Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-92-06101/USCOURTS-ca10-92-06101-0/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 

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PUBLISH 

FlL .... JJ lP 

United Statel ~ r~of Appea Tenth C1!'t.-ult 

UNITED STATES COURT OF APPEALS FEB 161993 

TENTH CIRCUIT ROBERT L. HOECKER 

Clerk 

UNITED STATES OF AMERICA, 

Plaintiff, 

v . 

ROYAL N. HARDAGE, OKLAHOMA NATIONAL STOCKYARDS 

COMPANY, J.O.C. OIL EXPLORATION, DAL-WORTH 

INDUSTRIES, DOUBLE EAGLE, SAMUEL BISHKIN, doing 

business as Eltex Chemical, L & s BEARING 

COMPANY, KERR-McGEE CORPORATION, CATO OIL, ADVANCE 

CHEMICAL DISTRIBUTION, INC., ALLIED-SIGNAL, INC., 

AT&T TECHNOLOGIES, INC. , ASHLAND OIL, INC., 

ATLANTIC RICHFIELD COMPANY, BORG-WARNER 

CORPORATION, EXXON CORPORATION, THE FIRESTONE TIRE 

AND RUBBER COMPANY, FOSTER FEED & SEED CO., 

GENCORP, INC., BULL HN INFORMATION SYSTEMS INC., 

MAGNETIC PERIPHERALS, INC., MAREMONT CORPORATION, 

MOBIL CHEMICAL COMPANY, NALCO CHEMICAL COMPANY, 

OKLAHOMA GAS & ELECTRIC COMPANY, THE OKLAHOMA 

PUBLISHING COMPANY, ROCKWELL INTERNATIONAL 

CORPORATION, TEXACO, INC., TEXAS INSTRUMENTS, 

INC., UNIROYAL INC. , UOP, INC., WESTINGHOUSE 

ELECTRIC CORPORATION, WEYERHAEUSER COMPANY, POWELL 

SANITATION SERVICE, INC., 

Defendants, 

and 

UNITED STATES POLLUTION CONTROL, 

Defendant-Appellant, 

McDONNELL-DOUGLAS CORPORATION, 

Defendant-Appellee, 

v. 

A.H. BELO, doing business as Dallas Morning News, 

ACME FENCE & IRON CO., ALAMO GROUP TEXAS, INC., 

AIRCRAFTSMAN, INC., AGNEW AUTO PARTS, AMERICAN 

NATIONAL CAN CORPORATION, ANADITE, INC., ARROW 

TANK TRUCKS, AZTEC MANUFACTURING, ARROW 

INDUSTRIES, AVIALL OF TEXAS, INC. , BASF, BETZ 

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Appellate Case: 92-6101 Document: 010110170363 Date Filed: 02/16/1993 Page: 1 
LABORATORIES, INC., BLANKS ENGRAVING, BEAZERS ) 

MATERIALS, BLACKWELL ZINC COMPANY, INC., BROADWAY ) 

MACHINE & MOTOR SUPPLY, INC., THE BUCKET SHOP, ) 

INC., CHARLES MACHINE WORKS, INC., CONTAINER ) 

SUPPLY, INC., CARNATION COMPANY, CONTAINER CORP. ) 

OF AMERICA, CONTINENTAL CAN COMPANY, INC. , COOK ) 

PAINT & VARNISH CO., CTU OF DELAWARE, COUNTRY HOME ) 

MEAT COMPANY, DART INDUSTRIES, DELTA FAUCET ) 

COMPANY, DEL PAINT CORPORATION, DIXICO, INC., ) 

DOWNTOWN AIRPARK, INC. , DRILEX SYSTEMS, INC. , ) 

DUBOIS CHEMICALS, INC. , ·DRESSER INDUSTRIES, INC. , ) 

DRILLERS ENGINE & SUPPLY, INC., DURA CHROME, ) 

FISHER CONTROLS, GAF, EC INDUSTRIES, FRED JONES ) 

MANUFACTURING COMPANY, GENERAL DYNAMICS, GENERAL ) 

MOTORS CORPORATION, GLIDDEN COMPANY, SCM ) 

CORPORATION, GROENDYKE TRANSPORT, INC., GENERAL ) 

ELECTRIC COMPANY, GOODYEAR TIRE AND RUBBER, INC., ) 

H.W. ALLEN, HUDIBERG CHEVROLET, INGERSOLL-RAND ) 

OILFIELD PRODUCTS COMPANY, HINDERLITER TOOL, ICO, ) 

INC., formerly known as Rodeo, Inc., JOHNSON ) 

CONTROLS, INC., JOHNSON & JOHNSON MEDICAL, INC., ) 

ORTHO PHARMACEUTICAL CORP . , JOHNSON-JOHNSON HOSPITAL,) 

SURGIKOS, INC., KELLY MOORE PAINT, KERR GLASS ) 

MANUFACTURING, JONES -BLAIR CO . , LAIDLAW WASTE, ) 

W.J. LAMBERTON, MASTER MOTOR REBUILDERS, INC., ) 

MORRIS FIXTURE CO., MADIX, GEORGE McKIDDIE, doing ) 

business as Capitol Greese Co., MOTOROLLA, ) 

NORTHROP WOR~DWIDE AIRCRAFT, doing business as ) 

Earl D. Mills, PACKAGING CORPORATION OF AMERICA, ) 

PARKER-HANNIFIN CORP., O'BRIEN CORPORATION, ) 

