entered as [of] this time," and instructed the parties to
determine the best way to move forward while the action was stayed.
Id. at 227.
F. Stay and Settlement Discussions Among Phase One Parties
During the stay that followed, Bangor and Citizens
informed the court that they were "actively engaged in efforts to
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craft a remedy for the environmental problem at issue in this
litigation" that would comport with the court's Findings and
Conclusions and also be acceptable to Maine, with whom they had
been holding meetings. The parties also reported that they had
"held multiple meetings and conference calls to discuss the
possibilities of settling all issues between them which, if
successful, would leave only claims against the Third Parties for
possible resolution by the Court in a Phase III trial." They noted
that no third parties had participated in these discussions. The
court continued to extend the stay throughout the end of 2006 in
order to allow the participating parties to continue negotiations
and attempt to "reach[] an efficient global resolution of this
matter."
Faced with the prospect that the Phase One parties and
the State might settle, the third- and fourth-party defendants
became active. On December 18, 2006, third-party defendants
Barrett Paving and Honeywell International and fourth-party
defendant Colas filed a motion for judgment, arguing that the
court's Findings and Conclusions limited Citizens's responsibility
to its equitable share and there were therefore no remaining claims
against them since "Citizens has made claim against Barrett and
Honeywell only for such share of liability as the Court may assign
to Citizens that exceeds its equitable share." Citizens filed an
opposition, arguing that the motion for judgment was improper
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because "all proceedings concerning the moving parties have been
stayed and bifurcated from the active dispute between the City and
Citizens, and . . . the dispute between the City and Citizens has
itself been stayed."
On January 18, 2007, the court extended the stay until
February 16. On February 16, Bangor and Citizens submitted a joint
status report indicating that they had executed a Settlement
Agreement and were in the process of finalizing a Consent Decree
with the State and the State DEP. The report noted that Bangor and
Citizens had "met and conferred with DEP and representatives of the
Attorney General's office on multiple occasions, and have exchanged
multiple drafts of the Consent Decree." It indicated that the
State had no objection to the "basic terms on which Citizens had
agreed to settle," and the main issues still to be resolved "center
around the specific procedures under which the City ultimately will
finalize the selection of the remedy with DEP at some later date."
On February 23, Citizens and Bangor submitted a joint
status report proposing a schedule for the Phase Three, or third-
party, liability determinations. They noted that the
determinations to be made included whether each of the third-party
defendants qualified as a liable party under CERCLA section 107(a)
and what responsibility the third parties should bear under the
principles of equitable allocations.
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On March 5, 2007, third-party defendants Maine Central
Railroad Company and Guilford Transportation Industries filed a
motion to dismiss, and third-party defendants Dead River Company
and Beazer East filed separate motions for judgment on the
pleadings. Citizens objected to all of these motions, noting that
"the Third Party Motions rely heavily on the Court's initial
Findings of Fact and Conclusions of Law from the first phase trial.
But those findings have not been entered as a final judgment, and
cannot properly serve as a basis for the Third Party Motions.
Moreover, the Court's findings actually point toward, not away
from, the third parties' liability . . . ."
G. Involvement of and Intervention by the State
The State did not respond until April 12, 2007 to the
district court's August 2003 suggestion that, if it wanted to
participate in the case, it ought to request to intervene or to be
included as an amicus curiae. Maine in April 2007 filed a motion
to intervene. See Fed. R. Civ. P. 24.
The State's motion described the State's involvement in
the case as follows: Starting in 2001, the DEP oversaw a remedial
investigation of the Site. On March 3, 2004, the DEP issued an
Uncontrolled Site Designation stating that the tar deposit in
Dunnett's Cove and/or the PAHs in this deposit are hazardous
substances and the Site is an "uncontrolled hazardous substance
site" as defined in the Maine Uncontrolled Sites Law. In 2004,
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Bangor and Citizens jointly engaged a consulting firm, which on
March 15, 2004, submitted a Feasibility Study Report to the DEP
that recommended several remedies for the Site. On August 17,
2005, the DEP issued a letter accepting these proposed remedies and
a Decision Document that identified its selected remedies.
Following the district court's issuance of the Phase One Findings
and Conclusions in June 2006, the DEP renewed its discussions with
Bangor and Citizens regarding remedies for the Site. The parties
did not reach an agreement on remedies but did reach an agreement
regarding the process by which remedies would be proposed and
evaluated, and this agreement was contained in a Consent Decree the
parties would submit to the court separately.
The State argued that it could intervene as of right5
because its interests would be "directly and irrevocably affected"
by the court's decision regarding the remedy phase of the
underlying lawsuit between Bangor and Citizens, both because it
owns the submerged lands underlying the Penobscot River and because
it has the power and responsibility to oversee the cleanup of
hazardous waste sites. The State argued that its interests could
not be adequately represented by either Bangor or Citizens because
"these parties are obligated to pay for the remedial actions and
therefore have a potential conflict of interest regarding the
5
Alternatively, it sought permissive intervention.
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selection of . . . remedies," and also because the State's police
power cannot be delegated to a third party.
Various third and fourth parties opposed the State's
motion to intervene, arguing that (a) it was untimely because it
came four years after the State declined specific invitations to
join the proceeding as a party; (b) the State had failed to file a
complaint with its motion to intervene as required by Fed. R. Civ.
P. 24(c); and (c) "the State's intervention raises the very real
specter that new claims will be filed, additional parties joined,
and many more years of discovery and other pretrial proceedings
will be commenced." The State responded that it could not have
filed a motion for intervention before the agreement embodied in
the Consent Decree was reached, and that the motion and proposed
Decree "identify the State's causes of action and the parties
against whom the State is asserting claims."
On May 25, 2007, the district court granted the State's
motion to intervene. Bangor II, 2007 WL 1557426, at *4. The court
held that the State's interests would not be adequately represented
by the other parties involved, and that although it was "puzzling
to the Court that the State decided to wait approximately four
years to intervene," it was also true that "the State has acted
expeditiously since learning how its interests were imperilled by
the Court's June 27, 2006 decision." Id. at *3. The court also
ruled that "the State's representation that it 'will take no action
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in this case against any of the third or fourth parties' suggests
that its intervention will either have no impact on the Third
Parties or may serve to consolidate and simplify any attempts to
hold any third or fourth party liable for remediation of the site."
Id. at *4. The court further held that under the "unique
circumstances" of this case, "the Court believes it is a proper
exercise of its discretion to excuse the State's failure to file a
pleading and rely on the presented record in considering the merits
of the claims that serve as the basis for the State's request to
intervene." Id.
H. Consent Decree
Meanwhile, on April 11, 2007, Bangor, Citizens, and the
State, as a proposed intervenor, filed a proposed Consent Decree.
The Decree specified that the parties' underlying agreement was
"premised upon the Court's approval of all material terms" of the
Decree on or before June 15, 2007.
Under the terms of this Decree, Maine covenanted not to
sue or take administrative action against Citizens under federal or
state laws, including common law, for contamination at the Site,
"whenever such claims may have arisen or arise in the future." The
covenant included claims based on natural resource damage and
future response actions.
