good morning i'm gregory evans on behalf of a sarcoma on december th two thousand and nine in washington d c the united states environmental protection agency in the department of justice held a press conference in that press conference they announced the closure of a circus bankruptcy which they described as one of the most successful environmental bankruptcies in united states history here is what they said and i quote from the head of the environmental and natural resources to vision of the of the of the department of justice quote just because a company goes into bankruptcy does not mean that it will avoid its environmental responsibilities that company was asarco quote taxpayers received more than a dollar for every dollar they claimed those taxpayers are the american citizenry why do any of us even several of the vote statements have relevanc honor because in its zeal to win union pacific spends a lot of time both in the trial below and in the briefs that they have filed disparaging asarco as a company that somehow tried to get a good deal as a company that tried to defraud its creditors and avoid its environmental responsibility and so we look to a rd party to validate what i am saying on behalf of overlooked what this court said on appeal about the the settlement release this court said that that release was ambiguous this court directed the court be lo to consider parole evidence this court in fact went further and identified the very language in the release that it identified as ambiguous and which allowed that the contract to be read in way that asarco was reading it in fact the court rejected the words used by the district court that the release if we read the way asarco is reading it it and i quote anything but mutual and your honors we see the same language again we see the same language in the in the judgment in the opinion of the court below and we know that the court below disregarded the instruction of this court to consider the parole evidence well it will later me there was a thirteen day trial there was a lot of testimony the court listened to it you obviously the factual mistakes that you're talking about have to be clearly erroneous so can you point to the facts that the court found that you think were clearly erroneous well i respectfully your honor i'm not so sure that that clearly erroneous standard applies to the factual finding of the district court if the district court according to the cases cited in the brief has made a mistake of law and the court was mistaken on the law in into important respects number one the court used texas law to determine whether there was a meeting of the minds with respect to the formation of the contract rather than to determine whether there was a meeting  the minds with respect to the precise released language that the court this court found to be and the u s the nd mistake of law that was made was the court at the court conflicted with the very instruction given by this court case to listen to the parole evidence in fact if we look at the opinion there is no citation of the parole evidence in terms of any kind of a substantive review of what was said let's look at what i said i think i mean just to be fair t court you're right that the court did repeat unfortunately that language that we had that should not have controlled the analysis but what the court said was listen i obviously started out thinking that the plain language of the release covered this i was rebuked i've now held this trial everything i listen to just confirms my initial instinct which is that this was intended to be covered and you're right maybe the court didn't go through and cite you know page and line numbers but as just crossing said i mean this judge has been living with this case for a long time he did what we instructed him to do and i don't think we should just assume that he ignored all of this evidence which is kind of what he just well what i'm saying with respect to both courts this course instruction that he that he consider that the district court consider parole evidence and with of course respect to what the district court did i would concede that the court listened to the parole evidence in fact days of it but never really grappled with it because if you look at what the parole evidence said in the record the parole evidence usually uniformly established that it was not a sarkozy intent to release this claim and that would be consistent with the language that this court  of the mistakes the court made what did it ignore in terms of actual factual evidence it heard what they did ignore i think what you're saying is the court really had made up its mind the st time around thirteen days of testimony later all it did was reaffirm what it thought before it went into it now this to judges sometimes do that but if it would help us if you could point to things that it ignored yes your honor let me let me in fact call the r larson thomas aldrich christopher fall robert jones the railroads witness michael cooper the railroads witness that is what the district court ignored let me run through briefly what it ignored linda larson and respected seattle environmental attorney waive the attorney proper client privilege with a circus permission took the stand and told all she said in trial that it was never a sarcomas intent to release this claim she testified that serco never contemplated such a waiver and in fact she testif never authorized her to commit to such a way for that was linda larson's testimony the attorney representing asarco who waived the attorney private client privilege to be able to tell this to the court the information that prepared to resolve all claims between it and union pacific i mean isn't it a reasonable inference from that i mean i take your point that there is no evidence either way of you know specifically bearing on this claim but there's a lot of evidence from both sides of the point of this provision was to wipe the slate clean and then eliminate any future litigation yes your honor but if we look at the context of that correspondence and other correspondence which by the way documentary evidence came in as parole evidence and testimony also came in the documentary evidence again refers to puts it in context to the proof of claim the amended proof of claim filed by union pacific in the bankruptcy it doesn't talk about any claim filed by asarco it doesn't talk about any anticipated claim by asarco and if i might just add one of the most important pieces of the documentary evidence that came in was some of the some of the drafts that were exchanged one of which omitted the language that said the release was including but not limited to including but not limited to the proof of claimed claim so that not limited to language was omitted by the parties in negotiations and that omission according to ms larsen who testified was actually helpful in e just ask you on that point because this is what was confusing me the claim that was at issue in union pacific proof of claim against asarco was a contribution claim for this exact same