T hi s di s pos i t i on i s notappr opr i a t e f orpubl i c a t i on and i s notpr e c e de nt * e xc e pta s pr ovi de d by N i nth C i r c ui tR ul e 36- 3.

T he H onor abl e J ohn R . T unhe i m , U ni t e d S t a t e s D i s tr i c tJ udge f orthe ** D i s tr i c tof

M i nne s ot a , s i tt i ng by de s i gna t i on.

NOT F OR P UB L I CAT I ON UN I TE D STATE S C OU RT OF APPE ALS FOR T HE NI NTH CI RC UI T S E MP R A E NE R GY , P l ai n t i ff-A p p el l ee an d C ro ssA p p e lla n t, v. M A R S H U S A , I N C ., D e f

e nda nt - A ppe l l a nta nd C ross -A pp el l ee . N os . 09- 55022, 09- 55290

D . C. N o . 2 : 0 7 CV - 5 4 3 1 - SJ O ( SS) ME MOR AN DU M *

A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt f o rth e C e n tr a l D is tr ic t o f C a lif o rn ia S . J a m e s O t e r o, D i s tr i c tJ udge , P r e s i di ng A r gue d a nd S ubm i tt e d J une 8, 2010 P a s a d e n a , C a lif

o rn ia B e f o r e : C A N B Y a n d W. F L E T C H E R , C i r c u i tJ u d g e s , a n d T U N H E I M, **

D i stri ctJudg e. 

# FI LED AU G 03 2010 M OLLY C. DW Y ER, CLERK U . S. C O U R T OF APPE ALS2

M a r s h U S A , I nc . ( “ M a r s h” ) appe a l s f r om af i na l j udgm e nte nt e r e d i n f a vor of S e m pr aE ne r gy( “ S e m pr a ” ) a f t e raj ury i s s ue d ave r di c ti n S e m pr a ’ s f a vora nd a w a r d e d d a ma g e s . W e a f f i rm. F ir s t, th e d is tr ic t c o u rt p r o p e r lys u b m itte d th e s ta tu te o f lim ita tio n s is s u e to the j ury , a nd the j ury ’ s c onc l us i on tha tM a r s h di d notpr ove i t s s t a tut e of l i m i t at i on s def

ense w as no tagai nstthe ov erw hel m i ng w ei gh tof the evi dence at tr ia l. A r e a s o n ab le ju r o rc o u ld h a v e c o n c lu d e d th a t ar e a s o n ab le p e r s o n in S e m p r a ’s p o s itio n w o u ld h a v e u n d e r s to o d th a t e v e n a“g o ld s ta n d a r d ” p o lic y c o u ld n o t c o v e ra ll p o te n tia l lo s s e s . A r e a s o n ab le ju r o rr e a c h in g th a t c o n c lu s io n c o u ld ha ve s i m i l a r l y f

ound tha tar e a s onabl e pe r s on i n S e m pr a ’ s pos i t i on, r e a di ng the st at em entof defe nse w i th thatun ders t andi ng i n m i nd , w ou l d n othave di sc ov er ed th a t M a r s h ’s n e g lig e n c e m a y h a v e b e e n ac au s e o f S e m p r a ’s in

ju ry . See C a l . C i v. P r o c . C o d e § 3 3 9 , s u b d . 1 ; J ol l yv . E l iL i l l

y& C o. , 75 1 P . 2d 92 3, 92 7 (C al . 19 88 ); se e al so H ydro-Mi l l

C o. v. H ayw ard, T

i l ton & R olap

p Ins. A ss ocs. , Inc. , 1 0 C a l. R ptr. 3d 58 2, 59 7-98 (C al . C t . A pp . 20 04 ); B utc he rv . T r uc k I ns . E x c h. , 9 2 C a l. R ptr. 2d 52 1, 54 1-42 (C al . C t . A pp . 20 00 ). S ec on d, the di stri ctcourtdi d n oterr i n al l ow i ng S em pra t o adv ance an a l t e rna t i ve the ory of