The State gave Bangor a release from liability which was
limited to "any matter relating to Existing Contamination at the
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Site and the work covered by this Decree" and "recovery of all past
and future Response and Oversight Costs." The DEP reserved all
rights against the City, but not Citizens, for natural resource
damage. It also reserved the right to institute proceedings to
modify the Decree to compel Bangor or its successors, but not
Citizens, to perform further response actions or to reimburse the
DEP for additional response and oversight costs if new conditions
at the Site were discovered or new information came to light
indicating that the remedial action outlined in the Decree was
insufficient.
Bangor and Citizens waived all claims against the State
and the DEP regarding existing contamination at the Site and work
covered by the Decree. Significantly as to the third- and fourth-
party defendants, they "reserve[d] all rights and defenses that
each or either of them may have in law or in equity for any claims
or causes of action against any non-party to this Decree." This
meant they could seek contribution from the parties who were not
signatories.
Citizens and Bangor also sought protection from all
contribution actions or claims for matters covered by the Decree,
such that "neither the City nor Citizens shall be liable for claims
for contribution brought by any party, or for any claims whatsoever
brought by any other potentially responsible party."
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In exchange, Citizens agreed to make payments to Bangor,
inter alia, for the costs of remedial actions. Bangor assumed any
and all of Citizens's liabilities relating to the Site. Bangor
assumed sole responsibility for performing remedial action at the
Site, which was to be performed under the supervision of the DEP
and according to terms and conditions set forth in the Decree. The
provision assigning Bangor responsibility contained the express
provision that "this assumption of sole responsibility by the City
shall in no way relieve any person or entity not party to this
Consent Decree from liability, or prevent the City or its assignees
from pursuing claims against those parties relating to the Existing
Contamination."
The remainder of the Decree outlined Bangor's specific
responsibilities regarding remediation of the Site. These
provisions called for extensive involvement by the DEP, which was
to receive frequent plans and reports and was required to approve
the Projects Operation Plan before its implementation.
I. Settlement Agreement
The Decree stated that there was a separate Settlement
Agreement between Citizens and Bangor. The State was not a party
to the Settlement Agreement.
Though not submitted by the Decree signatories, the
Agreement was submitted to the court by third and fourth parties.
The Agreement contained terms that "set out with particularity the
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obligations and covenants" between Bangor and Citizens, and those
terms would ultimately govern each party's relative share of
responsibility. The court considered some of the terms of the
Settlement Agreement in considering the approval of the Consent
Decree.
The Settlement Agreement stipulates that within fifteen
days of its effective date, Citizens is to pay $7.625 million into
an escrow account. Bangor assigns to Citizens any and all claims
it had or may have had against third parties with respect to the
Site. If any of the third parties were to pay any amount to
resolve a claim, Citizens can deduct all related expenses, and
remaining proceeds are to be divided two-thirds to Citizens and
one-third to the escrow account. If any remedial work at the Site
is performed with a federal appropriation, Citizens will receive a
refund from the escrow account equal to two-thirds of the cost of
that remedial work.
J. Ensuing Claims Against Third-Party Defendants
On April 12, 2007, before approval of the Decree,
Citizens filed a motion for leave to file supplemental third-party
complaints. Citizens asserted that its settlement with the City
gives rise to two new sets of claims under CERCLA section
113(f)(3)(B). This section provides that a person who has resolved
its liability to a state for some or all of a response action can
seek contribution from persons who are not parties to the
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settlement. See 42 U.S.C. § 9613(f)(3)(B). Under this provision,
Citizens sought to file supplemental claims based both (1) on any
amount that it agreed to pay under the Consent Decree which was
above and beyond its fair share of liability and, (2) because
Bangor was assigning its third-party claims to Citizens, on the
amount that the City agreed to pay above and beyond its fair share
of liability.
K. Court's Approval of Consent Decree
On April 13, 2007, the district court ordered expedited
briefing on the motion for entry of the Consent Decree. The court
also ordered that copies of the proposed Consent Decree be
published in the Bangor Daily News and on the DEP's website. This
was done. The court also ordered that public comments be filed
promptly with the court. The court declined then to rule on
Citizens's motion to file supplemental third-party claims and the
pending motions for judgment by third parties.
On May 25, 2007, in the same order in which it permitted
the State and the DEP's motion to intervene, the court approved and
ordered the entry of the Consent Decree, as amended, as a partial
final judgment. The court postponed ruling on other pending
motions, including the motions for judgment filed by various third
parties and Citizens's motion for leave to file supplemental third-
party complaints. Bangor II, 2007 WL 1557426, at *1.
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The district court assessed the proposed Consent Decree
to determine whether it was fair (including both procedural and
substantive fairness), reasonable, and consistent with the purpose
of CERCLA. The court noted that in making this inquiry, it had to
"acknowledge 'the wide range of potential problems and possible
solutions' and thereby leave it to the parties to resolve 'highly
technical issues and relatively petty inequities.'" Id. at *6
(quoting United States v. Cannons Eng'g Corp., 899 F.2d 79, 85-86
(1st Cir. 1990)).
As for procedural fairness, the district court noted that
it should "look to the negotiation process and attempt to gauge its
candor, openness, and bargaining balance." Id. (quoting Cannons,
899 F.2d at 86) (internal quotation marks omitted). Meanwhile, it
focused the substantive fairness inquiry on "concepts of corrective
justice and accountability," which can include a comparison of the
proportion of total costs to be paid by the settlers with the
proportion of liability attributable to them. Id. at *7 (quoting
United States v. Charles George Trucking, Inc., 34 F.3d 1081, 1088
(1st Cir. 1994)) (internal quotation marks omitted). As for the
reasonableness inquiry, the court noted that this circuit "has
explicitly called upon the Court to look at the following factors:
(1) the 'technical adequacy' or 'efficaciousness [of the decree] as
a vehicle for cleansing the environment;' (2) 'whether the
settlement satisfactorily compensates the public for the actual
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(and anticipated) costs of remedial and response measures;' and (3)
'the relative strength of the parties' litigation positions.'" Id.
at *8 (quoting Cannons, 899 F.2d at 89-90). The court did so.
The district court pointed out that under the terms of
the Consent Decree and underlying Settlement Agreement, Citizens
would pay $7.625 million into an escrow account. It described the
arrangement as follows:
Citizens also has agreed to continue to pursue
other third parties, which it continues to believe
are responsible for contributing the contamination
in the Cove. To that end, the Settlement Agreement
assigns to Citizens any claims that the City might
have against Third Parties related to the Site.
The City, for its part, has agreed to be
responsible for the actual remediation of the Site,
which will require it to work closely with the
State to finalize and implement a remediation plan.
Under the terms of the Consent Decree, the City is
financially responsible for the cost of remediation
to the extent it exceeds the balance of the escrow
fund.
Id. at *5. The court noted that the figure of $7.625 million
represented the "upper limit" of what Citizens could pay, since
under the Settlement Agreement, Citizens could end up recouping
some of this amount because of its right to receive a refund from
the escrow fund equal to two-thirds of any recoveries from third
parties or the cost of any remediation work completed with a
federal appropriation. Id. at *5 n.5.
