Court Opinion

ID: 42929
Source: CourtListenerOpinion
Date Created: 2010-04-25 21:39:34+00
Date Added: 2024-06-11T17:16:57.655284
License: Public Domain

United States Court of Appeals
                                                             Fifth Circuit
                                                           F I L E D
                      REVISED JUNE 8, 2006
                                                             May 26, 2006
                 UNITED STATES COURT OF APPEALS
                      FOR THE FIFTH CIRCUIT             Charles R. Fulbruge III
                                                                Clerk
                     _______________________

                           No. 04-20519
                     _______________________

                ELEMENTIS CHROMIUM L.P., ET AL.,

                                                        Plaintiffs,
                             versus

            COASTAL STATES PETROLEUM COMPANY, ET AL.,

                                                        Defendants,

                             versus

 EL PASO MERCHANT ENERGY-PETROLEUM CO., Successor by merger to
COASTAL STATES CRUDE GATHERING COMPANY, formerly known as
              COASTAL REFINING AND MARKETING, INC.,

                                         Third Party Plaintiff —
                                        Appellee-Cross-Appellant,

                             versus

                    AMERADA HESS CORPORATION,

                                         Third Party Defendant —
                                                        Appellee,
                             versus

                MAGELLAN TERMINALS HOLDINGS L.P.,

                                         Third Party Defendant —
                                      Appellant — Cross-Appellee.

         On Appeal from the United States District Court
               for the Southern District of Texas

Before JONES, Chief Judge, and KING and DENNIS, Circuit Judges.
EDITH H. JONES, Chief Judge:

            All sides appeal the district court’s judgment appor-

tioning liability in a CERCLA cleanup case.      Magellan Terminals

Holdings L.P. (“Magellan”) and Amerada Hess Corp. (“Hess”) appeal

the district court’s imposition of joint and several liability upon

them.    El Paso Merchant Energy-Petroleum Co. (“El Paso”) appeals

the district court’s allocation of liability for future cleanup

costs.

            Finding that Magellan preserved its objection to joint

and several liability, and that liability in contribution actions

brought under § 113(f) of the Comprehensive Environmental Response,

Compensation and Liability Act (“CERCLA”), 42 U.S.C. §§ 9601-9675,

is several only, we VACATE and REMAND for allocation of liability

between Magellan and Hess.      With respect to the district court’s

allocation of liability to El Paso, we AFFIRM.

                           I.   Background

            Elementis Chromium L.P. and Elementis Chromium, Inc.

(collectively “Elementis”) own a manufacturing plant in Corpus

Christi that became contaminated with hydrocarbons as a result of

operations at one or more nearby properties:    (1) a facility owned

by El Paso, located to the southwest of the Elementis property; and

(2) a facility formerly owned by Hess and purchased by Magellan in

1999; this property is located to the south of the Elementis

property.

                                   2
             Elementis sued El Paso for recovery and/or contribution

of response costs to clean up the hydrocarbon contamination on its

property. Elementis and El Paso ultimately settled their case, but

El   Paso    then   brought    a   third-party       action   against     Hess   and

Magellan, seeking contribution for response costs at the Elementis

site.    The case went to a bench trial in the Southern District of

Texas, where        Magellan   and   Hess     were   represented     by   the    same

counsel.      In its findings of fact, the district court concluded

that El Paso was 89.95% responsible for the contamination at the

Elementis     property,    and     that   Magellan     and    Hess   were   10.05%

responsible.

             Treating Magellan and Hess as a collective entity for the

purposes of allocating responsibility, the district court imposed

joint and several liability upon the two companies for their share

of the cleanup costs.          Magellan timely brought a Motion to Amend

Findings and Judgment in an effort to receive a specific allocation

of responsibility. The district court declined to decide the issue

whether liability under CERCLA § 113(f) was several only, and

instead denied the motion on the grounds that Magellan and Hess had

waived their argument by not presenting evidence or arguments at

trial.      Magellan timely appealed both the Amended Final Judgment

and the district court’s denial of its Motion to Amend Findings and

Judgment.     El Paso cross-appealed the Amended Final Judgment and

the Findings of Fact and Conclusions of Law.

                                          3
                           II.   Discussion

     A.   Waiver/Judicial Estoppel

          Before addressing whether the imposition of joint and

several liability is proper for contribution actions brought under

CERCLA § 113(f), this court must first determine whether Magellan

waived its objection on this issue.     This court generally reviews

a decision on a motion to alter or amend a judgment for abuse of

discretion.   Ross v. Marshall, 426 F.3d 745, 763 (5th Cir. 2005).

