Esso Standard Oil Co. v. Rodríguez-Pérez , 455 F.3d 1 ( 2006 )

United States Court of Appeals
For the First Circuit
No. 05-1722
ESSO STANDARD OIL COMPANY (Puerto Rico),
a Puerto Rico Corporation,
Plaintiff, Appellee,
v.
CARLOS E. RODRÍGUEZ-PÉREZ; CARMEN ORTIZ-LOPEZ;
CONJUGAL PARTNERSHIP RODRÍGUEZ-ORTIZ,
Defendants, Third-Party Plaintiffs, Appellants,
CARLOS M. BELGODERE-PAMIES; JANET ROE;
CONJUGAL PARTNERSHIP BELGODERE-ROE,
Defendants,
ESTATE OF PAGÁN-PAGÁN,
Third-Party Defendant, Appellee.
ON APPEAL FROM A JUDGMENT OF THE UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO
[Hon. Justo Arenas, Chief Magistrate Judge]
Before
Lipez and Howard, Circuit Judges,
and Bowman,* Senior Circuit Judge.
Héctor M. Alvarado-Tizol, for appellant.
David P. Freeman, with whom Alexandra Rivera-Saez and O'Neill
& Borges were on brief, for appellees.
June 14, 2006
*
Of the Eighth Circuit, sitting by designation.
LIPEZ, Circuit Judge. Esso Standard Oil Company brought
suit under the Comprehensive Environmental Response, Compensation,
and Liability Act ("CERCLA"), and the Resource Conservation and
Recovery Act ("RCRA") against Carlos Rodríguez-Pérez, his wife
Carmen Ortiz-Lopez, and their conjugal partnership; and Carlos M.
Belgodere-Pamies, his wife Janet Roe, and their conjugal
partnership (collectively, "Defendants"). The defendants filed
state law counterclaims. The parties consented to proceed before
a U.S. magistrate judge. On summary judgment, the magistrate judge
dismissed those counterclaims with prejudice.
Subsequently, with Esso's claims still pending, the
United States Supreme Court decided Cooper Industries, Inc. v.
Aviall Services, Inc., 543 U.S. 157 (2004). There, the Court held
that a CERCLA contribution claim, similar to the one asserted in
this case by ESSO, was subject to certain statutory requirements.
There is no dispute that Esso did not meet these requirements and,
therefore, could not maintain its CERCLA claim against the
defendants. The magistrate judge dismissed the CERCLA claim
accordingly.
The defendants now challenge the magistrate judge's
dismissal of their state law counterclaims, claiming that, in the
aftermath of Cooper Industries, there was never subject matter
jurisdiction over them. We affirm.
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I.
A. Factual Background
Esso primarily sought two forms of relief: (1)
contribution under § 113(f) of CERCLA, 42 U.S.C. § 9613(f); and (2)
injunctive relief under § 7002(a)(1)(B) of the Solid Waste Disposal
Act, as amended by RCRA, 42 U.S.C. § 6972, for the response costs
that Esso incurred in remedying environmental contamination at a
gasoline service station located in La Vega Ward, Barranquitas,
Puerto Rico (the "Station"). Operated as a retail service station
from the mid-1930's until August 1998 when it was closed, the
Station sold gasoline, diesel fuel, automobile parts, and motor
oil. The Station's operators performed oil changes, greasing
operations, used battery recharging and replacement, mechanical
work, and the washing of vehicles on the premises. In 1971,
Rodriguez took over control of the Station's day-to-day operations
from his father. In 1979, Rodriguez leased the station from José
Domingo Pagán-Pagán. Rodriguez managed and controlled the Station
from 1979 until its closure in August 1998.
There was significant disposal of hazardous substances on
the premises during the Station's operation under Rodriguez's
management. Motor oil drained from automobiles was allowed to flow
into the Piñones River, a body of water located behind the station.
Similarly, used oil filters were found buried in large quantities
in the northern part of the Station. Gasoline and diesel used to
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flush dirt and grease from vehicles were rinsed onto the ground
and into the river using a pressure hose. As a result, the
premises became contaminated with a number of hazardous substances
including lead, chromium, benzene, ethylbenzene, toluene, and
xylene.
Belgodere began his involvement at the station in 1993.
In 1994, he conducted reviews of soil conditions and inventory
records in connection with a prior civil action brought by
Rodriguez against Esso. In 1995, Belgodere entered into a formal
agreement with Rodriguez to act as the latter's environmental
consultant and expert witness.
Under CERCLA, Esso sought contribution from Defendants
for the cost of cleaning up the hazardous substances on the
premises of the Station. Under RCRA, Esso sought an injunction
ordering Defendants, among other things, "to investigate, abate and
remediate any endangerment posed by the environmental conditions"
at the Station.
B. Procedural Background
The proceedings, as they are relevant to this appeal,
unfolded as follows:
-- After Esso filed its Second Amended Complaint, Defendants filed
counterclaims grounded in state law claiming: (1) lost income; (2)
lost future income; (3) lost gasoline; (4) slander; (5) attorney's
fees; (6) mental anguish; and (7) injunctive relief.
