15 -3 93 4- cv In re Methy l Tertiary Bu tyl Eth er (“MT BE”) Products Liab ility Litigatio n

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## I n the

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# Uni te d Stat es Cour t of Appeals
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## For the Second Cir cuit 4

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5 August Term, 2016

6 No. 15-3934-cv 7

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8 I N R E M E T H Y L T E R T I A RY B U T Y L E T H E R (“MTBE”) P R O D U C T S L I A B I L I T Y 9 L I T I G A T I O N 10

________ 11 O R A N G E C O U N T Y W A T E R D I S T R I C T, 12 Plaintiff-Appellant,
13 v.

14 T E X A C O R E F I N I N G A N D M A R K E T I N G , I N C ., E Q U I L O N E N T E R P R I S E S LLC, 15 S H E L L O I L C O M P A N Y, d/b/ a S H E L L O I L P R O D U C T S US, A T L A N T I C 16 RI C H F I E L D C O M P A N Y, f/k/ a A R C O P E T R O L E U M C O M P A N Y, d/b/ a A R C O 17 P R O D U C T S C O M P A N Y, a/k/a A R C O , BP P R O D U C T S N O R T H A M E R I C A , 18 I N C ., BP W E S T C O A S T LLC, (D O E 3), 19 Defendants-Appellees;

20 U N O C A L C O R P O R A T I O N , C O N O C O P H I L L I P S C O M P A N Y, C H E V R O N 21 U.S.A., I N C ., d/b/ a C H E V R O N P R O D U C T S C O M P A N Y, D /B /A C H E V R O N 22 C H E M I C A L C O M P A N Y, U N I O N O I L C O M P A N Y O F C A L I F O R N I A , I N C ., 23 T O S C O C O R P O R A T I O N , E X X O N M O B I L C O R P O R A T I O N , F /K/A E X X O N 24 C O R P O R A T I O N , D /B /A E X X O N M O B I L R E F I N I N G A N D S U P P L Y C O M P A N Y, 25 E X X O N M O B I L C H E M I C A L , C O R P O R A T I O N , E X X O N , CHEMICAL U.S.A., 26 M O B I L E C O R P O R A T I O N , U L T R A M A R, I N C ., V A L E R O R E F I N I N G A N D 27 M A R K E T I N G C O M P A N Y, V A L E R O R E F I N I N G C O M P A N Y -C A L I F O R N I A , 28 V A L E R O R E F I N I N G , T E S O R O P E T R O L E U M C O R P O R A T I O N , (D O E 4),No. 15-3934-cv

1 T E S O R O R E F I N I N G A N D M A R K E T I N G C O M P A N Y, I N C ., P E T R O -D I A M O N D , 2 I N C ., (D O E 6), S O U T H E R N C O U N T I E S O I L C O ., (D O E 7), A R C O C H E M I C A L 3 C O M P A N Y, (D O E 201), L Y O N D E L L C H E M I C A L C O M P A N Y, F /K/A A R C O 4 C H E M I C A L C O M P A N Y G&M O I L C O M P A N Y, I N C ., 7-E L E V E N , I N C ., USA 5 G A S O L I N E C O R P O R A T I O N , D O E S, 9-200, A N D D O E S 202-1000, I N C L U S I V E , 6 C H E V R O N C O R P O R A T I O N , E X X O N M O B I L E O I L C O R P O R A T I O N , TMR 7 C O M P A N Y, C H E V R O N T E X A C O C O R P O R A T I O N , 8 Defendants. 9

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10 Appeal from the United States District Court 11 for the S outhern D istrict of New York. 12 No. 04-cv-4968

 ̄Shira A. Sche indlin, Judge

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14 Argued: De cember5, 2016 15 Decided: June 12, 2017 16

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17 Before : P A R K E R, RA G G I A N D H A L L , Circuit Judges

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19 Plaintiff-Appella n t Orange County Water District appeals 20 from a judgment in consolidated mul ti-di strict li tigation in the 21 Un it e d S ta tes District Court for the Southern District of New York 22 (Shira A. Scheindlin, Judge). The d istrict court granted summary 1 23 judgment to Defe ndants-Appellees BP and Shell on the ground that 24 the Orange County Water District’s suit was b a r r e d b y res judicat a 25 as a consequence of earlier consen t ju d gments entere d in California 26 state court reso lving simi lar suits against BP a n d Shell brought by 27 the Orange County District Attorney.

