Opinion ID: 199705
Heading Depth: 2
Heading Rank: 3

Heading: 1998 Cost Recovery Action

Text: 17 In March 1998, the United States filed before Judge Torres a second cost recovery action (the 1998 action) against Kayser-Roth, seeking $4.1 million in additional response costs incurred after the period covered by the 1990 judgment and $2.3 million in interest. In its complaint, the government relied on the 1990 declaratory judgment finding Kayser-Roth liable for future response costs. 18 Shortly after the filing of this second cost recovery action, the Supreme Court decided United States v. Bestfoods, 524 U.S. 51 (1998)(discussed infra). Consequently, Kayser-Roth filed a motion under Fed. R. Civ. P. 60(b)(5) 5 for relief from the liability determination in the 1990 declaratory judgment. 6 As grounds therefor, Kayser-Roth argued that Bestfoods changed the CERCLA liability standards applied by Judge Boyle and thus rendered prospective application of his 1990 declaratory judgment unjust. 19 At oral argument before Judge Torres, Kayser-Roth explained that the relief sought under Rule 60(b)(5) would give Kayser-Roth the opportunity to have its liability determined anew under current law in the action before Judge Torres. We share that understanding of the effect of Rule 60(b)(5) relief in this setting. Relief, if granted, would not exonerate Kayser-Roth from liability with any finality, but rather would release Kayser-Roth from the prior declaratory judgment to the extent that this judgment imposes liability for future response costs. The issue of liability under CERCLA would be back on the table, giving Kayser-Roth an opportunity to litigate its liability under current law in the context of the 1998 cost recovery action. 20 In considering Kayser-Roth's request for relief, Judge Torres found that the 1990 declaratory judgment, applied to Kayser-Roth for future response costs, would have prospective effect and would inflict undue hardship on Kayser-Roth, two requirements for relief under Rule 60(b)(5). 7 See Kayser-Roth II, 103 F. Supp. 2d at 78-81. However, Judge Torres denied relief from judgment under Rule 60(b)(5) because of his conclusion that Kayser-Roth remained liable as both owner and operator under Bestfoods. Id. at 82, 85. Addressing operator liability first, Judge Torres reasoned: 21 Judge Boyle expressly found that Kayser-Roth directed Stamina Mills's activities with respect to environmental matters, in general, and operation of the facility utilizing TCE, in particular. Judge Boyle also found that Kayser-Roth had directed activities at the site. Consequently, Bestfoods would not alter [Judge Boyle's] determination of operator liability as affirmed by the First Circuit. 22 Id. at 82. As to owner liability, Judge Torres held that Bestfoods did not undermine Judge Boyle's veil-piercing analysis and upheld the determination that Kayser-Roth was liable as an owner. Id. at 85. The denial of the motion for relief under Rule 60(b)(5) prompted the instant appeal.