NOT RECOMMENDED FOR FULL-TEXT PUBLICATION 

File Name: 17a0384n.06 

No. 16-1264 

UNITED STATES COURT OF APPEALS 

FOR THE SIXTH CIRCUIT

EMPLOYERS INSURANCE OF WAUSAU, et al., 

 Plaintiffs-Appellees, 

v. 

MCGRAW EDISON COMPANY, 

 Defendant-Appellant. 

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ON APPEAL FROM THE 

UNITED STATES DISTRICT 

COURT FOR THE WESTERN 

DISTRICT OF MICHIGAN 

Before: DAUGHTREY, MOORE, KETHLEDGE, Circuit Judges. 

 KETHLEDGE, Circuit Judge. In the 1950s, the McGraw-Edison Company owned a plot 

of land in Bloomfield, New Jersey (the “McGraw Bloomfield property”), where it operated two 

battery factories: the Primary Battery plant and Storage Battery plant. McGraw sold the Storage 

Battery plant in 1960, and later transferred the Primary Battery plant to a subsidiary called 

Battery Products, Inc. Thereafter, Cooper Industries acquired McGraw and discovered that 

several of McGraw’s factories, including the Primary Battery plant, had potentially contaminated 

the environment. Cooper asked its insurers to cover its liabilities for the cleanup; in response, 

they sued Cooper in the Western District of Michigan, seeking a declaration that the 

contamination was not covered by their policies. Cooper and its insurers settled that suit in 1989. 

Per their settlement agreement, Cooper released any future claims arising from contamination at 

five facilities, including one in Bloomfield, which the parties called the “McGraw-Edison 

Battery Products Plant facility.” Twenty years later, the United States Environmental Protection 

Agency notified Cooper that the entire McGraw Bloomfield property—including both the 

Primary Battery plant and Storage Battery plant—might have contributed to pollution in the 

Passaic River. In 2014, Cooper’s insurers returned to federal court, arguing that the 1989 

settlement agreement barred Cooper from seeking insurance coverage for the federal EPA’s 

environmental claims. The district court agreed, holding that Cooper’s release of its claims for 
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the “Battery Products Plant facility” included a release for any pollution migrating from the 

McGraw Bloomfield property as a whole—including, therefore, the Storage Battery plant—

rather than just the Primary Battery plant. We respectfully disagree and reverse. 

I. 

 Thomas Edison began manufacturing batteries in New Jersey over 100 years ago. His 

company, Thomas A. Edison, Inc., managed two adjacent battery plants there, located on land 

straddling the line between Bloomfield and Belleville. The Primary Battery Division operated 

one plant, while the Storage Battery Division operated the other. Thomas A. Edison, Inc. 

thereafter merged with McGraw Electric Company, and the new McGraw-Edison Company took 

over both battery divisions. In 1960, McGraw-Edison sold the Storage Battery plant to another 

battery company. Meanwhile, the Primary Battery plant continued making batteries under 

McGraw’s management. 

In 1984, a heavy rainstorm caused the Primary Battery plant’s wastewater-treatment 

system—also called a “lagoon” or “settling pond”—to overflow into a neighbor’s yard. The 

neighbor complained to the New Jersey Department of Environmental Protection, which sent 

McGraw a notice of potential contamination. The notice ordered McGraw to investigate soil and 

groundwater contamination at its Belleville facility. A year later, McGraw transferred the 

Primary Battery plant to a subsidiary, Battery Products, Inc. Meanwhile, McGraw itself became 

a subsidiary of Cooper Industries. Cooper, McGraw, and Battery Products, Inc. (collectively, 

“Cooper”) began investigating the contamination in and around the Primary Battery plant. 

Parallel government investigations revealed that several other McGraw facilities around the 

country had potentially polluted the environment. In 1986, Cooper asked its insurers to cover its 

investigation costs and potential liability for that pollution. 

That same year, the insurers sued Cooper in federal court in Michigan, seeking a 

declaration that the relevant insurance policies did not cover Cooper’s liability for the pollution. 