“A trial court abuses its discretion when its ruling is based on an

erroneous view of the law or a clearly erroneous assessment of the

evidence.”    Bocanegra v. Vicmar Servs., Inc., 320 F.3d 581, 584

(5th Cir. 2003).    To the extent the ruling reconsidered a question

of law, however, the standard of review is de novo.         Ross, 426 F.3d

at 763.   Motions to alter or amend judgments “cannot be used to

raise arguments which could, and should, have been made before the

judgment issued” and “cannot be used to argue a case under a new

legal theory.”     Simon v. United States, 891 F.2d 1154, 1159 (5th

Cir. 1990).

          El Paso contends, and the district court agreed, that

Magellan and Hess waived their objections to the imposition of

joint and several liability.     The alleged waiver took place during

a   discussion   between   the   district     court   and    counsel   for

Magellan/Hess over whether Williams Terminals Holdings and its

                                   4
related entities (“Williams”) were proper defendants in the CERCLA

action:

      THE COURT: Just a minute. Who is the responsible party?
      I mean, does it vary over time? Is that the problem?

      [counsel for Magellan/Hess] MR. WILKINSON:     Well, the
      responsible parties would be Hess for a time period and
      then the current owner is actually Magellan Terminal
      Holdings, L.P., are the two parties that really belong in
      this suit. Of course, they all deny liability —

      THE COURT:   What’s the — if I enter judgment for a
      percentage of the cleanup costs, will you be able to
      allocate it among them? Do you represent both —

      MR. WILKINSON: I represent both of them. There’s an
      indemnity agreement — there’s a defense and indemnity
      agreement between Hess and Williams following the sale of
      the terminal.    So Hess is providing a defense and
      indemnity, Your Honor.

      THE COURT:     So what difference does it make?

      MR. WILKINSON: We have two other entities that really
      aren’t owners/operators of the terminal.        In the
      understandable ways that lawyers work, you just get all
      of the entities when you don’t understand —

      THE COURT:    I’ll let you-all work that out over the noon
      hour.

R23:609 (emphasis added).1          In its later findings of fact, the

court imposed joint and several liability on Magellan and Hess,

prompting Magellan’s motion to alter or amend.

            The district court, in its oral decision on the motion,

stated that it was

      1
            Later that day, counsel for Magellan/Hess stipulated that Magellan
“is the entity with legal responsibility for what we have referred to as the Hess
Terminal since the terminal was sold by Hess in 1999 and that [the Williams
companies] . . . are not proper parties, necessary parties.” R23:645. The
district court then agreed to dismiss Williams from the suit without prejudice.

                                       5
      troubled by the lateness of this motion. I did the best
      I could to fairly allocate the response costs between El
      Paso and Hess. Nobody ever mentioned except me what the
      allocation between Mr. Wilkinson’s client[s] should be.
      And the only response I got was that there’s a defense
      and indemnity agreement. If you all had raised this,
      Mr. Wilkinson, at trial, we could have stopped,
      conducted, extended the time for evidence, reviewed the
      exhibits, asked meaningful questions to some of the
      witnesses, and I would be in a position to make an
      informed choice.   So, assuming, without deciding that
      liability under Section 113 is only [several], not joint
      and several, an issue that the Fifth Circuit has not yet
      definitively decided, I conclude that Magellan has waived
      this argument by not presenting evidence or arguments at
      trial.   So, I am going to deny the motion for that
      reason.

R28:6-7.    The existence of an indemnity agreement weighed heavily

in the district court’s conclusion that Magellan had waived its

objection to the imposition of joint and several liability.                    El

Paso thus argues that the district court was “entitled to rely on

statements made by counsel in open court,” and that the doctrines

of either judicial estoppel or waiver bar Magellan’s claim.                 Ergo

Sci., Inc. v. Martin, 73 F.3d 595, 600 (5th Cir. 1996).2

      2
             This court will focus its attention upon whether Magellan can be said
to have waived its objection to the implementation of joint and several
liability, as the district court viewed Magellan’s argument as having been
waived. However, to the extent that El Paso raises Ergo Science to argue in
favor of the application of judicial estoppel, such an argument must be rejected.
In Ergo Science, counsel unequivocally renounced his client’s claim to certain
funds in a pretrial hearing, and then sought to challenge a ruling of the
district court based on that waiver through a post-trial motion. Because the
district court accepted counsel’s original position, counsel was estopped from
asserting a clearly inconsistent position at a later time. Ergo Science, 73 F.3d
at 598.    In the instant case, Magellan’s alleged renunciation is far from
unequivocal, and the company never took the contrary position that joint and
several liability was appropriate. See Ahrens v. Perot Sys. Corp., 205 F.3d 831,
833 (5th Cir. 2000). Thus, Magellan cannot be judicially estopped from asserting
its objection here.