The court considered the Settlement Agreement when it
expressly stated that its assessment of the Consent Decree was
based upon the fact that Citizens had agreed to pay "up to" $7.625
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million as well as the possibility of Citizens's paying less than
this amount. Id. The court however declined the request of some
third and fourth parties that it "give equal consideration to the
Settlement Agreement." Id. at *5 n.6. The court reasoned that it
had reviewed the terms of the Settlement Agreement, that the
Consent Decree would not be contingent on the Settlement Agreement,
and that the Settlement Agreement "in no way 'trumps' the terms of
the Consent Decree."6 Id.
As for procedural fairness, the court concluded that "as
between the State, the City and Citizens, the Court is amply
satisfied that the Consent Decree represents the end result of a
procedurally fair, arm's-length negotiation process." Id. at *6.
The court rejected the contention of third and fourth parties that
they were unfairly excluded from the settlement process, noting
that the record was "devoid of any evidence, including any
affidavits of counsel, suggesting that any third or fourth party
asked to attend or participate in settlement talks . . . but were
affirmatively excluded." Id. at *7. The court remarked that
"[d]espite the lack of an invitation, the status reports
undoubtedly put the third and fourth parties on notice that
settlement discussions were ongoing. Given that notice, these
6
The court also noted that the two sets of comments it
received from the public during the comment period came from third
and fourth parties. The court stated that it had reviewed these
comments and "determined that they do not require any discussion in
the context of the pending Motion." Id. at *5 n.7.
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parties could have certainly requested the opportunity to
participate." Id. The court further pointed out that "[a]lthough
a global resolution might have been possible and even preferable,
it is not surprising or unfair that the City and Citizens would
reach a settlement without the participation of the third or fourth
parties given the trifurcated nature of the proceedings." Id.
With respect to substantive fairness, the court noted
that although there remains uncertainty about the total cost of the
Dunnett's Cove remediation, it could still determine that the
Consent Decree is substantively fair. The court pointed out that
"[t]he First Circuit previously has endorsed the trial court
'confin[ing] its inquiry to the substantive fairness of the
aggregate class contribution' without concerning itself as to how
the members of the settling class have chosen to divvy up the
various costs and risks." Id. (quoting Charles George Trucking, 34
F.3d at 1088-89) (citations and internal quotation marks omitted).
It also noted that pursuant to the Consent Decree, "the City and
Citizens have agreed to fund the entire remediation regardless of
whether contribution is ever received from other parties or
sources." Id. The court did compare the proportion of total
projected costs to be paid by the settlors with the liability
attributed to them in the Phase One Findings, see Charles George
Trucking, 34 F.3d at 1087, and noted that "Citizens' contribution
of $7.625 million roughly correlates to the Court's previous
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equitable apportionment, especially when one considers the
additional response costs [of $1.33 million] Citizens has already
incurred." Bangor II, 2007 WL 1557426, at *7 n.11.
As for reasonableness, the court pointed out that the
Consent Decree provides for a remedy "that would at least match
(and may well exceed)" any remedy that might have been developed in
a second phase trial. Id. at *8. The court also noted that by
allowing the remedial process to begin without requiring further
litigation, the Consent Decree would be efficient. Id. The court
rejected the argument that the Consent Decree's remedy was not
reasonable because it may exceed what the court would otherwise
have required; the court pointed out that "nothing prevents the
City and Citizens from agreeing to do more remediation than might
be required by CERCLA and RCRA." Id. With respect to litigation
positions, the court noted that "there was undoubtedly a good faith
basis for continuing this litigation," but both sides realized that
settlement would be a cost-effective solution. Id.
The court concluded that the Consent Decree was faithful
to the purposes of CERCLA and RCRA, noting that this determination
"clearly overlaps with the Court's assessment of reasonableness."
Id. at *9.
L. Ruling on Third- and Fourth-Party Motions for Judgment
The court then turned to the third and fourth parties'
motions for judgment and deferred decision, observing that
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"[f]ollowing entry of the Consent Decree, these arguments rest on
a questionable premise and beg the question: to what extent, if at
all, can the Court rely on its Phase One Findings of Fact and
Conclusions of Law to make any decision regarding the viability of
Citizens' outstanding claims against the Third Parties?" Id. The
court requested briefing from the parties on this question.
With respect to Citizens's claims against the third
parties, the court remarked that "it seems that Citizens now has a
single CERCLA claim for contribution that is primarily governed by
42 U.S.C. § 9613(f)(3)(B)." Id. The court held that this claim
"would be best pursued as an entirely new case." Id. at *10. The
court noted that absent a "compelling objection," such a new case
would also include the third and fourth parties' complaints. The
court noted that its "interest in seeing these claims proceed as a
separate case is driven primarily by pragmatic, docket management
concerns." Id.
Various third and fourth parties filed motions for
reconsideration of the court's rulings. Citizens filed a
supplemental brief arguing that the court's Phase One Findings and
Conclusions should not be considered the law of the case, noting
that the court had never entered those as a final judgment, whereas
it had entered the Consent Decree as a final judgment. Various
third- and fourth-party defendants filed an opposing motion arguing
that Citizens could not "unilaterally expunge the record
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established over four years of litigation simply by entering a
settlement after trial of the claims brought by and against it."
On July 20, 2007, the court denied the third and fourth
parties' motions for reconsideration of its approval of the Consent
Decree. The court noted that it was not "persuaded that the Third-
Party and Fourth-Party Defendants are prejudiced by the entry of
the Consent Decree as a final judgment. . . . [T]he entry of the
Consent Decree as a final judgment will neither create unnecessary
procedural complexities for the remaining action nor will it
adversely affect orderly future proceedings or the expeditious
final resolution of this matter."
M. Instructions to Citizens To File Third-Party Complaints
in a New Case
On July 20, 2007, the court denied Citizens's motion for
leave to file supplemental third-party complaints in the existing
case, given its preference that further proceedings be docketed as
a new case. The court's order included the following language:
After carefully considering the issues
briefed by the parties, the Court finds that
the Phase One Findings of Fact and Conclusions
of Law are not binding on the Court or any of
the parties to this litigation. Under the
changed circumstances in the case, those
findings and conclusions were superseded by
the Settlement Agreement reached between the
City of Bangor and Citizens and the Court
approved Consent Decree between the State of
Maine, the City of Bangor, and Citizens. As
such, those findings and conclusions were
never available for appellate review and,
thus, never became final.
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Accordingly, given that Citizens had expressed its willingness to
file its supplemental third-party complaints as a new case and, the
court concluded, there would not be any prejudice to the third
parties, the court ordered that the supplemental third-party
complaints be filed as a new case. The effect of the language
quoted above is presented as a major issue in this appeal.
On November 28, 2007, the court granted Citizens's motion
to dismiss its third-party claims without prejudice and deemed all
of the pending third- and fourth-party motions for judgment moot
and therefore dismissed all of them without prejudice. City of
Bangor v. Citizen Commc'ns Co., No. 02-183, 2007 WL 4233094, at *1-
2 (D. Me. Nov. 28, 2007).
