the honorable the united states court of appeals for the st circuit is now in session all persons having any physicist before this honorable court may give their attendance and they shall be heard god save the united states of america and this honorable court court is in session today's remedy in the consent decree is identical to one that the district court held on lawful earlier in the proceedings and two out of nearly two dozen non operating p r piece the only ones who settled in this case are other federal agencies now circle requires the district court to exercise independent judgment and to fulfill that obligation in this case the district court needed to explain why and based on evidence this settlement and this consent decree are fair and lawful despite these unprecedented distinctions court did not do that we believe that the court was excessively deferential and therefore abused its discretion i would like to start if i could your honour's with the rim of the remedy and the rod in the face to order and then move to the settlement issues for the nd half of my agency's expertise of the parties agreement and the quote yes there is deference in this circumstance your honor but we think that one thing that distinguishes this from canons and indeed from any other case we have we've encountered and certainly this co has it can countered is that there is a prior decision from the court very well considered that reaches the exact opposite conclusion from what is in the consent decree and so while there may be a deference to the agent was that it was  that the law of the case is that what you say no and let me be very clear we're not arguing that the phase two decision is law of the case or that the face to decision prevents the court from ever entering a consent decree rather our argument is a little more narrow and that the phase two decision because of its significance and because of the district court's obligation to exercise independent judgment in approving a consent decree and circle like this at least requires the court to explain why it has changed its mind assuming it has for without that explanation it's not clear to to the public and certainly to us whether the district court was had fairly changes mind or whether the court simply misperceived its role in reviewing this consent decree  a view is that after the district court held that this this remedy was unlawful it cannot be consistent with the purposes of circle there is a fundamental i was the lack of explanation in the order approving the consent decree your honor and i think the reason is the reconsideration motion is relevant as is the appeal that the united states took after that original decision certainly the united states believes that the face to order was wrong the district court responded to the muslims reconsideration by withdrawing his prior order after receiving the most reconsideration my understanding your honor is that after the motion for i'm sorry is that wrong and a slightly different is that the district court because the notice of appeal had been filed the parties went back to the district court and asked whether it would entertain the reconsideration motion to discord said yes and so this court remanded the case to the district court for those proceedings to go forward right that because of the notice of appeal the dysport did not have jurisdiction to entertain their reconsideration motion otherwise the parties brief the issue before the court was able to decide it the  parties return to the court order is no longer in a sure as part of the consent decree itself yes the order was doing that he said it was no longer arbitrary and capricious correct know that well let me be blunt to be precise what he said was in the consent decree and in the order he said that he had reached the can help that the remedy was not inconsistent with the national contingency plan whereas in the face to ruling he said the must have concluded that those arguments were good or like that is that the only flaw that he didn't specifically say that well i think it's not that it's not simply a failure to explain i take that back it is a failure to explain because it without the explanation we just to get this right if he had said in light of the arguments in the motion for reconsideration it's no longer inconsistent with the n c p does your procedural argument go right i think if he had said my face to order was wrong and in light of the rules you know that govern reconsideration i'm changing my mind i think that would result most of our issue as to the consent of great love he said that though well if it's not so much that it's wrong as much as there are two fair side here and now they've settled it and i think this is fair and reasonable and he has a little footnote about the groundwater issue and then they allow they the consent decree allows edition simpering to sort of if the  still necessary so did the wrist provision for some of the things he was worried about well your honor i think that in the ordinary case if this were not a circle case the rules that govern reconsideration would require the court to you know give that explanation to the public right a circle a consent decree a fax more than just the settling parties it affects the public at large it affects non settling parties and so the requirement for independent judgment which circle imposes on judges in the circumstance we believe at least requires the court to put forth that explanation and show that the court was not being overly deferential at the flip side of independent judgment is excessive deference so when there is a pro forma decision at the if you have three or four page order that enters the consent decree it doesn't explain why the court has changed its mind but simply in conclusory fashion asserts this is not inconsistent the national contingenc through i guess the st is and i'm still not entirely clear what follows if you're right about the explanation so