Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_10-cv-00634/USCOURTS-azd-4_10-cv-00634-0/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 42:9607 Real Property Tort to Land

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

STATE OF ARIZONA, et al., 

Plaintiffs, 

vs.

ASHTON COMPANY, INC., et.al., 

Defendants. 

CITY OF TUCSON, et al.,

Plaintiff-Intervenors,

vs.

BALDOR ELECTRIC COMPANY,

et al.,

Defendants in Intervention. _________________________________

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No. CIV 10-634-TUC-CKJ

ORDER

Pending before the Court is the issue of whether the filing of Answers to the Complaints

in Intervention and discovery is appropriate before consideration of the Motion to Enter

Consent Decrees (Doc. 109). The parties were provided an opportunity to file briefs

regarding the issues. Oral argument was presented to the Court on October 17, 2011.

Plaintiff State of Arizona (“the State”) and Defendant Tucson Foundry & Manufacturing,

Inc., and Industrial Pipe Fittings, LLC (collectively, “TF/IPF”) have filed briefs asserting that

neither answers nor discovery is appropriate prior to resolution of the Motion to Enter

Case 4:10-cv-00634-CKJ Document 167 Filed 10/21/11 Page 1 of 9
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For example, Intervenors point out that the court in United States v. Wastecontrol of

Fla., Inc., 730 F. Supp. 401, 404 (M.D. Fla. 1989), was in possession of the administrative

record to consider in its review. However, the court did not state that all such information

was needed in its consideration. 

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Consent Decrees. Intervenors Tucson Airport Authority, Arizona Board of Regents,

University of Arizona, Raytheon Company, Tomkins Industries, Inc., Tucson Electric Power

Company, and Pima County (“Intervenors”) have submitted a brief asserting that further

information is needed for the Court to adequately determine whether the Consent Decrees

should be entered.

The parties all appear to agree that the proper inquiry regarding the Motion to Enter

Consent Decrees is whether the settlements are procedurally and substantively fair,

reasonable, in the public interest, and are consistent with the polices of CERCLA. State of

Arizona v. Nucor Corp., 825 F.Supp. 1452 (D.Ariz. 1992), aff’d on other grounds, 66 F.3d

213 (9th Cir. 1995), United States v. Montrose Chemical Corp. of Calif., 50 F.3d 741 (9th

Cir. 1995).

Intervenors assert that answers and discovery are permissible and necessary. Intervenors

assert that, under Fed.R.Civ.P. 12(a), there is no controversy before the Court and, under

Fed.R.Civ.P. Rule 26(b)(1), they are entitled to discovery regarding nonprivileged facts

relevant to their claim that the proposed consent decrees are not substantively or procedurally

fair, reasonable, or consistent with the objectives of WQARF and CERCLA. Intervenors

assert that inquiries into the information relied on by the State in developing the estimated

remediation cost of $75 million and each settling party’s allocated share would simply enable

this Court and Intervenors to assess whether the consent decrees are substantively fair, an

exercise which the Court must conduct. Additionally, the Intervenors disagree with the

Court’s assertion in the June 29, 2011, Order that discovery may not be appropriate and

attempts to distinguish the cases cited in that Order.1

 However, Intervenors do not cite to any

authority that found discovery to be appropriate in similar circumstances to the case at bar.

Case 4:10-cv-00634-CKJ Document 167 Filed 10/21/11 Page 2 of 9
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The State argues that, because the City of Tucson intervenors and Board of Regents, et

al., intervenors, do not have a right to contribution, no purpose would be served by allowing

discovery. The State asserts that, under CERCLA, parties are permitted to recover costs of

recovery under 42 U.S.C. § 9607(a) and contribution under 42 U.S.C. § 9613(f). United

States v. Atlantic Research Corporation, 551 U.S. 128, 131 (2007). The State points out that

none of the Intervenors have asserted any current or potential claim for cost recovery under