Thi s case hassi nce been reassigned to Jud ge Ver non S. Bro deri ck. 1 2No. 15-3934-cv

1 Because we conclude that th e recor d does not sufficiently 2 establish that the Orange County District Attorney and th e Orange 3 County Water Dis tr ic t were in privity, we vacate the district court’s 4 res judicat a determination a nd remand the claim s against BP and 5 Sh ell to the Southern District of New York for further procee dings 6 consistent with thi s opinion. 7

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8 M I C H A E L D

. A X L I N E , M i l l e r & A x l i n e , A 9 Pro fessional Corp oration, Sacramento, CA, for 10 Plaintiff-Appellant

. 11 M A T T H E W T. H E A R T N E Y, Arnold & Porter LLP, 12 Los Angeles, CA, S T E P H A N I E B. W E I R I C K, Arnold 13 & Porter LLP, Washington, D.C ., P E T E R C. 14 C O N D R O N , Sedgwick LLP, Washington, D.C ., for 15 Defendants-Appellees

. 16

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17 B A R R I N G T O N D. P A R K E R, Circuit Judge : 18 This appeal arises f r om contamination of groundwater in 19 Orange County, California, from various oil companies’ use of the 20 gasoline a d d it iv e methyl tertiary butyl ether (“MTBE”). This case, 21 initial ly brought in 2003 in C ali fornia state court, was removed to the 22 Ce ntral District of California and transfer red in 2004 to the Southern 23 District of New York by the J u d icial Panel on Multidi strict 24 Liti ga ti o n . S e e 28 U.S.C. § 1407. The district court transfer red to the 25 Cen tral District of California a ll c la ims exce pt those against BP and 26 Shell. The district court g r anted the defendan ts summary judgment

2 27 on those claims. Those claim s are the subject of this appeal.

Defendants A tlantic Rich fi el d Co mpany, BP West Co ast Pro ducts LLC, and B P Prod ucts 2 N o r th Ameri ca, Inc. are col l ecti v el y refe rred to as “BP. ” Defendants Shel l Oil Co mpany, Equil on Enterpri ses LLC, and Texa co Refi ning and Marketi ng Inc. are col l ecti v el y refe rred to as “Shel l .” 3No. 15-3934-cv

1 Plaintiff-Appellant Orange C o u n ty W a te r D istrict (the 2 “District”), which is r espons ible for groundwater qual ity in the 3 Orange County basin, all eged that the additi on of MTBE to gasoline 4 sold by BP and Shell and other defendan ts that le a ch e d from 5 u n d e r g r o u n d s t o r a g e t a n k s c o n t a m i n a t e d , o r th r e a te n s to 6 cont a mi n ate, groundwater at more than four hundred sites within 7 the Distri c t’ s jurisdiction. The District sued in 2003. Claims against 8 BP and Shell for MTBE contamination had bee n b r o u gh t by the 9 Orange County District Attorney (“OCD A”) in 1999 and were 10 settled in 2002 and 2005 respe ctively.
11 In 2015, BP and Shell moved f o r s u mm ary judgment on the 12 ground that res judicat a arising from the 2002 and 2005 settlements 13 barr ed the District’s 2003 lawsui t. Th e district court granted the 14 moti on, dismi ssed the District’s claims a g a ins t BP and Shell, and 15 remanded the claim s against the remaining defendan ts to the 16 Cen tral District of Cali fornia for trial. See28 U.S.C. § 1407(a). 17 On app eal, the District challenges the lower court’s 18 applicati on of res judica ta o n th e ground that it was not in privity 19 with the OCD A. Because, based on the recor d befor e us, we cannot 20 conclude that the District and OCD A are in privity, we vacate the 21 judgm ent and remand the district’s claim s against BP and Shell to 22 the Souther n District of New York forfurther p rocee dings. 23 I. BACKGROUND 3
24 A. The Orange County Water District 25 The District is a public corpo r a ti o n created by the California 26 state legisl ature u nder the Orange County Water District Act (“the 27 District Act” ) to manage, regulate, replenish, and protect the 28 groundwater basin gener ally coveri n g the norther n half of Orange 29 County. See District Act §§ 1(a); 2(6)

