* Pursuant to 5 TH C IR . R. 47.5, the Court has determined that this opinion should not

be published and is not precedent except under the limited circumstances set forth in 5 TH

C IR . R. 47.5.4. UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 96-60458

BRENDA GAIL RITZER; WILLIAM W. RITZER; PATRICIA

BOSARGE; PATRICIA R. LANNING; RUSSELL W. LANNING;

DOBBINS EDWARDS; LILLIE V. GOODSON; LESTER LANNING;

MARGARET LANNING,

Plaintiffs-Appellants/Cross-Appellees,

versus

T.L. JAMES CONSTRUCTION, INC.; DIXIE CONTRACTORS,

INC; MISSISSIPPI LEASING, INC., also known as Mississippi

Leasing Corporation; HARRISON COUNTY; WILLIAM

GILCHRIST, JR.,

Defendants-Appellees/Cross-Appellants.

Appeals from the United States District Court

For the Southern District of Mississippi

(1:94-CV-108-BrR)

June 9, 1998

Before POLITZ, Chief Judge, BENAVIDES and PARKER, Circuit Judges.

POLITZ, Chief Judge: *1 42 U.S.C. §§ 9601-9675 (1994).

2

Brenda Gail Ritzer and nine individuals residin g and owning property located

near a closed landfill in Harrison County, Mississippi, brought suit against T.L.

James Construction, Inc., Dixie Contractors, Inc., Mississippi Leasing Inc.,

Harrison County, and William Gilchrist, Jr., alleging causes of action for private

response costs under the Comprehensive Environmental Response, Compensation

and Liability Act (CERCLA) 1 and state claims of negli gence, nuisance, strict

liability, trespass, and misrepresentation. In a bench trial on the CERCLA claims,

at the conclusion of the plaintiffs’ case the district court granted defendants

judgment as a matter of law under Fed.R.Civ. P. 52(c). Thereafter the district court

dismissed without prejudice the remaining state law claims. We affirm the

dismissal of the CERCLA action but vacate the dismissal of the state law claims

and remand for further proceedings thereon.

BACKGROUND

In 1969, defendants James, Dixie and Mississippi Leasing acquired a certain

tract of property in Harrison County, Mississippi. The tract was subdivided and the

three companies retained joint ownership of one 40-acre porti on. In 1978,

defendant Gilchrist, pursuant to a management contract authorizing him to act on

behalf of the defendant property owne rs, leased the 40-acre tract to defendant3

Harrison County for use as a landfill.

On August 4, 1978, the Mississippi Bureau of Pollution Control, a division

of the Mississippi Department of Natural Resources, issued the County a permit to

operate a sanitary landfill on five acres located in the northwest quarter of the 40-

acre tract. In October 1981, the County sought permission from the State of

Mississippi to expand the landfill. The State conducted an investigation and

environ mental geologist Michael Seal, reported the land proposed for the expansion

was unsuitable for a sanitary landfill. The request to expand was denied and in

March 1983 the County decided to close the landfill, although it had been granted

permission to dispose of dry trash thereon. In mid-1986 the County stopped

receiving all waste at the site and submitted a closure plan. In March 1989, the

BPC acknowledged to the County that the State of Mississ i ppi’s regulatory

requirements for closing the landfill had been met.

During the landfill’s operation the neighboring property owners observed that

their water omitted an unpleasant odor, changed colors and began to taste bad. In

1993 the plaintiffs hired a consulting firm to perform an environmental assessment

of their property. Based on the information obtained, the plaintiffs formed the

opinion that hazardous material had been deposited at the landfill, leaching of those

materials had occurred, and there was a threat that the substances had migrated into2 Omnitech Int’l, Inc. v. Clorox Co. , 11 F.3d 1316 (5th Cir. 1994); Price v.

Marathon Cheese Corp. , 119 F.3d 330 (5th Cir. 1997).

4 their w ater wells and onto their property. The present action followed, in which

plaintiffs invoked CERCLA, to recover response costs and a declaratory judgment,

and state claims of

negligence, nuisance, strict liability, trespass, and

misrepresentation.

Following extensive discovery, the CERCLA claims were litigated. Upon

conclusion of plaintiffs’ case-in-chief, after three days of trial, th e court invoked

Fed.R.Civ.P. 52(c) and granted the defendants judgment as a matter of law. The

court found that plaintiffs had failed to prove the release or threatened release of

hazardous substances which did or could contaminate their property. Acting sua

sponte the court dismissed the state law claims without prejudice. Plaintiffs moved

for relief under Fed.R.Civ.P. 59(e) requesting that the court retain jurisdiction over

the state law claims. The court denied the motion and plaintiffs timely appealed.