pool of environmental ok so so that's so that's but that was a big part of it this nd was that union pacific claimed that along its main line that mining waste had washed up and contaminated its main lines such that they were  certain sum of money and i thought this was a contribution claim because they said we have been forced to pay cleanup costs yes we have yes and we think you guys are partly responsible and we want to get some of that money back from yes and mainline according to the evidence runs along the south fork and there are proof of claim related to the washed up tailings along the south fork this claim is about the railroads that union pacific built with and that relates to operable unit three which is what this this case is about the claim that they were making related to the south fork and the impacts that asarco those they claim that  other mining companies activities had upon their main line because they were forced to pay to clean up that product off it was all within three well it is not within otoh you three i or at least this portion of you three but guess what doesn't make any sense just to me from your position you're trying to defend is that if they had a contribution claim against you and they were going to settle that it wouldn't make any sense for them to do that if you were just going to turn around and bring a contribution claim against that right that the whole deal is that what we're going to resolve our differences and i'm going to give up you know if some of the money that i'm seeking from you but if you could just turn around and sue me to get back even more than that what if i came from a so well at the time union pacific had not disclosed to anyone its ubiquitous use of mining waste along the north fork in fact they denied it until it was proven at trial at the time union pacific was disavowing the abandoned railroads that its companies bill along the north fork so it was not in their interest to raise north fork impacts but this case is about north fork impact and by the way if if union pacific had paid for and settled its claims with united states with respect to the north fork impact it would have received contribution protection under circle and they they did not receive contribution under circle for the impacts of the north fork railroad system they only received contribution protection under circa for the south fork cleanup so that's the important distinction the other the other important point is while it may have been good business judgement to have considered within the context of the settlement of the proof of claim filed by union pacific why d the release constantly say claims by union pacific against the sarc oh again and again and again and that's the ambiguity that this court found which they did directed the district court to address and which the witnesses did address and uniformly the witnesses testified that there was no meetings of the no meeting of the mind with respect to two to the release and i if i may continue the the other witnesses that testified christopher fall and tom aldrich who signed the agreement corroborated exactly what ms larsen said so there has been nothing in that and the court below that contradicts  add that it was mr fall and mr aldridge who testified in this trial that it was very important for sarka to retain the right to pursue union pacific later with respect to this portion of the superfund site and they did so how did they do so if it was so important and you have a no no i think you've mentioned at least six maybe ten attorneys why didn't they say so the why didn't they specifically reserve the right to bring a contribution claim and they did your honor we're in the th plan of reorganization confirmed by the bankruptcy court and confirmed by the district court  circle preserved its right to pursue contribution under served for this very site that is at issue in this very case that claim was preserved and importantly if you look at the sequence of it your honor it was preserved after this settlement agreement was entered into so if it was if it was contemplated by the parties that there would be this mutual release why then would asarco include in its th plan of reorganization preservation of that right which it did it preserved its right to pursue this this cla i want to add if i may talking again about the parole evidence briefly something said by union pacific six witnesses on the issue they called a man named michael cooper who was there retained environmental expert michael cooper testified that he was never asked to evaluate a sark of his claims against union pacific and that he was only asked to evaluate union pacific claims against the s and that kind of bears itself out does very itself out in the agreement union pacifics claims against this arco you know we're in the agreement does it address specifically or even in claims with respect to this site against union pacific he testified as an environmental expert that he evaluated the environmental impacts along the south fork of the corn lane river river not anything about the north fork not anything about union pacific about a sarkis potential claims against union pacific and so if you have an environmental expert and you claim as they did as they argued in their briefs that this was a set off situation and where the parties were negotiating over the differences between two sites and that there was some brilliant reduction in the amount of the claim because you know they all understood what the competing claims were the very environmental expert that came forward and at the trial said he never considered that he never looked at asarco claims against against union pacific perhaps bad business judgment but those are the facts and those are the facts that this court ignored that the  excuse me your honour's that the lower court completely ignored we can't look to that opinion and find references to fall to alter each to larson to cooper or to jones jones was another witness that they that they brought forward he said they never discussed it he was an attorney that they brought forward and his his testimony is also compelling because he told this court and this court listen he told this court that  claims against against the union pacific were never discussed and that's the pearl evidence and that's the pro level and said this court overlooked and repeated its textual analysis and concluding and concluded that the reading that or sarka is attempting to impose would render the release anything but mutual explain how its interpretation of the contract once rejected by this court can be read consistent with the parole evidence and with the language that is in that agreement union pacific some claim against asarco quickly i'd like to touch on the texas law that applies i think i'll have to do that what the court like me to  good morning your honour's good may it please the court carolyn mcintosh court did not air with respect to either of those holdings and we request that this court affirm for both independent reasons st when this case was last