NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 15a0539n.06
No. 14-4078
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
GOODYEAR TIRE AND RUBBER COMPANY, )
FILED
Jul 30, 2015
)
Plaintiff-Appellant, ) DEBORAH S. HUNT, Clerk
)
v. ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
LOCKHEED MARTIN CORPORATION, ) COURT FOR THE NORTHERN
) DISTRICT OF OHIO
Defendant-Appellee. )
)
)
BEFORE: BOGGS and KETHLEDGE, Circuit Judges; and BLACK, District Judge.*
BOGGS, Circuit Judge. In 1987, Goodyear Tire & Rubber Company (“Goodyear”)
entered into an Asset Purchase Agreement (the “Agreement”) with Loral Corporation whereby
Loral agreed to buy all assets and assume all liabilities of a Goodyear affiliate. One of the assets
covered by the Agreement was the Airdock, a massive facility built in Akron, Ohio in 1929 to
manufacture and house blimps. In 1997, Loral merged with Lockheed Martin Corporation
(“Lockheed”), and Lockheed took ownership of the Airdock.
In 2003, Lockheed discovered that the Airdock’s original siding was contaminated with
non-liquid polychlorinated biphenyls (“PCBs”), a chemical substance that is now considered to
be hazardous waste. Lockheed notified the Environmental Protection Agency and entered into a
consent agreement that required Lockheed to clean up the PCB contamination and remove the
*
The Honorable Timothy S. Black, United States District Judge for the Southern District of
Ohio, sitting by designation.
No. 14-4078, Goodyear v. Lockheed
Airdock’s siding. Lockheed has spent tens of millions of dollars on the cleanup and will need to
spend millions more to complete it.
In an attempt to recover the cleanup costs, Lockheed sued Goodyear in 2010 under the
Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”),
42 U.S.C. § 9601 et seq., and Ohio’s Voluntary Action Program, Ohio Rev. Code § 3746.01 et
seq. In response, Goodyear argued that it had transferred its environmental liability for the
Airdock to Loral (and therefore to Lockheed) in the Asset Purchase Agreement. The district
court agreed and granted summary judgment to Goodyear in a decision that was affirmed by this
court in 2013 (the “Airdock Litigation”).
The dispute now returns to us for a second time. After its victory in the Airdock
Litigation, Goodyear sought to recover under the Asset Purchase Agreement’s indemnification
provisions for the litigation expenses and attorney’s fees that it incurred in defending against
Lockheed’s initial suit. The district court below ruled that the expenses did not fall within
Lockheed’s indemnification obligations and granted summary judgment to Lockheed. For the
reasons given below, we affirm.
I
A
In our opinion regarding the dispute over the cleanup costs in the Airdock Litigation, we
described the factual background as follows:
In 1929, the Goodyear Zeppelin Corporation built the Airdock, a facility used to
manufacture and house blimps. For the Airdock’s siding, Goodyear Zeppelin
installed coated steel sheets known as Robertson Protected Metal. The coating on
these sheets contained polychlorinated biphenyls (“PCBs”), a chemical substance
now considered to be hazardous waste. See 15 U.S.C. § 2605(e).
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No. 14-4078, Goodyear v. Lockheed
Goodyear Zeppelin later sold the Airdock to Goodyear Tire & Rubber Company.
Shortly thereafter, Goodyear leased the Airdock to its wholly owned subsidiary,
Goodyear Aerospace Corporation (“GAC”). Goodyear continued to lease the
Airdock to GAC for the next 46 years.
On March 13, 1987, Goodyear and GAC entered into a written agreement with
Loral Corporation, under which Loral agreed to buy all of GAC’s assets and
assume all of GAC’s liabilities (the “Asset Purchase Agreement”). Although
Goodyear, rather than GAC, held legal title to the Airdock, Goodyear transferred
it to Loral pursuant to the Agreement. Ten years later, Loral merged with
Lockheed, and Lockheed became the Airdock’s owner.
Sixteen years later—in 2003—Lockheed discovered that the Airdock was
contaminated with PCBs. Tests confirmed that the contamination had also spread
to Haley’s Ditch, a stream 1,000 feet north of the Airdock. Lockheed notified the
Environmental Protection Agency, in compliance with the Toxic Substances
Control Act, 15 U.S.C. § 2601 et seq. Lockheed and the EPA then entered into a
consent agreement. That agreement provided that Lockheed had unlawfully used
and disposed of PCBs beginning on June 30, 1997 (the date Lockheed merged
with Loral). Consequently, the agreement required Lockheed to clean up the
contamination caused by the Airdock and, eventually, to remove the Airdock’s
siding. Lockheed estimates that it has spent more than $31 million on the cleanup,
and that the removal of the siding will cost many millions more.