                                        6
              However,   it    is   well    established     that   a   “party   has

presented an issue in the trial court if that party has raised it

in either the pleadings or the pretrial order, or if the parties

have tried the issue by consent.”              Burch v. Coca-Cola Co., 119 F.3d

305, 319 (5th Cir. 1997)(quoting Portis v. First Nat’l Bank, 34

F.3d 325, 331 (5th Cir. 1994)).             In the instant case, there is no

dispute that Magellan included its objection to the imposition of

joint and several liability in the pretrial order; indeed, the

district court acknowledged as much in its ruling on Magellan’s

motion to amend the judgment.              An issue included in the pretrial

order may be waived where a litigant makes a “specific concession”

as to that issue at a later date.                See Indus. Magromer Cueros y

Pieles S.A. v. La. Bayou Furs, Inc., 293 F.3d 912, 919 (5th Cir.

2002). Here, however, the exchange between Magellan/Hess’s counsel

and the district court is at best ambiguous and appears to be an

example of two parties talking past each other, not a specific

concession by counsel on the issue of joint and several liability.

Magellan should not be deprived of its right to argue an issue

properly included in the pretrial order on the basis of a single

passing reference to an indemnity agreement.

              Nor will this court deem Magellan’s objections waived due

to its failure to present evidence.               The district court expressed

frustration with the fact that Magellan did not prominently argue

the   issue    of   joint     and   several     liability   at   trial,   but   the

company’s failure to do so is understandable, given that its

                                           7
position at trial was that it was not liable for any of the

contamination at the Elementis site.3          It is El Paso, as the party

bringing an action for contribution, that bore “the burden of

proving the defendant is a responsible party under § 107(a) of

CERCLA and also the burden of proving the defendant’s equitable

share of costs.”      Centerior Serv. Co. v. Acme Scrap Iron & Metal

Corp., 153 F.3d 344, 348 (6th Cir. 1998); see also Minyard Enters.,

Inc. v. Se. Chem. & Solv. Co., 184 F.3d 373, 385 (4th Cir.

1999)(same).      El Paso argues that it does not have to prove

liability as to individual defendants in a CERCLA contribution

action, but it cites no case law in support of this proposition.

This court therefore declines to relieve El Paso of its burden of

proof.4    Magellan cannot be faulted for inadequate presentation of

evidence as to the proper allocation of costs when it never bore

the burden of proof in the first place.           As such, we find that the

district court abused its discretion in its determination that

Magellan waived its objections to the imposition of joint and

several liability against it, and we proceed to the merits of

Magellan’s and Hess’s claim.

      B.    Joint and Several Liability

      3
            Because El Paso offered no evidence against Magellan, Magellan
requested as a finding of fact that “[t]he [Hess] terminal did not handle benzene
at any time it was owned by [Magellan].” R7:1260.
      4
            It should be noted that such burden shifting would be contrary to our
holding, infra, that liability under CERCLA § 113(f) is several only.

                                       8
              The    standard      of   review        “for    a    bench    trial    is    well

established:         findings of fact are reviewed for clear error and

legal issues are reviewed de novo.”                     In re Mid-South Towing Co.,

418 F.3d 526, 531 (5th Cir. 2005).                The district court’s imposition

of joint and several liability is a matter of law, which we review

de novo.

              With respect to contribution actions, CERCLA § 113(f)(1),

42   U.S.C.    §     9613(f)(1),        provides       that       “any    person    may    seek

contribution from any other person who is liable or potentially

liable under [CERCLA] § 107(a). . . .                        In resolving contribution

claims, the court may allocate response costs among liable parties

using   such        equitable      factors       as    the        court    determines       are

appropriate.”         Section § 113(f) is thus intended to provide a

liable party under CERCLA with a cause of action to “mitigate the

harsh   effects       of   joint    and    several       liability”         imposed       under

§ 107(a).     OHM Remediation Servs. v. Evans Cooperage Co., 116 F.3d

1574, 1582 (5th Cir. 1997).

              The two parties disagree over whether liability is joint

and several, or several only, in § 113(f) contribution actions.

Although this issue is one of first impression in this circuit, the

overwhelming majority of our sister circuits have concluded that

liability is merely several under § 113(f).                              See, e.g., United

States v. Davis, 261 F.3d 1, 29 (1st Cir. 2001); Kalamazoo River

Study Group v. Menasha Corp., 228 F.3d 648, 653 (6th Cir. 2000);

Minyard, 184 F.3d at 385; Pinal Creek Group v. Newmont Mining

                                             9
Corp., 118 F.3d 1298, 1301 (9th Cir. 1997); Sun Co., Inc. v.

Browning-Ferris, Inc., 124 F.3d 1187, 1193 (10th Cir. 1997);

Redwing Carriers, Inc. v. Saraland Apartments, 94 F.3d 1489, 1514

(11th Cir. 1996).        As the Ninth Circuit noted in Pinal Creek, a

“contrary [i.e., joint and several] approach is not supported by

CERCLA’s text, is inconsistent with the traditional doctrine of

contribution, and runs the risk of creating procedural chaos.”