appealed this court found that the bankruptcy settlement agreement between us arco and union pacific was ambiguous as to whether the settlement released asarco this court remanded for the just court as fact finder to resolve that ambiguity based upon the extrinsic evidence of the parties and tapped at trial the district court did exactly what that court what this court in instructed it to do on re manned after extensive review of extensive evidence the district court made the factual determination that asarco released the claim against union pacific and the bankruptcy news pause there and just addressed your opponent's argument that one of the legal errors that infects the factual findings that you've just mentioned is that the district court thought that texas law only required a meeting of the minds for contract formation purposes when in fact we could have a look at the cases that they have a very clear it's consistent with the way it works in is for contract formation and the court found that the contract was valid there was an offer acceptance and amount of money just cited the contract was approved by the bankruptcy  was implemented by both parties right that's a necessary but not sufficient condition to form a contract what you also need is a meeting of the minds of the two parties as to what this specific term in compass is so it's not enough if you all have your people who say well we thought they meant this and they have their people said what we thought it meant that and there's no no meeting of the minds as to that right so that's what i think that this record got wrong as a legal matter and i'm wondering how do you explain wh the are we not communicating because i'm agreeing with you on that i'm saying that is necessary yes but and additional court thought that's all that you needed but it's not you need in a dish in a meeting of the minds as to the specific term in the dish or course seem to think no i don't need to resolve i don't need to find that you all actually met as to the meaning of whether this term encompassed the right and that seems wrong in resolving an ambiguous contract the fact finder is to waive the extrinsic evidence and it is this court determined that the ambiguity related to whether or not the release provision  that a meeting of the minds was required with respect to that specific provision rather the reason form an enforceable contract the parties have to agree as to what the term in dispute means and yes i said that that's what the whole trial was about yes so i'm asking you so i and i'm if you're if what you're going to say is that just because there are people said what we never intended to release that claim that they've destroyed or doesn't have to credit that i grant you that but the court does have to say i think well that's what you guys are saying now i don't believe it i think at the time you all were negotiating this you really did have in mind that it was going to compass this claim as well and here here are my reasons why and what  saying i guess is that the district never seem to give us here the reasons why because it had this footnote saying i don't need to worry about this me the mind stuff because that is only relevant for contract formation purposes actually the court did say exactly what the reasons were  that the court determined that and what it did was it concluded that there were competing there was competing extrinsic evidence so it weighed that in the context of the contract itself and the reason broader than that it was a broad form release of all all claims of any kind or character in law are an act would be known or unknown and those claims related to the pass for past and future costs so the court found that the release defined the scope of the parties intent and that that the correspondence in leading to or the negotiations leading to the settlement agreement also defined the fact that both parties intended a global release of all claims between them and they didn't say a global release of global settlement of all claims between them be some of the most some of the most compelling evidence that the court relied on is the conduct of the parties after the settlement was implemented and there this is a very contentious bankruptcy the the debtor at the pendant during the pendency of the litigation was reorganization and so there were two plans of reorganization that went to near final ultimately it was the parents plan that was confirmed but the debtors point and union of reorganization didn't reserve many claims i was confused i have the six point i don't have the th planet your point referred to with the th plan is the parent's plan and the parents plan was confirmed but the parent's plan doesn't evidence the conduct of the contracting parties the debtor's is land wrong in saying that that plan does reserve the school scuse me your opponent represented i think that the th plan which that's why i said i don't notes that it did reserve this claim the th plan was confirmed nearly a year after the bankruptcy settlement was entered into between union pacific and as such it couldn't reserve a claim that was already released unsettled it couldn't breathe life back into it ok yeah obviously if it had been released but we're trying to figure out whether or not it had been released and he's saying that as evidence of what he  thought back then look to the conduct after the settlement was reached and the conduct of the debt or the party that negotiated the agreement with with union pacific is reflected in the  amended plan of reorganization where it preserved no claims against union pacific and to your honor's point with regard to what the what the  release the focus something release and the scope of the proofs of claim you know pacific brought a contribution action and that was the cut that was the action that was resolved in the bankruptcy settlement a contribution contribution action asserted by union pacific was that it had incurred more costs when it was and was obligated to pay in oh you three but he said that no it was with respect to i can't remember north or south  fork because i'm getting confused but right he's saying that not enough your guys claim rep related to a totally different part of this larger area than the claim that they are now trying to bring us you well we included and it was a addressing is not in the site the north fork basin was determined by e p a to be clean not required they requested the district court in two thousand to remove the north fork from the site because the north fork river has always been demonstrated to be clean it meets all state water quality standards even in one thousand nine hundred and thirty it was determined to have a very healthy fishery by d ellis and that evidence was in the record so the cost that union pacific incurred were incurred in oh you three they were along the main line which parallels the south fork but  all of the testimony about the north fork was one hotly disputed in the trial and secondly union pacific successfully disputed that there was never an environmental