PRINTPACK, INC. , PROCTOR & GAMBLE MANUFACTURING ) 

CO., QUEBECOR PRINTING, MAXWELL COMMUNICATION, ) 

RIVERSIDE PRESS, RELIANCE UNIVERSAL, INC., ROTEX ) 

CORPORATION, SHERWIN WILLIAMS COMPANY, STAR ) 

MANUFACTURING, SERMATECH, SOUTHWEST ELECTRIC ) 

COMPANY, STEARNS & FOSTER BEDDING, SUSAN CRANE, ) 

TECCOR ELECTRONICS, INC., TRW, INC., TURBODEL, ) 

UNITED PLATING WORKS, INC . , VALLEY STEEL PRODUCTS ) 

COMPANY, UNIT PARTS COMPANY, UNITED STATES BRASS ) 

CORPORATION, VAN DER HORST USA, WASTE MANAGEMENT ) 

OF OKLAHOMA, WESTERN UNIFORM & TOWEL SERVICE, ) 

ZOECON CORPORATION, XEROX, CONSOLIDATED CLEANING, ) 

ABCO, INC., ADVANCE PACKAGING, INC., AMEDCO STEEL ) 

INC., AMERICAN TRAILERS, ANTHES INC., doing ) 

business as Anthes Hi-Reach, ARTHUR G. McGEE & ) 

COMPANY, B & J TANK TRUCK SERVICE, INC., B.W. ) 

SOLUTIONS, INC., BACON TRANSPORT COMPANY, INC., ) 

BEAUTY CRAFT VANITIES, BLACKWELL INDUSTRIAL, PAUL ) 

BOONE, individually and formerly doing business as ) 

Lawton Plating Co., BROADWAY MACHINE & MOTOR ) 

SUPPLY, INC. , C & H SERVICES, INC., CMI CORPORATION, ) 

CENTRAL OKLAHOMA EQUIPMENT CORPORATION, CIMARRON ) 

AIRCRAFT CORPORATION, CIMARRON MANUFACTURING ) 

COMPANY, CLIFTCO, INC., DAY INTERNATIONAL ) 

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Appellate Case: 92-6101 Document: 010110170363 Date Filed: 02/16/1993 Page: 2 
CORPORATION, DIFFEE MOTOR COMPANY, D-MAC LEASING, ) 

INC., EUREKA TOOL COMPANY, FERRIS RESOURCES, INC., ) 

FRUEHAUF CORPORATION, Fruehauf Division, FRUEHAUF ) 

CvRPORATION, doing business as Hobbs Trailer, HOBBS ) 

TRAILER, VERNON GARNEY, individually and doing ) 

business as Auto Saver, GLIDDEN COATING, a Division ) 

of SCM Corporation, HAMM & PHILLIPS SERVICE COMPANY, ) 

INDUSTRIAL FABRICATION CO., JACKIE COOPER OLDS-GMC, ) 

INC. , JAMES BUTE COMPANY, WILLIAM JENKINS , ) 

individually and doing business as Foster Septic ) 

TanJc, J.F. SMITH & SONS; INC., KELSEY-HAYES ) 

CORPORATION, also known as Kelsey Axle & Brakes Co., ) 

BILL LANCE, LARRY GOAD & COMPANY, LASSITER ) 

ENTERPRISES, INC., MATERIALS RECOVERY ENTERPRISES, ) 

INC., McALESTER PUBLIC SCHOOLS, BOB McBROOM, ) 

individually and doing business as American ) 

Furniture Stripping, RAY McGEE, individually and ) 

doing business as Quality Drum Service, GREASE ) 

COMPANY, MEDLEY MATERIAL HANDLING INC., METROPLEX ) 

SANITATION, INC., MISTLETOE EXPRESS SERVICE, INC., ) 

NAPKO CORPORATION, NEWMAN BROS. TRUCKING COMPANY, ) 

NOBLE CHEMICAL CORPORATION, THE CITY OF NORMAN, ) 

OKLAHOMA TANK SERVICE, OKLAHOMA TRANSPORTATION ) 

COMPANY, PAGE INDUSTRIES, INC., POWELL ELECTRIC ) 

MANUFACTURING COMPANY, GEORGE POWELL, individually ) 

and doing business as Powell Service Company, ) 

PREMIER INDUSTRIAL CORP., doing business as Kent ) 

Industries, RWR STEEL COMPANY, RABAR ENTERPRISES, ) 

INC., RAM TRANSPORTS, INC., RELIANCE UNIVERSAL INC., ) 

S & S PLATING COMPANY, SOLVENT MANUFACTURING ) 

COMPANY, INC., SOONER OIL PATCH SERVICES, INC., ) 

SPECTOR RED BALL, INC., STEELCRAFT, INC., SUBLETT & ) 

ASSOCIATES, INC., SUNWEST INDUSTRIES OF OKLAHOMA, ) 

INC., RAYMOND SWITZER, individually and doing ) 

business as Switzer & Gypsum Lime Company, T.I.P., ) 

INC., THERMO KING SALES & SERVICE OF OKLAHOMA, INC.; ) 

TRIANGLE ENGINEERING COMPANY, TRIGG DRILLING ) 

COMPANY, INC., VICTOR EQUIPMENT CO., WASTE SERVICES, ) 

INC., WELCH ENTERPRISES, INC., JIM WESLEY, ) 

individually and doing business as Jim's Septic Tanlc,) 

