Court Opinion

ID: 4176702
Source: CourtListenerOpinion
Date Created: 2017-06-12 15:03:40.803601+00
Date Added: 2024-06-11T08:45:59.769622
License: Public Domain

15-3934-cv
     In re Methyl Tertiary Butyl Ether (“MTBE”) Products Liability Litigation

1                                              In the
2                  United States Court of Appeals
3                               For the Second Circuit
4                                             ________

5                                      August Term, 2016

6                                         No. 15-3934-cv
7                                           ________

8     IN RE METHYL TERTIARY BUTYL ETHER (“MTBE”) PRODUCTS LIABILITY
9                                LITIGATION
10                                ________
11                   ORANGE COUNTY WATER DISTRICT,
12                           Plaintiff-Appellant,

13                                                 v.

14    TEXACO REFINING AND MARKETING, INC., EQUILON ENTERPRISES LLC,
15      SHELL OIL COMPANY, d/b/a SHELL OIL PRODUCTS US, ATLANTIC
16    RICHFIELD COMPANY, f/k/a ARCO PETROLEUM COMPANY, d/b/a ARCO
17     PRODUCTS COMPANY, a/k/a ARCO, BP PRODUCTS NORTH AMERICA,
18                  INC., BP WEST COAST LLC, (DOE 3),
19                         Defendants-Appellees;

20      UNOCAL CORPORATION, CONOCOPHILLIPS COMPANY, CHEVRON
21     U.S.A., INC., d/b/a CHEVRON PRODUCTS COMPANY, D/B/A CHEVRON
22     CHEMICAL COMPANY, UNION OIL COMPANY OF CALIFORNIA, INC.,
23      TOSCO CORPORATION, EXXON MOBIL CORPORATION, F/K/A EXXON
24    CORPORATION, D/B/A EXXONMOBIL REFINING AND SUPPLY COMPANY,
25    EXXONMOBIL CHEMICAL, CORPORATION, EXXON, CHEMICAL U.S.A.,
26      MOBILE CORPORATION, ULTRAMAR, INC., VALERO REFINING AND
27     MARKETING COMPANY, VALERO REFINING COMPANY-CALIFORNIA,
28       VALERO REFINING, TESORO PETROLEUM CORPORATION, (DOE 4),
                                                                             No. 15-3934-cv

1    TESORO REFINING AND MARKETING COMPANY, INC., PETRO-DIAMOND,
2    INC., (DOE 6), SOUTHERN COUNTIES OIL CO., (DOE 7), ARCO CHEMICAL
3     COMPANY, (DOE 201), LYONDELL CHEMICAL COMPANY, F/K/A ARCO
4    CHEMICAL COMPANY G&M OIL COMPANY, INC., 7-ELEVEN, INC., USA
5    GASOLINE CORPORATION, DOES, 9-200, AND DOES 202-1000, INCLUSIVE,
6      CHEVRON CORPORATION, EXXON MOBILE OIL CORPORATION, TMR
7                 COMPANY, CHEVRONTEXACO CORPORATION,
8                               Defendants.
9                                ________

10                     Appeal from the United States District Court
11                       for the Southern District of New York.
12                     No. 04-cv-4968 ¯ Shira A. Scheindlin, Judge.
13                                            ________

14                                 Argued: December 5, 2016
15                                  Decided: June 12, 2017
16                                         ________

17                   Before: PARKER, RAGGI AND HALL, Circuit Judges.
18                                     ________

19          Plaintiff-Appellant Orange County Water District appeals
20   from a judgment in consolidated multi-district litigation in the
21   United States District Court for the Southern District of New York
22   (Shira A. Scheindlin, Judge).1 The district court granted summary
23   judgment to Defendants-Appellees BP and Shell on the ground that
24   the Orange County Water District’s suit was barred by res judicata
25   as a consequence of earlier consent judgments entered in California
26   state court resolving similar suits against BP and Shell brought by
27   the Orange County District Attorney.

     1
         This case has since been reassigned to Judge Vernon S. Broderick.

                                                   2
                                                                          No. 15-3934-cv

1           Because we conclude that the record does not sufficiently
2    establish that the Orange County District Attorney and the Orange
3    County Water District were in privity, we vacate the district court’s
4    res judicata determination and remand the claims against BP and
5    Shell to the Southern District of New York for further proceedings
6    consistent with this opinion.
7                                  ________

8                            MICHAEL D. AXLINE , Miller & Axline, A
9                            Professional Corporation, Sacramento, CA, for
10                           Plaintiff-Appellant.