c aus a t i on. T he a rbi tr a t i on pa ne l ’ s rul i ng l e f tope n the po ss i bi l i ty thatS em pra’ s l osse s had m ore than o ne cause, and the di stri ctcourt3

barr ed S em pra f

rom di sput i ng the cause thatthe panel had i dent i fi ed. M oreover, as M a r s h c onc e de s , S e m pr ai nf orm e d M a r s h tha ti tw a nt e d the br oa de s tc ove r a ge p o s s ib le . T hi r d, the di s tr i c tc ourtdi d notabus e i t s di s c r e t i on i n i t s e vi de nt i a ry rul i ngs rel at ed t o th e av ai l ab i l i ty o f al t ern at i v e co v erag e. T h e d i stri ctco u rtd i d n o tab u se its d is c r e tio n in a d m ittin g th e e x p e rt te s tim o n y o f W in if r e d B a k e r . See Fe d . R. E vi d. 70 2. T he di stri ctcourtal so di d n otabuse i t s di sc re t i on i n con cl ud i ng that M ar sh’ s f

ai l ure t o t i m el y des i gn at e M i l es W ri gh tw as no tsubst ant i al l y j ust i fi ed a n d th a t S e m p r aw o u ld s u f f e rh a rm f r o m th e la te d is c lo s u r e . See Fe d . R. Ci v . P. 3 7 . W i th r e s pe c tt o G us t a vo de L uc i o, the di s tr i c tc ourtdi d notabus e i t s di s c r e t i on in c o n c lu d in g th a t M a r s h a d o p te d h is s ta te m e n ts , F e d . R . E v id . 8 0 1 ( d ) ( 2 ) ( B ) , o rin l i m i t i ng hi s l a y w i tne s s t e s t i m ony , F e d. R . E vi d. 701. S ub st ant i al evi dence s upport e d the j ury ’ s f

i ndi ng tha tM a r s h c oul d ha ve obt a i ne d a l t e rna t i ve c ove r a ge for S em pra. F ou rth, al tho ug h the di stri ctcourtm ayhave err ed i n i nstruct i ng the j ury a s to th e e le m e n ts o f

b r e a c h o f

c o n tr a c t, s e e U

S E c o lo g y, I n c . v . S ta te , 28 C al . R ptr. 3d 894, 910 ( C a l . C t . A pp. 2005) , M a r s h di d nots ubm i tapr ope ri ns truc t i on or c le a r lyid e n tif

y th e e rr o rto th e c o u rt, a n d th e r e f o r e th e c o u rt d id n o t ab u s e its d is c r e tio n in r e f

u s in g to g iv e th e in s tru c tio n th a t M a r s h r e q u e s te d . V o o h ri es-4

L ars on v . C e s s na A i r c r af t C o. , 2 4 1 F .3 d 7 0 7 , 7 1 4 ( 9 th C ir . 2 0 0 1 ) ; G loverv. B IC C or p. , 6 F .3 d 1 3 1 8 , 1 3 2 7 ( 9 th C ir . 1 9 9 3 ) . M o r e o v e r , a n y e rr o rw a s h a rm le s s . See C ount s v . B ur l i ngton N

. R . R . C o. , 95 2 F . 2d 11 36 , 11 40 (9th C i r. 19 91 ). F or the foregoi ng re as on s, w e AF F I RM th e ju d g m e n t o f th e d is tr ic t c o u rt. W e th e r e f

o r e d is m is s S e m p r a ’s c r o s s - ap p e a l a s m o o t. Se e G olde n W . R e f i ni ng C o. v . SunT r us t B ank , 5 3 8 F .3 d 1 2 3 3 , 1 2 4 3 ( 9 th C ir . 2 0 0 8 ) ; A brom son v. A m . P ac. C or p. , 11 4 F . 3d 89 8, 90 4 (9th C i r. 19 97 ).

A F F I R M E D i n 09- 55022 D I S M I S S E D as m oot i n 09- 55290