. Th e D is tr ict provides water to 30 more than two mil li on u s ers, but it is not a water retailer and does

Unl ess otherwi se noted , the facts reci ted b el ow are undispute d and deri v e fro m the partie s’ 3 sub missi ons o n summ ary judgment. 4No. 15-3934-cv

1 not provide water directly to the public

. See Orange County Water 2 District, What We Do, http://www.ocwd.com/what-we-do / (last 3 visited May 26, 2017). Nineteen water pr o ducers, including citi es, 4 other water districts, and private water companies, obta in water 5 f r o m the District’s groundwater basin and sell it to the public. S e e 6 O r a n g e C o u n t y W a t e r D i s t r i c t , M e m b e r A g e n c i e s , 7 h t t p : / / w w w . o c w d

. c o m / w o r k i n g - w i t h

- u s / m e m b e r - a g e n c i e s / ( l a s t 8 visited May 26, 2017). 9 The District also protects various rights to water from the 10 Santa Ana R iv e r, w hich is the primary source of water in the basin

. 11 S e e O r a n g e C o u n t y W a t e r D i s t r i c t , A b o u t , 12 http://www.ocwd.com/ab out/ (last visited May 26, 2017). Pur suant 13 to that obligati on, the District may bring claim s on behalf of the 14 pub lic, that is, the water users in its service areas. Orange County 15 Water Dist. v. City of Riverside, 173 Cal. App. 2d 137, 167 (1959); see 16 al so District Act § 2(9). The District also may bring claim s on its own 4 17 b ehalf under the District Act to recove r costs it paid, or will p a y, to 18 remediate groundwater contamination. S e e D istrict Act § 8. Finally, 19 the District is authorized to “act jointly with or coope rate with the 20 U n it ed States or any agency thereo f, the State of California o r a ny
Se cti on 2 (9 ) o f the Di stric t Act pro v i des: 4 To carry out the purpo ses of this act, to commence, maintain, i ntervene i n, def end, and c ompro mise, i n the nam e of the di stric t, or otherwi se , and to assume the costs and expenses of any and all actio ns and pro ceed i ngs now or hereafter b egun to prevent i nterfer ence with water or water ri ghts used or useful to l ands withi n the di stric t, or d i mi nu t i o n of the quantity or pol l utio n or contaminatio n of the water suppl y of the di stric t, or to prevent unlawful expor t at i o n of water fro m the di stric t, or to prevent any i nt e r f e rence with the water or water ri ghts used or useful i n the di stri c t wh i ch may endanger or dama ge the i nha b i tants, l ands, o r use of water i n the di stric t; pro v i ded, however, tha t the di stric t sha l l not have power to i ntervene or take part i n, or to pay costs or expenses o f, actio ns or contro v ersi es b etween the owners of l ands orw ater ri ghts all of which are entir el y withi n the b ou nd ar i es of the di stric t and which do not i nv ol v e pol l utio n orcontam i nati on of water within the di stric t or ex por ting wa ter outsi de o f the d i stric t's b oundari es o r any threat thereof

. Cal. Water Co de A pp § 40 -(2 )9

. 5No. 15-3934-cv

1 agency thereo f, [and] any c o u n ty o f the State of California

. . . to 2 c a r r y o ut the provisions and purpose s of [the District Act].” Id. at 3 § 2(11). 4 B. The Orange County District Attorney
5 The OCD A repr esen ts the people of California. Its mission is 6 to “enhance public safety and welfare an d c reate a sense of security 7 in the communi ty through the vigorous en forcement of criminal and 8 civil laws in a just, honest, efficie nt and ethical manner.” See Mission Statement, http://or angecountyda.org/ office/mission.asp (last visited 9 May 26, 2 0 1 7 )