42 U.S.C. § 9607(a).

As to claims for contribution, the State asserts that claims for contribution are controlled

by 42 U.S.C. § 9613(f) which states, in part, that any “person may seek contribution from any

other person who is liable or potentially liable under section 9607(a) of this title during or

following any civil action under 9606 of this title or under section 9607(a) of this title.” The

State points out that, in Cooper Industries, Inc, v. Aviall Services, Inc., 543 US 157 (2004),

the Supreme Court specifically addressed whether a private party that voluntarily incurred

response costs but had not been sued under CERCLA could obtain contribution from other

liable parties under 42 U.S.C. § 9613(f) and held that “contribution may only be sought

subject to the specific conditions, namely ‘during or following’ a specific civil action.”

Aviall at 166. “Section 113(f)(1) ... authorizes contribution claims only ‘during or following’

a civil action under §106 or 107(a) and it is undisputed that Aviall has never been subject to

such an action. Aviall therefore has no §113(f)(1) claim.” Aviall at 168. The State asserts

that, because neither the City of Tucson nor the Board of Regents, et al., have ever been the

subject of a civil suit as required in 42 U.S.C. § 9613(f), they do not have a viable

contribution claim. Indeed, the State points out that the “result of non-settlors possibly

bearing a disproportionate liability for the open-ended costs of remediation is therefore

consistent with the Statute’s paradigm, which encourages the finality of early settlements.”

United States v. Davis, 261 F.3d 1, 28 (1st Cir. 2001). The State appears to agree that Pima

County could have a contribution claim, but such a claim would breach the 2002 Consent

Decree entered in CIV 00-574. State Brief, Doc. 157, Attachment. 

The Court finds Intervenors’ reliance on Aerojet to be misplaced. In relying on Aerojet,

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Intervenors appear to be equating the discussion of whether intervention is appropriate as to

why discovery is appropriate. During argument, the Court discussed with counsel that,

following the Aerojet remand, the district court did not permit discovery by the intervenors.

See United States v. Andruss Family Trust, 2011 WL 1334391 (C.D.Cal. 2011). That court

discussed that discovery as to why decisions were made would not strengthen an argument

that a consent decree is unfair. The court also pointed out that disclosure had been made –

further discovery would raise privilege issues and only shed minimal light on the issues.

Counsel for Tucson Airport Authority distinguished Andruss Family Trust on the basis that

more disclosure had been made in the Andruss Family Trust case. However, the State

indicated that they have conducted interviews of more than 800 people and have disclosed

more than 100,000 pages of documents to Intervenors. This is not disputed, but Intervenors

complain that the material is disorganized and only includes memoranda regarding the

interviews rather than the interviews themselves. As in Andruss Family Trust, it appears that

additional disclosure would offer minimal additional information regarding the interviews

and the investigation that has already been conducted.

Intervenors assert that basic information is needed to evaluate the reasonableness and

fairness of the settlements in the Consent Decree and, therefore, answers to the Intervenor

Complaints and discovery prior to consideration of the Motion to Enter Consent Decrees are

needed. Intervenors assert that the State has not provided sufficient information for the Court

to meaningfully apply the standards. Specifically, Intervenors point out that the State simply

identifies a list of categories of costs that would comprise the remedy and states that it

utilized “a generally accepted EPA methodology for assigning liability.” Doc. 109, p.7, ln.

4-11; Exh. C, p. C-1. This does not provide the amount of the estimated cost for each

category, much less the required reasonable underlying basis for each such estimate. 

Furthermore, the State does not offer an explanation of the basis for the allocation

percentages or even provide the allocation percentage as to each potentially responsible

party. Further, Intervenors assert that the State’s reliance on Mr. Ernest Joseph Blankinship’s

deposition testimony violates the Hon. Raner C. Collin’s order that, if Mr. Blankinship

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becomes unavailable, his “deposition shall not be admissible for any purpose . . . in any

pending or subsequent federal or State judicial or administrative proceeding.” MC 09-001-

TUC-RCC, Doc. 134, pp. 8-9. 