11                           MATTHEW T. HEARTNEY, Arnold & Porter LLP,
12                           Los Angeles, CA, STEPHANIE B. WEIRICK, Arnold
13                           & Porter LLP, Washington, D.C., PETER C.
14                           CONDRON, Sedgwick LLP, Washington, D.C., for
15                           Defendants-Appellees.
16                                      ________

17   BARRINGTON D. PARKER, Circuit Judge:
18           This appeal arises from contamination of groundwater in
19   Orange County, California, from various oil companies’ use of the
20   gasoline additive methyl tertiary butyl ether (“MTBE”). This case,
21   initially brought in 2003 in California state court, was removed to the
22   Central District of California and transferred in 2004 to the Southern
23   District of New York by the Judicial Panel on Multidistrict
24   Litigation. See 28 U.S.C. § 1407. The district court transferred to the
25   Central District of California all claims except those against BP and
26   Shell.2 The district court granted the defendants summary judgment
27   on those claims. Those claims are the subject of this appeal.

     2
      Defendants Atlantic Richfield Company, BP West Coast Products LLC, and BP Products
     North America, Inc. are collectively referred to as “BP.” Defendants Shell Oil Company,
     Equilon Enterprises LLC, and Texaco Refining and Marketing Inc. are collectively referred
     to as “Shell.”

                                                3
                                                                             No. 15-3934-cv

1           Plaintiff-Appellant Orange County Water District (the
2    “District”), which is responsible for groundwater quality in the
3    Orange County basin, alleged that the addition of MTBE to gasoline
4    sold by BP and Shell and other defendants that leached from
5    underground storage tanks contaminated, or threatens to
6    contaminate, groundwater at more than four hundred sites within
7    the District’s jurisdiction. The District sued in 2003. Claims against
8    BP and Shell for MTBE contamination had been brought by the
9    Orange County District Attorney (“OCDA”) in 1999 and were
10   settled in 2002 and 2005 respectively.
11         In 2015, BP and Shell moved for summary judgment on the
12   ground that res judicata arising from the 2002 and 2005 settlements
13   barred the District’s 2003 lawsuit. The district court granted the
14   motion, dismissed the District’s claims against BP and Shell, and
15   remanded the claims against the remaining defendants to the
16   Central District of California for trial. See 28 U.S.C. § 1407(a).
17         On appeal, the District challenges the lower court’s
18   application of res judicata on the ground that it was not in privity
19   with the OCDA. Because, based on the record before us, we cannot
20   conclude that the District and OCDA are in privity, we vacate the
21   judgment and remand the district’s claims against BP and Shell to
22   the Southern District of New York for further proceedings.
23                                   I. BACKGROUND3
24           A.      The Orange County Water District
25          The District is a public corporation created by the California
26   state legislature under the Orange County Water District Act (“the
27   District Act”) to manage, regulate, replenish, and protect the
28   groundwater basin generally covering the northern half of Orange
29   County. See District Act §§ 1(a); 2(6). The District provides water to
30   more than two million users, but it is not a water retailer and does

     3
      Unless otherwise noted, the facts recited below are undisputed and derive from the parties’
     submissions on summary judgment.

                                                  4
                                                                              No. 15-3934-cv

1    not provide water directly to the public. See Orange County Water
2    District, What We Do, http://www.ocwd.com/what-we-do/ (last
3    visited May 26, 2017). Nineteen water producers, including cities,
4    other water districts, and private water companies, obtain water
5    from the District’s groundwater basin and sell it to the public. See
6    O r a n g e C o u n ty Wa te r D istr ic t, M e mb e r Age n c i e s ,
7    http://www.ocwd.com/working-with-us/member-agencies/ (last
8    visited May 26, 2017).
9           The District also protects various rights to water from the
10   Santa Ana River, which is the primary source of water in the basin.
11   See Orange County Water District, About,
12   http://www.ocwd.com/about/ (last visited May 26, 2017). Pursuant
13   to that obligation, the District may bring claims on behalf of the
14   public, that is, the water users in its service areas. Orange County
15   Water Dist. v. City of Riverside, 173 Cal. App. 2d 137, 167 (1959); see
16   also District Act § 2(9).4 The District also may bring claims on its own
17   behalf under the District Act to recover costs it paid, or will pay, to
18   remediate groundwater contamination. See District Act § 8. Finally,
19   the District is authorized to “act jointly with or cooperate with the
20   United States or any agency thereof, the State of California or any