. With resp ect to water, the OCD A is charged with 10 11 protec ti n g the people’s “primary interest in the conser vation, 12 control, and util izati on of the w a te r r esource s of the state.” Joint 13 Append ix on Appeal (“App.”) 4246 (quoting Cal. Water Code 14 § 13000). Pursuant to this charge, the O C D A is authorized to sue on 15 behalf of the public “to protect the public fr o m h e a lth and safety 16 hazards” and “preve nt destruction of Orange County’s groundwater 17 reso urces and otherwise protec t th e environment.” App. 4240. 18 However, the OCD A may not pro s e c u te a cause of action on behalf of a different public agenc y, such as the District. See People v. Superior 19 Court, 224 Cal. App. 4th 33, 41–44 (Cal. Ct. App. 2014) 20 . 21 C. Prior MTBE L itigation
22 In 1 999, the OCD A sued BP and Shell in Orange County 23 Super ior Court. Both suits asser ted claims b ased on release s of 24 MTBE from undergr ound storage tanks at B P a n d S h ell gas stations 25 resulting in the contamination of adjacent soil and ground water. 26 B o th s uits alleged that the MTBE r eleases constituted continuing an d 27 p e r mane nt nuisances. See Cal. Civ. Code §§ 3479 and 3480

. Th e 28 OCD A sought damages and injunctive relief requiring the 29 investigati on, abatement and cleanup of contaminated areas as well 30 as steps to control the potential mig ration of MTBE plumes. The 31 OCD A’s co mp laints specifically all eged that it was not repr esen ting any water district. See App. 4241, 4339. 32

6No. 15-3934-cv

1 Though not a party to the OCD A’s lawsui ts, the Distric t knew 2 about th em. On July 14, 2000, the District’s gener al manager wrote to 3 the Orange County Director of Environm ental Health regar ding the 4 suits, stating: 5 The Orange County Water District has apprec iated the 6 opportunity to pro v ide technical assistance to your 7 d e partment and to the Orange County District Attorne y 8 to help in the enforc ement of c le a nu p of MTBE and 9 other petroleum contaminants from leaking gasoline 10 storage tanks in Or ange Coun ty. 11 App. 4306. 12 In 2002, th e O CD A and BP agreed to settle. Accordingly, the 13 Orange County Super ior Court entere d a consen t ju d g me nt settling 14 all of the OCD A ’ s c laims against BP. The settlement constituted “a 15 r e lease from any known or unknown past or pres ent claims , 16 v iolations, or causes of action that were or could have been as s e r te d 17 in the First Amended Complaint” with regar d to MT B E 18 cont a mination. App. 4220. Pursuant to the terms of the settlement, 19 BP agreed to reimburse OCD A’s investigati on costs and to fund and 20 impl ement a “plume d elineation” program to combat MTBE 21 mig ration. BP also became subject to injunctive relief prohibiting it 22 f r o m a d d i n g M T B E t o g a s o l i n e p r o d u c e d i n C a l i f o r n i a . 23 Subse quently, in 2003, the District sued sever al oil c o mp a nies, 24 including BP and Shell, for MTBE contamination. 25 In January 2005, Shell also agr eed to se ttl e with the OCD A and 26 a hearing wa s s c h eduled to consider the settlement. The District 27 appeare d and opposed the settlement on the ground that its 2 0 03 28 suit against S h e ll w a s pending. The District also requested the 29 opportunity to formally move to int e rvene . Shell opposed 30 intervention on the ground that the moti on was u n ti me ly

. The 31 OCD A also opposed interve ntion, contending that:

7No. 15-3934-cv

1 The Water District’s claim s are common-l aw b ased; they 2 are damage based; they are independen t of our claim s; 3 a n d we have always taken the position, and the C o u r t 4 has read in the document we have take n th e position, 5 that there’s nothing we’re doing in this settlement that 6 has anything to d o w ith precluding the Water District 7 from pursuing their case in Fede ral Court. 8 App. 4420. The court denied th e District’s moti on to intervene and 9 entere d a consen t judgm ent settling all claim s against Shell. The 10 relief provided in the consen t judgment with Shell was simi lar to 11 th a t provided in the consen t judgment with BP, including 12 compensation to th e OCD A for investigati on costs, the funding of a 13 plume delineation program, and otherinjunctive re li ef.
14 Although, as noted, the OCD A was compensated for it s 15 investigati on costs and for the funding of a plume delineation 16 program, neither settlement awarded the District reimburse me n t for 17 its cleanup costs, or compensation for BP and Shell’s contamination 18 of the groundwater in the District, something the OCD A was not 19 authorized to recove r. In its suit, the District a ll e g e s that following 20 the OCD A s e ttlements, MTBE plumes have migrated from BP and 21 Shell’s stations toward the District’s water production wells. See 22 App. 4506. 23 D. The District’s Lawsuit against BP and Shell
24 In the 2003 suit that w a s filed in California state court against 25 a number of oil c o mp a n ies, including BP and Shell, the District 26 all eged that it suffere d injury as a consequence of bei n g required to 27 expe nd funds “to investigate, c le an up, abate, and/or remediate the 28 MTBE

