15-3934-cv

In re Methyl Tertiary Butyl Ether (“MTBE”) Products Liability Litigation

1 In the

2 United States Court of Appeals

3 For the Second Circuit

4 ________

5 August Term, 2016

6 No. 15-3934-cv 

7 ________

8 IN RE METHYL TERTIARY BUTYL ETHER (“MTBE”) PRODUCTS LIABILITY

9 LITIGATION

10 ________

11 ORANGE COUNTY WATER DISTRICT,

12 Plaintiff-Appellant,

13 v. 

14 TEXACO REFINING AND MARKETING, INC., EQUILON ENTERPRISES LLC,

15 SHELL OIL COMPANY, d/b/a SHELL OIL PRODUCTS US, ATLANTIC

16 RICHFIELD COMPANY, f/k/a ARCO PETROLEUM COMPANY, d/b/a ARCO

17 PRODUCTS COMPANY, a/k/a ARCO, BP PRODUCTS NORTH AMERICA,

18 INC., BP WEST COAST LLC, (DOE 3),

19 Defendants-Appellees;

20 UNOCAL CORPORATION, CONOCOPHILLIPS COMPANY, CHEVRON

21 U.S.A., INC., d/b/a CHEVRON PRODUCTS COMPANY, D/B/A CHEVRON

22 CHEMICAL COMPANY, UNION OIL COMPANY OF CALIFORNIA, INC.,

23 TOSCO CORPORATION, EXXON MOBIL CORPORATION, F/K/A EXXON

24 CORPORATION, D/B/A EXXONMOBIL REFINING AND SUPPLY COMPANY,

25 EXXONMOBIL CHEMICAL, CORPORATION, EXXON, CHEMICAL U.S.A.,

26 MOBILE CORPORATION, ULTRAMAR, INC., VALERO REFINING AND

27 MARKETING COMPANY, VALERO REFINING COMPANY-CALIFORNIA,

28 VALERO REFINING, TESORO PETROLEUM CORPORATION, (DOE 4),
 No. 15-3934-cv

1 TESORO REFINING AND MARKETING COMPANY, INC., PETRO-DIAMOND,

2 INC., (DOE 6), SOUTHERN COUNTIES OIL CO., (DOE 7), ARCO CHEMICAL

3 COMPANY, (DOE 201), LYONDELL CHEMICAL COMPANY, F/K/A ARCO

4 CHEMICAL COMPANY G&M OIL COMPANY, INC., 7-ELEVEN, INC., USA

5 GASOLINE CORPORATION, DOES, 9-200, AND DOES 202-1000, INCLUSIVE,

6 CHEVRON CORPORATION, EXXON MOBILE OIL CORPORATION, TMR

7 COMPANY, CHEVRONTEXACO CORPORATION,

8 Defendants.

9 ________

10 Appeal from the United States District Court

11 for the Southern District of New York.

12 No. 04-cv-4968  ̄ Shira A. Scheindlin, Judge.

13 ________

14 Argued: December 5, 2016

15 Decided: June 12, 2017

16 ________

17 Before: PARKER, RAGGI AND HALL, Circuit Judges.

18 ________

19 Plaintiff-Appellant Orange County Water District appeals

20 from a judgment in consolidated multi-district litigation in the

21 United States District Court for the Southern District of New York

22 (Shira A. Scheindlin, Judge). The district court granted summary 1

23 judgment to Defendants-Appellees BP and Shell on the ground that

24 the Orange County Water District’s suit was barred by res judicata

25 as a consequence of earlier consent judgments entered in California

26 state court resolving similar suits against BP and Shell brought by

27 the Orange County District Attorney.

 This case has since been reassigned to Judge Vernon S. Broderick. 1

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1 Because we conclude that the record does not sufficiently

2 establish that the Orange County District Attorney and the Orange

3 County Water District were in privity, we vacate the district court’s

4 res judicata determination and remand the claims against BP and

5 Shell to the Southern District of New York for further proceedings

6 consistent with this opinion.