let's say i grant that the modifications revision can't solve the problem because there's still if you are  right and illegal to create theft and so modification cancel the slander then the argument one answer to that is what he said it's not illegal because he said it was not inconsistent you say but i don't know what that means you haven't explained yourself but you also said if he had said the reason it's not illegal is because i accept the arguments in the motion perkins reconsideration then there's no problem correct if the district court had said that would that have been sufficient absolutely ok so what do you want us to do if you are right so if we're correct we think it normal to send a thank you we think it needs to be sent back so that the district court can  nd point on the consent decree what if the record cap is not implicated by the groundwater finding which was one of you are the government made in the most reconsideration act what is the import to you of the groundwater finding groundwater classification as it pertains to us is that it is an extra is the dish where it said in the face to order and i argue we reckon it's not an extra couple intertwined in the classification i don't perceive has an impact on the ultimate remedy that our clients might ultimately pay for the correct and incorrect but on that point your honor i would just emphasize that we are with the district court and its finding in the case to decision that they are inextricably intertwined we think that was the correctly reasoned approach so i guess unless you're your honour's have further questions on the remedial aspects of this in the few minutes i have left i would like to talk about the settlement between e p a and the d o d so a special feature i this is contribution protection when a party settles with the e p a they are protected from contribution claims brought by other p r piece and so because of contribution protection district courts have to be careful to ensure that a settlement is fair to all parties fair to the non settling parties here we believe that the e p a did not substantiate the fairness of its five hundred and fifty thousand dollars settlement with the federal agencies what he has told told the district court was that the agencies can settle at this injuries because the agencies aren't liable at a high level we think there are two problems with that i want to unpack with your honor's permission st we think that mischaracterizes the phase one decision and two it's an incomplete response to all  aspects of substantive fairness so turning to the st of these agencies were clearly not off the hook or out of the case after phase one phase one happened four years before this settlement and remained d o d remained in this case for the four years afterwards that's because phase one was focused on d o d s liability for one particular chemical for dioxins whether d o d was liable for other chemicals was going to be adjudicated in later phases of the case now we're not saying that  from settling with the d o d before face three of the case this court has already rejected that and it makes no sense if you could thanks parties who would place what we're saying is that citation of the phase one decision is simply in doesn't address whether and to what extent is the settling parties might be responsible for the other chemicals at the site nor does it address the allocation of responsibility and importantly in this case the arm the requirement that e t a settle in an length settlement with other federal agencies in a sense e p a is not allowed to pick favorites when it settles because of contribution protection and so in most cases indeed the ones we're familiar with when e p a settles with a party it relates to  responsibly is allocated with respect to something at the site there's a neutral or site specific basis that the agency provides for why it's settling with who it's selling with so in the canons case e p a drew a line at what at one percent and anyone who had provided less than one ist and you're your argument so the two points one i thought in the record that the district court concluded that these parties with whom they said the settlement was reached had drums that didn't have herbicides to the site and that those tactical herbicides were produced dioxins one of the main chemicals that the site and in can in stead the court found that d o d had sent turban oil and turban all to the site but if i understand your honour's question correctly yes if we can if we can prove but the problem is the contribution protection so that we can actually go after d o d for that share afterwards and so the to the extent but with respect to that didn't you have an opportunity to object it they is one just on this exact point we did not nor did we need to because if i did not want one in in the district court's opinion i thought i thought there was a the exchange with the district court where you think you're your client that they wanted to be able to show that he was wrong on that point and his response was i don't see how you're going to do any better than m hart on that point right and so your honor asked about phase one and that didn't happen at right although i do it this is an important point from my perspective in our client's perspective is that in the district courts phase one decision at footnote one hundred and twenty one that i alluded to a moment ago the court said everything i've just ruled as diogenes am heart isn't going to apply to these rd parties settlement you had the opportunity to make the case to the district where he should not approve this item precisely for that reason that you haven't had a chance to really prove it he said in response well and hart has done everything i have no reason to think you'll do better than i am hard so whether you get a fair opportunity well i think this goes to the allocation of responsibility between settling in and settling parties because that is one of