Cooper responded by filing a “Counterclaim and Crossclaim.” In Count III of the Counterclaim, 

Cooper explained that it was seeking coverage for its liability “for contamination allegedly from 

[McGraw’s] Battery Products Plant in Bloomfield, New Jersey[.]” Cooper described the 

“Battery Products Plant” as a factory that manufactured “battery products” and that “McGraw 
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ha[d] owned and operated” since 1959. Cooper also alleged that, after 1959, contamination had 

been “introduced into settling ponds on the Battery Products site” and had thereafter entered 

New Jersey’s groundwater. Over the next three years, the New Jersey Department of 

Environmental Protection continued to investigate the Primary Battery plant for environmental 

contamination. Eventually, the investigation also included two lagoons on the adjacent land, 

where McGraw’s Storage Battery plant had been. When Cooper and the Department discovered 

contamination in those lagoons, Cooper agreed to clean them up. 

Cooper and its insurers settled the insurers’ declaratory-judgment lawsuit and Cooper’s 

counterclaim in 1989. Per the settlement agreement, the insurers paid Cooper an undisclosed 

sum of money and Cooper released any future claims arising from “[t]he McGraw-Edison 

Battery Products Plant facility located in Bloomfield, New Jersey and anything released, 

escaping, or migrating . . . from the site including contamination of the groundwaters of the State 

of New Jersey as described in [Count III of] the Counterclaim and Cross-Claim[.]” Elsewhere in 

the agreement, the parties specified that Michigan law governed the agreement’s interpretation 

and that “any dispute” over its terms “shall be commenced and resolved in the United States 

District Court for the Western District of Michigan, Southern Division.” In December 1989, the 

district court incorporated the settlement agreement into its order of dismissal. 

Twenty years later, the federal EPA notified Cooper that the McGraw Bloomfield 

property, including both the Primary Battery plant and Storage Battery plant, might have 

polluted the Passaic River. Cooper sued its insurers in New Jersey state court, claiming an 

entitlement to coverage for the environmental contamination. The insurers then returned to 

federal court in Michigan, seeking a declaration that, per the 1989 settlement agreement, Cooper 

had released its insurance claims. Cooper conceded that it had released any claim for coverage 

that involved contamination escaping from the Primary Battery plant (which Battery Products, 

Inc., had operated in the 1980s). But Cooper argued that the agreement permitted its claims for 

any contamination originating from the Storage Battery plant. Cooper also argued that the 

district court should abstain from hearing the case because of the pending New Jersey lawsuit. 

The district court rejected Cooper’s abstention argument and granted the insurers’ motion 

for declaratory relief, reasoning that “the only fair way” to interpret the term “McGraw-Edison 
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Battery Products Plant facility” as used in the settlement agreement was as a reference to the 

entire McGraw Bloomfield property, including the Storage Battery plant. This appeal followed. 

II. 

A. 

As an initial matter, Cooper argues that the district court should not have exercised 

jurisdiction over this declaratory-judgment action. We review that decision for an abuse of 

discretion. See Scottsdale Ins. Co. v. Flowers, 513 F.3d 546, 554 (6th Cir. 2008). A federal 

court should abstain from ordering declaratory relief if doing so would amount to “[g]ratuitous 

interference” with a pending state-court action that involves the same state-law issues and the 

same parties as the federal action. Id. at 559 (citations omitted); see Brillhart v. Excess 

Insurance Co. of America, 316 U.S. 491, 495 (1942). 

Cooper argues that the district court should have left the issue in this case—i.e., whether 

the settlement agreement released Cooper’s pending claims for insurance coverage—for the New 

Jersey court to decide. But the settlement agreement itself includes a mandatory forum-selection 

clause, which states that “any dispute” over the agreement’s terms “shall be commenced and 

resolved” in federal court in the Western District of Michigan. Cooper has neither challenged 

the validity of that clause nor explained why it “should not be enforced.” See Smith v. Aegon 

Cos. Pension Plan, 769 F.3d 922, 929 (6th Cir. 2014). Hence the court did not abuse its 

discretion in exercising its jurisdiction per the clause’s terms here. 

B. 