Lockheed later sued Goodyear, seeking to recover the cleanup costs under the
Comprehensive Environmental Response, Compensation, and Liability Act
(“CERCLA”), 42 U.S.C. § 9601 et seq., and Ohio’s Voluntary Action Program,
Ohio Rev. Code § 3746.01 et seq. Under each statute, the default rule is that a
company that contaminates a facility is liable for the cleanup costs, even if the
company later sells the facility. See 42 U.S.C. § 9607(a); Ohio Rev. Code §
3746.23(B). Lockheed therefore argued that Goodyear was liable for the
Airdock’s cleanup costs because Goodyear contaminated the Airdock with PCBs.
Goodyear moved for summary judgment. In support, Goodyear pointed out that
CERCLA and Ohio law each allow a company to transfer its environmental
liability to another party by contract. See 42 U.S.C. § 9607(e); Ohio Rev. Code §
3746.23(F). Goodyear therefore argued that it had transferred its liability for the
Airdock to Loral through the Asset Purchase Agreement.
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No. 14-4078, Goodyear v. Lockheed
The district court agreed with Goodyear’s interpretation of the Agreement and
granted summary judgment in its favor.
Lockheed Martin Corp. v. Goodyear Tire & Rubber Co., 529 F. App’x 700, 701–02 (6th Cir.
2013).
In the Airdock Litigation appeal, we agreed with the district court that the Agreement
transferred Goodyear’s liability for the cleanup to Loral and thereby to Lockheed when it merged
with Loral. Id. at 705. After noting that CERCLA and Ohio law each allow companies to
transfer environmental liability by contract, we determined that the Airdock was an “asset[] . . .
of GAC” for the purposes of the Agreement and that “[t]he Agreement therefore transferred
Goodyear’s liability for cleaning up the Airdock” to Lockheed. Id. at 702, 705.
B
Fresh off of its victory in round one, Goodyear filed a complaint on November 5, 2013,
seeking indemnification from Lockheed for the fees, costs, and expenses incurred in defending
the Airdock Litigation. Goodyear argued that its expenses from the Airdock Litigation fell
within § 6.19.2 of the Asset Purchase Agreement, which sets out Loral’s—and therefore
Lockheed’s—obligations to indemnify Goodyear for various expenses. The district court
disagreed and held that Goodyear’s expenses were not covered by § 6.19.2 as a matter of law.
Goodyear Tire & Rubber Co. v. Lockheed Martin Corp., No. 5:13 CV 2465, 2014 WL 4852129,
at *7 (N.D. Ohio Sept. 29, 2014). The court granted summary judgment in favor of Lockheed,
and Goodyear now appeals.
II
We review a district court’s grant of summary judgment de novo. Borman, LLC v. 18718
Borman, LLC, 777 F.3d 816, 821 (6th Cir. 2015). Summary judgment is proper if “the movant
shows that there is no genuine dispute as to any material fact and the movant is entitled to
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No. 14-4078, Goodyear v. Lockheed
judgment as a matter of law.” Fed. R. Civ. P. 56(a). The central inquiry is “whether the
evidence presents a sufficient disagreement to require submission to a jury or whether it is so
one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 251–52 (1986).
Our interpretation of the Asset Purchase Agreement is governed by Ohio law. Under
Ohio law, “contract interpretation is a matter of law subject to de novo review on appeal.”
United States v. Ohio, 787 F.3d 350, 353 (6th Cir. 2015) (citing City of St. Marys v. Auglaize
Cnty. Bd. of Comm’rs., 875 N.E.2d 561, 568 (Ohio 2007)). As is our general approach in
contract disputes, “our role is to give effect to the intent of the parties.” Sunoco, Inc. (R & M) v.
Toledo Edison Co., 953 N.E.2d 285, 292 (Ohio 2011). We will read the provisions of the contact
as a whole and derive the parties’ intent from the contract’s plain meaning. Ibid.