. . . contamination caused by Defe ndants. ” App. 4365. The 29 District asser ted common law claim s, p r im a r ily sounding in public 30 nuisance, an d a c la im under the District Act “to recove r 31 compe n s a tor y and all other damages, including all neces sary funds 32 to investigate, monitor, preve nt, ab a te , or contain any contamination

8No. 15-3934-cv

1 of, or pollu tion to, groundwaters within th e District from MTBE.” 2 App. 4364. (In a subse quent filing, the District all ege d th a t its 3 remedial-acti on costs totaled over $3 mil li on a n d e stimated it would 4 take “additi onal mil li ons o f dollars and decades befor e MTBE is 5 cleaned up.” App. 4108.) The Distri c t also s ought injunctive relief “to 6 protect the qual ity of the common water supplies of the District; to 7 preve nt pollu tion or con tamination of that water supply; and to 8 a s s ure that the resp onsible parties—and not the District nor the 9 public—bear the ex pense .” App. 4364. 10 Defe ndants removed the cas e to feder al court on grounds of 11 diversity and the case was transfer red to the Southern District of 12 New Y o r k by the MDL Panel. After more than ten years of discovery 13 and p r e - tr ial procee dings, BP and Shell moved for summary 14 judgment, contending that the District’s claims w e r e barr ed by the 15 OCD A Conse nt Judgments under the doctr ine of res judicat a. 16 The district court agreed and granted the moti on. Sp e c if ically, 17 the co u rt concluded that the Conse nt Judgments constituted final 18 judgments on the merits; that th e O CD A’s prior lawsui ts and the 19 District’s lawsui t c ontained identical causes of a c tion; and “[b]ecause 20 the District and the OCD A were both acting on be h a lf of the public 21 to enforc e the same primary right, the parties are in p r iv ity.” In re 22 Methyl Tertiary Butyl Ether (MTBE) Prod. Liab. Litig. , 46 F. S u pp. 3d 23 440, 450 (S.D.N .Y. 2014), judgment entered sub nom . In re Methyl 24 Tertiary B utyl Ether (“Mtbe”) Prod. Liab. Litigation , No. 1358 (SAS), 25 2015 WL 7758530 (S.D.N .Y. Dec. 1, 2015). Wh at makes this case a 26 c lo se one is that both the OCD A and the District have bro a d 27 mandates under California law to protect the Orange County w a te r 28 supply. 29 With no claim s remaining against BP and Shell, the district 30 court remanded the District’s suit to the C entral District of California 31 excluding BP and Shell as defendan ts. Before the reman d o r d er went 32 into effect, the District moved to include BP and She ll a s d e f e n d a n ts 33 in th e o r d e r, c o n te n d in g th a t t h e d i s t r i c t c o u r t ’ s r e s judicat a
9No. 15-3934-cv

1 r u l i n g did not bar th e D i s t r i c t ’ s contin u ing nuisance claim s. The 2 d istr ict court denied that moti on, holding that the language of th e 3 Conse nt Judgments indicated an intention on be h a lf o f the parties to 4 reso lve all such claim s. The district court then entere d a final 5 judgment pursuant to Feder al Rule of Civil Procedure 54(b) 6 dismi ssing the District’s suit against BPand She ll

. 7 The District appeals the res judicat a ruling and three prior 8 order s of the district court against all defendan ts, including BP and 9 Shell. Those order s granted summary ju dgment on the District’s 10 trespas s claim; dismi ssed some of the District’s common-l a w c laims 11 as ti me-barr ed, and denied the District’s partial summary judgment 12 moti on seeking to recove r its investigati on costs u n d e r the District 13 A c t. We disagree with the district court’s conclusion that the 14 District’s suit against B P and Shell is barr ed by res judicat a. 15 Accordingly, we vacate the grant of summary judgment o n res 16 jud ic a ta g rounds and remand to the Southern District of New York 17 for further procee dings