     4
      Section 2(9) of the District Act provides:
             To carry out the purposes of this act, to commence, maintain, intervene in,
             defend, and compromise, in the name of the district, or otherwise, and to
             assume the costs and expenses of any and all actions and proceedings now
             or hereafter begun to prevent interference with water or water rights used
             or useful to lands within the district, or diminution of the quantity or
             pollution or contamination of the water supply of the district, or to prevent
             unlawful exportation of water from the district, or to prevent any
             interference with the water or water rights used or useful in the district
             which may endanger or damage the inhabitants, lands, or use of water in
             the district; provided, however, that the district shall not have power to
             intervene or take part in, or to pay costs or expenses of, actions or
             controversies between the owners of lands or water rights all of which are
             entirely within the boundaries of the district and which do not involve
             pollution or contamination of water within the district or exporting water
             outside of the district's boundaries or any threat thereof.
     Cal. Water Code App § 40-(2)9.

                                                   5
                                                               No. 15-3934-cv

1    agency thereof, [and] any county of the State of California . . . to
2    carry out the provisions and purposes of [the District Act].” Id. at
3    § 2(11).
4          B. The Orange County District Attorney
5            The OCDA represents the people of California. Its mission is
6    to “enhance public safety and welfare and create a sense of security
7    in the community through the vigorous enforcement of criminal and
8    civil laws in a just, honest, efficient and ethical manner.” See Mission
9    Statement, http://orangecountyda.org/office/mission.asp (last visited
10   May 26, 2017). With respect to water, the OCDA is charged with
11   protecting the people’s “primary interest in the conservation,
12   control, and utilization of the water resources of the state.” Joint
13   Appendix on Appeal (“App.”) 4246 (quoting Cal. Water Code
14   § 13000). Pursuant to this charge, the OCDA is authorized to sue on
15   behalf of the public “to protect the public from health and safety
16   hazards” and “prevent destruction of Orange County’s groundwater
17   resources and otherwise protect the environment.” App. 4240.
18   However, the OCDA may not prosecute a cause of action on behalf
19   of a different public agency, such as the District. See People v. Superior
20   Court, 224 Cal. App. 4th 33, 41–44 (Cal. Ct. App. 2014).
21         C.     Prior MTBE Litigation
22          In 1999, the OCDA sued BP and Shell in Orange County
23   Superior Court. Both suits asserted claims based on releases of
24   MTBE from underground storage tanks at BP and Shell gas stations
25   resulting in the contamination of adjacent soil and groundwater.
26   Both suits alleged that the MTBE releases constituted continuing and
27   permanent nuisances. See Cal. Civ. Code §§ 3479 and 3480. The
28   OCDA sought damages and injunctive relief requiring the
29   investigation, abatement and cleanup of contaminated areas as well
30   as steps to control the potential migration of MTBE plumes. The
31   OCDA’s complaints specifically alleged that it was not representing
32   any water district. See App. 4241, 4339.

                                         6
                                                           No. 15-3934-cv

1           Though not a party to the OCDA’s lawsuits, the District knew
2    about them. On July 14, 2000, the District’s general manager wrote to
3    the Orange County Director of Environmental Health regarding the
4    suits, stating:
5          The Orange County Water District has appreciated the
6          opportunity to provide technical assistance to your
7          department and to the Orange County District Attorney
8          to help in the enforcement of cleanup of MTBE and
9          other petroleum contaminants from leaking gasoline
10         storage tanks in Orange County.
11   App. 4306.
12          In 2002, the OCDA and BP agreed to settle. Accordingly, the
13   Orange County Superior Court entered a consent judgment settling
14   all of the OCDA’s claims against BP. The settlement constituted “a
15   release from any known or unknown past or present claims,
16   violations, or causes of action that were or could have been asserted
17   in the First Amended Complaint” with regard to MTBE
18   contamination. App. 4220. Pursuant to the terms of the settlement,
19   BP agreed to reimburse OCDA’s investigation costs and to fund and
20   implement a “plume delineation” program to combat MTBE
21   migration. BP also became subject to injunctive relief prohibiting it
22   from adding MTBE to gasoline produced in California.
23   Subsequently, in 2003, the District sued several oil companies,
24   including BP and Shell, for MTBE contamination.
25         In January 2005, Shell also agreed to settle with the OCDA and
26   a hearing was scheduled to consider the settlement. The District
27   appeared and opposed the settlement on the ground that its 2003
28   suit against Shell was pending. The District also requested the
29   opportunity to formally move to intervene. Shell opposed
30   intervention on the ground that the motion was untimely. The
31   OCDA also opposed intervention, contending that:

                                       7
                                                             No. 15-3934-cv

1          The Water District’s claims are common-law based; they
2          are damage based; they are independent of our claims;
3          and we have always taken the position, and the Court
4          has read in the document we have taken the position,
5          that there’s nothing we’re doing in this settlement that
6          has anything to do with precluding the Water District
7          from pursuing their case in Federal Court.
8    App. 4420. The court denied the District’s motion to intervene and
9    entered a consent judgment settling all claims against Shell. The
10   relief provided in the consent judgment with Shell was similar to
11   that provided in the consent judgment with BP, including
12   compensation to the OCDA for investigation costs, the funding of a
13   plume delineation program, and other injunctive relief.
14          Although, as noted, the OCDA was compensated for its
15   investigation costs and for the funding of a plume delineation
16   program, neither settlement awarded the District reimbursement for
17   its cleanup costs, or compensation for BP and Shell’s contamination
18   of the groundwater in the District, something the OCDA was not
19   authorized to recover. In its suit, the District alleges that following
20   the OCDA settlements, MTBE plumes have migrated from BP and
21   Shell’s stations toward the District’s water production wells. See
22   App. 4506.
23         D.     The District’s Lawsuit against BP and Shell
24          In the 2003 suit that was filed in California state court against
25   a number of oil companies, including BP and Shell, the District
26   alleged that it suffered injury as a consequence of being required to
27   expend funds “to investigate, clean up, abate, and/or remediate the
28   MTBE . . . contamination caused by Defendants.” App. 4365. The
29   District asserted common law claims, primarily sounding in public
30   nuisance, and a claim under the District Act “to recover
31   compensatory and all other damages, including all necessary funds
32   to investigate, monitor, prevent, abate, or contain any contamination

                                        8
                                                             No. 15-3934-cv

 1   of, or pollution to, groundwaters within the District from MTBE.”
 2   App. 4364. (In a subsequent filing, the District alleged that its
 3   remedial-action costs totaled over $3 million and estimated it would
 4   take “additional millions of dollars and decades before MTBE is
 5   cleaned up.” App. 4108.) The District also sought injunctive relief “to
 6   protect the quality of the common water supplies of the District; to
 7   prevent pollution or contamination of that water supply; and to
 8   assure that the responsible parties—and not the District nor the
 9   public—bear the expense.” App. 4364.
10         Defendants removed the case to federal court on grounds of
11   diversity and the case was transferred to the Southern District of
12   New York by the MDL Panel. After more than ten years of discovery
13   and pre-trial proceedings, BP and Shell moved for summary
14   judgment, contending that the District’s claims were barred by the
15   OCDA Consent Judgments under the doctrine of res judicata.
16          The district court agreed and granted the motion. Specifically,
17   the court concluded that the Consent Judgments constituted final
18   judgments on the merits; that the OCDA’s prior lawsuits and the
19   District’s lawsuit contained identical causes of action; and “[b]ecause
20   the District and the OCDA were both acting on behalf of the public
21   to enforce the same primary right, the parties are in privity.” In re
22   Methyl Tertiary Butyl Ether (MTBE) Prod. Liab. Litig., 46 F. Supp. 3d
23   440, 450 (S.D.N.Y. 2014), judgment entered sub nom. In re Methyl
24   Tertiary Butyl Ether (“Mtbe”) Prod. Liab. Litigation, No. 1358 (SAS),
25   2015 WL 7758530 (S.D.N.Y. Dec. 1, 2015). What makes this case a
26   close one is that both the OCDA and the District have broad
27   mandates under California law to protect the Orange County water
28   supply.
29          With no claims remaining against BP and Shell, the district
30   court remanded the District’s suit to the Central District of California
31   excluding BP and Shell as defendants. Before the remand order went
32   into effect, the District moved to include BP and Shell as defendants
33   in the order, contending that the district court’s res judicata