III
A
The Asset Purchase Agreement includes cross-indemnification provisions reflecting
Goodyear’s (and GAC’s) indemnification obligations to Loral (and Lockheed), and Loral’s (and
Lockheed’s) indemnification obligations to Goodyear (and GAC).1 In order to fulfill its
obligation to read the Agreement as a whole and give effect to each of its provisions, see
Saunders v. Mortensen, 801 N.E.2d 452, 455 (Ohio 2004), the district court read the cross-
indemnification provisions together. See Goodyear, 2014 WL 4852129, at *5.
1
For ease of reference, we refer to Goodyear and GAC collectively as Goodyear, and Loral and
Lockheed collectively as Lockheed.
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No. 14-4078, Goodyear v. Lockheed
Section 6.19.2 sets out Lockheed’s indemnification obligations to Goodyear in part as
follows:
Loral agrees to indemnify and hold GAC and Goodyear . . .
harmless from and against, and upon their respective demand to
pay or reimburse them . . . for any claim arising out of the
operations of GAC subsequent to the Closing Date . . . .
(emphasis added). Section 6.19.1, in contrast, sets out Goodyear’s indemnification obligations to
Lockheed. That provision states:
GAC and Goodyear, jointly and severally, agree to indemnify and
hold Loral . . . harmless from and against, and upon their demand
to pay or reimburse them for . . . any claims, actions, suits or
proceedings . . . relating to contamination or adverse effect on the
environment . . . caused by, attributable or relating to or arising
out of the operation, use, control or ownership on or prior to the
Closing Date of the [Airdock] . . . .
(emphases added). The parties agree that the Airdock Litigation constitutes a “claim” for these
purposes but dispute whether that claim “ar[ose] out of the operations” of the Airdock prior or
subsequent to the Agreement’s closing date in 1987.
The district court determined that Goodyear’s obligations under § 6.19.1 “depen[d] upon
whether the claim was ‘caused by, attributable or relating to or arising out of the operation, use,
control or ownership [of the Airdock] prior to the Closing Date,’ and not when the claim was
discovered or submitted to Goodyear pursuant to the post-closing timeframes of that section.”
Goodyear, 2014 WL 4852129, at *5. The court then stressed that the relevant language from
§ 6.19.2, which sets out Lockheed’s indemnification obligations for “any claim arising out of the
operations of GAC subsequent to the Closing Date,” “is similar, but not identical, to section
6.19.1.” Ibid. There was nothing in the provisions’ text or structure, however, to suggest that
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No. 14-4078, Goodyear v. Lockheed
the “arising out of” language should be interpreted differently in the separate indemnification
provisions. Ibid.
In interpreting Lockheed’s indemnification obligations under § 6.19.2, the district court
applied the Nearest-Reasonable-Referent Canon to determine that the “subsequent to the Closing
Date” language in that section modifies “operations of GAC,”2 and not “claim.” Id. at *6. Thus,
the district court determined that “Lockheed’s indemnification obligations are triggered by
claims ‘caused by, attributable to or relating to or arising out of’ the operations of the Airdock
after 1987—not by claims caused by or attributable to or relating to Airdock operations prior to
closing—even if those claims may not be discovered or asserted until after closing.” Id. at *5.
In the court’s view, “[t]he cross-indemnification provisions of the [Agreement] contain clear and
unambiguous lines of demarcation between pre-closing and post-closing operations,” and “the
only reasonable interpretation of section 6.19.2 is that the time when a claim arises is determined
by when the operations causing the claim occurred, or when the operations to which the claim is
related to or attributable, occurred.” Id. at *6.
The district court then examined whether Lockheed’s claim against Goodyear in the
Airdock Litigation arose from operations of the Airdock prior or subsequent to the closing date
of the Agreement in 1987. If the claim arose from operations prior to 1987, then the claim would
fall outside Lockheed’s indemnification obligations under § 6.19.2. If the claim arose from
operations subsequent to 1987, then the claim would fall within § 6.19.2 and Goodyear could
recover.
The district court ultimately held that “Lockheed’s claims against Goodyear in the
Airdock Litigation did not arise after the Closing Date,” and thus “those claims do not trigger
2
The parties agreed that “operations of GAC” in effect means “operations of the Airdock” in this
case. See Goodyear, 2014 WL 4852129, at *4.
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No. 14-4078, Goodyear v. Lockheed
Lockheed’s indemnification obligations under section 6.19.2.” Id. at *7. The court reasoned that
Lockheed’s claim did not arise from post-closing operations or remediation costs from cleaning
up the PCB contamination but rather from the pre-closing use of PCBs in the construction of the
Airdock. See ibid. (“Lockheed’s claims against Goodyear regarding PCB cleanup at the
Airdock were attributable or related to—arose from—utilization of PCB containing materials in
the construction of the Airdock and the continued presence of those hazardous materials in
connection with the operation of the Airdock for over 50 years prior to the Closing Date.”).