. Because, as discussed below, the district 18 court’s Rule 54(b) order did not adequately certify the prior three 19 order s, we lack jurisdiction to review them. Those order s c a n a ls o be 20 a ddres sed on remand, either in the Southern District of New Yo r k o r 21 after any r eturn of this action to the Central District of California.
22 II. DISCUSSION 23 We review a district court ’ s g r a n t of summary judgment de 24 novo . Coosemans Specialties, Inc. v. Gargiulo, 4 8 5 F

. 3 d 701, 705 (2d Cir. 25 2007). 26 A. Res judicata
27 The centra l iss ue in this appeal is whether the Conse nt 28 Judgments have res judicat a effect. California la w governs our res 29 judicat a a

nal ysis . See Marrese v. Am. Acad. of Orthopaedic Surgeons , 470 30 U.S. 373, 380 ( 1 9 8 5 ). Res judicat a “gives certain conclusive effect to a 31 former judgment in subse quent li tigation involving th e same 32 controver sy.” B o e ke n v . Philip Morris USA, Inc. , 48 Cal. 4th 788, 797

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1 ( 2 0 10) (citati on and quotation marks omitted) (emphasis in original). 2 The doct r in e “ r ests upon the ground that the party to be affected, or 3 some o th e r w ith whom [it] is in privity, has li tigated, or had an 4 opportunity to li tigate th e same matter in a former action in a court 5 of competent jurisdiction, and s h o u ld not be permitted to li tigate it 6 again to the harass ment and vexation of [ it s ] o pponent.” Villacres v. 7 ABM Indus. Inc. , 189 Cal. App. 4th 562, 575 (C a l. Ct. App. 2010) 8 (citati on and quotati on marks omitted). 9 In C a lifornia, res judicat a applies when three elements are 10 satisfied: “1) the issues decided in the prior adjudication are 11 id e ntical with those pres ented in the later action; 2) there was a fin a l 12 judgment on the merits in the prior action; and 3) th e p a rty against 13 whom the plea is raised was a party or was in privity with a party to 14 the prior adjudication.” Citizens for Open Access to Sand & Tide, Inc. v. 15 Seadrift Assoc. (“COAST”) , 60 Cal. App. 4th 1053, 1065 (Cal. Ct. App. 16 1998) (citati ons omitte d ). We conclude that the third element is not 17 met because the curre nt recor d d o e s n o t support a finding of privity 18 betweenthe OCD A and the District. 19 B. Privity 20 Under California law, parties are in privity w here “the 21 nonparty has an identity o f in te r e s t w ith, a n d adequate 22 repr e s e ntation by, the party in the first action and the nonparty 23 should reaso nably expe ct to be bound by the prior adjudication.” 24 City of Martinez v. Texaco Trading & Transp., Inc. , 353 F. 3 d 758, 764 25 (9th Cir. 2003) (quoting Helfand v. Nat'l Union Fire Ins. C o. , 10 Cal. 26 App. 4th 869, 902 (Cal. Ct. App. 1992)).
27 California law tracks the Supre me C o urt’s feder al common 28 law definiti on of “adequacy” for purpose s of the privity inqu iry. See Arias v. Superior Court, 46 Cal. 4 th 969, 989 (2009). 29 Thus, “[a] party’s 30 repr esen tati on of a nonparty is ‘adequate’

. . . on ly if, at a mini mum : 31 (1) The interests of the n o n p a rty and her repr esen tati ve are ali gned; 32 and (2) either the party unders tood hers elf to be actin g in a

11No. 15-3934-cv

1 repr esen tati ve capacity or the original cour t to o k care to protect the 2 in te r ests of the nonparty.” Taylor v. Sturgell, 553 U.S. 880, 900 (2 0 0 8 ) 3 (citati ons omitted).
4 The district court found the OCD A and District to be in privity 5 because they are “so identifi ed in interest with [ea ch other] that 6 [they] repr esen t[ ] th e same legal right.” In re MTBE , 46 F. Supp. 3d 7 at 451-52 (quoting Lerner v. Los Angeles City Bd. of Educ ., 59 Cal.2d 8 382, 398 (1963)). The dis tr ict court compared the OCD A and 9 District’s complaints and concluded that the Distri c t s o u ght to 10 enforc e the same rights as the OC DA did in it s prior suits, namely, to 11 “preve nt d estruction of Orange County’s groundwater reso urces 12 and otherwise pr otect the environment.” App. 4240. 13 The District argues that privity did not exist bec ause its 14 interests are distinct from th e p ub li c’s and that the OCD A was not 15 an ad e qu a te repr esen tati ve of the District in the prior suits. BP and 16 Shel l, o n the other hand, contend that the OCD A and the District are 17 agents o f th e same government and theref ore in privity. We agree 18 with the District for the follow ing reasons