WESTERN COMMERCIAL TRANSPORT, INC., WESTRAN ) 

CORPORATION, WITCO, INC., XAL CORPORATION, THOMAS ) 

ENGEL, A-BETTER SANITATION SERVICE, INC., REAGENT ) 

CHEMICAL & RESEARCH, INC., SUN EXPLORATION & PROD. ) 

CO. , CAMERON IRON WORKS, J. C. · PENNEY CO. , INC. , ROHM ) 

& HAAS SEEDS, INC., PHILLIPS PETROLEUM COMPANY, ) 

SOUTH PRAIRIE CONSTRUCTION CO., THE ATCHISON, TOPEKA) 

AND SANTA FE RAILWAY COMPANY, NORDAM CORP., NATIONAL) 

CAN CORP. I LAND & MARINE RENTAL co. , formerly known ) 

as Tesoro Land & Marine Rental Co., GOODYEAR TIRE ) 

AND RUBBER, INC. , CROWL MACHINE & HEAT TREATING CO. , ) 

CRANE CARRIER CO., CORNING GLASS WORKS, DELTA FAUCET) 

CO. , OCCIDENTAL CHEMICAL, JOHN ZINK CO. , GENERAL ) 

MOTORS CORP., DURA-CHROME INDUSTRIES, INC. , THE DOW ) 

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Appellate Case: 92-6101 Document: 010110170363 Date Filed: 02/16/1993 Page: 3 
CHEMICAL CO., also known as Dow Industrial Service ) 

of the Dow Chemical Co., Dowell Division of the Dow ) 

Chemical Co., & Brasos Oil & Gas Division of the Dow) 

Chemical Co., IUTS LIQUIDATING CORP., formerly know ) 

as Industrial Uniform & Towel Supply Inc., CLYDE'S ) 

CARBURETOR SERVICE, INC., AMOCO PROD. co., formerly ) 

known as Pan American Petroleum, DOVER RESOURCES, ) 

INC., HUDIBURG CHEVROLET, INC., AMF TUBOSCOPE, EASON) 

OIL CO., FOX-SMYTHE TRANSPORTATION CO., ) 

INTERNATIONAL CRYSTAL MFG. CO., KOBE, INC., NELSON ) 

ELECTRIC POWER SERVICE, ·INC. , NEWSPAPER PRINTING ) 

CORPORATION, RYDER TRUCK RENTAL, INC., formerly ) 

known as Wilco Truck Rental, Inc., SOUTHWEST ) 

ELECTRIC COMPANY, STAR MFG. CO. OF OKLAHOMA, CORKEN ) 

INTERNATIONAL CORP., forIJlerly known as Corken Pump ) 

Co., GLOW-LITE CORP., (ARTRA), GENERAL ELECTRIC ) 

COMPANY, FORD MOTOR CO . , CONOCO, INC., E.I. DUPONT ) 

DE NEMOURS & CO. , CON'T'INENTAL OIL CO. , DAY ) 

INTERNATIONAL CORPORATION, (Electric Hose & Rubber), ) 

CENTRAL SALES PROMOTION, INC., SOONER FORD TRUCK ) 

SALES, INC. , W & W STEEL CO. , CHROMALLOY AMERICAN, ) 

BRITTAIN BROTHERS, ICO, INC., formerly known as I 

Fodco, Inc., Sucker Rod Service, and Rodcore, Inc., ) 

HOMCO INTERNATIONAL, doing business as A-1 Bit & ) 

Tool, TOM BROWN'S OPTICAL SERVICE, INC., ) 

) 

Third-Party-Defendants. ) 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF OKLAHOMA 

(D.C. No. CIV-86-1401-W) 

Raymond T. Reott (Theodore R. Tetzlaff and Gary W. Ballesteros, of 

Jenner & Block, Chicago, Illinois, were wit~ him on the briefs), 

of Jenner & Block, Chicago, Illinois, for the Defendant-Appellant. 

Susan L. Gates (Michael D. Graves, of Tulsa, Oklahoma, was with 

her on the brief), of Tulsa, Oklahoma, for the Defendant-Appellee. 

Before TACHA and BALDOCK, Circuit Judges, and BROWN, District 

Judge.* 

TACHA, Circuit Judge. 

* The Honorable Wesley E. Brown, Senior District Judge, United 

States District Court for the District of Kansas, sitting by 

designation. 

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Appellate Case: 92-6101 Document: 010110170363 Date Filed: 02/16/1993 Page: 4 
Defendant-Appellant United States Pollution Control, Inc. 

("USPCI") appeals a judgment of the United States District Court 

for the Western District of Oklahoma. finding USPCI liable in 

indemnification for McDonnell Douglas Corporation's ("MDC") costs 

relating to the Hardage Superfund Site and awarding attorneys' 

fees and prejudgment interest . We exercise jurisdiction under 28 

U.S.C. § 1291 and affirm in part, reverse in part, and remand for 

further proceedings consjstent with this opinion . 