The State asserts, however, that all Intervenors were given access to the State’s public

records in conjunction with the State’s Petition to Perpetuate Testimony of Mr. Blankinship

and that, other than privileged documents, Intervenors have already received all

documentation that the State relied upon for its settlement offers. Additionally, the State

asserts that the investigation will take an additional three to five years to complete. Counsel

for Pima County argues that, because the deposition of Mr. Blankinship is expected to be

completed this year, an additional three to five years of investigation is not likely. However,

the State points out that, for budgetary reasons, the projection is reasonable. In other words,

even if the Court were to permit additional discovery, in light of the projected time for

completion of the discovery and the State’s assertion that it has disclosed all non-privileged

documents, it appears only minimal additional information would be available within a

reasonable time.

The Motion to Enter Consent Decrees summarily describes the methodology and provides

some basis for the remediation costs:

ADEQ reviewed the information in its files including interviews of over 800 witnesses

and over 100,000 pages of documents. ADEQ then compiled that information and

determined where gaps existed in its information to determine those areas where data was

unknown and therefore where those uncertainties gave rise to risk in early settlements.

Additionally, ADEQ analyzed the information about the Site to determine those areas

about which it had no information and therefore where additional risk of early settlement

may be present. Finally, a preliminary early allocation was performed in which a rough

allocation of share was determined for each potentially responsible party based on its

activities as a generator, transporter, owner or operator of the Site. This allocation used

an established and accepted EPA model for allocations at landfill sites.

Doc. 109, p.12.

Each Defendant’s estimated share of the projected total cost of the remedy was calculated

using the information from the files of ADEQ (containing interviews of over 800

witnesses and over 100,000 pages of documents) and using a generally accepted EPA

methodology for assigning liability. Based upon a preliminary estimate of remedial action costs of $75 Million, the range of liability for the Defendants extended from 0.01% of the

estimated total clean up costs to 0.2%, or as expressed in dollar figures, from $10,000.00

to $150,750.00.

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Id. at p. 7. The Motion’s Ex. C includes some details for the basis of the remediation costs.

Indeed, TF/IPF asserts that the State has provided the Court and parties with a description

of the analysis it performed in assessing proportionate shares of liability to be attributed to

the settling parties based on its estimates and available information and that deference to the

State's reasoned determination is required by law. See, e.g., United States v. George A.

Whiting Paper Co., 644 F.3d 368, 372 (7th Cir. 2011); SEC v. Randolph, 736 F.2d 525, 529

(9th Cir. 1984) (emphasizing the need for "deference to the judgment of the government

agency which has negotiated and submitted the proposed judgment"). If the State and the

settling parties are incorrect, that is the risk taken by settling early (including the State’s risk

of absorbing orphan shares). TF/IPF asserts that additional discovery will not change this.

Although Intervenors cite to Montrose for the assertion that a court may abuse its discretion

in approving a consent decree without adequate evidence, the Montrose court discussed how

the trial court was not even provided with the government’s estimate of damages – there was

no discussion that supporting documentation for those estimates were needed to determine

fairness and reasonableness. Here, the government has provided some information that has

provided the basis for the damages and has indicated that it has used an EPA approved

methodology. The parties have not provided any authority to the Court that intervenors or

non-settling parties are entitled to disclosure of the specific methodology.

Additionally, the Court also considers that, as argued by TF/IPF, there is a strong public

policy in favor of early settlements. See e.g. United States v. George A. Whiting Paper Co.,

644 F.3d 368, 373 (7th Cir. 2011) (once state has explained the basis for its estimations, court

must defer to expertise of agency and federal policy encouraging settlement). Additionally,

TF/IPF makes an argument under A.R.S. 49-285(H) similar to the argument made by the

State that reallocation is not available in this case. 

TF/IPF also argues that, because the State has asserted that it can only impose

proportional, several-only liability on any defendant, the State should be bound by that

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2

TF/IPF also asserts that the Intervenor Complaints should be dismissed – in effect,

under Fed.R.Civ.P. 12(b)(6). The Court finds that determination of this issue would more

appropriately be considered if/when answers or other response were ordered.