7 ________

8 MICHAEL D. AXLINE, Miller & Axline, A

9 Professional Corporation, Sacramento, CA, for

10 Plaintiff-Appellant.

11 MATTHEW T. HEARTNEY, Arnold & Porter LLP,

12 Los Angeles, CA, STEPHANIE B. WEIRICK, Arnold

13 & Porter LLP, Washington, D.C., PETER C.

14 CONDRON, Sedgwick LLP, Washington, D.C., for

15 Defendants-Appellees.

16 ________

17 BARRINGTON D. PARKER, Circuit Judge:

18 This appeal arises from contamination of groundwater in

19 Orange County, California, from various oil companies’ use of the

20 gasoline additive methyl tertiary butyl ether (“MTBE”). This case,

21 initially brought in 2003 in California state court, was removed to the

22 Central District of California and transferred in 2004 to the Southern

23 District of New York by the Judicial Panel on Multidistrict

24 Litigation. See 28 U.S.C. § 1407. The district court transferred to the

25 Central District of California all claims except those against BP and

26 Shell. The district court granted the defendants summary judgment 2

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

Defendants Atlantic Richfield Company, BP West Coast Products LLC, and BP Products 2

North America, Inc. are collectively referred to as “BP.” Defendants Shell Oil Company,

Equilon Enterprises LLC, and Texaco Refining and Marketing Inc. are collectively referred

to as “Shell.”

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1 Plaintiff-Appellant Orange County Water District (the

2 “District”), which is responsible for groundwater quality in the

3 Orange County basin, alleged that the addition of MTBE to gasoline

4 sold by BP and Shell and other defendants that leached from

5 underground storage tanks contaminated, or threatens to

6 contaminate, groundwater at more than four hundred sites within

7 the District’s jurisdiction. The District sued in 2003. Claims against

8 BP and Shell for MTBE contamination had been brought by the

9 Orange County District Attorney (“OCDA”) in 1999 and were

10 settled in 2002 and 2005 respectively. 

11 In 2015, BP and Shell moved for summary judgment on the

12 ground that res judicata arising from the 2002 and 2005 settlements

13 barred the District’s 2003 lawsuit. The district court granted the

14 motion, dismissed the District’s claims against BP and Shell, and

15 remanded the claims against the remaining defendants to the

16 Central District of California for trial. See 28 U.S.C. § 1407(a).

17 On appeal, the District challenges the lower court’s

18 application of res judicata on the ground that it was not in privity

19 with the OCDA. Because, based on the record before us, we cannot

20 conclude that the District and OCDA are in privity, we vacate the

21 judgment and remand the district’s claims against BP and Shell to

22 the Southern District of New York for further proceedings. 

23 I. BACKGROUND3

24 A. The Orange County Water District

25 The District is a public corporation created by the California

26 state legislature under the Orange County Water District Act (“the

27 District Act”) to manage, regulate, replenish, and protect the

28 groundwater basin generally covering the northern half of Orange

29 County. See District Act §§ 1(a); 2(6). The District provides water to

30 more than two million users, but it is not a water retailer and does

Unless otherwise noted, the facts recited below are undisputed and derive from the parties’ 3

submissions on summary judgment.

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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 producers, including cities,

4 other water districts, and private water companies, obtain water

5 from the District’s groundwater basin and sell it to the public. See

6 Orange County Water District, Member Agenc ies ,

7 http://www.ocwd.com/working-with-us/member-agencies/ (last

8 visited May 26, 2017). 