I. Background 

This appeal arises out of a suit filed in 1986 by the United 

States for relief under the Comprehensive Environmental Response 

Compensation and Liability Act ("CERCLA"), 42 U. S.C. § 9601 et 

seq., for the cleanup of the Royal N. Hardage Industrial Waste 

Site ("Hardage Site") near Criner, Oklahoma. MDC and USPCI were 

among 37 defendants named in that suit. MDC generated hazardous 

waste deposited at the Hardage Site; USPCI transported MDC's and 

other parties' waste to the Hardage Site. Due to the size and 

complexity of the litigation, the district court divided the case 

into four phases: Phase I determined the appropriate cleanup 

remedy; Phase II determined the liability of the named defendants 

to the government as responsible parties under CERCLA; Phase III 

resolved all cross-claims and .third-party claims; and Phase IV 

allocated the amounts to be paid by the liable parties. 

In Phase I, the district court opted not to implement the 

government's proposed remedy, instead favoring the remedy proposed 

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Appellate Case: 92-6101 Document: 010110170363 Date Filed: 02/16/1993 Page: 5 
by the Hardage Steering Committee ("HSC") . 1 In Phase II, MDC, 

along with most of the HSC defendants, stipulated to liability as 

a generator of hazardous waste pursuant to CERCLA § 107(a) (3). 

USPCI contested its liability, but was found liable as a 

transporter of hazardous waste pursuant to CERCLA §§ 106 and 

107(a) (4). Although certain facts and findings of Phases I and II 

will be relevant to this appeal, we do not revisit the merits of 

those decisions here. R~ther, this appeal centers on the district 

court's resolution of cross-claims for indemnification between MDC 

and USPCI and the proper amounts to be paid therefrom -- Phase III 

and IV issues respectively. 

For purposes of this appeal, MDC began Phase III in 1988, 

when it filed its claim for indemnification against USPCI for any 

expenses arising out of the Hardage Site. MDC based this claim on 

an indemnification clause found in two transport and disposal 

contracts between MDC and USPCI . In 1990, USPCI responded in kind 

when it sought indemnification from its customers, including MDC, 

pursuant to language contained on the USPCI standard-form shipping 

tickets. In its order entered August 16, 1990, the district court 

dismissed USPCI's "shipping-ticket" claim, finding the 

indemnification language inapplicable under the facts of the case. 

In the interim, both sides filed for partial summary judgment 

1 Most of th2 original defendants organized themselves as HSC 

defendants in order to enjoy economies of scale in contesting 

various elements of the government's CERCLA enforcement 

activities. USPCI originally joined the HSC but later dropped 

out. For background information and the disposition of the Phase 

I case, see United States v. Hardage, No. 90-6325, 1992 WL 372569 

(10th Cir. Dec. 21, 1992). 

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Appellate Case: 92-6101 Document: 010110170363 Date Filed: 02/16/1993 Page: 6 
against the other on the indemnification provisions contained in 

the transport and disposal contracts. In its order entered 

February 20, 1991, the district court granted swnmary judgment 

against USPCI and for MDC. 

The litigation then entered Phase IV. The district court 

found that MDC was entitled to be indemnified by USPCI in the 

amount of $1,486,464 . 08. This amount represented assessments paid 

by MDC to the HSC for the HSC's response costs and legal expenses 

and also included additional legal expenses incurred directly by 

MDC in its Hardage Site defense. In addition, the court awarded 

prejudgment interest on the HSC assessments in the amount of 

$369.574.03. The district court has since awarded additional 

prejudgment interest, MDC's Rule 54(d) costs, and post-judgment 

interest. 

USPCI timely appealed the judgment of the district court . It 

alleges the following errors: (1) MDC was not entitled to summary 

judgment on the competing indemnification provisions; (2) USPCI 

was entitled to swnmary judgment on the shipping-ticket claims and 

under the transport and disposal contracts; (3) the district court 

erroneously awarded "unreasonable" defense costs; and (4) 

prejudgment interest was inappropriate . 

II. Indemnification 

We review a trial court's grant or denial of summary judgment 

de novo, applying the same standards used by the district court. 

Osgood v, state Farm Mutual Auto, Ins. co •. 848 F.2d 141, 143 

(10th Cir. 1988). Summary judgment is appropriate where "the 

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Appellate Case: 92-6101 Document: 010110170363 Date Filed: 02/16/1993 Page: 7 
pleadings, depositions, answers to interrogatories, and admissions 

on file, together with the affidavits, if any, show that there is 

no genuine issue as to any material fact and that the moving party 

is entitled to a judgment as a matter of law. " Fed. R. Civ. P. 

56(c). "When applying this standard, we examine the factual 

record and reasonable inferences therefrom in the light most 

favorable to the party opposing summary judgment." Applied 

Genetics Int'l. Inc. v. First Affiliated Secs., Inc . , 912 F.2d 

1238, 1241 (10th Cir. 1990). 

We also review the district court' s dismissal of USPCI's 

shipping-ticket cross-claim de nova. "[T]he dismissal of a 

complaint is proper if, taking all well-pleaded facts as true and 

construing them in the light most favorable to the plaintiff, it 

is clear that the plaintiff can prove no set of facts in support 

of his claim that would entitle him to relief." National 

Commodity & Barter Ass'n v. Gibbs, 886 F.2d 1240, 1244 (10th Cir. 

1989) . 

MDC and USPCI each seek indemnification from the other for 

their respective liabilities as CERCLA responsible parties. 

CERCLA § 107(e) (1) provides: 

No indemnification, hold harmless, or similar agreement 

or conveyance shall be effective to transfer from the 

owner or operator of any vessel or facility or from any 

person who may be liable for a release or threat of 

release under this section, to any other person the 

liability imposed under this section. Nothing in this 

subsection shall bar any agreement to insure, hold 

harmless. or indemnify a party to such agreement for any liability under this section. 