B
On appeal, Goodyear seems not to dispute the district court’s interpretation of the
indemnity provisions. Rather, Goodyear takes issue with the district court’s conclusion that
Lockheed’s claim in the Airdock Litigation “did not arise after the Closing Date.” Appellant Br.
18 (quoting Goodyear, 2014 WL 4852129, at * 7). Before this court, Goodyear asserts that the
Airdock Litigation in fact constitutes a claim arising out of post-closing operations at the
Airdock.
1
In support of its assertion, Goodyear first argues that the basis for the consent agreement
between Lockheed and the EPA regarding the PCB contamination and cleanup “was Lockheed’s
own post-closing operations at the Airdock,” and “Lockheed’s liability therefore derived from its
operations at the Airdock conducted years after the ink had dried on the [Agreement].” Ibid.
“Thus,” the argument goes, “the costs sought by Lockheed associated with these proceedings
‘aris[e] out of’ post-closing, not pre-closing, operations.” Ibid.
The problem with Goodyear’s argument is that, while the consent agreement and the
associated cleanup may relate to post-closing activities (i.e., the continued presence of PCBs in
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No. 14-4078, Goodyear v. Lockheed
the Airdock and their spread to the surrounding areas), the “operations” that gave rise to
Lockheed’s “claim” against Goodyear regarding that contamination occurred decades before the
Asset Purchase Agreement’s closing in 1987.
In the Airdock Litigation, Lockheed “argued that Goodyear was liable for the Airdock’s
cleanup costs because Goodyear contaminated the Airdock with PCBs.” Lockheed, 529 F.
App’x at 702 (emphasis added); see also Goodyear, 2014 WL 4852129, at *6 (“[I]n the Airdock
Litigation, Lockheed sued Goodyear to recover for use and disposal of PCBs on the site during
the decades that the Airdock was owned and operated by Goodyear and its
predecessors/subsidiaries, all of which necessarily occurred prior to or on the Closing Date.”).
In effect, Lockheed sought to impose liability on Goodyear because Goodyear operated the
Airdock “at the time,” 42 U.S.C. § 9607(a), that the PCBs were introduced to the site. Thus, the
“operations” “out of” which Lockheed’s claim “ar[ose]” are those that caused the contamination
of the facility with PCBs in the first place—specifically, the construction of the Airdock in 1929
and its maintenance over the subsequent decades. Lockheed, 529 F. App’x at 701–02.3
Goodyear’s reliance on the text of Lockheed’s consent agreement with the EPA does not
change the outcome. That agreement identifies the Robertson Protected Metal (“RPM”) used in
the Airdock’s construction as a “PCB Article” and a “PCB Item” as defined in 40 C.F.R. § 761.3.
The agreement then describes two counts against Lockheed for violating environmental
regulations and statutes. First, it asserts that Lockheed engaged in the unauthorized use of
PCBs—specifically, that Lockheed “has used the RPM in the Airdock continuously from
3
This conclusion is supported by our decision in the Airdock Litigation appeal, in which we
stressed that “Goodyear’s liability for cleaning up the Airdock” was “transferred” by the Asset
Purchase Agreement as a “liabilit[y] of GAC.” Lockheed, 529 F. App’x at 705. If liability for
the cleanup did not arise from pre-closing operations by Goodyear, it would not have been a
liability in existence at the time the Agreement was signed and thus could not have been
transferred by that Agreement to Loral/Lockheed.
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No. 14-4078, Goodyear v. Lockheed
approximately June 30, 1997 to the present” and this use “constitutes, for each day, a violation.”
Second, the agreement asserts that Lockheed engaged in the unauthorized disposal of PCBs—
specifically, that Lockheed “fail[ed] to properly dispose of” PCBs released from the RPM at the
Airdock “from June 30, 1997 to the present.” Based on these allegations, Goodyear maintains
that the consent agreement establishes that “Lockheed’s liability to the EPA derived from its own
post-closing operation of the . . . Airdock.” Appellant Br. 22.