9 The District also protects various rights to water from the

10 Santa Ana River, which 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/about/ (last visited May 26, 2017). Pursuant

13 to that obligation, the District may bring claims on behalf of the

14 public, 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 also District Act § 2(9). The District also may bring claims on its own 4

17 behalf under the District Act to recover costs it paid, or will pay, to

18 remediate groundwater contamination. See District Act § 8. Finally,

19 the District is authorized to “act jointly with or cooperate with the

20 United States or any agency thereof, the State of California or any

 Section 2(9) of the District Act provides: 4

To carry out the purposes of this act, to commence, maintain, intervene in,

defend, and compromise, in the name of the district, or otherwise, and to

assume the costs and expenses of any and all actions and proceedings now

or hereafter begun to prevent interference with water or water rights used

or useful to lands within the district, or diminution of the quantity or

pollution or contamination of the water supply of the district, orto prevent

unlawful exportation of water from the district, or to prevent any

interference with the water or water rights used or useful in the district

which may endanger or damage the inhabitants, lands, or use of water in

the district; provided, however, that the district shall not have power to

intervene or take part in, or to pay costs or expenses of, actions or

controversies between the owners of lands or water rights all of which are

entirely within the boundaries of the district and which do not involve

pollution or contamination of water within the district or exporting water

outside of the district's boundaries or any threat thereof. 

Cal. Water Code App § 40-(2)9.

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 No. 15-3934-cv

1 agency thereof, [and] any county of the State of California . . . to

2 carry out the provisions and purposes of [the District Act].” Id. at 

3 § 2(11).

4 B. The Orange County District Attorney

5 The OCDA represents the people of California. Its mission is

6 to “enhance public safety and welfare and create a sense of security

7 in the community through the vigorous enforcement of criminal and

8 civil laws in a just, honest, efficient and ethical manner.” See Mission

9 Statement, http://orangecountyda.org/office/mission.asp (last visited

10 May 26, 2017). With respect to water, the OCDA is charged with

11 protecting the people’s “primary interest in the conservation,

12 control, and utilization of the water resources of the state.” Joint

13 Appendix on Appeal (“App.”) 4246 (quoting Cal. Water Code 

14 § 13000). Pursuant to this charge, the OCDA is authorized to sue on

15 behalf of the public “to protect the public from health and safety

16 hazards” and “prevent destruction of Orange County’s groundwater

17 resources and otherwise protect the environment.” App. 4240.

18 However, the OCDA may not prosecute a cause of action on behalf

19 of a different public agency, such as the District. See People v. Superior

20 Court, 224 Cal. App. 4th 33, 41–44 (Cal. Ct. App. 2014).

21 C. Prior MTBE Litigation 

22 In 1999, the OCDA sued BP and Shell in Orange County

23 Superior Court. Both suits asserted claims based on releases of

24 MTBE from underground storage tanks at BP and Shell gas stations

25 resulting in the contamination of adjacent soil and groundwater.

26 Both suits alleged that the MTBE releases constituted continuing and

27 permanent nuisances. See Cal. Civ. Code §§ 3479 and 3480. The

28 OCDA sought damages and injunctive relief requiring the

29 investigation, abatement and cleanup of contaminated areas as well

30 as steps to control the potential migration of MTBE plumes. The

31 OCDA’s complaints specifically alleged that it was not representing

32 any water district. See App. 4241, 4339. 

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1 Though not a party to the OCDA’s lawsuits, the District knew

2 about them. On July 14, 2000, the District’s general manager wrote to

3 the Orange County Director of Environmental Health regarding the

4 suits, stating:

5 The Orange County Water District has appreciated the

6 opportunity to provide technical assistance to your

7 department and to the Orange County District Attorney

8 to help in the enforcement of cleanup of MTBE and

9 other petroleum contaminants from leaking gasoline

10 storage tanks in Orange County.

11 App. 4306.

12 In 2002, the OCDA and BP agreed to settle. Accordingly, the

13 Orange County Superior Court entered a consent judgment settling

14 all of the OCDA’s claims against BP. The settlement constituted “a

15 release from any known or unknown past or present claims,

16 violations, or causes of action that were or could have been asserted

17 in the First Amended Complaint” with regard to MTBE

18 contamination. App. 4220. Pursuant to the terms of the settlement,

19 BP agreed to reimburse OCDA’s investigation costs and to fund and

20 implement a “plume delineation” program to combat MTBE

21 migration. BP also became subject to injunctive relief prohibiting it

22 from adding MTBE to gasoline produced in California.