the components of substantive fairness that e p a as i said before not pick favorites but rather have liable we think is only could at most show that e p a d o d is not liable for the dioxins and so there's an absence of evidence there's nothing you could in a comfort and say well hey deal he's also not responsible for these other chemicals that wasn't  at issue in phase one and so th your honor is that if you take a look at the case management order which is at page two hundred and ninety seven of the appendix the district court did not in the allow for the introduction of evidence as to all other toxins in the  phase the st phase was about the visibility of harm a unique concept and circle that says you know a party who is ordinarily jointly and severally liable for all pollutants that this is the basic idea you're saying that there is a category of evidence that he just never looked at and in consequence of not looking at that there's no way this finding could on that record ever be supported is that the basic argument yes and the e p a did not come forth with anything along those lines either and the upshot is that our clients will get to make that argument later on yes that is in a nutshell your honor there's a there's a category of evidence as to deity's liability that was not germane to face one of us wasn't produced for phase one and e p a didn't even attempt to come forward with it in connection with that settlement with the d o j here and so question if there's not even a glimmer of an indication of the other evidence you're talking about that would matter in the district court says you haven't made any showing that it would matter then we just are reviewing whether he's right or wrong and right well i'd like to say there's a glimmer your honor because this is our client's their issues we've not been involved in any discovery nor had the opportunity to develop this as a factual matter within the case owing to the case management order so it's puts us in a little bit of a catch twenty two you know our failure to have evidence that something that we've been from precluded from having evidence on which is why i'm focused on e p a s failure to show why the theory that we intend to litigate at face three is you know so hopeless that that they should be able to settle on the basis of the phase one findings alone so if i've gone over my time around as i would like to make one very last point on the settlements if i may which is that there is in several cases when e p a settles only with another federal agency an extra concern about whether the settlement is arm's length and the district court in pennsylvania and the pes a case that we've cited to this court and into the dish or court said that when the agency does not open negotiations to everybody it's sort of put the thumb on the scale and the conclusion that this is not an arm's length settlement at the end of the day this settlement was the settlement aspect of this was between e p a and d o d and that settlement was not open to everyone e p a admits that pages thirty eight dollars thirty nine cents of it's brief to specific all i have are the objective facts your honor that you p a refused to negotiate with any of the any c customer group except for d o d it made its mind up and only invited d o d to that table and so you know there is i think that calls into question we're not saying it's impossible that this is an arm's length settlement again this is e p a s failure to put on evidence to show that this was truly an arm's length settlement and because of the concerns that arise with contribution protection the court needed to scrutinize the district court should have scrutinized more closely to make sure that this wasn't a sweetheart deal between two federal agencies trial that these not liable defend its will contribute five hundred and fifty thousand dollars to this cleanup this is the kind of resolution of a simple litigation that is strongly encouraged by both congress and this court which has repeatedly recognized the strong public policy favoring settlements especially in complex that it will in addition could you address the the point that is that your opponent is making about the groundwater binding because it's contention is that you even  that's true you can't have a legal consent decree and that absent a finding about the groundwater issue in light of his earlier order what we have is an unexplained find are critical find into a consent decree which is arguably arbitrary suspected that the ground water classification was tying up with the selection of the soil remedy inextricably intertwined and why if you take another look at that and he did in the motion for reconsideration and the very end of the motion for re consideration actually says this is our response to that this is e p a s reconsiderations of the district court had that in front it had the knowledge that that as explained understand what you have in front of it i guess that the objection from your opponent is but he didn't tell us why he did what he did and to lose you well well it is one is we could imply or say that we could say he must implicitly agreed with the motion for reconsideration or alternatively even if he didn't somehow the modification provision takes care of that is there some other possibility is yes marius ph for us his decision entering the consent decree the district  court st of all says that he took into consideration all these things and then he says based on all of the things he's reviewed and the information provided at the three hour hearing where these things were thoroughly discussed that the remedial action describ but you can't have a modification unless you have a decree st that needs to be modified and i understand your opponent to be saying the decree itself is there for unlawful unless the groundwater problem was solved at the time of the initial  ahead suppose i had to write an opinion pinion was going to come out in your favor