Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_03-cv-00647/USCOURTS-cand-5_03-cv-00647-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Case No. C 03-647 JF (PVT)

ORDER RE SCOPE OF LITIGATION ON REMAND

(JFLC2)

**E-Filed 11/8/06**

NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

ARTHUR G. MAIONCHI, et al., 

 Plaintiffs,

 v.

SAFETY-KLEEN SERVICES, INC., et al.,

 Defendants.

Case Number C 03-647 JF (PVT)

ORDER RE SCOPE OF LITIGATION

ON REMAND

An issue has arisen regarding the scope of the instant litigation following the remand

from the Court of Appeals. In particular, Union Pacific Corporation (“Union Pacific”) contends

that on remand it may assert that Plaintiffs committed a knowing and intentional or willful

misrepresentation or breach sufficient to relieve Union Pacific of its indemnification obligations

under the Merger Agreement. Plaintiffs contend that any such argument is precluded by the

appellate decision.

In its opposition brief on appeal, Union Pacific stated explicitly that “Union Pacific has

never asserted that the Shareholders knowingly and intentionally breached a representation or

warranty.” Union Pacific Opp. Br. on Appeal, 46 n. 24. The Court of Appeals apparently treated

this statement as a judicial admission, and thus stated it its decision as follows:

Case 5:03-cv-00647-JF Document 78 Filed 11/08/06 Page 1 of 3
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2

Case No. C 03-647 JF (PVT)

ORDER RE SCOPE OF LITIGATION ON REMAND

(JFLC2)

Thus, Union Pacific promised to indemnify the former partners against all SELs,

unless the former partners committed knowing and intentional or willful

misrepresentation or breach. Union Pacific does not make that assertion, so the

Merger Agreement provides the exclusive means of allocating residual and longterm environmental risk between the parties.

Maionchi v. Union Pacific Corp., 156 Fed. Appx. 27, 29 (9th Cir. Nov. 23, 2005) (emphasis

added). The Court of Appeals explicitly concluded that the indemnity provision of the Merger

Agreement is binding on Union Pacific, and directed that “[d]amages and the terms of the

declaratory relief should be determined on remand.” Id.

Union Pacific filed a petition seeking a panel rehearing and/or modification of the

appellate decision to delete the language quoted above, arguing that leaving the languages in

would deprive Union Pacific of defenses against indemnity liability not previously adjudicated. 

The petition was summarily denied.

Given the explicit language in the appellate decision, and the appellate panel’s apparent

determination not to correct any potential ambiguity therein, this Court has no alternative but to

conclude that the scope of the litigation on remand is limited to a determination of Plaintiffs’

damages and the terms of declaratory relief.

IT IS SO ORDERED. 

DATED: 11/8/06

_____________________________

JEREMY FOGEL

United States District Judge

Case 5:03-cv-00647-JF Document 78 Filed 11/08/06 Page 2 of 3
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

Case No. C 03-647 JF (PVT)

ORDER RE SCOPE OF LITIGATION ON REMAND

(JFLC2)

Copies of Order served upon the following persons:

John F. Barg jfb@ bcltlaw.com,

Stuart I. Block sblock@coxcastle.com,

Grace A. Carter gracecarter@paulhastings.com, farshidarjam@paulhastings.com,

edwardhan@paulhastings.com, bradenwilhelm@paulhastings.com

David D. Cooke dcooke@allenmatkins.com, mtang@allenmatkins.com;

knewsome@allenmatkins.com

Hilton S. Williams hiltonwilliams@paulhastings.com, dellagrant@paulhastings.com

Marc A. Zeppetello , Esq maz@bcltlaw.com, af@bcltlaw.com

Melanie L. Tang

Allen Matkins Leck Gamble & Mallory LLP

Three Embarcadero Center, 12th Floor

San Francisco, CA 94111

Case 5:03-cv-00647-JF Document 78 Filed 11/08/06 Page 3 of 3