The consent agreement does suggest that Lockheed’s violation of environmental
regulations, and thus Lockheed’s liability to the EPA, arose from Lockheed’s post-closing
operations at the Airdock. For the purposes of indemnification under the Asset Purchase
Agreement, however, we are concerned with the operations that gave rise to Lockheed’s claims
against Goodyear for indemnification or contribution, not the operations that gave rise to the
EPA’s claims against Lockheed for unlawful use of PCBs. The consent agreement establishes
that Lockheed improperly used and improperly disposed of PCBs after 1997, which are the post-
closing operations that gave rise to Lockheed’s liability to the EPA. It does not establish,
however, that Lockheed was responsible for contaminating the Airdock with PCBs in the first
place. That contamination, upon which Lockheed’s claim in the Airdock Litigation was
premised, resulted from the pre-closing operations of Goodyear.
2
Goodyear next argues that the fact that Lockheed sought to hold Goodyear liable for
cleanup and remediation costs incurred post-closing suggests that Lockheed’s claim necessarily
arose from post-closing operations. In the Airdock Litigation, Lockheed sought to recover from
Goodyear “all necessary costs” incurred in response to the consent agreement and PCB cleanup,
as well as response costs Lockheed “may incur in the future at the Airdock.” Goodyear
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No. 14-4078, Goodyear v. Lockheed
maintains that this demonstrates a connection between Lockheed’s claim and its post-closing
operations. See Appellant Br. 23. For similar reasons, this argument fails.
There is no doubt that Lockheed incurred (and will continue to incur) costs in
remediating the PCB contamination after the closing date. Similarly, it is reasonable to assume
that the extent of the damages associated with the contamination increased post-closing as the
contamination spread. The extent of the damages, however, does not affect the underlying basis
for Lockheed’s claim in the Airdock Litigation for the purposes of the indemnification
provisions. Rather, the only question under § 6.19.2 and § 6.19.1 is what “operations” gave rise
to Lockheed’s claim in the first place. Whether Lockheed discovered and began remediating the
contamination in 1987, 2003, or 2019, the operations that gave rise to the resulting claim—i.e.,
the construction of the Airdock causing its contamination with PCBs—remain the same.
Goodyear’s argument, in fact, would undermine the effect of the Asset Purchase
Agreement’s cross-indemnification provisions. Goodyear suggests that Lockheed’s claim in the
Airdock Litigation necessarily arose from Lockheed’s post-closing operations at the Airdock
because Lockheed sought contribution for costs arising after closing. See Appellant Br. 24–25.
However, Loral/Lockheed only took over control of the Airdock upon the closing of the Asset
Purchase Agreement in 1987, and thus Loral/Lockheed, by definition, could only incur—and
thereafter seek indemnification or contribution for—cleanup and remediation costs arising after
closing. Under Goodyear’s reading of the indemnification provisions, then, every claim by
Lockheed would arise from post-closing operations and fall within Lockheed’s indemnification
obligations under § 6.19.2, and no claim by Lockheed would fall within Goodyear’s
indemnification obligations for claims arising out of pre-closing operations under § 6.19.1.
Interpreting the Asset Purchase Agreement in such a manner would defeat the intent of the
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No. 14-4078, Goodyear v. Lockheed
parties to establish cross-indemnification obligations and would run afoul of our responsibility to
read the Agreement “as a whole” and “give effect to each provision.” Saunders, 801 N.E.2d at
455.
3
In a final attempt to recoup costs from Lockheed, Goodyear argues for the first time on
appeal that § 6.19.2 establishes that Lockheed is responsible for Goodyear’s losses if they
resulted “in whole or in part” from any claim arising out of the post-closing operations of the
Airdock. Appellant Br. 26 (emphasis added). This argument would seem to fail in light of our
conclusion above that the construction operations that gave rise to Lockheed’s claim in the
Airdock Litigation occurred prior to closing. In any event, Goodyear did not present this theory
before the district court, and the record does not enable us to determine whether or to what extent
Lockheed’s post-closing use of the Airdock contributed “in part” to Goodyear’s defense costs in
the Airdock Litigation. We therefore need not address this argument further. Cf. Scottsdale Ins.
Co. v. Flowers, 513 F.3d 546, 552 (6th Cir. 2008) (“[A]n argument not raised before the district
court is waived on appeal to this Court.”).
IV
In conclusion, we hold that Lockheed’s claim in the Airdock Litigation arose from pre-
closing operations of the Airdock and thus falls outside Lockheed’s indemnification obligations
under § 6.19.2 of the Asset Purchase Agreement. We therefore AFFIRM the district court’s
judgment.
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