and the opinion was going to say it's fine that there was an earlier order saying it was arbitrary and capricious based on the issue in the groundwater issue and the and it should have a linkage to record because when he issued the new consent decree he had concluded that those were no longer problems what would be the explanation i could give as to why the district court in issuing the consent decree no longer thought there were problems what would i look what would i say he he concluded that led him to resolve his prior concerns i would say the statement  work is probably the number one thing he would point to which should that the issue of the grammar of the class made no difference to the implementation of the soil remedy it has been concerned that those things are ground and once it got down to that more needy greedy level it was clear that the crimes that were had theory did not actually affect the actual remedy in any way so the remedy is consistent with a national contingency plan i a regulation that governs this and provides that if there are major modifications there's administrative requirements as well as of course yet in the courts authorization allies and hard ended up going in and doing it ishall sampling and looking at that pass and how much fission plays they ate all that decided that the requests he kept was no longer necessary is that something that they'd have to go back in to get approval from the court well we never get to that point is it would never a had two arguments in their motion for reconsideration about the record point one was that the record cap was not an extra people intertwined and so the support was wrong to have thought it was and the nd point was that the ground you could read to embrace either one of i think the evidence is very clear st of all this court you know if you don't have to find the district court actually made these findings itself you're reviewing that it is discretion and well let me just ask your question directly time of the entry of the consent decree yes prior to the reclassification using rhode island system it we were in the same situation we were when he issued his face one order yes but establish still made the of the liable and just some before you vanish from my perspective what is your answer to your point of contention that they had no opportunity to make the case at the time of settlement that he was not looking at a whole range of evidence that might have that was relevant that he couldn't make a finding as he did without having considered that i think the district critical issue very well himself he sent if that were all it took to stop  are and their contribution to the cleanup and here we have heart beyond what is normally available we have a twenty eight dollars day trial after extensive discovery of the district court probably said this was litigated into the ground  district court was very well aware that this theoretical possibility that there might be something else out there was not a reason to reject it would be if he would not follow the proper standard free of consent decrees if he had allowed that to say well this is still you thank you position of being the counsel for a party that both challenged and is now implementing the remedy and also participated in both phase one and phase two is lead trial counsel so i thought i'd start off where ms pathan left off with a deal of the point she's absolutely correct and i want to dispel what might be a misunderstanding the claims against the any c c customers other than the department of defense were stayed at the request of the  customers there was a joint stipulation that was submitted to judge smith by everyone that the claims against the any c c customers and the discovery on the extent to which they contaminated the site by supplying drums to any c c would be came out that set the phasing and i apologize for not having a joint appendix reference but at the c f two to two there are numerous case management orders that contain the same thing do you deal with in a unique position because with respect to one contaminant dioxin  hearts defense and phase one was that the dioxin was from d o d not m heart so rather than have d o d s liability parsed out over both cases the structure was all evidence all discovery on all substances for d o g s liability would be done in phase one and then if they were found liable presumably along with m heart after phase one in phase three the contribution shares  d proportionate responsibilities will be determined when we decided the liability of the any c t customers so everyone pushed for the acapella its not to be participating in phase the air force base in the navy base contained any hazardous substances and after the trial the judge found that we hadn't proven that so we came into the settlement negotiations over the consent decree in a position that one of the parties federal parties was already found not to be liable for anything any hazardous substances sent to the site and i think it's important to keep that context in mind when you evaluate the amount that they agreed to pay to resolve the case the nd point i'd make and i did test at the time of settlement was there any what was the nature of the showing made about of the consent decree and then the hearing and you know there was extensive discovery this case has gone on for so long even i haven't participated in all of it including the discovery portion with respect to d o d but you know i tried the case it didn't point to anything other than you know i think in argument as opposed to something in the record that turbine oil sure sounds like it might have something hazardous then it but you know we had the opportunity to do that we had a trial on it classification would be arbitrary and capricious he i in my view deferred on that because he wanted to have figure out what they were going to do on the ground water is just and then have us come back and see if we agreed or disagreed