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City of Emeryville v. Robinson

September 15, 2010

CITY OF EMERYVILLE; EMERYVILLE REDEVELOPMENT AGENCY, PLAINTIFFS-APPELLEES,
v.
HOWARD F. ROBINSON, JR.; CHRISTOPHER D. ADAM; HILARY A. JACKSON, INDIVIDUALLY AND AS SUCCESSORS TO MARY LOU ADAM AS TRUSTEE OF (A) TRUST A /U/T/O THE ADAM FAMILY TRUST DATED OCTOBER 10, 1997 AND RELATED ON OCTOBER 14, 2003 AND (B) THE ADAM FAMILY TRUST, SURVIVOR'S SHARE, INTERVENORS-APPELLEES,
THE SHERWIN-WILLIAMS COMPANY, AN OHIO CORPORATION, DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Northern District of California William H. Alsup, District Judge, Presiding D.C. No. 3:99-cv-03719-WHA.

The opinion of the court was delivered by: Hall, Circuit Judge

FOR PUBLICATION

Argued and Submitted February 10, 2010 -- San Francisco, California.

Before: Cynthia Holcomb Hall, David R. Thompson, and M. Margaret McKeown, Circuit Judges.

OPINION

The Sherwin-Williams Company ("Sherwin-Williams") appeals from an order of the district court granting in part, and denying in part, a motion for declaratory and injunctive relief. Sherwin-Williams brought the motion to enforce a 2001 court-approved settlement (the "2001 Settlement"), which it negotiated with appellees City of Emeryville and the Emery-ville Redevelopment Agency (collectively, "Emeryville") to resolve a lawsuit filed by Emeryville in 1999 in the Northern District of California pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9601-9675 ("CERCLA"). That suit (the "Site A litigation") sought to recover clean-up costs as to a 14.5-acre parcel ("Site A") where Sherwin-Williams manufactured, stored, and distributed pesticides from the 1920s through the 1960s. Under the terms of the 2001 Settlement, Sherwin-Williams paid Emeryville $6.5 million for Site A clean-up, and agreed to a cost-sharing formula for future groundwater remediation.

In the instant action, the district court concluded that the release provision in the 2001 Settlement was intended to bar the claims Emeryville is currently asserting against Sherwin-Williams in a separate action, which the Emeryville Redevelopment Agency filed in 2006 in Alameda County Superior Court (the "State Court Action") to recover $32 million in clean-up costs from Sherwin-Williams and others for a different parcel ("Site B"), but only to the extent the Site B claims arose from or were related to contaminants that "emanated from" Site A.

Appellees and intervenors Howard F. Robinson, Jr., Christopher D. Adam, and Hilary A. Jackson (collectively, "Intervenors") are recent or current owners of portions of Site B, who were also named as defendants in the State Court Action, but they were not parties to and did not have notice of the Site A litigation or the 2001 Settlement. Intervenors are also, however, cross-claimants in the State Court Action, who were allowed to intervene in this case to prevent the extinguishment of rights of contribution they seek to enforce against Sherwin-Williams for contamination of their properties at Site B. In the instant action, the district court ruled that the contribution bar in the 2001 Settlement does not apply to the Inter-venors' cross-claims against Sherwin-Williams.

The district court had jurisdiction under the express terms of the 2001 Settlement, pursuant to the All Writs Act, 28 U.S.C. § 1651. See Sandpiper Village Condominium Ass'n, Inc. v. Louisiana-Pacific Corp., 428 F.3d 831, 841 (9th Cir. 2005). We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

I. Factual and Procedural Background

This case concerns the contamination and clean-up of two adjacent sites in Emeryville, California, a small Northern California city that was once the home of heavy industry, but currently-after decades of effort by an aggressive local redevelopment agency-hosts a plethora of "big box" stores, hotels, restaurants, and numerous other retail outlets. Site A consists of the properties commonly known as the former Sepulveda Property (5600 Shellmound Street), the former McKinley Property (5500 Shellmound Street), the former Elementis Property (4650 Shellmound Street), the Old Shell-mound Street Right of Way, and additional properties south of 4650 Shellmound Street. Site B borders Site A on the north, and consists of the C&S Enterprise Property (1535 Powell Street), the Koeckritz Property (5770 Shellmound Street), the Robinson Property (5760 Shellmound Street), and the Adam Property (1525 Powell Street and the Rail Spur Property).*fn1

A. The 1999 Site A Litigation in the District Court

From the 1920s through the 1960s, Sherwin-Williams owned and occupied the northern third of Site A, and used the property for formulation, storage, and distribution of pesticides. In the late 1990s, significant soil and groundwater contamination was found on the former Sherwin-Williams property. In August 1999, Emeryville filed a lawsuit against Sherwin-Williams and other defendants, not including Inter-venors, alleging that the defendants were responsible for contaminants "in the soil and groundwater at and beneath [Site A] and migrating from [Site A]." See City of Emeryville v. Elementis Pigments, 2001 WL 964230 (N.D. Cal. 2001). Emery-ville sought cost recovery, contribution, and damages from the defendants under federal, state, and common law theories of liability.