. 19 First, the recor d befor e us d o e s not establish that the District 20 and the OCD A are age n ts of the same government. Indeed, as 21 a c kn o w le d g e d b y th e d is tr ict court, this question is n o t 22 determinative. The relevant question for privity analysis is whether 23 “the interests of the District an d the OCD A are ali gned.” In re MTBE , 24 46 F. Sup p . 3 d at 451

. Here , it is clear that, on the one hand, the 25 District and the OCD A have sign ificant overlapping interests in 26 protecting Orange County’s groundwater reso urces and that the 27 harm that the s u its addres s and the relief sought are simi lar. On the 28 o th e r hand, it is clear that the District and the OCD A also ha v e 29 asser ted interests in this case that diverge. 30 In Orange County Water Distr i c t v . Arnold Engineering Company, 31 196 Cal. Ap p . 4 th 1 1 10 (Cal. Ct. App. 2011), the only case that 32 appears squ arely to addres s the District’s privity with the California

12No. 15-3934-cv

1 public, the District sued various entiti es that owne d , o p erated, or 2 leased industrial facili ties for contaminating groundwater within the 3 Distric t’ s jurisdiction. The defendan ts moved to disqual ify the 4 District’s counsel on th e ground that California law prohibited a 5 public entity from paying a private att orney a contingency fee to 6 prose cute a p ub li c nuisance abatement action. The trial court denied 7 the moti on, holding th a t the District was not pursuing the action on 8 the public’s behalf. Rather, the trial court found that the District 9 brought the action on its own behalf to r e cover remediation costs 10 and oth e r damages it suffere d distinct from any damages the public 11 suffere d. The California Court of Appe a ls a ffirmed the trial court, 12 holding: 13 Although th e Water District repr esen ts the water users 14 in its service area, and may bring li tigation o n their 15 behalf, the Water District d id not bring this action in a 16 repr esen tati ve capacity or on its users ' b e h a lf. This 17 action d o e s n o t seek to enforc e any rights the Water 18 District's users may have in th e groundwater or to 19 recove r any damages its users may have s u ffere d from 20 the contaminati on 21 . . . . 22 We con c lu d e the trial court corre ctly determined the 23 Water District's lawsui t is esse ntial ly a n a c tion seeking 24 to recove r the costs to investigate a n d r emediate the 25 contaminated groundwater, not a public nuisance 26 abatement action prosecuted onthe public's behalf.
27 Id. at 1125. While the issue of res judicat a was n o t b efore the court, 28 th e holding lends signifi cant support to the District’s argument that 29 it does have interests distinct fr o m th o s e o f the public or those of the 30 OCD A. 31 We next consider whether the District and the public’s distinct 32 interests are “ali gned” for purpose s of privity. First, there is no

13No. 15-3934-cv

1 dispute that the OCD A is not e mp o wered to bring lawsui ts on the 2 District’s behalf; or, convers ely, th a t the District cannot do so on 3 behalf of th e O C D A

. Further, there is no indication from the recor d 4 that the OCD A share d in the District’s distinct right to recove r its 5 costs to investigate and remediate groundwater c o ntamination, a 6 righ t th e D istr ict Act confer s exclusively on the District. See District Act § 8; P e o p l e v . S u perior Court, 224 Cal. App. 4th at 41–44 7 . Indeed, 8 the district court itself found it compelling th at the parties were not 9 ali gned given their assurance s to that e ff e ct. See In re MTBE , 46 F. 10 Supp. 3d at 452. The OCD A explicitly repr esen ted in its complaints 11 against BP and S h e ll that it did “not repr esen t[ ] any water district or 12 other munici pality,” App. 4241, 4339, and the Shell consen t 13 judgment specifically states that it was “ n o t inten d[ed]

. . . to legally 14 bar, es to p , release , alter, or supers ede any investigati on, action, 15 order, request, demand or dire c ti v e of