on whether or not the record cap could be justified without it in the phase two trial we raised what were largely implemented ability concerns because this isn't a landfill it's a it's a it's a plot of land and link to the groundwater finding do you agree with that or not yes i agree with that and in fact your honor probably eighty or ninety percent of a receipt cap is already on the site the work work is commenced  cap i don't want to get the significance of that that might be harmful to you in the sense that if it's if it is inextricably linked that wouldn't help your case so i would only point out your honor that they implemented but implement ability issues the judge smith receipt kept in the absence of the groundwater justification was why he alternately concluded that a receipt path was still appropriate and vacated the prior ruling and and to the extent that that was referenced in the statement of work as was the anticipated change in the groundwater classification that specifically in the statement of work that's incorporated in the consent decree he he understood from that and the party who had raise the implementation challenges that in our view those and them implementation challenges had been addressed and we weren't challenging the  so thank you ron and less and less anyone has any additional questions from you one sentence from the case management order let me read the court the nd sentence at after ninety seven however during this phase you know these one yeah evidence will be used solely to determine the liability of m hart and any c c and whether this liability if proven is divisible among the two parties and as mr harper mill just told the court the only issue for divisibility in this case was asked to dioxins and so as the district court itself recognized at the end of the face one opinion at app or thirty two  forty three cents its conclusion that d o t was not liable for anything was beyond the scope of the case management order and we think not fair to the parties like us now you asked earlier about whether there's anything in the record that specifically links this turmoil with p c b s i'm not able to dig it up at you right now i can tell the court seriously our theory based on e p a s own website which lists turban all as a source of p c p s this isn't speculative this isn't sort of a pious guy theory this is a theory that is based on e p a s own materials provided on the public website now turning back to the remedial portion that presidents it's an intentional i believe it was mentioned but i don't think there was more than a and a mention trend at the hearing and that's what i'm on able to dig up for your honour's right now based on the transcript your honour's it's not clear why the didn't work before you go to that because i'm just a little hughes about the nature your argument because there's a aspect of it would seems to have an aspect which seems procedural so one version of it is that given the record that he had for him the district court simply could not have made the d o d finding that he made and that has nothing to do with your opportunity rights to have made a case or not you just think given that what he evidence you that are just and have made that point and that's it seems like a substantive right which i understand right and we look at the record and we decide whether given the standard it's enough wrecked the procedural variant of it seems to be that you're suggesting somehow you didn't have a chance to do something and i don't and what that what the relationship i'm not even sure you raise that on appeal that i don't think that's correct your honor i don't think we're we're a friendly saying that the consent decree will the settlement portion needs to be vacated because we lacked an opportunity to develop this case are our focus is on the evidence that you pay put forth to justify the five hundred and fifty thousand dollars what i'm bringing up the rest to say is that you know we do think there's a fair chance this isn't just sort of fly specking you know we did sit by we waited for phase three and there is something yet to be proven here and so when  comes to the court and says d o t is not liable liquid use and phase one your honor that's not a complete basis for concluding that he pays not liable because twenty other and u c c customers have contribution claims against d o d on a different theory so turning now to the and eighty five the district court this is from the hearing on the consent decree and this is why we think fundamentally it's unfair and inaccurate to read the district court's four page order approving the consent decree here somehow reflecting a substantive re evaluation of the face to order quote if any heart doesn't find the remedy arbitrary and capricious and who cares really i mean why do we need to worry about it we think the district court applied the wrong standard he approached the settlement this consent extend it where as if it were a private arrangement was extra deferential relied on the hope that any e s d or statement of work might fix the things that the court found unlawful and faced him or one question about a point that was raised on this exact point supposed to do is take the consent decree take the remedy and tell the party here's the part you're doing it's not supposed to change in any material way what the remedy does we think m r places far too much reliance on it on the statement of work because in essence them are just saying the statement o changed the remedy an improper way so if a nice reason to runners we would ask that the consent decree and the settlement be vacated and that this be sent back to the proper procedures can be complied with thank you that conclude the argument for today the session of the honorable united states court of appeals is now recessed until the next session of the court god save the united states of america and this honorable court counsel you may disconnect from the hearing