42 U.S.C. § 9607(e) (1) (emphasis added). The plain meaning of 

this language is that, although responsible parties may not 

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Appellate Case: 92-6101 Document: 010110170363 Date Filed: 02/16/1993 Page: 8 
altogether transfer their CERCLA liability, they have the right to 

obtain indemnification for that liability. ~ Mardan Cor_p, v. 

C,G.C. Music. Ltd., 804 F.2d 1454, 1458 (9th Cir. 1986); Purolator 

Prods, Cor_p, v. Allied-Signal. Inc., 772 F. Supp. 124, 128-29 

(W.D.N.Y. 1991). 

The parties agree that Oklahoma law governs the 

interpretation and construction of the indemnification 

provisions. 2 Our task therefore is to ascertain and apply 

Oklahoma law such that we reach the result that would be reached 

by an Oklahoma court . .s..e.e Ada.ms-Arapahoe Sch, Dist. No. 28-J v. 

GAF Coi;:p., 959 F.2d 868, 870 (10th Cir. 1992). We review de nova 

the district court's rulings with respect to Oklahoma law. Salve 

Regina college v. Russell, 111 s. ct. 1211, 1221 (1991). 

We first consider whether MDC was entitled to indemnification 

under the transport and disposal contracts. Between March 1973 

and October 1979, USPCI transported over 250,000 gallons of 

hazardous waste generated by MDC to the Hardage Site . 

These shipments occurred under two contracts between MDC and 

USPCI. In 1972, the parties entered into Contract No. MRS-1340 

("1972 Contract"), whereby USPCI agreed to transport and dispose 

of hazardous substances generated by MDC. In 1977, the parties 

2 The record does not reveal whether the district court made 

the threshold determination of whether federal common law or state 

law would govern the interpretation of indemnification provisions 

between CERCLA responsible parties . .s..e.e United States v. Kimbell 

Foods. Inc., 440 U.S. 715, 727-28 (1979). Because the 

government's interests are unaffected by the allocation of 

liability between jointly and severally liable parties, we easily 

conclude that a uniform federal rule is unnecessary and that state 

law will govern the indemnification clauses. ~ Mardan, 804 F.2d 

at 1457-60. 

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Appellate Case: 92-6101 Document: 010110170363 Date Filed: 02/16/1993 Page: 9 
entered into Contract No. S&S-2046 ("1977 Contract"), which 

superseded and replaced the 1972 Contract and which provided for 

substantially the same transport and disposal services. Both the 

1972 and 1977 Contracts contained several essentially identical 

indemnification provisions: Attachment A to both contracts 

contains an indemnification provision running in MDC's favor; 

Attachment B to both contracts contains an indemnification 

provision running in USP~I ' s favor; and the Supplemental Terms and 

Conditions to both contracts contains yet another indemnification 

clause favoring MDC. This case turns on the resolution of these 

purportedly antithetical contractual provisions. 

We begin our inquiry with the actual language of the 

contracts. 3 MDC proffers two indemnification provisions running 

in its favor. First, Attachment A provides: 

[USPCI] shall furnish his own equipment and warrants 

that the material obtained by him pursuant to this 

contract shall be transported and disposed of in a 

manner which will not cause harm or damage to persons or 

property and agrees that he will hold [MDC] harmless 

from any claim of loss or damage resulting from the 

transporting or disposal of said materials. 

Second, the Supplemental [Special] Terms and Conditions states: 

[USPCI] hereby agrees to indemnify and save harmless 

[MDC] . . . against all liability, obligations, claims, 

loss atd expense (1) caused or cre~ted by [USPCI] ... arising out of work hereunder .... 

USPCI counters with its own indemnification provision from 

the transport and disposal contracts. Attachment B provides: 

3 Because the corresponding provisions in the 1972 and 1977 

Contracts are materially identical, we refer to the provisions in 

the 1972 Contract only. 

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Appellate Case: 92-6101 Document: 010110170363 Date Filed: 02/16/1993 Page: 10 
[MDC] and the Government agree to indemnify and save 

harmless [USPCI], its agents and employees against all 

liability, obligations, claims, losses and expenses (1) 

caused or created by MDC and the Government, its 

subcontractors, or the agents and employees of either, 

whether negligent or not, arising out of work hereunder, 

or (2) arising out of injuries (including death) 

suffered or allegedly suffered by employees of MDC and 

the Government or its subcontractors (i) in the course 

of their employment or (ii) in the performance of work 

hereunder. 

Applying Oklahoma law, we conclude that MDC was properly 

awarded summary judgment_ for indemnification. "An indemnification 

agreement is a valid agreement in Oklahoma, and is governed by 

statute." Fretwell v. Protection Alarm co., 764 P.2d 149, 152 

(Okla . 1988); ~ .aJ..aQ Okla . Stat. Ann. tit. 15, §§ 421-430 (West 

1966). Under Oklahoma law, an agreement to indemnify a party for 

its own negligence4 "must meet the following three conditions: (1) 

the parties must express their intent to exculpate in 

unequivocally clear language; (2) the agreement must result from 

·an arm's-length transaction between parties of equal bargaining 

power; and (3) the exculpation must not violate public policy." 