Cooper argues that the district court wrongly interpreted the settlement agreement to 

release its insurance claims for pollutants migrating from anywhere on the McGraw Bloomfield 

property, rather than from only the Primary Battery plant. We review de novo the district court’s 

interpretation of the settlement agreement. See Solo v. United Parcel Serv. Co., 819 F.3d 788, 

794 (6th Cir. 2016) (citing Port Huron Educ. Ass’n v. Port Huron Area Sch. Dist., 550 N.W.2d 

228, 237 (Mich. 1996)). 

Michigan “law presumes that . . . the actual words used in the contract” embody the 

parties’ intent. City of Grosse Pointe Park v. Mich. Mun. Liab. & Prop. Pool, 702 N.W.2d 106, 
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124 (Mich. 2005). Thus, we start with the contract’s text to determine if its terms, standing 

alone, are unambiguous. In the settlement agreement, Cooper released its insurance claims for 

“[t]he McGraw-Edison Battery Products Plant facility located in Bloomfield, New Jersey and 

anything released, escaping, or migrating . . . from the site including contamination of the 

groundwaters of the State of New Jersey as described in [Count III of] the Counterclaim and 

Cross-Claim[.]” The parties now dispute the meaning of the term “McGraw-Edison Battery 

Products Plant facility” as used in the agreement. 

According to Cooper, the term “Battery Products Plant facility” refers to only the Primary 

Battery plant—the factory that McGraw transferred to its wholly owned subsidiary, Battery 

Products, Inc., in 1985. The settlement agreement supports this position. Per the agreement, 

Cooper released its insurance claims for several other “Plant facilities” across the country, and 

the contracting parties named each one according to the McGraw division that had managed it. 

Besides those sites, the agreement also lists, in Exhibit C, over 30 other McGraw facilities where 

Cooper was aware of potential claims for environmental contamination. Each facility is named 

after the entity or division operating it, with names including the “Service Division Facility,” the 

“Bussman Facility,” and the former “Toastmaster” and “Worthington” facilities. These names 

show that the contracting parties had a convention for identifying the facilities in the agreement 

based on the entities that operated them. Under that convention, the Battery Products Plant 

facility refers to the Primary Battery plant, which Battery Products, Inc. operated, and which 

does not include the Storage Battery plant. 

Moreover, the settlement agreement incorporates the Counterclaim by reference, and 

Cooper’s description of the “Battery Products Plant” in the Counterclaim confirms that the 

settlement’s release encompassed only contamination escaping from the Primary Battery plant. 

In the Counterclaim, Cooper describes the Battery Products Plant as the property that “McGraw 

has owned and operated” since 1959. At the time Cooper filed the Counterclaim, the Primary 

Battery plant was the only Bloomfield factory that fit that description. Cooper also used lowercase letters to write the phrase “battery products” when describing how the Battery Products 

Plant “engaged in the manufacture of battery products.” But Cooper capitalized the term when 

referring to the “Battery Products site.” Capitalization indicates that a phrase “is a proper noun 

designating ‘a particular person, place, or thing.’” In re B.A.D., 690 N.W.2d 287, 292 (Mich. Ct. 
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App. 2004) (citation omitted). And the only particular entity to which “Battery Products” could 

refer in the Counterclaim is Battery Products, Inc. See id. The settlement agreement’s explicit 

reference to the Counterclaim thus indicates that the agreement was likewise using “Battery 

Products” as shorthand for Battery Products, Inc. 

Despite all these proofs that the “Battery Products Plant facility” referred to the Primary 

Battery plant, the insurers argue that the settlement agreement and the counterclaim 

unambiguously refer to the entire McGraw Bloomfield facility. They make two basic arguments. 

First, they contend that the settling parties could not have been referring only to land owned by 

Battery Products, Inc., because the settlement agreement neither mentions Battery Products, Inc. 

by name nor includes the word “Inc.” when referring to the Battery Products Plant facility. 

Rather, the insurers say, “Battery Products” is a generic reference to the batteries produced by 

the entire McGraw Bloomfield property, which until 1960 included the Storage Battery plant. 