Pinal Creek, 118 F.3d at 1303.5

            We agree:     “[W]hen one liable party sues another liable

party under CERCLA, the action is not a cost recovery action under

§ 107(a),” and the imposition of joint and several liability is

inappropriate.        Redwing Carriers, 94 F.3d at 1513.                  The plain

language of § 113(f)(1) directs the courts to “allocate response

costs among liable parties” in an equitable manner, 42 U.S.C.

§   9613(f)(1),    and   it     is    clear       that   under   the   principle   of

contribution,     a    liable        party    is    entitled     to    recover   only

“proportional shares of judgment from other tort-feasors whose

negligence contributed to the injury and who were also liable to

      5
            The imposition of joint and several liability in the instant case
would also be inconsistent with the earlier decisions of the district court. On
October 15, 2003, the district court granted El Paso's motions for partial
summary judgment as to Hess's and Williams's claims under § 107(a). R6:1217.
In arguing that Hess and Williams, as potentially responsible persons under
CERCLA, could not maintain § 107(a) actions against it, El Paso stated the proper
claim against it was under § 113(f), and that it could not be held “jointly and
severally liable as a matter of law.” R6:1014. The district court accepted this
argument and granted El Paso’s motions for partial summary judgment. Moreover,
all parties were in agreement on liability under § 113(f), as Hess and Williams
concurred in El Paso’s analysis of CERCLA, noting that the same reasoning was
applicable to El Paso’s claims against them. R6:1045, 1060.

                                             10
the plaintiff.”         OHM, 116 F.3d at 1582.          Finally, to allow for the

imposition of joint and several liability in contribution actions

under CERCLA is to invite “inefficiency, potential duplication, and

prolongation of the litigation process.”                 Pinal Creek, 118 F.3d at

1303.6      As    liability      is    several   only    in   CERCLA   contribution

actions, the district court erred in imposing joint and several

liability upon Hess and Magellan.                Therefore, the judgment of the

district court must be vacated and remanded to determine the proper

division of liability between Magellan and Hess.7

      C.   Allocation of Liability

            Finally, El Paso argues that the district court erred in

allocating       only   10.05%    of    future    response    costs    to   Hess   and

Magellan.    We review the district court’s findings of fact only for

clear error.       A finding of fact is not clearly erroneous “if it is

plausible in the light of the record read as a whole.”                         Baker

      6
            El Paso relies upon Browning-Ferris Industries of Illinois, Inc. v.
Ter Maat, 195 F.3d 953 (7th Cir. 1999) for the proposition that the imposition
of joint and several liability is within the equitable powers of the district
court under § 113(f). The actual holding in Ter Maat was, inter alia, that a
district court erred in believing that it was “constrained to allocate liability
equally among joint polluters.” Ter Maat 195 F.3d at 957. To the extent that
Ter Maat also suggested that § 113(f) did not contain a bright line prohibition
against the imposition of joint liability, such a position is at odds with the
overwhelming majority of circuit courts that have addressed the issue of
liability under § 113(f). Moreover, none of the hypothetical concerns over
several liability raised in Ter Maat (e.g., one responsible party is insolvent,
rendering the others responsible for a larger share of cleanup costs than is
equitable) is present in the instant case. See id.
      7
            The district court has an adequate factual basis in the record to
properly allocate responsibility between Magellan and Hess. For example, it may
allocate responsibility based upon years of ownership. Alternatively, it may
simply conclude, based upon evidence in the record that the hydrocarbon
contamination of the Elementis property took place in the 1970s and 80s, decades
prior to Magellan’s purchase of the Hess property in 1999, that Hess should be
held responsible for all 10.05% of the remaining CERCLA liability.

                                           11
Hughes Oilfield Operations, Inc. v. Cage (In re Ramba), 416 F.3d

394, 402 (5th Cir. 2005).   As Magellan and Hess correctly argue,

there is a great deal of evidence on the record regarding the age

and type of contamination found on the Elementis property that

directly implicates El Paso.      We find no evidence sufficient to

produce “the definite and firm conviction that a mistake has been

committed” by the district court, and as such, the court did not

clearly err in its allocation of response costs to El Paso.    United

States v. U.S. Gypsum Co., 333 U.S. 364, 395, 68 S. Ct. 525, 542

(1948).

                         III.   Conclusion

          Magellan did not waive its objection to the imposition of

joint and several liability against it; we REVERSE the district

court’s holding to the contrary.       Because liability under CERCLA

§ 113(f) is several only, the decision of the district court is

VACATED and REMANDED. As we AFFIRM the district court’s allocation

of future response costs to El Paso, on remand, the district court

need only determine the proper allocation of Magellan and Hess’s

10.05% share of response costs.

          REVERSED, VACATED and REMANDED IN PART; and AFFIRMED IN

PART.

                                  12