23 Subsequently, in 2003, the District sued several oil companies,

24 including BP and Shell, for MTBE contamination.

25 In January 2005, Shell also agreed to settle with the OCDA and

26 a hearing was scheduled to consider the settlement. The District

27 appeared and opposed the settlement on the ground that its 2003

28 suit against Shell was pending. The District also requested the

29 opportunity to formally move to intervene. Shell opposed

30 intervention on the ground that the motion was untimely. The

31 OCDA also opposed intervention, contending that:

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 No. 15-3934-cv

1 The Water District’s claims are common-law based; they

2 are damage based; they are independent of our claims;

3 and we have always taken the position, and the Court

4 has read in the document we have taken the position,

5 that there’s nothing we’re doing in this settlement that

6 has anything to do with precluding the Water District

7 from pursuing their case in Federal Court.

8 App. 4420. The court denied the District’s motion to intervene and

9 entered a consent judgment settling all claims against Shell. The

10 relief provided in the consent judgment with Shell was similar to

11 that provided in the consent judgment with BP, including

12 compensation to the OCDA for investigation costs, the funding of a

13 plume delineation program, and other injunctive relief.

14 Although, as noted, the OCDA was compensated for its

15 investigation costs and for the funding of a plume delineation

16 program, neither settlement awarded the District reimbursement for

17 its cleanup costs, or compensation for BP and Shell’s contamination

18 of the groundwater in the District, something the OCDA was not

19 authorized to recover. In its suit, the District alleges that following

20 the OCDA settlements, 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 was filed in California state court against

25 a number of oil companies, including BP and Shell, the District

26 alleged that it suffered injury as a consequence of being required to

27 expend funds “to investigate, clean up, abate, and/or remediate the

28 MTBE . . . contamination caused by Defendants.” App. 4365. The

29 District asserted common law claims, primarily sounding in public

30 nuisance, and a claim under the District Act “to recover

31 compensatory and all other damages, including all necessary funds

32 to investigate, monitor, prevent, abate, or contain any contamination

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1 of, or pollution to, groundwaters within the District from MTBE.”

2 App. 4364. (In a subsequent filing, the District alleged that its

3 remedial-action costs totaled over $3 million and estimated it would

4 take “additional millions of dollars and decades before MTBE is

5 cleaned up.” App. 4108.) The District also sought injunctive relief “to

6 protect the quality of the common water supplies of the District; to

7 prevent pollution or contamination of that water supply; and to

8 assure that the responsible parties—and not the District nor the

9 public—bear the expense.” App. 4364.

10 Defendants removed the case to federal court on grounds of

11 diversity and the case was transferred to the Southern District of

12 New York by the MDL Panel. After more than ten years of discovery

13 and pre-trial proceedings, BP and Shell moved for summary

14 judgment, contending that the District’s claims were barred by the

15 OCDA Consent Judgments under the doctrine of res judicata. 

16 The district court agreed and granted the motion. Specifically,

17 the court concluded that the Consent Judgments constituted final

18 judgments on the merits; that the OCDA’s prior lawsuits and the

19 District’s lawsuit contained identical causes of action; and “[b]ecause

20 the District and the OCDA were both acting on behalf of the public

21 to enforce the same primary right, the parties are in privity.” In re

22 Methyl Tertiary Butyl Ether (MTBE) Prod. Liab. Litig., 46 F. Supp. 3d

23 440, 450 (S.D.N.Y. 2014), judgment entered sub nom. In re Methyl

24 Tertiary Butyl Ether (“Mtbe”) Prod. Liab. Litigation, No. 1358 (SAS),

25 2015 WL 7758530 (S.D.N.Y. Dec. 1, 2015). What makes this case a

26 close one is that both the OCDA and the District have broad

27 mandates under California law to protect the Orange County water

28 supply.