On November 29, 2007, the district court issued a final
judgment in which it entered judgment in favor of the United States
Army Corps of Engineers with respect to Citizens's third-party
claims and noted that the Amended Consent Decree (which did not
involve any substantive changes from the proposed Consent Decree)
had been entered as a final judgment.
II.
The appeal now before us is a consolidated appeal by the
non-MGP parties (Barrett Paving, Honeywell International, Beazer
East, Colas, Dead River Company, and the Speirs parties) of the
district court's entry of the Consent Decree; the court's order
that Citizens's motion to file supplemental claims and the third-
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and fourth-party motions for judgment be dismissed without
prejudice and refiled as a new case; and the July 20, 2007 order in
which the court declared that its Findings of Facts and Conclusions
of Law were "superseded" by the Consent Decree.
A. The Consent Decree
Almost all of the law regarding approval of CERCLA
consent decrees comes from cases in which the United States was a
party. That is not our situation. It is worth considering the
roles CERCLA sets forth in cases involving private parties and
states.
CERCLA gives the federal government a role not given to
the states. CERCLA enables the federal government to facilitate
the cleanup of toxic waste sites. "As its name implies, CERCLA is
a comprehensive statute that grants the President broad power to
command government agencies and private parties to clean up
hazardous waste sites." Key Tronic Corp. v. United States, 511
U.S. 809, 814 (1994).
Section 104 of CERCLA authorizes the President to
undertake removal or other appropriate remedial action whenever a
hazardous substance is released or there is a substantial threat of
such release. 42 U.S.C. § 9604(a)(1). The President must promptly
notify the appropriate state officials and seek to coordinate
actions under this section with them. Id. § 9604(b)(2). The
President cannot enter into remedial actions under this section
-36-
unless the state where the hazardous release first occurs enters
into an agreement providing, inter alia, that it will assure all
future maintenance of the removal and remedial action. Id. §
9604(c)(3).
Section 106 of CERCLA permits the President, when he
determines that there may be an "imminent and substantial
endangerment to the public health or welfare," to require the
Attorney General to seek an injunction in the federal district
court in the district where the threat occurs. Id. § 9606(a).
Courts have held that this section applies only to the federal
government, and so states and other entities are unable to seek
injunctions under CERCLA. Colorado v. Idarado Mining Co., 916 F.2d
1486, 1493 (10th Cir. 1990) (noting that "[c]ourts have adhered to
the view that injunctions are not available to states and other
non-federal plaintiffs under CERCLA" and collecting cases).
CERCLA also includes provisions that permit both states
and private parties to recover cleanup costs and seek contribution
from responsible parties and so provides further incentives for the
remediation of hazardous waste sites. Key Tronic, 511 U.S. at 816
(noting that CERCLA "expressly authorizes a cause of action for
contribution in [§] 113 and impliedly authorizes a similar and
somewhat overlapping remedy in [§] 107").
Congress has also recognized a special role for states in
authorizing judicial approval for consent decrees in which the
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state is a party, and then authorizing both contribution protection
and contribution claims. Under section 113 of CERCLA, co-liable
parties may seek contribution from one another, and courts
resolving such claims "may allocate response costs among liable
parties using such equitable factors as the court determines are
appropriate." 42 U.S.C. § 9613(f)(1). Section 113 contains
provisions that were added to CERCLA by the Superfund Amendments
and Reauthorization Act ("SARA") of 1986, Pub. L. No. 99-499, 100
Stat. 1613; see also Key Tronic, 511 U.S. at 816. These provisions
give protection from contribution claims to parties that settle
with the federal government or a state in a judicially or
administratively approved settlement, and they grant contribution
claims against non-settlors to these settling parties. Section
9613(f)(2) provides: "A person who has resolved its liability to
the United States or a State in an administrative or judicially
approved settlement shall not be liable for claims for contribution
regarding matters addressed in the settlement." In addition, §
9613(f)(3)(B) provides: "A person who has resolved its liability to
the United States or a State for some or all of a response action
. . . in an administrative or judicially approved settlement may
seek contribution from any person who is not party to a settlement
-38-
. . . ." Congress thus authorized judicial approval of consent
decrees entered into with states.7
States are given a special role in defining allowable
costs and cleanup standards. Section 107 authorizes the recovery
of costs expended in accordance with the National Contingency Plan
("NCP").8 See 42 U.S.C. § 9607(a)(4)(B). Actions undertaken by
the federal or a state government are presumed not to be
inconsistent with the NCP; private plaintiffs have the burden of
proving that their response actions are consistent with the NCP.
See 1 A.J. Topol & R. Snow, Superfund Law and Procedure, § 1:2, at
10-11 (2007 ed.). Often that showing is met if the remediation
work is carried out under the approval and monitoring of the
appropriate state environmental agency. See, e.g., NutraSweet Co.
v. X-L Eng'g Co., 227 F.3d 776, 791 (7th Cir. 2000); Esso Standard
7
It is not clear whether this statutory contribution
protection extends to agreements entered into with parties other
than the federal government or a state. See City of Detroit v.
Simon, 247 F.3d 619, 628 (6th Cir. 2001) (there is no contribution
protection for a party that entered into a settlement with Detroit
because the city cannot be equated with the United States or a
state, as the language of CERCLA requires); 2 A.J. Topol & R. Snow,
Superfund Law and Procedure, § 7:91, at 181 (2007 ed.) ("Although
the text of CERCLA is silent regarding the right of contribution
protection for private party settlements, to facilitate settlement
. . . a number of federal courts have interpreted CERCLA's language
to include private parties . . . .").
8
"The national contingency plan specifies procedures for
preparing and responding to contaminations and was promulgated by
the Environmental Protection Agency . . . pursuant to CERLCA § 105,
42 U.S.C. § 9605." Cooper Indus., Inc. v. Aviall Servs., Inc., 543
U.S. 157, 161 n.2 (2004); see also 40 C.F.R. § 300.
-39-
Oil Co. (P.R.) v. Rodríguez Pérez, No. 01-2012, 2004 WL 2238894, at
*13 (D.P.R. 2004). The appellants here do not claim the Consent
Decree does not comply with the NCP.
Section 121 specifies standards for cleanups conducted
pursuant to CERCLA. Any such cleanup must comply with federal
standards or more stringent state standards if they exist. 42
U.S.C. § 9621(d)(2)(A). States, in turn, are given the authority
to enforce "any Federal or State standard, requirement, criteria,
or limitation to which the remedial action is required to conform
under this chapter in the United States district court for the
district in which the facility is located." Id. § 9621(e). A
number of provisions in section 121 relate to state involvement in
cleanups, requiring the President to promulgate regulations to
ensure that a state has "substantial and meaningful involvement" in
the "initiation, development, and selection of remedial actions to
be undertaken in that State." Id. § 9621(f)(1).