B. The 2001 Settlement of the Site A Litigation

A mediated settlement of the Site A litigation was reached in November 2000, and approved by the district court in February 2001 in an order granting a "Motion for Approval of Settlement and Determination of Good Faith," which was filed by Emeryville, and joined by Sherwin-Williams. In the order approving the 2001 Settlement, the district court found that the Settling Defendants*fn2 were entitled to "such protection as is provided in" § 113(f) of CERCLA, 42 U.S.C. § 9613(f), and the California good faith settlement statute, Cal. Code Civ. P. §§ 877 and 877.6, as well as an order "dismissing the cross-claims asserted in the [Site A litigation], and barring contribution or equitable indemnity claims." Under the terms of the 2001 Settlement, Sherwin-Williams agreed to pay Emeryville a lump sum of $6.5 million, and agreed to share future costs of ongoing response actions "arising from groundwater at, on, under, or emanating from" Site A.*fn3

In return for remediation cost-sharing, the parties to the 2001 Settlement released one another "from any and all claims, demands, actions, and causes of action arising from or related to [Site A], including without limitation, claims arising from the release(s) of hazardous substances and/or contaminants at, on, under or emanating from [Site A], whether presently known or unknown, suspected or unsuspected," and waived the protections of California Civil Code section 1542. The parties specifically agreed that "[t]he releases provided herein shall not extend to any party or entity other than Emeryville, Sherwin-Williams, [and the other Settling Defendants]."

The district court retained jurisdiction to enforce the 2001 Settlement. The parties further agreed that the "prevailing party" in such a dispute would be entitled to recover reasonable attorney's fees and other costs.

C. The 2006 State Court Action as to Site B

In 2005, Emeryville began investigating contamination at Site B. A November 2005 report concluded that "[p]otential offsite sources of chemicals of concern" included the adjacent properties "formerly occupied by a Sherwin-Williams arsenic-based pesticide manufacturing facility" and that elevated arsenic at Site B's southern border was "most likely due to residually contaminated soil from former Sherwin-Williams pesticide manufacturing site."

In May 2006, the Emeryville Redevelopment Agency filed the State Court Action, Emeryville Redevelopment Agency v. Robinson, No. RG06267594, alleging that Sherwin-Williams and other defendants were liable for "hazardous substances discharged, deposited, disposed of, or released onto or at [Site B] and/or emanating to and from [Site B]." The other defendants, including Intervenors and the City of Emeryville, each denied liability and filed cross-claims against Sherwin-Williams and each other, seeking contribution and/or indemnity.*fn4

D. The Instant Proceedings to Enforce the 2001 Settlement

On July 31, 2008, Sherwin-Williams commenced the instant action by filing a motion in the district court for the Northern District of California. In its motion, Sherwin-Williams sought to enforce the 2001 Settlement, including the release and contribution bar, and to obtain a dismissal with prejudice of the claims and cross-claims filed against it in the State Court Action. More specifically, with respect to the State Court Action, Sherwin-Williams sought an order (i) confirming that the 2001 Settlement released all of the claims asserted against it by Emeryville, and provided protection against any cross-claims for contribution asserted by Emery-ville and the other parties; (ii) compelling the dismissal of the complaint and all cross-complaints against it, including those filed by Intervenors; and (iii) awarding attorney's fees and costs it incurred in filing the motion and defending itself. Emeryville opposed Sherwin-Williams's motion, and sought to recover its own fees and costs. Sherwin-Williams served its motion to enforce the 2001 Settlement on Intervenors and several other neighboring property owners.

Shortly thereafter, Intervenors sent letters to the district court indicating their desire to intervene in the instant action. On September 19, 2008, the district court granted twenty days for filing motions to intervene and responses to Sherwin-Williams's motion to enforce the 2001 Settlement. On October 9, 2008, Intervenors filed their motions to intervene pursuant to Federal Rule of Civil Procedure 24(a) (hereafter, "Rule 24(a)") and CERCLA § 113(i), 42 U.S.C. § 9613(i), along with a brief in opposition to Sherwin-Williams's motion to enforce the 2001 Settlement. A week later, all parties were heard on all pending motions.

In its final Amended Order entered on November 25, 2008 ("the Amended Order"), the district court granted Sherwin-Williams's motion to enforce the 2001 Settlement in part, and denied it in part. The motion was granted to the extent it sought confirmation that the release in the 2001 Settlement applied to the claims asserted against Sherwin-Williams by Emeryville in the State Court Action and dismissal of those claims, but only "insofar as those claims arise from or relate to contaminants that emanated from Site A." Sherwin-Williams's motion was denied to the extent it sought an order dismissing the cross-claims for contribution and/or indemnity filed by Intervenors and other defendants in the State Court Action. The district court denied both Sherwin-Williams's and Emeryville's requests for attorney's fees and costs.

Sherwin-Williams timely appealed from the Amended Order on December 23, 2008. Emeryville filed a notice of ...


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