29 With no claims remaining against BP and Shell, the district

30 court remanded the District’s suit to the Central District of California

31 excluding BP and Shell as defendants. Before the remand order went

32 into effect, the District moved to include BP and Shell as defendants

33 in the order, contending that the district court’s res judicata

9
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1 ruling did not bar the District’s continuing nuisance claims. The

2 district court denied that motion, holding that the language of the

3 Consent Judgments indicated an intention on behalf of the parties to

4 resolve all such claims. The district court then entered a final

5 judgment pursuant to Federal Rule of Civil Procedure 54(b)

6 dismissing the District’s suit against BP and Shell.

7 The District appeals the res judicata ruling and three prior

8 orders of the district court against all defendants, including BP and

9 Shell. Those orders granted summary judgment on the District’s

10 trespass claim; dismissed some of the District’s common-law claims

11 as time-barred, and denied the District’s partial summary judgment

12 motion seeking to recover its investigation costs under the District

13 Act. We disagree with the district court’s conclusion that the

14 District’s suit against BP and Shell is barred by res judicata.

15 Accordingly, we vacate the grant of summary judgment on res

16 judicata grounds and remand to the Southern District of New York

17 for further proceedings. Because, as discussed below, the district

18 court’s Rule 54(b) order did not adequately certify the prior three

19 orders, we lack jurisdiction to review them. Those orders can also be

20 addressed on remand, either in the Southern District of New York or

21 after any return of this action to the Central District of California. 

22 II. DISCUSSION

23 We review a district court’s grant of summary judgment de

24 novo. Coosemans Specialties, Inc. v. Gargiulo, 485 F.3d 701, 705 (2d Cir.

25 2007).

26 A. Res judicata

27 The central issue in this appeal is whether the Consent

28 Judgments have res judicata effect. California law governs our res

29 judicata analysis. See Marrese v. Am. Acad. of Orthopaedic Surgeons, 470

30 U.S. 373, 380 (1985). Res judicata “gives certain conclusive effect to a

31 former judgment in subsequent litigation involving the same

32 controversy.” Boeken v. Philip Morris USA, Inc., 48 Cal. 4th 788, 797

10
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1 (2010) (citation and quotation marks omitted) (emphasis in original).

2 The doctrine “rests upon the ground that the party to be affected, or

3 some other with whom [it] is in privity, has litigated, or had an

4 opportunity to litigate the same matter in a former action in a court

5 of competent jurisdiction, and should not be permitted to litigate it

6 again to the harassment and vexation of [its] opponent.” Villacres v.

7 ABM Indus. Inc., 189 Cal. App. 4th 562, 575 (Cal. Ct. App. 2010)

8 (citation and quotation marks omitted).

9 In California, res judicata applies when three elements are

10 satisfied: “1) the issues decided in the prior adjudication are

11 identical with those presented in the later action; 2) there was a final

12 judgment on the merits in the prior action; and 3) the party 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) (citations omitted). We conclude that the third element is not

17 met because the current record does not support a finding of privity

18 between the OCDA and the District.

19 B. Privity

20 Under California law, parties are in privity where “the

21 nonparty has an identity of interest with, and adequate

22 representation by, the party in the first action and the nonparty

23 should reasonably expect to be bound by the prior adjudication.”

24 City of Martinez v. Texaco Trading & Transp., Inc., 353 F.3d 758, 764

25 (9th Cir. 2003) (quoting Helfand v. Nat'l Union Fire Ins. Co., 10 Cal.