As to consent decrees, SARA also added provisions, in
section 122, that authorize the President to enter into settlements
with private parties and lay out procedures governing such
settlements. See id. § 9622; 2 Topol & Snow, supra, § 7:89, at 155
(noting how the settlement process was "radically changed" by SARA,
which "expressly authorized EPA to enter into settlement agreements
with PRPs and provided both procedural and substantive direction
concerning the forms that those settlements should take"). The
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section 122 procedures include that any agreement between the
United States and a PRP under section 122 is to be entered in the
appropriate federal district court as a consent decree. Id. §
9622(d)(1)(A). At least thirty days before a final judgment is
entered, the proposed settlement must be filed with the court and
the Attorney General must provide an opportunity for persons not
named as parties to the action to comment. Id. §
9622(d)(2)(A),(B). The Attorney General is to consider and file
with the court any written comments. Id. § 9622(d)(2)(B). In this
case the district court essentially followed these procedural
requirements even though the United States was not a party.
The vast majority of the case law involving court
approval of consent decrees involves cases in which the United
States is a party. See, e.g., United States v. Davis, 261 F.3d 1
(1st Cir. 2001); Charles George Trucking, 34 F.3d at 1081; Cannons,
899 F.2d at 79. It is common for CERCLA consent decrees between or
among private parties and a state also to be submitted for court
approval. See, e.g., New York v. Panex Indus., Inc., No. 94-0400E,
2000 WL 743966, at *1 (W.D.N.Y. June 6, 2000); Kelley v. Wagner,
930 F. Supp. 293, 294-95 (E.D. Mich. 1996); State of Ariz. v.
Motorola, Inc., 139 F.R.D. 141, 147 (D. Ariz. 1991).9
9
In Davis, 261 F.3d 1, after the initial phase of a CERCLA
action between the United States and a PRP was resolved, there was
a contribution litigation between private parties which was
resolved by a settlement in the form of a judicially approved
consent decree. In Davis we recognized several bases for the
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Against this background we evaluate appellants' claims.
B. Whether Appellants Have Standing To Challenge the Decree
We turn to the Consent Decree in this case, beginning
with Citizens's argument that the appeal should be dismissed
because the third and fourth parties lack standing to challenge the
Decree.
Citizens points to case law establishing that "[a]
nonsettling defendant does not ordinarily have standing to object
to a court order approving a partial settlement since the
nonsettling defendant is generally not affected by the settlement."
In re Viatron Computer Sys. Corp. Litig., 614 F.2d 11, 14 (1st Cir.
1980). That misses the point. Here, the third and fourth parties
are potentially affected by the settlement. Citizens asserts,
inter alia, that by virtue of the Decree alone, it has the right to
collect from third parties under CERCLA section 113(f)(3)(B), which
provides that an entity "who has resolved its liability to the
United States or a State for some or all of a response action or
for some or all of the costs of such action in an administrative or
authority of the district court to approve such a consent decree.
One source was the fairly broad authority of courts to approve
consent decrees recognized in Local No. 93, International Ass'n of
Firefighters v. City of Cleveland, 478 U.S. 501, 525 (1986).
Davis, 261 F.3d at 22. Another was to promote the objectives of
CERCLA by facilitating the prompt remediation of hazardous waste
sites, id., especially given that these claims arose from the
original suit filed by the United States. We also pointed out that
it is permissible for consent decrees to provide relief broader
than a court could have awarded after trial. Id.
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judicially approved settlement may seek contribution from any
person who is not a party to a settlement." 42 U.S.C. §
9613(f)(3)(B).
Standing generally has two components: statutory and
constitutional. We do not understand Citizens's objection to be a
challenge to statutory standing. After all, our precedent under
CERCLA has allowed a non-settling third party to challenge a
consent decree entered into by a party that was seeking
contribution from the third party. Davis, 261 F.3d at 17-18.
Indeed, as described below, Citizens's position would undercut one
of CERCLA's goals.
The Article III constitutional requirements for standing
are "expressed in a familiar three-part algorithm: a would-be
plaintiff must demonstrate a concrete and particularized injury in
fact, a causal connection that permits tracing the claimed injury
to the defendant's actions, and a likelihood that prevailing in the
action will afford some redress for the injury." Me. People's
Alliance & Natural Res. Def. Council v. Mallinckrodt, Inc., 471
F.3d 277, 283 (1st Cir. 2006) (citing Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560-61 (1992)). These components are
easily satisfied on the facts here. The third and fourth parties
assert that the entry of the Consent Decree injures them because it
opens the door for Citizens to seek contribution from third
parties.
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Moreover, it is well established that "a non-settling
defendant has standing to object to a partial settlement which
purports to strip it of a legal claim or cause of action, an action
for indemnity or contribution for example." Waller v. Fin. Corp.
of Am., 828 F.2d 579, 583 (9th Cir. 1987). "[B]ecause approval of
a consent decree under CERCLA results in contribution protection to
the settling party, it also affects the rights of PRPs who are not
parties to the decree." United States v. Charter Int'l Oil Co., 83
F.3d 510, 515 (1st Cir. 1996). As Citizens acknowledges, the
Consent Decree includes a provision that "Citizens and the City are
entitled to protection from all contribution actions or claims for
the matters addressed in this decree."
Further, as the third and fourth parties point out, the
Decree does not extinguish Maine's claims "against any party other
than Citizens for natural resource damages, or for response costs
that overrun prior estimates." Indeed, CERCLA's permitting broad
contribution protection for settling parties is "not a scrivener's
accident"; it can provide a valuable incentive for parties to
settle early. United Techs. Corp. v. Browning-Ferris Indus., Inc.,
33 F.3d 96, 103 (1st Cir. 1994).
We reject the argument that appellants lack standing and
get to the real issues.
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C. Standard of Review of the Consent Decree
CERCLA does not mandate a particular test for courts that
have been asked to approve a consent decree under either 42 U.S.C.
§ 9622(d)(1)(A), when the United States is a party, or under the
contribution section, id. § 9613(f), when a state is a party. In
suits involving the United States, courts have developed a three-
pronged inquiry: is the decree "reasonable, faithful to the
statute's objectives, and fair (both procedurally and
substantively)"? Charles George Trucking, 34 F.3d at 1084 (citing
Cannons, 899 F.2d at 85). This inquiry is similar to the one used
by courts when reviewing consent decrees generally: "District
courts must review a consent decree to ensure that it is 'fair,
adequate, and reasonable; that the proposed decree will not violate
the Constitution, a statute or other authority; [and] that it is
consistent with the objectives of Congress . . . .'" Conservation
Law Found. of New England, Inc. v. Franklin, 989 F.2d 54, 58 (1st
Cir. 1993) (quoting Durrett v. Hous. Auth. of Providence, 896 F.2d
600, 604 (1st Cir. 1990)); see also Local No. 93, Int'l Ass'n of
Firefighters v. City of Cleveland, 478 U.S. 501, 512-13 (1986).
This court has not had the occasion to consider a consent
decree involving a state rather than the federal government. Other
courts have applied the test articulated in Cannons and Charles
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George Trucking to decrees involving states as parties.10 See,
e.g., Panex Indus., 2000 WL 743966, at *1; Kelley, 930 F. Supp. at
297; Motorola, Inc., 139 F.R.D. at 147. As explained below, the
fact that the United States is not a party does affect the level of
deference we apply.