                                        9
                                                              No. 15-3934-cv

 1   r u l i n g did not bar the District’s continuing nuisance claims. The
2    district court denied that motion, holding that the language of the
3    Consent Judgments indicated an intention on behalf of the parties to
 4   resolve all such claims. The district court then entered a final
 5   judgment pursuant to Federal Rule of Civil Procedure 54(b)
 6   dismissing the District’s suit against BP and Shell.
 7          The District appeals the res judicata ruling and three prior
 8   orders of the district court against all defendants, including BP and
 9   Shell. Those orders granted summary judgment on the District’s
10   trespass claim; dismissed some of the District’s common-law claims
11   as time-barred, and denied the District’s partial summary judgment
12   motion seeking to recover its investigation costs under the District
13   Act. We disagree with the district court’s conclusion that the
14   District’s suit against BP and Shell is barred by res judicata.
15   Accordingly, we vacate the grant of summary judgment on res
16   judicata grounds and remand to the Southern District of New York
17   for further proceedings. Because, as discussed below, the district
18   court’s Rule 54(b) order did not adequately certify the prior three
19   orders, we lack jurisdiction to review them. Those orders can also be
20   addressed on remand, either in the Southern District of New York or
21   after any return of this action to the Central District of California.
22                               II. DISCUSSION
23          We review a district court’s grant of summary judgment de
24   novo. Coosemans Specialties, Inc. v. Gargiulo, 485 F.3d 701, 705 (2d Cir.
25   2007).
26         A.     Res judicata
27         The central issue in this appeal is whether the Consent
28   Judgments have res judicata effect. California law governs our res
29   judicata analysis. See Marrese v. Am. Acad. of Orthopaedic Surgeons, 470
30   U.S. 373, 380 (1985). Res judicata “gives certain conclusive effect to a
31   former judgment in subsequent litigation involving the same
32   controversy.” Boeken v. Philip Morris USA, Inc., 48 Cal. 4th 788, 797

                                        10
                                                              No. 15-3934-cv

 1   (2010) (citation and quotation marks omitted) (emphasis in original).
2    The doctrine “rests upon the ground that the party to be affected, or
3    some other with whom [it] is in privity, has litigated, or had an
4    opportunity to litigate the same matter in a former action in a court
5    of competent jurisdiction, and should not be permitted to litigate it
6    again to the harassment and vexation of [its] opponent.” Villacres v.
7    ABM Indus. Inc., 189 Cal. App. 4th 562, 575 (Cal. Ct. App. 2010)
8    (citation and quotation marks omitted).
9           In California, res judicata applies when three elements are
10   satisfied: “1) the issues decided in the prior adjudication are
11   identical with those presented in the later action; 2) there was a final
12   judgment on the merits in the prior action; and 3) the party against
13   whom the plea is raised was a party or was in privity with a party to
14   the prior adjudication.” Citizens for Open Access to Sand & Tide, Inc. v.
15   Seadrift Assoc. (“COAST”), 60 Cal. App. 4th 1053, 1065 (Cal. Ct. App.
16   1998) (citations omitted). We conclude that the third element is not
17   met because the current record does not support a finding of privity
18   between the OCDA and the District.
19         B.     Privity
20          Under California law, parties are in privity where “the
21   nonparty has an identity of interest with, and adequate
22   representation by, the party in the first action and the nonparty
23   should reasonably expect to be bound by the prior adjudication.”
24   City of Martinez v. Texaco Trading & Transp., Inc., 353 F.3d 758, 764
25   (9th Cir. 2003) (quoting Helfand v. Nat'l Union Fire Ins. Co., 10 Cal.
26   App. 4th 869, 902 (Cal. Ct. App. 1992)).
27           California law tracks the Supreme Court’s federal common
28   law definition of “adequacy” for purposes of the privity inquiry. See
29   Arias v. Superior Court, 46 Cal. 4th 969, 989 (2009). Thus, “[a] party’s
30   representation of a nonparty is ‘adequate’ . . . only if, at a minimum:
31   (1) The interests of the nonparty and her representative are aligned;
32   and (2) either the party understood herself to be acting in a