Defendants cross-appeal the dismissal without prejudice.

ANALYSIS

In our de novo review of the district court’s decision to grant judgment as a

matter of law we apply the same legal standard as it did. 2 Credibility

determinations, the weighing of evidence and inferences drawn from the facts are3 Fed R. 52(a); Conkling v. Turner , 18 F.3d 1285 (5th Cir. 1994).

4 Title 42 U.S.C. § 9601(14) defines a “hazardous substance” as: (A) any substance

designated pursuant to section 1321(b)(2)(A) of Title 33, (B) any element, compound,

mixture, solution, or substance designated pursuant to section 9602 of this title, (C) any

hazardous waste having the characteristics identified under or listed pursuant to section

3001 of the Solid Waste Disposal Act [42 U.S.C. § 6921] (but not including any waste

the regulation of which under the Solid Waste Disposal Act [42 U.S.C. § 6901 et seq.]

has been suspended by Act of Congress), (D) any toxic pollutant listed under section

1317(a) of Title 33, (E) any hazardous air pollutant listed under section 12 of the Clean

Air Act [42 U.S.C.A. § 7412], and (F) any imminently hazardous chemical substance or

mixture with respect to which the Administrator has taken action pursuant to section 2606

of Title 15...

5 Amoco Oil, Co. v. Borden, Inc. , 889 F.2d 664 (5th Cir. 1989).

5 left to the finder of fact and such findings will not be disturbed unless clearly

erroneous. 3

We first address the CERCLA claims. In order to establish a p rima facie case

for relief under Section 107(a) of CERCLA, the plaintiffs must prove: (1) the site

in question is a “facility”; (2) the defendants are responsible persons; (3) a release

or threatened release of a hazardous substance 4 has occurred; and (4) the release or

threatened release has caused the plaintiffs to incur response costs. 5

The district court found that plaintiffs failed to prove that the landfill had

released or threatened a release of a hazardous substance onto their property. The

district judge found that consultants, hired by the plaintiffs, analyzed the soil and

water in areas deemed most likely to have contamination, but that their analyses did6 Szabo was offered as an expert “in recognizing...environmental concerns” from

records of landfill operations.

6 not indicate any hazardous substance had been released from the landfill. In

addition, neither of the plaintiffs’ experts, John Szabo 6 nor geologist Burton Kemp,

could provide evidence or testimony to support the plaintiffs’ theory that hazardous

was te had migrated from the landfill onto their property. Finally, Bill Barnett,

Chief o f the Groundwater Division of the Mississippi Department of Environmental

Qu ality, testified that, based upon his personal knowledge of the landfill, the

records of his department as the state enforcement authority, and his review of all

data and findings obtaine d by both parties, there was no evidence of offsite

contamination from the landfill.

The district judge also found that there was no threatened release of

hazardous substances. The plaintiffs allege hazardous substances were received in

the sanitary land fill and rainwater falling on the landfill could leach those

hazardo us substances into shallow groundwater under the landfill through

permeable sand and silt strata in the vicinity of the site. The district judge found

that the plaintiffs’ theory of a thre atened release was based entirely upon

speculation and conjecture. Our review of the record likewise persuades. We

cannot accept the plaintiffs’ theory of a threatened release. Whether a release or7 Amoco Oil.

8 See Licciardi v. Murphy Oil U.S.A., Inc , 111 F.3d 396 (5th Cir. 1997) (responsible

parties are not liable under CERCLA, unless there is evidence they posed a threat to the

public or the environment justifying a response action).

9 We find neither error nor abuse of discretion in the trial court’s exclusion of the

proffered testimony and report of Michael Seal. He was not designated as an expert in

accordance with Local Rules.

7 threatened release has caused a party to incur response costs must be determined

on a case-by-case basis, with a focus on whether the hazard at issue justified any

response actions. 7 The trial court concluded, “apart from a generalized assumption

concerning the contents of sanitary l a ndfills, the plaintiffs have offered no evidence

of specific hazardous substances which have been, or are about to be, released from

the site.” Assuming the existence of hazardous substances at the landfill, the

plainti ffs did not prove the release of any substance at the landfill or onto the

surrounding properties, the justification for response costs in the form of specific

evidence, or the justification for response costs as the result of a violation of federal

or state law. 8 The district court did not err in finding that plaintiffs failed to prove

a release or threatened release and the judgment dismissing the CERCLA claims

is affirmed. 9

Supplemental Jurisdiction

The standard of review, for both a denial of a Rule 59(e) motion to alter or10 FDIC v. Fuller , 994 F.2d 223 (5th Cir. 1993); Noble v. White , 996 F.2d 797 (5th

Cir. 1993).