An appellate court will overturn a district court's
decision to approve the entry of a CERCLA consent decree in a case
involving the United States "only for manifest abuse of
discretion." Charles George Trucking, 34 F.3d at 1085. An abuse
of discretion occurs when "a material factor deserving significant
weight is ignored, when an improper factor is relied upon, or when
all proper and no improper factors are assessed, but the court
makes a serious mistake in weighing them." Cannons, 899 F.2d at 84
(quoting Indep. Oil & Chem. Workers of Quincy, Inc. v. Procter &
Gamble Mfg. Co., 864 F.2d 927, 929 (1st Cir. 1988)) (internal
quotation marks omitted).
10
Some CERCLA suits are brought by private parties and the
resulting settlements do not involve consent decrees. Courts have
applied an analogous inquiry in determining whether to approve such
private settlements, evaluating the "'fairness, adequacy and
reasonableness' of private settlements by considering the criteria
for apportionment between the parties, the public policy favoring
settlements, the strength of the case, the amount of the settlement
offer, and the like." 2 Topol & Snow, supra, § 7:91, at 181; see
also Amoco Oil v. Dingwell, 690 F. Supp. 78, 85 (D. Me. 1988),
aff'd sub nom. Travelers Indem. Co. v. Dingwell, 884 F.2d 629 (1st
Cir. 1989).
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In CERCLA settlements in cases involving the United
States which have been approved by the district court, an appellate
court applies two levels of deference. The first layer of
deference is to the series of judgments made by the United States
and its expert and experienced staff at the EPA in reaching a
settlement. "[T]he first layer of insulation implicates the trial
court's deference to the agency's expertise and to the parties'
agreement." Cannons, 899 F.2d at 84.
The second layer of deference is to the trial court;
"[b]ecause approval of a consent decree is committed to the trial
court's informed discretion, the court of appeals should be
reluctant to disturb a reasoned exercise of that discretion." Id.
(citations omitted).
In this case, the agency involved was not the federal
EPA, and so there can be no deference to the EPA. The question
becomes what deference, if any, should be given to a state agency
which is not charged with implementing CERCLA. We recognize the
DEP does have a mandate under state law to "prevent, abate and
control the pollution of the air, water and land and preserve,
improve and prevent diminution of the natural environment of the
State." Me. Rev. Stat. Ann. tit. 38, § 341-A.
Federal courts generally defer to a state agency's
interpretation of those statutes it is charged with enforcing, but
not to its interpretation of federal statutes it is not charged
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with enforcing. Bldg. Trades Employers' Educ. Ass'n v. McGowan,
311 F.3d 501, 507 (2d Cir. 2002); see also Idaho Dep't of Health &
Welfare v. U.S. Dep't of Energy, 959 F.2d 149, 152 (9th Cir. 1992).
We choose to accord some deference to Maine's decision to
sign onto the Consent Decree, but not the same amount of deference
we would accord the EPA in a consent decree involving the United
States. We give deference in recognition that the state agency has
some expertise. This lesser deference does not displace the
baseline standard of review for abuse of discretion. Even if we
gave the Maine DEP no deference, we would still find, on the facts
here, no abuse of discretion.
D. Merits of Challenge to Court Approval of Decree
Generally, two types of groups challenge CERCLA consent
decrees: concerned local governments or citizens who believe that
the decree is inadequate to ensure a proper cleanup, and PRPs who
were not parties to the settlement and worry that they will be left
to bear a disproportionate share of cleanup costs. 2 Topol & Snow,
supra, § 7:92, at 185-86. Here there can be no concern that the
Decree is inadequate to ensure a proper cleanup since the settling
parties are together covering one hundred percent of cleanup costs.
Indeed, appellants do not challenge the reasonableness of that
aspect of the Decree.
Rather, the appellants' primary concern appears to be
that the terms of the Consent Decree will allow one of the settling
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parties, Citizens, (a) to assert claims against them for
contribution that they believe would have been barred by the
court's earlier Phase One Findings and Conclusions; (b) to have
contribution protection; and (c) to pay less than its fair share.
There is no real claim that the court operated under the
wrong legal standard: the claim is that the court did not
faithfully execute the standard.11
Appellants present four major arguments that the entry of
the Decree was in error: (a) the district court did not conduct a
sufficiently rigorous inquiry of the Settlement Agreement; (b) the
Decree is not substantively fair because it is impermissibly
favorable to Citizens; (c) the Decree is not procedurally fair
because its material terms were negotiated privately and adopted
without significant scrutiny by the State; and (d) the Decree
violates CERCLA section 122.
1. Failure To Conduct Rigorous Scrutiny of the
Settlement Agreement
The third and fourth parties argue that the district
court should have conducted a more searching inquiry of the terms
of the private Settlement Agreement before it approved the Decree.
11
In a footnote, the third and fourth parties assert that
Maine violated Fed. R. Civ. P. 24 by not filing a pleading with its
motion to intervene, and they object to the district court's
excusing this. Since this argument is presented only in a passing
fashion in a footnote, we deem it to be waived. United States v.
Van Anh, 523 F.3d 43, 53 n.8 (1st Cir. 2008). Even if the argument
were not waived, there was no abuse of discretion in the district
court's decision to elevate substance over form.
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They are particularly concerned with the assignment of the City's
third-party claims to Citizens and the arrangement through which
Citizens can keep two-thirds of any recovery from third parties net
of litigation costs.
The appellants' argument that the district court did not
consider the terms of the Settlement Agreement is manifestly
untrue. The court expressly stated that it was considering certain
settlement terms from the Agreement, in particular the $7.625
million figure and the fact that Citizens might end up paying less
than that amount because of its potential to recover from third
parties through assignment and by contribution or benefit from
federal payments. Bangor II, 2007 WL 1557426, at *5 nn.5-6.
The argument is made that the court was required to go
farther than it did. The court quite properly considered the
private Settlement Agreement to the extent it was germane to the
scrutiny required of the Consent Decree. No more was needed.
Private settlements usually "do not entail the judicial approval
and oversight involved in consent decrees." Buckhannon Bd. & Care
Home, Inc. v. W. Va. Dep't of Health & Human Res., 532 U.S. 598,
604 n.7 (2001).
Appellants' argument then shifts in character to an
argument that the court should have ruled, in the course of
considering the Consent Decree, that any assignment of claims by
the City in the private Settlement Agreement to Citizens was
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invalid.12 The court very carefully said it was not then deciding
the question of the enforceability of either these provisions or of
the likelihood that Citizens would ultimately pay less than $7.625
million. Bangor II, 2007 WL 1557426, at *5 n.5. The decision by
the district court not to resolve every issue that could arise from
the later enforcement of the Consent Decree was correct. See
Charter Int'l Oil, 83 F.3d at 515-16.
The district court did not abuse its discretion by not
scrutinizing the purported assignment to test its validity.