Transpower Constructors v. Grand River Dam Auth. , 905 F.2d 1413, 

1420 (10th Cir. 1990). Because USPCI does not assert either that 

the agreement was not an arm's length deal or that it violates 

public policy, our inquiry focuses on whether the parties 

unequivocally expressed an intent to indemnify. "Intent must be 

4 MDC's CERCLA liability, of course, is strict, rather than 

based on negligence. One court appears to fully extend the policy 

of the negligence rule to strict liability indemnification cases. ~ Purolator Prods •• 772 F. Supp. at 130-31. We do not decide 

whether to extend the negligence rule to strict liability cases, 

however, because we find that MDC is entitled to indemnification 

even under the fullest application of the negligence rule. 

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Appellate Case: 92-6101 Document: 010110170363 Date Filed: 02/16/1993 Page: 11 
dete:rmined by construing the contract as a whole, and the court 

must construe the contract so as to give effect to each 

provision." Greenberg v. Service Business Forms Indus., 882 F.2d 

1538, 1540 (10th Cir. 1989) (applying Oklahoma law), cert. denied, 

493 U.S. 1045 (1990). We therefore analyze the various 

indemnification provisions separately and as a whole. 

We first find that MDC is entitled to indemnification from 

USPCI under Attachment A, which indemnifies all losses "resulting 

from" the transportation or disposal of MDC's hazardous waste. 

Although an indemnification agreement must clearly and 

unequivocally express an intent to exculpate the indemnitee for 

its own acts, it need not specifically refer to those acts in 

order to achieve that result. Transpower, 905 F.2d at 1421. 

Rather, such an intent may be found where the language of the 

indemnification is so broad and all-inclusive that it necessarily 

sweeps all events -- including those occurring because of the 

indemnitee's actions intc its coverage. Id.; see also 41 Am. 

Jur. 2d Indemnity§ 15, at 701-02. Although Oklahoma has not 

addressed the effect of the precise language presented in this 

case, our analysis of Oklahoma law leads us to conclude that the 

te:rm "resulting from" is the type of all-inclusive and unambiguous 

language sufficient to exculpate MDC for its strict generator 

liability. 

In Colorado Milling & Elevator Co. v, Chicago. Rock Island & 

Pacific Railroad Co., 382 F.2d 834 (10th Cir. 1967), we 

interpreted a lease contract that indemnified any loss "'aris[ing] 

from or ... connected with (1) any act or omission on the part 

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Appellate Case: 92-6101 Document: 010110170363 Date Filed: 02/16/1993 Page: 12 
of the Lessee ... or (2) any condition whatsoever in the 

premises.'" M. at 836 (emphasis omitted) (applying Oklahoma 

law). We held that, because the broad language was "allinclusive," the intent of the parties to indemnify was necessarily 

clear and unequivocal . .IQ.; see also Trumbower v. Sports Car Club 

of Am •• Inc., 428 F. Supp. 1113, 1114-16 (W.D. Okla. 1976) (phrase 

"on account of" sufficient to trigger exculpatory indemnification) 

(applying Oklahoma law). These results are consistent with both 

the ordinary scope and meaning of the words used and with other 

related decisions. See. e.g., Tyler v . Dowell, Inc., 274 F.2d 

890, 894-95 (10th Cir.) (phrase "in the course of" sufficiently 

expresses intent for exculpatory indemnification) (applying New 

Mexico law), cert. denied, 363 U.S. 812 (1960); Purolator Prods., 

772 F. Supp. at 131 n.3 (phrase "relating to or arising out of" 

triggers indemnification for CERCLA responsible party liability) 

(applying New York and Delaware law); Missouri Pacific R.R. Co. v. 

Kansas Gas & Elec. co., No. 86-1020-K, slip op. (D. Kan. Dec. 16, 

1986) (phrase "arising out of or connected with" triggers 

exculpatory indemnification) (applying Ka.1sas law). But see 

Sinclair Oil & Gas co. v. Brown, 333 F.2d 967, 968-69 (10th Cir. 

1964) (indemnity clause did not establish exculpatory 

indemnification because it appli~d only to losses "resulting from 

the operators" of the indemnitor) (applying Texas law) . We thus 

conclude that, under Oklahoma law, the indemnification in 

Attachment A covering losses "resulting from" the transport or 

disposal of MDC's hazardous waste is sufficiently all-inclusive to 

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clearly and unmistakably express USPCI's intent to indemnify MDC 

for its present CERCLA liability. 5 

We next find that USPCI has failed to identify in the 1972 

and 1977 Contracts any indemnificatory language running in its 

favor that would apply to this case. Attachment B, upon which it 

relies in the contract claim, covers losses "caused or created by" 

MDC . MDC, however, did not cause or create USPCI's liability. 

Rather, USPCI is a liab~e party under CERCLA § 107(a) because it 

transported or disposed of hazardous waste at the Hardage Site . 

As USPCI notes, transporter liability is predicated on site 

selection by the transporter. See 42 U.S.C. § 9607(a) (4) . In 

Phase II of the Hardage Site litigation, however, the district 

court found that USPCI had indeed selected the Hardage Site for 

disposal of MDC's waste. 6 That judgment was appealed but is now 

final. We therefore conclude that USPCI, which caused its own 

liability by selecting and transporting waste to the Hardage site , 

may not claim indemnification under Attachment B. 

Finally, USPCI's shipping tickets contain the following 

indemnification language: 

5 The Supplemental Terms and Conditions indemnification is not 

applicable under these facts because MDC, as a generator under 42 

U.S.C. § 9607(a) (3), "caused" its own CERCLA liability. Cf. infra 

discussion of Attachment B. 