                                        11
                                                             No. 15-3934-cv

1    representative capacity or the original court took care to protect the
2    interests of the nonparty.” Taylor v. Sturgell, 553 U.S. 880, 900 (2008)
3    (citations omitted).
4           The district court found the OCDA and District to be in privity
5    because they are “so identified in interest with [each other] that
6    [they] represent[ ] the same legal right.” In re MTBE, 46 F. Supp. 3d
7    at 451-52 (quoting Lerner v. Los Angeles City Bd. of Educ., 59 Cal.2d
8    382, 398 (1963)). The district court compared the OCDA and
9    District’s complaints and concluded that the District sought to
10   enforce the same rights as the OCDA did in its prior suits, namely, to
11   “prevent destruction of Orange County’s groundwater resources
12   and otherwise protect the environment.” App. 4240.
13          The District argues that privity did not exist because its
14   interests are distinct from the public’s and that the OCDA was not
15   an adequate representative of the District in the prior suits. BP and
16   Shell, on the other hand, contend that the OCDA and the District are
17   agents of the same government and therefore in privity. We agree
18   with the District for the following reasons.
19          First, the record before us does not establish that the District
20   and the OCDA are agents of the same government. Indeed, as
21   acknowledged by the district court, this question is not
22   determinative. The relevant question for privity analysis is whether
23   “the interests of the District and the OCDA are aligned.” In re MTBE,
24   46 F. Supp. 3d at 451. Here, it is clear that, on the one hand, the
25   District and the OCDA have significant overlapping interests in
26   protecting Orange County’s groundwater resources and that the
27   harm that the suits address and the relief sought are similar. On the
28   other hand, it is clear that the District and the OCDA also have
29   asserted interests in this case that diverge.
30        In Orange County Water District v. Arnold Engineering Company,
31   196 Cal. App. 4th 1110 (Cal. Ct. App. 2011), the only case that
32   appears squarely to address the District’s privity with the California

                                        12
                                                             No. 15-3934-cv

1    public, the District sued various entities that owned, operated, or
2    leased industrial facilities for contaminating groundwater within the
3    District’s jurisdiction. The defendants moved to disqualify the
4    District’s counsel on the ground that California law prohibited a
5    public entity from paying a private attorney a contingency fee to
6    prosecute a public nuisance abatement action. The trial court denied
7    the motion, holding that the District was not pursuing the action on
8    the public’s behalf. Rather, the trial court found that the District
9    brought the action on its own behalf to recover remediation costs
10   and other damages it suffered distinct from any damages the public
11   suffered. The California Court of Appeals affirmed the trial court,
12   holding:
13         Although the Water District represents the water users
14         in its service area, and may bring litigation on their
15         behalf, the Water District did not bring this action in a
16         representative capacity or on its users' behalf. This
17         action does not seek to enforce any rights the Water
18         District's users may have in the groundwater or to
19         recover any damages its users may have suffered from
20         the contamination
21                                    ....
22         We conclude the trial court correctly determined the
23         Water District's lawsuit is essentially an action seeking
24         to recover the costs to investigate and remediate the
25         contaminated groundwater, not a public nuisance
26         abatement action prosecuted on the public's behalf.
27   Id. at 1125. While the issue of res judicata was not before the court,
28   the holding lends significant support to the District’s argument that
29   it does have interests distinct from those of the public or those of the
30   OCDA.
31          We next consider whether the District and the public’s distinct
32   interests are “aligned” for purposes of privity. First, there is no