2. Procedural Fairness
To gauge procedural fairness, "a court should ordinarily
look to the negotiation process and attempt to gauge its candor,
openness, and bargaining balance." Cannons, 899 F.2d at 86. Here,
the district court concluded that "as between the State, the City
and Citizens, the Court is amply satisfied that the Consent Decree
represents the end result of a procedurally fair, arm's-length
negotiation process." Bangor II, 2007 WL 1557426, at *6. The
court also rejected the contention of third and fourth parties that
they were unfairly excluded from the settlement process. As a
factual matter, the court noted that "[d]espite the lack of an
invitation, the status reports undoubtedly put the third and fourth
12
The third and fourth parties argue that this assignment
is barred by estoppel because the City had not timely asserted its
claims against third parties, and the Phase One Findings and
Conclusions were based on "the City's affirmative decision not to
bring claims against third parties."
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parties on notice that settlement discussion were ongoing." Id. at
*7.
The EPA itself, when the United States institutes a
CERCLA action, does not need to open settlement offers to all PRPs.
Cannons, 899 F.2d at 93. It also does not need to spoon-feed them:
"In the CERCLA context, the government is under no obligation to
telegraph its settlement offers, divulge its negotiating strategy
in advance, or surrender the normal prerogatives of strategic
flexibility which any negotiator cherishes." Id.
The appellants focus here not on their exclusion from the
settlement talks but rather on a series of arguments that the
State's involvement was so cursory as to undermine the integrity of
the procedures used. Specifically, they argue that the State was
not sufficiently involved in the negotiation process, did not
explain why the Decree differed from its prior administrative
findings, and did not respond to the public comments it received
about the Decree.
The claim is not supported by the record. The district
court could properly credit Maine's representations that
[t]he negotiations, which occurred in late 2006
through early 2007, included numerous meetings,
telephone calls, and exchanges of draft consent
decrees. Both DEP and the Maine Office of the
Attorney General were actively involved in the
negotiations. The State authored the first draft
of the Consent Decree in late 2006.
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Br. of Appellees State of Me. & Me. Dep't of Envtl. Prot. at 4
(citations omitted). The State also noted that the DEP will be
significantly involved in the implementation of the Decree. For
instance, Bangor has already submitted to the DEP a work plan for
conducting pre-design studies, and the Decree includes a process
for the proposal and consideration of modified remedies for the
Site, under which the DEP will make determinations regarding which
remedies or modified remedies will be implemented. Further,
"[g]iven that the Consent Decree will result in the cleanup being
performed and fully funded by responsible parties, the State's
release of its present and future claims against Citizens is in no
way an abdication of the State's responsibility to protect the
public interest." Id. at 23.
Rather than address these facts, appellants try to
leapfrog to an inference of procedural unfairness from a conclusion
the State reached that they do not like. They argue the "extent of
the State's abdication of responsibility is apparent from its
statement that it had no obligation to look behind the combined
financial commitment of the settling parties to fund the
remediation." Br. of Appellants Barrett Paving Materials, Inc. et.
al. at 55. This is essentially the same argument that the third
and fourth parties make with respect to the district court: that
the court should not have approved the Decree because Citizens was
getting too beneficial a deal vis-à-vis Bangor. Maine's failure to
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address this concern does not turn the State into a mere "bystander
to negotiations of the substantive settlement terms." Id.
Appellants fall back on an argument that the State's
signing onto the Consent Decree was deficient because it was
inconsistent with the State's prior position that Citizens was the
party responsible for the contamination. But, as the State notes,
the June 2006 Phase One Findings and Conclusions were an
"intervening event" between the DEP's March 2004 statement that
"evidence points to the MGP as the primary or sole source of the
tar plume" and its participation in drafting the Consent Decree.
There was no inconsistency.
Appellants' last argument of procedural unfairness also
fails. It asserts that the State did not respond to public
comments regarding the Decree, and that this violated CERCLA
section 122, 42 U.S.C. § 9622(d)(2)(B). Section 9622(d)(2)(B) does
not apply to agreements to which the United States is not a party.
Even if it did apply, it provides for comments by "persons who are
not named as parties to the action." Id. The two comments
received in this case were from third- and fourth-party defendants.
Appellants can hardly claim they were not adequately heard.
The district court did not abuse its discretion by
finding the Decree to be procedurally fair.
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3. Substantive Fairness
We give deference to the trial judge's sense of the
substantive fairness of the Decree, regardless of the fact that we
do not have the EPA's assessment, but only the State's. Cf. Davis,
261 F.3d at 24. Usually, there is deference to the EPA's judgment
on fairness, and no independent court inquiry. 2 Topol & Snow,
supra, § 7:91, at 173-75.
Here, the court appropriately first reasoned, after its
long history with the case, that it was "amply" satisfied that
there was procedural fairness, that this contributed to its
conclusion of substantive fairness, and that this Decree was
substantively fair. Bangor II, 2007 WL 1557426, at *6-7.
The court calibrated the estimated total costs of the
cleanup against the respective monetary liability being assumed by
the City and Citizens. The court took notice that the DEP had
previously estimated the range of possible cleanup costs to be
between $13.2 million and $21.9 million. Id. at *7 n.11. The
court noted that since the total costs of remediation were unknown,
and the amount of contribution was unknown, both the City and
Citizens were taking on risk. The cleanup, however, was
guaranteed, as was the payment of response costs. Id. at *7.
Appellants argue that the court was obligated to do more.
Specifically, they argue the fairness component is meant to provide
them rigorous protection in the end from paying more than their
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fair share. From the point of view of the third and fourth
parties, Citizens should not, with the total amount being unknown,
be able to cap its liability at $7.625 million.
We think this is a misapprehension of the fairness
doctrine. The oft-cited language from cases where the United
States is a party is that the substantive fairness inquiry involves
"corrective justice and accountability, concentrating on 'the
proposed allocation of responsibility as between settling and non-
settling PRPs.'" Davis, 261 F.3d at 24 (quoting Charles George
Trucking, 34 F.3d at 1088). Thus, the substantive fairness inquiry
considers fairness in terms of both larger societal concepts such
as corrective justice and fairness to non-settling parties.
Under SARA, Congress intended there to be some mechanism
to police the EPA's conduct in settlements. Congress enacted SARA
in 1986 in order to "rein-in" the EPA; for instance, section 122
"contains detailed provisions that restrict EPA's freedom to
conduct negotiations and to enter into CERCLA settlement
agreements." 1 Topol & Snow, supra, § 1:3, at 14, 16; see also
Cannons, 899 F.2d at 89 (acknowledging the possibility of coercive
government settlement practices). That concern about overseeing
whether the EPA has been "fair" is not our concern here.
Further, this court has tended to treat private parties
in CERCLA settlement cases as entities who can protect themselves,
assuming the procedures are fair. This circuit has stressed that
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"[t]here is little need for a court to police the substantive
fairness of a settlement as among settling parties of a particular
class. Sophisticated actors know how to protect their own
interests, and they are well equipped to evaluate risks and
rewards." Charles George Trucking, 34 F.3d at 1088. Therefore, a
court can "usually confine its inquiry to the substantive fairness
of the aggregate class contribution, or, put another way, to the
proposed allocation of responsibility as between settling and non-
settling" parties. Id. As a result, it "would have served no
useful purpose [for the district court] to go further and focus the
lens of inquiry on the fairness of each class member's
contribution." Id.
Settlements do not demand perfection. There are many
factors involved. "[A] PRP's assumption of open-ended risks may
merit a discount on comparative fault, while obtaining a complete
release from uncertain future liability may call for a premium."