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assertion and, therefore, there is no need for contribution claims or discovery.2

 The State has

not disputed this assertion and indeed, appears to agree with it. The Court notes that the

Ninth Circuit Court of Appeals has recognized that statements by other government officials may

be admissible as a statement by a party opponent. United States v. Van Griffin, 874 F.2d 634

(9th Cir. 1989); see also, United States v. Kattar, 840 F.2d 118, 130-31 (1st Cir. 1988), citing

United States v. Powers, 467 F.2d 1089, 1097 (7th Cir. 1972) (Steven, J., dissenting)

(government manifested belief in substance of documents by submitting them to other federal

courts); Williams v. Union Carbide Corp., 790 F.2d 552 (6th Cir. 1986).

When the Court considers the ongoing nature of the investigation by the State (including

the minimal information that would be subject to discovery), the information already

disclosed to Intervenors, including remediation costs and general methodology information

(compared to Montrose), the statements by the State that any orphan shares will be borne by

the taxpayers, and the public policy reasons for encouraging early settlements, the Court

finds it is not appropriate to permit discovery by Intervenors. In light of this conclusion, the

Court also finds that directing answers to the Intervenor Complaints to be filed will only

result in unnecessary delay. The Court, therefore, declines to order answer to be filed and

declines to order discovery. 

In reaching this conclusion, the Court recognizes that Intervenors have argued that this

Court has insufficient information before her to adequately consider the Motion to Enter

Consent Decrees. Although the Court has found that Intervenors are not entitled to conduct

discovery, the Court acknowledges that she must have sufficient information before her to

determine whether the settlements are procedurally and substantively fair, reasonable, in the

public interest, and are consistent with the polices of CERCLA. Nucor Corp., 825 F.Supp.

at 1456; Montrose, 50 F.3d at 746. While the Court recognizes the government is entitled

to deference, see e.g., Montrose, 50 F.3d at 746, and environmental agency formulas should

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3

The Court declines to specify what additional information regarding the methodology

the State should provide (e.g., affidavit, policy statement describing EPA formula,

calculation), but advises the State that the Court cannot grant the Motion to Enter Consent

Decrees if inadequate information is presented to permit the Court to determine whether the

settlements are procedurally and substantively fair, reasonable, in the public interest, and are

consistent with the polices of CERCLA.

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be upheld if there is a plausible explanation for it, Davis, 261 F.3d at 24, the Motion to Enter

Consent Decrees filed in this case does not provide any details of the EPA formula used in

this case and has not provided any explanation as to how this EPA formula was used in

calculating appropriate settlement amounts. The Court finds it appropriate, therefore, to

direct the State to supplement its Motion to Enter Consent Decrees with additional

information regarding the EPA formula/methodology used to calculate settlement amounts.3

Further, the Court does find it appropriate for Intervenors to have an opportunity to

respond to the Motion to Enter Consent Decrees although the response time has passed.

Additionally, the Court finds it appropriate to provide Intervenors, including the City of

Tucson who has already filed a response to the Motion to Enter Consent Decrees, an

opportunity to respond to the State’s supplemental filing. 

The Court, therefore, will set a briefing schedule. The Court notes that the City of

Tucson has requested oral argument. The Court declines to schedule oral argument at this

time, but advises the parties and Intervenors that, if any other party or Intervenor seeks oral

argument, they shall notify the Court.

Accordingly, IT IS ORDERED:

1. Answers to the Intervenor Complaints need not be filed.

2. The Court declines to permit discovery by Intervenors.

3. The State shall file a supplemental to its Motion to Enter Consent Decrees that

provides additional information to the Court regarding the methodology used by the State to

calculate the settling parties’ shares on or before November 7, 2012.

4. Intervenors shall file any response to the Motion to Enter Consent Decrees and

supplemental filing on or before November 25, 2012.

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5. The State shall file any reply on or before December 5, 2012.

DATED this 20th day of October, 2011.

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