6 In its Findings of Fact and Conclusions of Law entered August 

8, 1991, the district court found, among other things, that USPCI 

"contracted with Mr. Hardage to use the Hardage Site for hazardous 

waste disposal prior to approaching any of the customers in 

question [and) proposed the Hardage Site to its customers as a 

location for hazardous waste disposal." See also United States v. 

Hardage, 750 F . Supp. 1444, 1459 (W.D. Okla. 1990) (detailing USPCI's site selection) . 

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Customer agrees to indemnify and save harmless [USPCI], 

its agents and employees, against any and all 

liabilities, obligations, claims, losses, and expenses 

(1) caused or created by Customers, its sub-contractors, 

or the agents and employees of either, whether negligent 

or not, arising out of work hereunder 

The district court dismissed USPCI's claim for indemnification 

against all of its generators, including MDC, based on this 

provision. We agree with the district court that the shipping 

ticket indemnification clause suffers thE same infirmity as 

USPCI's other indemnification clauses: USPCI caused its own loss 

as the transporter of the hazardous waste. 7 

In sum, once each indemnification provision is analyzed 

individually, it becomes apparent that this case does not present, 

as USPCI argues, a quagmire of contradictory indemnifications. 

Rather, we encounter a contractual relationship in which one 

party 

party 

MDC -- obtained sweeping indemnification while the other 

USPCI -- acquired only limited protection from liability. 

Because the facts of this case do not trigger USPCI's limited 

indemnification but do trigger MDC's broad provision, we find that 

the district court properly granted MDC StL'llITlary judgment for 

indemnification and properly denied summary judgment for USPCI. 

We further find that this same analysis supports the district 

court's dismissal of USPCI's claim for indemnification based on 

its shipping tickets. 

7 Because we find the shipping-ticket provision inapplicable 

under the facts of this case, we do not address whether its effect 

was barred by integration clauses contained in the transport and 

disposal contracts. 

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III. Attorneys' Fees 

Under the prevailing indemnification provisions in the 1972 

and 1977 Contracts, USPCI agreed to indemnify MDC for "any claim 

of loss or damage resulting from the transporting or disposal" of 

the hazardous waste. MDC seeks its attorneys' fees under Okla. 

Stat. Ann. tit. 15, § 427 (West 1966), which provides that 

indemnity against claims "embraces the costs of defense against 

such claims ... incurr~d in good faith, and in the exercise of 

reasonable discretion." See Gay & Taylor. Inc. v. St . Paul Fire & 

Marine Ins. Co., 550 F . Supp. 710, 718 (W.D. Okla. 1981) (stating 

"general rule that unless an indemnity contract otherwise 

provides, it indemnifies the contracting party against all costs 

including attorneys' fees"). 

The district court awarded to MDC the following amounts: 

HSC Assessments: 

Hardage Steering Committee 

Brown, Maroney Trust Fund 

Southwest Title and Trust Co. 

United States Court Clerk 

Legal Fees Paid Directly by MDC: 

Hall, Estill 

McKinney, Stringer 

Travel Expenses/In-House Counsel: 

Dan Summers 

Total: 

$ 565,671.07 

633,621.00 

20,204.00 

1,000.00 

$ 254,255.30 

1,069.75 

$ 10.642.96 

$1,486,464.08 

The parties stipulated that 48% of MDC's HSC assessments --

$585,838.30 -- represents costs attributable to attorneys' fees. 

In its opinion entered February 2, 1992, the district court 

concluded that MDC was entitled to the full $1,486,464 . 08. 

Regarding the attorneys' fees paid directly by MDC and the inhouse expenses, the court applied section 427(3) and determined 

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that, some duplication of effort notwithstanding, those expenses 

were reasonably incurred. USPCI does not appeal that ruling. 

As to the attorneys' fees included in the HSC assessments, 

the district court concluded that, because the indemnification 

covered any loss -- not just reasonable loss the issue of 

reasonableness was relevant only, if at all, to MDC's conduct in 

approving and paying the assessments. USPCI contends that all 

attorneys' fees, whateve~ form they take, must pass the 

"reasonableness" test and that the legal expenses underlying the 

HSC assessments were in many cases unreasonable and therefore 

unrecoverable . 

An award of attorneys' fees typically represents a finding of 

fact subject to review for clear error and reversible only if "'it 

is without factual support in the record, or if the appellate 

court, after reviewing all the evidence, is left with the definite 

and firm conviction that a mistake has been made.'" Las Vegas Ice 

& Cold Storage co. v. Far West BanJc, 893 F.2d 1102, 1185 (10th 

Cir. 1990) (quoting LeMaire ex rel. LeMaire v . United States, 826 

F.2d 949, 953 (10th Cir. 1987)). USPCI, however, does not contest 

the lower court's factual findings of reasonableness regarding 

MDC's direct legal costs. Rather, it challenges the court's 

decision to restrict the reasonableness inquiry regarding the HSC 

assessment attorneys' fees to ·the narrow question of whether it 

was reasonable to incur those expenses by joining the HSC at all. 

This involves a question of the proper scope and interpretation of 

Oklahoma law, a question which we review de novo. Salve Regina 

College, 111 s. Ct . at 1221 . 

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It is clear that in the ordinary case the indemnitee may 

recover its attorneys' fees incurred in defending against the 

indemnified liability only insofar as those fees were "incurred in 

good faith, and in the exercise of reasonable discretion." Okla. 