. . . the Orange County Water 16 District,” App. 4403–04. Finally, if this were not dispositive, the 17 OCD A then stated on the recor d at th e mo ti on to intervene hearing 18 th a t its claim s were distinct from those of the District and that it s 19 lawsuit did not have “anything to do” with the District’s suit in 20 feder al court. App

. 4 420. See, e.g. , City of Martinez, 353 F.3d at 764 21 (concluding, unde r California law, that City not ali gned with 22 interests of state age n c y where City was “informed that the 23 settlement woul d not preclude it from later raising it s civilclaim s”). 24 F in ally, we do not believe that the OCD A adequately 25 protected the Dist r ict’s interests. The OCD A success fully opposed 26 the District’s attempt to intervene in the OCD A’s suits

. N e ither 27 settlement reimbursed the Dist r ict’s clean up costs or afforded it 28 other compensation. The injunctive relief in the OCD A Conse nt 29 Judgments h a s expired and the District all eges that MTBE plumes 30 from BP and Shell stations c o ntinue to mig rate toward the District’s 31 water production wells. These are interests unique to the District 32 that w ere not adjudicated in the prior suits. Their existence means 33 that the District’s interests are no t s u fficiently ali gned with those of

14No. 15-3934-cv

1 the OCD A. And the recor d does not establish that in th e p rior suits 2 the trial court took special care to protect the D is tr ic t’ s interests. 3 Taken together, th e se factors do not permit a finding of privity. See 4 City of Martinez, 353 F.3d at 7 6 4

. ( “ A s [the City’s] interests were not 5 adequately repr esen ted by the [state] a n d it was told not to 6 participate, it would be patently unfair to bar the City’s claim s based 7 on res judicat a.”). 8 C . Prior district court orders 9 The District asks that we review the district court’s prior 10 order s dismi ssing some of its claim s against all defendan ts. We lack 11 jurisdiction to do so. 12 Rule 54(b) requires the court to “expr essly determine” the 13 claim s to which it is dir ecting a final judgment. Fed. R. Civ. P. 54(b). 14 Here , the district court’s Rule 54(b) certifica ti o n was li mited solely to 15 the claim s that survived against BP and Shel l a t th e tim e of the res 16 judicata decision. The surviving claim s were so much of the 17 District’s claim s as had not already been dismi ssed as to all 18 defend ants based upon a failu re (a) to comply with the statute of 19 li mit ations, (b) to s ta te a claim in trespas s or (c) to state a claim 20 under the District Act. While the district cou r t did not explicitly li mit 21 the arguments that the District migh t r a ise on appeal, it plainly did 22 not c e r ti fy for appeal claim s, common to all defendan ts, that had 23 previously been dismi ssed for independen t r easons . Indee d , it stated 24 that the Rule 54(b) certificati on was granted as to th e c la ims against 25 BP and Shell dismi ss e d o n grounds of res judicat a, which it 26 concluded were the only ones that were proper ly “th e focus of [an] 27 appeal” because they w e r e “discrete and separ able issues that are 28 appropr iated decided by the circuit on a 54(b) certificati on.” In re 29 MTBE , 1358 (SAS), 2015 WL 7758530, at *4 (S.D.N .Y. Dec. 1, 2015); see 30 generally Novick v. AXA Network LLC , 642 F.3d 304, 311 (2d Cir. 2011) 31 (“[A] district court gener ally shall not grant a Ru le 54(b) certificati on 32 if the same or closely related issues remain to be li tigated.” ( in te r nal 33 quotation marks omitted)). Because the previously dismi ssed claim s
15No. 15-3934-cv

1 w e r e not mentioned, and thus not adequately cer tifi ed by the district 2 court’s Ru le 5 4 ( b) order, we may not review them here

. See id. at 314 3 (explaining that Rule 54(b) certificati o n that fails to “expr essly 4 determine” claim for appeal or provide “reaso ned, even if b r ief, 5 explanation ” to that effect “is insuffici ent to confer appellate 6 jurisdiction” (internal q uotati on marks and citations omi tted)).
7 CONCLUSION 8 For the foregoing r e a s o n s , we vacate the district court’s grant 9 of summary judgment on res judicat a grounds an d r e mand the 10 District’s action against BP and Shell to the Southern Dis tr ic t o f New 11 York for further procee dings consistent w ith this opinion. See 28 12 U.S.C. § 1407(a).

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