Opinion ID: 203380
Heading Depth: 1
Heading Rank: 4

Heading: Court's Approval of Consent Decree

Text: On April 13, 2007, the district court ordered expedited briefing on the motion for entry of the Consent Decree. The court also ordered that copies of the proposed Consent Decree be published in the Bangor Daily News and on the DEP's website. This was done. The court also ordered that public comments be filed promptly with the court. The court declined then to rule on Citizens's motion to file supplemental third-party claims and the pending motions for judgment by third parties. On May 25, 2007, in the same order in which it permitted the State and the DEP's motion to intervene, the court approved and ordered the entry of the Consent Decree, as amended, as a partial final judgment. The court postponed ruling on other pending motions, including the motions for judgment filed by various third parties and Citizens's motion for leave to file supplemental third-party complaints. Bangor II, 2007 WL 1557426, at . The district court assessed the proposed Consent Decree to determine whether it was fair (including both procedural and substantive fairness), reasonable, and consistent with the purpose of CERCLA. The court noted that in making this inquiry, it had to acknowledge `the wide range of potential problems and possible solutions' and thereby leave it to the parties to resolve `highly technical issues and relatively petty inequities.' Id. at  (quoting United States v. Cannons Eng'g Corp., 899 F.2d 79, 85-86 (1st Cir.1990)). As for procedural fairness, the district court noted that it should look to the negotiation process and attempt to gauge its candor, openness, and bargaining balance. Id. (quoting Cannons, 899 F.2d at 86) (internal quotation marks omitted). Meanwhile, it focused the substantive fairness inquiry on concepts of corrective justice and accountability, which can include a comparison of the proportion of total costs to be paid by the settlers with the proportion of liability attributable to them. Id. at  (quoting United States v. Charles George Trucking, Inc., 34 F.3d 1081, 1088 (1st Cir.1994)) (internal quotation marks omitted). As for the reasonableness inquiry, the court noted that this circuit has explicitly called upon the Court to look at the following factors: (1) the `technical adequacy' or `efficaciousness [of the decree] as a vehicle for cleansing the environment;' (2) `whether the settlement satisfactorily compensates the public for the actual (and anticipated) costs of remedial and response measures;' and (3) `the relative strength of the parties' litigation positions.' Id. at  (quoting Cannons, 899 F.2d at 89-90). The court did so. The district court pointed out that under the terms of the Consent Decree and underlying Settlement Agreement, Citizens would pay $7.625 million into an escrow account. It described the arrangement as follows: Citizens also has agreed to continue to pursue other third parties, which it continues to believe are responsible for contributing the contamination in the Cove. To that end, the Settlement Agreement assigns to Citizens any claims that the City might have against Third Parties related to the Site. The City, for its part, has agreed to be responsible for the actual remediation of the Site, which will require it to work closely with the State to finalize and implement a remediation plan. Under the terms of the Consent Decree, the City is financially responsible for the cost of remediation to the extent it exceeds the balance of the escrow fund. Id. at . The court noted that the figure of $7.625 million represented the upper limit of what Citizens could pay, since under the Settlement Agreement, Citizens could end up recouping some of this amount because of its right to receive a refund from the escrow fund equal to two-thirds of any recoveries from third parties or the cost of any remediation work completed with a federal appropriation. Id. at  n. 5. The court considered the Settlement Agreement when it expressly stated that its assessment of the Consent Decree was based upon the fact that Citizens had agreed to pay up to $7.625 million as well as the possibility of Citizens's paying less than this amount. Id. The court however declined the request of some third and fourth parties that it give equal consideration to the Settlement Agreement. Id. at  n. 6. The court reasoned that it had reviewed the terms of the Settlement Agreement, that the Consent Decree would not be contingent on the Settlement Agreement, and that the Settlement Agreement in no way `trumps' the terms of the Consent Decree. [6] Id. As for procedural fairness, the court concluded that as between the State, the City and Citizens, the Court is amply satisfied that the Consent Decree represents the end result of a procedurally fair, arm's-length negotiation process. Id. at . The court rejected the contention of third and fourth parties that they were unfairly excluded from the settlement process, noting that the record was devoid of any evidence, including any affidavits of counsel, suggesting that any third or fourth party asked to attend or participate in settlement talks ... but were affirmatively excluded. Id. at . The court remarked that [d]espite the lack of an invitation, the status reports undoubtedly put the third and fourth parties on notice that settlement discussions were ongoing. Given that notice, these parties could have certainly requested the opportunity to participate. Id. The court further pointed out that [a]lthough a global resolution might have been possible and even preferable, it is not surprising or unfair that the City and Citizens would reach a settlement without the participation of the third or fourth parties given the trifurcated nature of the proceedings. Id. With respect to substantive fairness, the court noted that although there remains uncertainty about the total cost of the Dunnett's Cove remediation, it could still determine that the Consent Decree is substantively fair. The court pointed out that [t]he First Circuit previously has endorsed the trial court `confin[ing] its inquiry to the substantive fairness of the aggregate class contribution' without concerning itself as to how the members of the settling class have chosen to divvy up the various costs and risks. Id. (quoting Charles George Trucking, 34 F.3d at 1088-89) (citations and internal quotation marks omitted). It also noted that pursuant to the Consent Decree, the City and Citizens have agreed to fund the entire remediation regardless of whether contribution is ever received from other parties or sources. Id. The court did compare the proportion of total projected costs to be paid by the settlors with the liability attributed to them in the Phase One Findings, see Charles George Trucking, 34 F.3d at 1087, and noted that Citizens' contribution of $7.625 million roughly correlates to the Court's previous equitable apportionment, especially when one considers the additional response costs [of $1.33 million] Citizens has already incurred. Bangor II, 2007 WL 1557426, at  n. 11. As for reasonableness, the court pointed out that the Consent Decree provides for a remedy that would at least match (and may well exceed) any remedy that might have been developed in a second phase trial. Id. at . The court also noted that by allowing the remedial process to begin without requiring further litigation, the Consent Decree would be efficient. Id. The court rejected the argument that the Consent Decree's remedy was not reasonable because it may exceed what the court would otherwise have required; the court pointed out that nothing prevents the City and Citizens from agreeing to do more remediation than might be required by CERCLA and RCRA. Id. With respect to litigation positions, the court noted that there was undoubtedly a good faith basis for continuing this litigation, but both sides realized that settlement would be a cost-effective solution. Id. The court concluded that the Consent Decree was faithful to the purposes of CERCLA and RCRA, noting that this determination clearly overlaps with the Court's assessment of reasonableness. Id. at .