26 App. 4th 869, 902 (Cal. Ct. App. 1992)). 

27 California law tracks the Supreme Court’s federal common

28 law definition of “adequacy” for purposes of the privity inquiry. See

29 Arias v. Superior Court, 46 Cal. 4th 969, 989 (2009). Thus, “[a] party’s

30 representation of a nonparty is ‘adequate’ . . . only if, at a minimum:

31 (1) The interests of the nonparty and her representative are aligned;

32 and (2) either the party understood herself to be acting in a

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1 representative capacity or the original court took care to protect the

2 interests of the nonparty.” Taylor v. Sturgell, 553 U.S. 880, 900 (2008)

3 (citations omitted).

4 The district court found the OCDA and District to be in privity

5 because they are “so identified in interest with [each other] that

6 [they] represent[ ] the 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 district court compared the OCDA and

9 District’s complaints and concluded that the District sought to

10 enforce the same rights as the OCDA did in its prior suits, namely, to

11 “prevent destruction of Orange County’s groundwater resources

12 and otherwise protect the environment.” App. 4240.

13 The District argues that privity did not exist because its

14 interests are distinct from the public’s and that the OCDA was not

15 an adequate representative of the District in the prior suits. BP and

16 Shell, on the other hand, contend that the OCDA and the District are

17 agents of the same government and therefore in privity. We agree

18 with the District for the following reasons.

19 First, the record before us does not establish that the District

20 and the OCDA are agents of the same government. Indeed, as

21 acknowledged by the district court, this question is not

22 determinative. The relevant question for privity analysis is whether

23 “the interests of the District and the OCDA are aligned.” In re MTBE,

24 46 F. Supp. 3d at 451. Here, it is clear that, on the one hand, the

25 District and the OCDA have significant overlapping interests in

26 protecting Orange County’s groundwater resources and that the

27 harm that the suits address and the relief sought are similar. On the

28 other hand, it is clear that the District and the OCDA also have

29 asserted interests in this case that diverge. 

30 In Orange County Water District v. Arnold Engineering Company,

31 196 Cal. App. 4th 1110 (Cal. Ct. App. 2011), the only case that

32 appears squarely to address the District’s privity with the California

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1 public, the District sued various entities that owned, operated, or

2 leased industrial facilities for contaminating groundwater within the

3 District’s jurisdiction. The defendants moved to disqualify the

4 District’s counsel on the ground that California law prohibited a

5 public entity from paying a private attorney a contingency fee to

6 prosecute a public nuisance abatement action. The trial court denied

7 the motion, holding that 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 recover remediation costs

10 and other damages it suffered distinct from any damages the public

11 suffered. The California Court of Appeals affirmed the trial court,

12 holding: 

13 Although the Water District represents the water users

14 in its service area, and may bring litigation on their

15 behalf, the Water District did not bring this action in a

16 representative capacity or on its users' behalf. This

17 action does not seek to enforce any rights the Water

18 District's users may have in the groundwater or to

19 recover any damages its users may have suffered from

20 the contamination 

21 . . . .

22 We conclude the trial court correctly determined the

23 Water District's lawsuit is essentially an action seeking

24 to recover the costs to investigate and remediate the

25 contaminated groundwater, not a public nuisance

26 abatement action prosecuted on the public's behalf.

27 Id. at 1125. While the issue of res judicata was not before the court,

28 the holding lends significant support to the District’s argument that

29 it does have interests distinct from those of the public or those of the

30 OCDA.

31 We next consider whether the District and the public’s distinct

32 interests are “aligned” for purposes of privity. First, there is no

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1 dispute that the OCDA is not empowered to bring lawsuits on the

2 District’s behalf; or, conversely, that the District cannot do so on

3 behalf of the OCDA. Further, there is no indication from the record

4 that the OCDA shared in the District’s distinct right to recover its

5 costs to investigate and remediate groundwater contamination, a

6 right the District Act confers exclusively on the District. See District

7 Act § 8; People v. Superior Court, 224 Cal. App. 4th at 41–44. Indeed,

8 the district court itself found it compelling that the parties were not

9 aligned given their assurances to that effect. See In re MTBE, 46 F.