Cannons, 899 F.2d at 88. Even more, this case exemplifies the
principle that there is a need to suitably reward early
settlements, particularly cost-effective ones. Id. Appellants
have been excused from the costs of the Phase One litigation; they
could have chosen to pursue settlement themselves, but chose not to
do so. Here, the data used to apportion liability fell within "the
broad spectrum of plausible appropriations." Id.
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The district court's evaluation of substantive fairness
was well within its discretion and this circuit's case law.
4. Compliance with CERCLA Section 122
The district court did not abuse its discretion in
concluding the Consent Decree complied with CERCLA. The appellants
claim that the Decree violates CERCLA because it does not comply
with 42 U.S.C. § 9622(f)(6)(A), which requires that a covenant not
to sue include an exception allowing the President to sue for
future liability that arises out of new developments, because it
provides for an unconditional release of future liability for
Citizens. The parties dispute whether the third and fourth parties
waived this argument by not sufficiently presenting it below.
Regardless of whether it was waived, the argument fails.
Section 122 of CERCLA plainly applies to settlements
involving the United States, and the third and fourth parties have
presented no convincing argument why we should disregard the clear
language of the statute and extend it to settlements involving
states and state agencies. See Arizona v. Components Inc., 66 F.3d
213, 217 (9th Cir. 1995) (noting that provisions of section 122 are
"not applicable to state settlements in which the EPA is not
involved"). The purpose of CERCLA section 122 is both to authorize
the President to enter into agreements with persons to perform
response actions and to impose specific restrictions on his doing
so. There is no evidence that Congress intended for states to be
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similarly restricted in entering into consent decrees.13 Even so,
the Consent Decree here does give parallel protection to the State.
If there are new problems at the Site in the future, Maine is
entitled to seek additional costs from the City if necessary.
III.
We turn to the remaining challenges, including
appellants' concerns about the role of the Phase One Findings and
Conclusions. The challenge is to the district court's denial of
the non-MGP parties' motions for judgment on Citizens's third-party
claims on the grounds not of the merits, but on mootness because
the claims would be heard in the new lawsuit. The appellants also
object to certain language the district court used. We will assume
there is appellate jurisdiction. Appellants' arguments can be
grouped together, and have two themes.
In the first, appellants say they were entitled to have
judgment entered in their favor on their motions for judgment and
it was therefore wrong of the court to have allowed Citizens to
file contribution claims in a new action against them.14 They also
13
The appellants cite only one case, from the District of
Utah, which held that the section 122 consent not to sue
requirement should apply to agreements involving states. Utah v.
Kennecott Corp., 801 F. Supp. 553, 569 n.20 (D. Utah 1992).
However, in a subsequent decision, the same court reached the
opposite conclusion about the applicability of section 122 to
agreements involving states. Utah v. Kennecott Corp., 232 F.R.D.
392, 399 (D. Utah 2005).
14
There is no need to address Citizens's argument that the
appellants lack standing to challenge the dismissal of their
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argue they are entitled to judgment because any assignment of
claims against them must be invalid. There was no error.
A district court enjoys inherent power to "control the
disposition of the causes on its docket with economy of time and
effort for itself, for counsel, and for litigants." Landis v. N.
Am. Co., 299 U.S. 248, 254 (1936); Taunton Gardens Co. v. Hills,
557 F.2d 877, 879 (1st Cir. 1977). Here, the district court
decided that the entire subject matter to which the motions for
judgment applied would be heard in a new case, where Citizens's
opposing motion to file supplemental claims for contribution would
also be considered. Appellants have not shown they would suffer
the "plain legal prejudice" that parties seeking to challenge a
dismissal without prejudice must demonstrate. Doe v. Urohealth
Sys. Inc., 216 F.3d 157, 160-61 (1st Cir. 2000).
The problem of a consent decree not resolving all matters
of interpretation which may be relevant in later contribution
actions is not a new one. In Charter International Oil, this court
held that in approving a consent decree with the EPA under CERCLA,
the district court must address only so many issues "as needed to
rule on the decree's fairness, reasonableness and fidelity to the
statute." Charter Int'l Oil, 83 F.3d at 515-16. We also noted
motions for judgment because there has been no adverse decision
against them, only a dismissal without prejudice. This argument is
foreclosed by circuit precedent. See Mirpuri v. ACT Mfg., Inc.,
212 F.3d 624, 628 (1st Cir. 2000); see also, e.g., Doe v. Urohealth
Sys. Inc., 216 F.3d 157, 160 (1st Cir. 2000).
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that there could be prudential reasons for the district court not
to resolve more than necessary. Id. The district court, as we
understand it, astutely followed this course and did no more than
necessary. Thus, the court was under no obligation to rule on
appellants' motions for judgment15 before it approved the Consent
Decree. Appellants may reassert their motions in the new
litigation.
In their second theme, appellants fear that the court's
actions have deprived them of an argument they wish to make in the
new action based on their interpretation of the court's Phase One
Findings and Conclusions. They worry about language in the court's
order of July 20, 2007 that the Phase One Findings and Conclusions
have been "superseded" by the entry of the Consent Decree: "Under
the changed circumstances in the case, those findings and
conclusions were superseded by the Settlement Agreement reached
between the City of Bangor and Citizens and the Court approved
Consent Decree between the State of Maine, the City of Bangor, and
Citizens." Appellants fear that this language precludes them from
making an argument that since judgment was entered for the Army
Corps of Engineers in 2004, they are entitled to have judgment
entered on parallel reasoning in the existing lawsuit.
15
Nothing in the law of the case doctrine dictates the
order in which a court addresses issues.
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We view this language in the court's order as primarily
being directed at the difference in allocations between Citizens
and Bangor in the Phase One Findings and the Consent Decree. The
court, in an abundance of caution, was making clear that the
Consent Decree, and not the Phase One Findings, governed as to
allocations between the settling parties. The court's orders made
it perfectly clear it was not, in Phase One, ruling on the
liability of the third- and fourth-party defendants.
Since the district court has never ruled on appellants'
motion for entry of judgment, the law of the case doctrine plays no
role. Christianson v. Colt Indus. Operating Corp., 486 U.S. 800,
815-16 (1988); Quern v. Jordan, 440 U.S. 332, 348 n.18 (1979);
Fiori v. Truck Drivers, Local 170, 354 F.3d 84, 90 (1st Cir. 2004).
Similarly, the court never ruled on the effect of the Phase One
Findings on third-party defendants and expressly reserved that
issue. Even if it had made such rulings, the law of the case
doctrine does not prevent a judge from changing his mind, so long
as there was an explanation and the court took into account
justified reliance. Fiori, 354 F.3d at 90.
To the extent appellants may be arguing, contrary to the
record, that the Phase One Findings were a final judgment, the
district court was plainly correct. No final judgment was entered
in Phase One.
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IV.
We affirm the district court's entry of the Consent
Decree and its dismissal without prejudice of the third and fourth
parties' motions for judgment and its allowance of Citizens's
motion to file supplemental claims in new litigation.
Affirmed. Costs are awarded to appellees.
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