Opinion ID: 3012864
Heading Depth: 3
Heading Rank: 2

Heading: “Dirty Mercury” Transactions

Text: Morton asserts that Tenneco shipped its own “dirty mercury” to the plant for processing into usable mercury, a transaction which clearly qualifies Tenneco for “arranger liability.” (Morton Brief at 15). Morton contends that it submitted evidence sufficient to survive summary judgment on this claim. Tenneco argues that Morton did not present this claim to the District Court at all. It is true that Morton did not include the “dirty mercury” allegation in its Statement of Contested Facts for the Pretrial Order. (Supp. App. at 2-3). As a general matter, the pretrial order will “control the subsequent course of the action unless modified by a subsequent order.” Fed. R. Civ. P. 16(e). Moreover, the “finality of the pretrial order contributes substantially to the orderly and efficient trial of a case.” Petree v. Victor Fluid Power, Inc., 831 F.2d 1191, 1194 (3d Cir. 1987). Nonetheless, “Rule 16 was not intended to function as an inflexible straightjacket on the conduct of litigation . . . instead, it was intended to insure the efficient resolution of cases and, most importantly, minimize prejudicial surprise.” Lamborn v. Dittmer, 873 F.2d 522, 527 (2d Cir. 1989) (citations omitted). Accordingly, Morton argues that the issue is properly addressed on appeal because it raised the issue in its brief opposing Tenneco’s motion for summary judgment. In response to Tenneco’s individual motion for summary judgment, Morton incorporated its Statement of Material Facts from the earlier summary judgment proceeding involving all of the defendants. In paragraph 10 of that Statement of Material Facts, Morton makes allegations about PVM and “dirty mercury” transactions against “The Customers” generally without specifying any customer by name. (App. at 157). In paragraph 11, Morton asserts that the “evidence confirming these transactions is overwhelming” and cites numerous pages of deposition testimony. Id. One of the cited portions of deposition 25 testimony indicates that Tenneco shipped “dirty mercury” to the plant. Id. (deposition transcript of Joseph H. Bernstein at 860). The critical issue is whether Tenneco was on notice of Morton’s “dirty mercury” claim during the summary judgment proceedings despite the fact that the claim was not included in the Pretrial Order. We find that Tenneco was sufficiently aware of the claim. Tenneco was presumably put on notice of Morton’s allegation at the time of the Bernstein deposition given that Bernstein stated that he believed that Tenneco shipped “dirty mercury” to the plant. If not at the time of the deposition, Tenneco was surely on notice as of the time it received Morton’s Statement of Material Facts during the first summary judgment proceeding. Finally, Tenneco was put on notice of this claim a third time when Morton incorporated its Statement of Material Facts into its response to Tenneco’s individual motion for summary judgment. Thus, although Morton’s failure to include this claim in the Pretrial Order violates the letter of Rule 16(e), our consideration of this claim on appeal does not violate the purpose of the rule, which is primarily to “minimize prejudicial surprise.” Lamborn, 873 F.2d at 527. Assuming we would consider the “dirty mercury” claim, Tenecco argues in the alternative that the District Court properly granted summary judgment to Tenneco because, quite simply,“Morton has absolutely no evidence to support such a claim.” (Tenneco Brief at 57). We disagree. Morton asserts that Tenneco shipped its own “dirty mercury” to the plant for processing into usable mercury. (Morton Brief at 15) (citing Bernstein Dep. at 40, 860). Morton maintains that the plant’s standard operating procedure was to store “dirty mercury” in separate flasks labeled with the customer’s name and date received and then to purify the mercury by a furnace-operated distillation process, which produced environmentally harmful residue. Id. (citing App. at 431-32, 443, 447, 46163, 868-69, 954). Morton contends that customers were apprised of the fact that “a certain percentage of mercury would be lost in the process.” Id. (citing App. at 963-65, 263). This evidence is sufficient to at least create a disputed 26 fact with respect to each of the principal “arranger liability” factors — ownership or possession, knowledge, and control. Therefore, under the standard we have just articulated, this evidence suffices to survive summary judgment.