But nowhere else in the settlement agreement did the contracting parties name a facility after the 

products it made, much less refer to those products as a proper noun. And the parties did not 

specify what type of corporate entity operated some of the other facilities referenced in the 

agreement, including the “Worthington” and “Bussman” facilities. Yet entities with those names 

plainly operated those facilities. The insurers provide no explanation for why the parties would 

depart from their convention when naming the Battery Products Plant facility but nowhere else. 

Moreover, no reasonable drafter who meant to refer to both the Primary Battery and Storage 

Battery plants would have named the Bloomfield facility after “Battery Products”—a phrase 

identical to the name of an entity managing only the Primary Battery plant. 

Second, the insurers contend that the settlement’s release must have encompassed the 

entire Bloomfield property because, when the parties settled in 1989, New Jersey’s investigation 

and Cooper’s remediation included the two lagoons on the Storage Battery site. In making this 

argument, however, the insurers openly rely on extrinsic evidence—which they cannot do unless 

they first identify a specific contractual ambiguity that the extrinsic evidence would clarify. See 

City of Grosse Pointe Park, 702 N.W.2d at 113-14. And the insurers have not tried to identify 

any such ambiguity. Nor do we think that the parties incorporated the extrinsic documents by 

reference into the settlement agreement. Under Michigan law, “the parties must manifest clearly 

[their] intent to incorporate” external documents into a contract. NILAC Int’l Mktg. Grp. v. 
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Ameritech Servs., Inc., 362 F.3d 354, 358 n.3 (6th Cir. 2004) (citing Forge v. Smith, 580 N.W.2d 

876, 881 & n.21 (Mich. 1998)). And here there is no indication whatever that the parties meant 

to incorporate the various documents (many of which were internal to the New Jersey 

Department of Environmental Protection) that the insurers rely upon now. 

The insurers’ contention is also without merit even taken on its own terms. The 

settlement agreement expressly releases any claim for not only contamination on the Battery 

Products site but also for “anything released, escaping, or migrating . . . from the site[.]” 

(emphasis added). The release would therefore encompass contamination that migrated from the 

Battery Products site to the Storage Battery lagoons. That the parties knew there was 

contamination on the Storage Battery property thus does not mean the release must encompass 

any contamination originating from the Storage Battery Plant. 

* * * 

 In summary, the settlement agreement’s reference to the “McGraw-Edison Battery 

Products Plant facility” unambiguously referred to the plant operated by Battery Products, Inc., 

rather than to the Bloomfield site as a whole. The district court’s January 27, 2016 order is 

therefore reversed. 
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KAREN NELSON MOORE, Circuit Judge, dissenting. This case asks us to 

determine whether a 1989 Settlement Agreement is ambiguous. The Settlement Agreement 

released insurers from coverage as to a battery manufacturing facility in Bloomfield, New Jersey. 

Cooper Industries argues that the Settlement Agreement unambiguously refers only to the facility 

that manufactured primary batteries, not to the adjacent facility that manufactured storage 

batteries. The insurers argue that the Settlement Agreement unambiguously refers to both the 

primary battery manufacturing operation and storage battery manufacturing operation because 

they were part of a single facility, not two separate facilities. The district court wrote a wellreasoned opinion concluding that the Settlement Agreement unambiguously refers to a single 

facility that manufactured both primary and storage batteries. The majority has written a wellreasoned opinion concluding that the Settlement Agreement unambiguously refers to only the 

primary battery facility, not the separate storage battery manufacturing facility. I conclude that 

the Settlement Agreement is ambiguous, and I would vacate the district court’s judgment and 

remand for an evidentiary hearing. 