issue there because the p a didn't include it in the site mail may exclude it and the water quality is good so asarco did not meet its burden of proof to show that that union pacific had any of the leases in the north fork that resulted in contamination in in oh you three and in the bankruptcy in the bankruptcy settlement union pacific brought a contribution claim saying it had overpaid asarco agreed and the party is accurate oblio allocated their responsibilities their liabilities between the two of them with a covered that issue a sharp those contributions claim in this case clearly arises out of or is in any way connected to the c d a site and the costs incurred by union pacific at to the scope of the settlement was defined by that the consideration offered in the release which was a broader scope them the scope the narrow scope that was limited to claims settled were in quote including but not limited to the liabilities and other obligations assertive in the proofs of coin so the bankruptcy settlement itself stated that it went beyond the preuss a claim these factual issues that counsel is raise the opposing counsel is raising today were the exact extrinsic evidence that the district court took days of testimony on and did exactly what this court directed the district court to do being waiting that competing extrinsic evidence and reach the conclusion the finding that asarco released its claim him in the bankruptcy settlement and that claim could not be revived by the parents later confirmed plan if if i may turn to so so union pacific requests that the court affirm that independent holding and then turning to the  contribution payment it self independently the court found that asarco wasn't entitled to contribution because it did not overpay its own share of the overall liability for oper unit three the court found again after extensive testimony and the several days and documentary evidence asarco paid just over twenty percent and not its twenty two percent share that had been adjudicated in prior in prior litigation and i will say that twenty two percent is a share of liability that is zero embrace throughout the bankruptcy in the bankruptcy estimation hearings it embraced to the joint stipulated facts in the trial below and in all the testimony within the trial so  the there was certainly substantial evidence with respect to that turning to the total cost of response for all you three before you get to that can i can i just ask the legal on the part of the district where it seems to have been that if serco paid less than its share you know as against the world then it's not entitled to anything but doesn't the court view to look at what union pacific you overpayment is a foundational requirement to maintain a contribution claim contribution the term itself is not defined in circle one hundred and thirteen up but it was defined by the united states supreme court in united states versus land of research corporation and that definition has been adopted of course by this court in the whittaker case and there the supreme court stated that the term contribution should be given its traditional meaning and it means that the tort fizzer is right to collect from others responsible for the same tort after the tortfeasor has paid more than his or her proportionate share so that they're there must st be well both the elements are there must be an overpayment getting out from in a proportionate share and that sort of begs the question which is is it in proportion to the total damage incurred by the world or in proportion to the liability of the other party to the action it's the proportionate share of liability for that particular site that is that is being contribution claims are being asserted over and the proponent of the contribution asarco had an obligation to prove by a preponderance of the evidence that it overpaid what that that union pacific was a coal liable party and that union pacific had not paid its fair share and what the district court found was that that asarco did not meet that burden of proof so asarco is the one that skipped over the overpayment question the district court and there is nothing in the statute or the case law that says as to those three overpayment requirement and therefore the outcome would have been the same so there overpayment question is fundamental foundational to a contract to maintain and contribution claim and the court properly disposed of the issue by resolving that because the prior litigation as well as evidence presented at this trial provided sufficient information for the district court to make the determination with respect to each of the primary cost factors to determine that asarco did not mean its burden of overpayment ok thank you very much ron let's put  thank you hundreds so unfortunately and it's difficult for me to say this union pacific has not failed to deal forthrightly with with the evidence many lawyers that came before me and many lawyers that will come after me have worked very hard to establish we know from the case law that circle was hard to hard to apply because of the way that it was drafted but we have a jur establishes the framework and that framework requires a finding of liability and aquittal allocation and equitable allocation and neither of these things did not occur in this case now the issue of of costs and cost calculations have come up so i do need to say that the district court was not free to rely upon hearsay evidence in establishing the total cost for the cleanup of the site as a part of its formula the district court was not free to deduct seventy million dollars from the amount that asarco paid the four hundred and eighty five million dollars at asarco paid to address the environmental issues to stop the litigation to voluntarily pay it so that human health and the environment could be protected the district court to ducted that some from the four hundred and eighty five million dollars that has been used as necessary response costs by the trust i would just conclude your honor by saying we all want to win that's understood but we have to look beyond beyond winning and losing today and we have to think about what will happen to a very important  most important environmental statute in this country to protect human health and the environment if we disregard the statutory framework that courts have guided us with as to how circle contribution claims should be handled in the district courts then parties like businesses will not have any kind of certainty and in knowing that if they volunteer the money if they put it into the communities to address the environment they will not be able to pursue contribution because district courts won't follow the framework that they're required to follow and that removes the incentive for businesses to go ahead and pay the sums to address the environmental issues and in so doing to protect human health and the environment thank you very much counsel for shifa helpful arguments in this very complicated case because just are you just admitted and we are in recess until tomorrow