10 Supp. 3d at 452. The OCDA explicitly represented in its complaints

11 against BP and Shell that it did “not represent[ ] any water district or

12 other municipality,” App. 4241, 4339, and the Shell consent

13 judgment specifically states that it was “not intend[ed] . . . to legally

14 bar, estop, release, alter, or supersede any investigation, action,

15 order, request, demand or directive of . . . the Orange County Water

16 District,” App. 4403–04. Finally, if this were not dispositive, the

17 OCDA then stated on the record at the motion to intervene hearing

18 that its claims were distinct from those of the District and that its

19 lawsuit did not have “anything to do” with the District’s suit in

20 federal court. App. 4420. See, e.g., City of Martinez, 353 F.3d at 764

21 (concluding, under California law, that City not aligned with

22 interests of state agency where City was “informed that the

23 settlement would not preclude it from later raising its civil claims”).

24 Finally, we do not believe that the OCDA adequately

25 protected the District’s interests. The OCDA successfully opposed

26 the District’s attempt to intervene in the OCDA’s suits. Neither

27 settlement reimbursed the District’s clean up costs or afforded it

28 other compensation. The injunctive relief in the OCDA Consent

29 Judgments has expired and the District alleges that MTBE plumes

30 from BP and Shell stations continue to migrate toward the District’s

31 water production wells. These are interests unique to the District

32 that were not adjudicated in the prior suits. Their existence means

33 that the District’s interests are not sufficiently aligned with those of

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1 the OCDA. And the record does not establish that in the prior suits

2 the trial court took special care to protect the District’s interests.

3 Taken together, these factors do not permit a finding of privity. See

4 City of Martinez, 353 F.3d at 764. (“As [the City’s] interests were not

5 adequately represented by the [state] and it was told not to

6 participate, it would be patently unfair to bar the City’s claims based

7 on res judicata.”). 

8 C. Prior district court orders

9 The District asks that we review the district court’s prior

10 orders dismissing some of its claims against all defendants. We lack

11 jurisdiction to do so. 

12 Rule 54(b) requires the court to “expressly determine” the

13 claims to which it is directing a final judgment. Fed. R. Civ. P. 54(b).

14 Here, the district court’s Rule 54(b) certification was limited solely to

15 the claims that survived against BP and Shell at the time of the res

16 judicata decision. The surviving claims were so much of the

17 District’s claims as had not already been dismissed as to all

18 defendants based upon a failure (a) to comply with the statute of

19 limitations, (b) to state a claim in trespass or (c) to state a claim

20 under the District Act. While the district court did not explicitly limit

21 the arguments that the District might raise on appeal, it plainly did

22 not certify for appeal claims, common to all defendants, that had

23 previously been dismissed for independent reasons. Indeed, it stated

24 that the Rule 54(b) certification was granted as to the claims against

25 BP and Shell dismissed on grounds of res judicata, which it

26 concluded were the only ones that were properly “the focus of [an]

27 appeal” because they were “discrete and separable issues that are

28 appropriated decided by the circuit on a 54(b) certification.” 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 generally shall not grant a Rule 54(b) certification

32 if the same or closely related issues remain to be litigated.” (internal

33 quotation marks omitted)). Because the previously dismissed claims

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1 were not mentioned, and thus not adequately certified by the district

2 court’s Rule 54(b) order, we may not review them here. See id. at 314

3 (explaining that Rule 54(b) certification that fails to “expressly

4 determine” claim for appeal or provide “reasoned, even if brief,

5 explanation” to that effect “is insufficient to confer appellate

6 jurisdiction” (internal quotation marks and citations omitted)).

7 CONCLUSION

8 For the foregoing reasons, we vacate the district court’s grant

9 of summary judgment on res judicata grounds and remand the

10 District’s action against BP and Shell to the Southern District of New

11 York for further proceedings consistent with this opinion. See 28

12 U.S.C. § 1407(a).

16