11 28 U.S.C. § 1367(c)(3)(1994).

12 Newport Limited, v. Sears, Roebuck and Co. , 941 F.2d 302, 307 (5th Cir. 1991).

13 484 U.S. 343 (1988).

14 383 U.S. 715 (1966).

8 amend a judgment and the district court’s decision to exercise supplemental

jurisdiction, is abuse of discretion. 10 We conclude that the district court abused

its discretion in dismissing the state law claims. 28 U.S.C. § 1367(c) provides, in

pertinent part, that the district courts may decline to exercise supplemental

jurisdiction over a claim if, “...the district court has dismissed all claims over

which it has original jurisdiction....” 11 This rule of law generally presents an

appropriate course of action in many instances, but “it is neither absolute nor

automatic.” 12 In Carnegie-Mellon Univ. v. Cohill

, 13 the Supreme Court offered

some guidance for district courts in their exercise of supplemental jurisdiction

pursuant to United Mine Workers v. Gibbs

. 14

Under Gibbs, a federal court should consider and weigh

in each case, and at every stage of the litigation, the

values of judicial economy, convenience, fa irness, and

comity in order to decide whether to exercise jurisdiction

over a case brought in that court involving pendent statelaw claims. When the balance of these factors indicates

that a case properly belongs in state court, as when the15 484 U.S. at 350.

16 Cinel v. Connick , 15 F.3d 1338 (5th Cir. 1994).

17 See Newport Limited v. Sears Roebuck and Co. , 941 F.2d 302 (5th Cir. 1991) (for

purposes of maintaining pendent jurisdiction over state-law claims, the late stage of

litigation, as well as other factors, distinguished case from ordinary cases in which the

federal claims are disposed of early in the life of the litigation); Doddy v. Oxy USA, Inc.

, 101 F.3d 448 (5th Cir. 1996) (district court did not abuse its discretion in maintaining

jurisdiction over state claims in case that had been in litigation for more than two years,

had more than 300 motions filed, and had required both parties to do extensive

discovery).

9

federal-law claims h ave dropped out of a lawsuit in its

early stages and only state-law claims remain, the federal

c ourt should decline the exercise of jurisdiction by

dismissing the case without prejudice. 15

Our review of the record, aided by the briefs and oral argument of counsel,

persuades that the district court abused its discretion in declining to exercise

jurisdiction after dismissing the CERCLA claims. All of the factors weigh in favor

of exercising supplemental jurisdiction. Judicial economy, convenience, and

fairness would be served, and comity would not be offended by a determination of

the plaintiffs’ state claims in federal court. The state claims arise from the same

facts underlying the CERCLA claims, there are no novel or unsettled issues of

Mississippi law, 16 and the claims were dismissed at an advanced st a ge of the

litigation. 17

The record reflects that the district judge had heard three days of testimony18 Newport Limited , 941 F.2d at 308.

10

on the federal claims, and was familiar with the parties, procedural history, facts,

and essential legal arguments. Judicial economy and convenience militate in favor

of completion of the state law claims by the court à quo , rather than require the

parties to refile their pleadings, motions, designations of experts, and other related

matters in state court. Further, it is apparent that the parties have made a

significant investment of resources herein. The discovery process was extensive

and entailed over 30 depositions. More than ten expert witness designations and

approximately 3,000 pages of testimony we re produced prior to trial, and nearly

400 exhibits were to be offered into evidence at trial. In addition, the plaintiffs

originally filed this action in federal court, neither of the parties contemplated

litigating this case in state court until the court dismisse d the state claims.

“Hesitant though we may be in rejecting the exercise of discretionary authority by

the trial court, we are compelled to do so when we consider the resources, public

and private, alread y invested in this lawsuit, clearly distinguishing it from the

ordinary cases in which the federal claims are disposed of early in the life of the

litigation.” 18

The order dismissing the state law claims without prejudice is vacated and

the matter is remanded to the district court for further proceedings consistent11

herewith.

AFFIRMED in part, VACATED and REMANDED in part.