 In its opinion concluding that the Settlement Agreement unambiguously referred to the 

entire battery manufacturing operation, the district court said: 

The first and most obvious problem is that the term the parties used is not the 

phrase that Cooper wants it to be. The parties referred simply to “Battery 

Products,” and not to “Battery Products, Inc.” The term is capitalized, but not 

defined anywhere else in the papers, and so the term must glean meaning from the 

overall context of its use. Reading into the term the corporate entity limits that 

Cooper urges is not warranted by the text or context. Second, the most natural 

referent for the term “Battery Products” is the 1984 notice letter, which is the 

triggering event for coverage purposes. And at that time the corporate entity 

“Battery Products, Inc.” did not even exist. . . . [T]hird and most important, the 

overall point of the whole settlement was to prepare a comprehensive 

identification of insurance exposures, and then divide them by site into released 

sites or on-notice sites. Reading the Agreement as Cooper urges would disrupt 

that design by effectively creating a third possibility: namely, a site that everyone 

knew was contaminated, and that the parties described in 25-year-old language on 

either the “Settled Site” or “On Notice” site exhibit, but that parties today are now 

describing in somewhat different words. On this record there is no basis to do so. 

R. 400 (Opinion at 13) (Page ID #2887). 

The majority opinion provides a different analysis: 
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Cooper released its insurance claims for several other “Plant facilities” across the 

country . . . . Each facility is named after the entity or division operating it, with 

names including the “Service Division Facility,” the “Bussman Facility,” and the 

former “Toastmaster” and “Worthington” facilities. These names show that the 

contracting parties had a convention for identifying the facilities in the agreement 

based on the entities that operated them. Under that convention, the Battery 

Products Plant facility refers to the Primary Battery plant, which Battery Products, 

Inc. operated, and which does not include the Storage Battery plant. . . . 

Moreover, . . . [i]n the Counterclaim, Cooper describes the Battery Products Plant 

as the property that “McGraw has owned and operated” since 1959. At the time 

Cooper filed the Counterclaim, the Primary Battery plant was the only Bloomfield 

factory that fit that description. Cooper also used lower-case letters to write the 

phrase “battery products” when describing how the Battery Products Plant 

“engaged in the manufacture of battery products.” But Cooper capitalized the 

term when referring to the “Battery Products site.” . . . The settlement 

agreement’s explicit reference to the Counterclaim thus indicates that the 

agreement was likewise using “Battery Products” as shorthand for Battery 

Products, Inc. 

Maj. Op. at 5–6. 

The central dispute between these two analyses of the Settlement Agreement is the 

meaning of the term “Battery Products.” In the above excerpt, the district court emphasizes that 

the term most likely refers to a 1984 letter written before the corporate entity Battery Products, 

Inc. existed. The district court also emphasizes that defining “Battery Products” to mean the 

facility eventually owned by Battery Products, Inc., rather than the entire facility that 

manufactured both primary and storage batteries, would undermine the purpose of the Settlement 

Agreement, which was “to prepare a comprehensive identification of insurance exposures, and 

then divide them by site into released sites or on-notice sites.” R. 400 (Opinion at 13) (Page ID 

#2887). The majority opinion, by contrast, emphasizes that the Settlement Agreement referred to 

other facilities based on the entities the operated them, and that Battery Products, Inc. operated 

the battery products manufacturing facility but not the storage battery manufacturing facility. 

The majority also emphasizes that the capitalization of “Battery Products” indicates that the term 

is short for Battery Products, Inc., not a general reference to the products manufactured at the 

facility. Each of these opinions makes a convincing case for the wisdom of its proposed 

interpretation of the term “Battery Products” in the Settlement Agreement. Neither makes a 

convincing case that the other interpretation is an impermissible construction of the term. 
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A contract is unambiguous when it “fairly admits of but one interpretation.” Allstate Ins. 

Co. v. Goldwater, 415 N.W.2d 2, 4 (Mich. Ct. App. 1987). This Settlement Agreement “fairly 

admits of” two interpretations. Id. Therefore, this Settlement Agreement is ambiguous. When a 

contract is ambiguous, the district court must hold an evidentiary hearing. See RE/MAX Int’l, 

Inc. v. Realty One, Inc., 271 F.3d 633, 646 (6th Cir. 2001). Because the Settlement Agreement is 

ambiguous, the district court abused its discretion by failing to hold an evidentiary hearing. 

I concur with the majority’s judgment that the district court properly exercised 

jurisdiction over the declaratory-judgment action. I disagree with the majority’s view that the 

contract is unambiguous, and I would remand for an evidentiary hearing. Therefore, I 

respectfully dissent.