Stat. Ann . tit. 15, § 427 (West 1966). The scope of Oklahoma's 

statutory reasonableness· requirement as applied to joint defense 

legal fees, however, is a question of first impression. In 

concluding that the distfiCt court erred by not examining the 

legal expenses underlying the HSC assessments, we find guidance in 

the experiences of other courts regarding collaborative legal 

fees. 

We first praise the steering committee members for their 

efforts to resolve this particular "litigatory monster." See In 

re Recticel Foam Cor:p., 859 F.2d 1000, 1001 (1st Cir. 1988) 

(describing the litigation growing out of the San Juan DuPont 

Plaza Hotel Fire of 1986). As the steering committee members must 

have discerned, this case is the type of "complex multi-party 

hazardous waste case" where "[t]raditional notions of adversarial 

litigation, in which each party engages in its own pretrial 

discovery, motion practice, settlement discussions and trial 

preparation, could not serve the legitimate needs of the .. . 

parties [or] of judicial economy." New Jersey Dep't. of Envt'l 

Protection v. Gloucester Envt'1 Management Servs,. Inc., 138 

F.R.D. 421, 426 (D.N.J. 1991). It is beyond dispute that the use 

of a steering committee in this case spared the unnecessary 

duplication of effort and expense of both the parties and the 

judiciary. We have no doubt that MDC substantially reduced its 

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legal costs by joining the HSC and that its decision to join the 

HSC was a reasonable one. 

Nonetheless, the reasonableness of using or joining a 

steering committee does not, by itself, establish the 

reasonableness of the legal expenses incurred through the joint 

efforts. Indeed, after-examining the body of cases involving 

liaison counsel or steering committees, we found no case accepting 

such a proxy. Rather, eyen where joint counsel clearly provides 

the most cost-effective resolution available, the lawyers involved 

still must establish the reasonableness of their actual legal 

expenses. see. e.g., Gloucester Envt'l Management Servs., 138 

F.R.D. at 428-431 (examining reasonableness of defendant steering 

committee's legal expenses in suit to compel contribution from 

delinquent parties). Oklahoma has articulated its own version of 

the "lodestar" test to determine the reasonableness of attorneys' 

fees,TM state ex rel. Burk v. City of Oklahoma City. 598 P.2d 

659, 661 (Okla. 1979), and we believe that Oklahoma courts would 

interpret the statutory reasonableness inquiry to require the 

application of that test to the actual legal expenses incurred by 

the HSC. We therefore reverse the decision of the district court 

awarding MDC attorneys' fees for its HSC assessments and remand 

for a determination of the reasonableness of the legal expenses 

underlying those assessments. 8 

8 We note that the reasonableness of steering committee legal 

expenses should reflect the context in which those expenses were 

incurred. For all of its benefits, a steering committee is a 

bureaucracy not without its warts. Even the best-run steering (Footnote Continued on Following Page) 

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IV. Prejudgment Interest 

After initially denying prejudgment interest, the court 

reconsidered its decision and awarded prejudgment interest on the 

HSC assessments from the time of such payments. Oklahoma law 

provides that 

any person who is entitled to recover damages certain, 

or capable of being made certain by calculation, and the 

right to recover which is vested in him upon a 

particular day, is entitled also to recover interest 

thereon from that day, except during such time as the 

debtor is prevented-by law, or by the act of the 

creditor from paying the debt. 

Okla. Stat. Ann. tit. 23, § 6 (West 1987). The district court 

ultimately concluded that the HSC assessments were sums certain as 

of the day of payment and that prejudgment interest therefore was 

appropriate . 

"Under§ 6, 'prejudgment interest will not be allowed unless 

the amount of recovery is liquidated or capable of ascertainment 

by calculation or resort to well-established market values. '" 

Withrow v. Red Eagle Oil Co., 755 P.2d 622, 625 (Okla. 1988) 

(quoting Sandpiper North Apartments, Ltd. v. American Nat'l Bank & 

Trust Co., 680 P.2d 983 , 993 (Okla. 1984)). An award of 

attorneys' fees is not a sum certain where the reasonableness of 

those fees is still to be determined by the trial court. 

Transpower, 905 F.2d at 1422 ("Damages are not certain where their 

(Footnote Continued from Previous Page) 

conunittees will necessarily involve some inefficiency and 

duplication of effort. Indeed, a steering conunittee might incur 

legitimate legal expenses simply monitoring its own progress. We 

therefore doubt that, under these circumstances, the Oklahoma 

courts would hold the HSC to the standard of efficiency expected 

of a single lawyer or firm. 

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calculation is left to the best judgment of the fact-finder."); 

see also Kelly-Springfield Tire Co, v . Mobil Oil Corp,, 551 P.2d 

671, 675 (Okla . Ct . App . 1975) (reasonableness of attorneys' fees 

to be determined by fact-finder). Indeed, the district court, in 

its order entered August 5, 1991, denied MDC's first request for 

prejudgment interest precisely because it included the direct 

legal expenses for which the court had yet to "receive evidence to 

determine the reasonableμess of the fees and costs sought . " 

Because we hold that the district court must determine the 

reasonableness of the legal expenses underlying the HSC 

assessments, the district court's award of prejudgment interest is 

reversed. 

AFFIRMED in part, REVERSED in part, and REMANDED for further 

consideration consistent with this opinion. 

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