                                        13
                                                              No. 15-3934-cv

1    dispute that the OCDA is not empowered to bring lawsuits on the
2    District’s behalf; or, conversely, that the District cannot do so on
3    behalf of the OCDA. Further, there is no indication from the record
4    that the OCDA shared in the District’s distinct right to recover its
5    costs to investigate and remediate groundwater contamination, a
6    right the District Act confers exclusively on the District. See District
7    Act § 8; People v. Superior Court, 224 Cal. App. 4th at 41–44. Indeed,
8    the district court itself found it compelling that the parties were not
9    aligned given their assurances to that effect. See In re MTBE, 46 F.
10   Supp. 3d at 452. The OCDA explicitly represented in its complaints
11   against BP and Shell that it did “not represent[ ] any water district or
12   other municipality,” App. 4241, 4339, and the Shell consent
13   judgment specifically states that it was “not intend[ed] . . . to legally
14   bar, estop, release, alter, or supersede any investigation, action,
15   order, request, demand or directive of . . . the Orange County Water
16   District,” App. 4403–04. Finally, if this were not dispositive, the
17   OCDA then stated on the record at the motion to intervene hearing
18   that its claims were distinct from those of the District and that its
19   lawsuit did not have “anything to do” with the District’s suit in
20   federal court. App. 4420. See, e.g., City of Martinez, 353 F.3d at 764
21   (concluding, under California law, that City not aligned with
22   interests of state agency where City was “informed that the
23   settlement would not preclude it from later raising its civil claims”).
24          Finally, we do not believe that the OCDA adequately
25   protected the District’s interests. The OCDA successfully opposed
26   the District’s attempt to intervene in the OCDA’s suits. Neither
27   settlement reimbursed the District’s clean up costs or afforded it
28   other compensation. The injunctive relief in the OCDA Consent
29   Judgments has expired and the District alleges that MTBE plumes
30   from BP and Shell stations continue to migrate toward the District’s
31   water production wells. These are interests unique to the District
32   that were not adjudicated in the prior suits. Their existence means
33   that the District’s interests are not sufficiently aligned with those of

                                        14
                                                              No. 15-3934-cv

1    the OCDA. And the record does not establish that in the prior suits
2    the trial court took special care to protect the District’s interests.
3    Taken together, these factors do not permit a finding of privity. See
4    City of Martinez, 353 F.3d at 764. (“As [the City’s] interests were not
5    adequately represented by the [state] and it was told not to
6    participate, it would be patently unfair to bar the City’s claims based
7    on res judicata.”).
8          C.     Prior district court orders
9           The District asks that we review the district court’s prior
10   orders dismissing some of its claims against all defendants. We lack
11   jurisdiction to do so.
12          Rule 54(b) requires the court to “expressly determine” the
13   claims to which it is directing a final judgment. Fed. R. Civ. P. 54(b).
14   Here, the district court’s Rule 54(b) certification was limited solely to
15   the claims that survived against BP and Shell at the time of the res
16   judicata decision. The surviving claims were so much of the
17   District’s claims as had not already been dismissed as to all
18   defendants based upon a failure (a) to comply with the statute of
19   limitations, (b) to state a claim in trespass or (c) to state a claim
20   under the District Act. While the district court did not explicitly limit
21   the arguments that the District might raise on appeal, it plainly did
22   not certify for appeal claims, common to all defendants, that had
23   previously been dismissed for independent reasons. Indeed, it stated
24   that the Rule 54(b) certification was granted as to the claims against
25   BP and Shell dismissed on grounds of res judicata, which it
26   concluded were the only ones that were properly “the focus of [an]
27   appeal” because they were “discrete and separable issues that are
28   appropriated decided by the circuit on a 54(b) certification.” In re
29   MTBE, 1358 (SAS), 2015 WL 7758530, at *4 (S.D.N.Y. Dec. 1, 2015); see
30   generally Novick v. AXA Network LLC, 642 F.3d 304, 311 (2d Cir. 2011)
31   (“[A] district court generally shall not grant a Rule 54(b) certification
32   if the same or closely related issues remain to be litigated.” (internal
33   quotation marks omitted)). Because the previously dismissed claims

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                                                           No. 15-3934-cv

 1   were not mentioned, and thus not adequately certified by the district
2    court’s Rule 54(b) order, we may not review them here. See id. at 314
3    (explaining that Rule 54(b) certification that fails to “expressly
4    determine” claim for appeal or provide “reasoned, even if brief,
5    explanation” to that effect “is insufficient to confer appellate
6    jurisdiction” (internal quotation marks and citations omitted)).
7                              CONCLUSION
8           For the foregoing reasons, we vacate the district court’s grant
9    of summary judgment on res judicata grounds and remand the
10   District’s action against BP and Shell to the Southern District of New
11   York for further proceedings consistent with this opinion. See 28
12   U.S.C. § 1407(a).

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