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-- Both parties moved for summary judgment on the issue of
liability for contribution under CERCLA. Esso also moved for
summary judgment on the state law counterclaims.
-- The magistrate judge issued an opinion and order on the pending
summary judgment motions. The magistrate judge granted summary
judgment in favor of Esso on Defendants' counterclaims, concluding
that the state law counterclaims were time-barred. The magistrate
judge also ruled in favor of Esso on the CERCLA liability claim.
-- Defendants filed a motion for reconsideration, requesting the
magistrate judge to reconsider his summary judgment decision.
-- While the reconsideration motion was pending, Esso submitted an
informative motion advising the magistrate judge of the Supreme
Court's decision in Cooper Industries. As a result of Cooper
Industries, Esso could not maintain its contribution claim pursuant
to § 113(f)(1) of CERCLA.
-- The magistrate judge denied Defendants' motion for
reconsideration. The magistrate judge contemporaneously issued:
(1) a partial final judgment dismissing Defendants' counterclaims
with prejudice pursuant to Fed. R. Civ. P. 54(b) (which permits a
district court to enter final judgments as to one or more but fewer
than all claims in a case involving multiple claims and/or
parties); and (2) an order requesting Esso to show cause as to the
effect of Cooper Industries on its CERCLA claim.
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-- In response to the magistrate judge's request to show cause,
Esso moved for voluntary dismissal without prejudice of both its
CERCLA and RCRA claims.
-- The magistrate judge entered an opinion and order dismissing
Esso's CERCLA claim with prejudice, based on the Cooper Industries
decision. The court also dismissed Esso's RCRA claim without
prejudice.
-- Defendants filed a motion to vacate judgment under Fed. R.
Civ. P. 60(b)(4) and 41(a)(2). Rule 60(b)(4) permits a district
court to relieve a party from a final judgment, order, or
proceeding if the judgement is void. Rule 41(a)(2) establishes a
framework for district courts to enter voluntary dismissals.
-- Esso filed a motion to amend or alter judgment pursuant to
Rule 59(e), requesting that the dismissal of its CERCLA claim be
without prejudice. Esso argued that because its CERCLA claim was
a contribution claim, the claim's dismissal should be without
prejudice in order to avoid res judicata and allow Esso to renew
the contribution claim on grounds other than § 113(f)(1) of CERCLA.
-- The magistrate judge issued a final order and opinion denying
Defendants' motion to vacate judgment. The magistrate judge
explained that while there never was subject matter jurisdiction
over Esso's CERCLA claim, there was jurisdiction over the case at
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all times because of Esso's RCRA claim.1 Therefore, it had
supplemental jurisdiction over Defendants' state counterclaims when
it ruled that those claims were time-barred.
-- In its final amended judgment, the magistrate judge, persuaded
by the reasoning in Esso's motion to alter or amend judgment,
dismissed without prejudice both Esso's CERCLA and RCRA claims.
Previously, he had dismissed the CERCLA claim with prejudice.
C. Standard of Review
We review a district court's ultimate conclusion on the
existence vel non of subject matter jurisdiction de novo because it
is a question of law. Skwira v. United States, 344 F.3d 64, 72
(1st Cir. 2003) (citing Valentín v. Hosp. Bella Vista, 254 F.3d
358, 365 (1st Cir. 2001)). Review of a decision made pursuant to
Rule 60(b)(4) is also de novo. M & K Welding, Inc. v. Leasing
Partners, LLC, 386 F.3d 361, 365 (1st Cir. 2004) ("Although orders
on some Rule 60(b) motions, such as those asserting mistake or
excusable neglect under subsection (b)(1), ordinarily are
reviewable only for abuse of discretion, a decision whether or not
a judgment is void under 60(b)(4) allows no room for discretion.
The review is de novo.").
1
We are not called upon to decide whether the CERCLA claim
should have been dismissed for lack of subject matter jurisdiction
under Fed. R. Civ. P. 12(b)(1), as the magistrate judge ruled, or
for failure to state a claim under Rule 12(b)(6).
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II.
A. Cooper Industries
There is no dispute that Esso's CERCLA claim was not
properly before the magistrate judge. In Cooper Industries, the
Supreme Court clarified the circumstances under which a private
party may seek contribution under § 113(f)(1) of CERCLA. Section
113(f)(1), pursuant to which Esso brought its contribution claim
against Defendants, "allows persons who have undertaken efforts to
clean up properties contaminated by hazardous substances to seek
contribution from other parties liable under CERCLA." Cooper
Indus., 543 U.S. at 160. Section 113(f)(1) further specifies that
a party may obtain contribution "during or following any civil
action" under CERCLA § 106 or § 107(a).
The issue the Court decided was "whether a private party
who has not been sued under § 106 or § 107(a) [of CERCLA] may
nevertheless obtain contribution under § 113(f)(1) from other
liable parties." 543 U.S. at 160-61. The Court held that such a
party may not. Id. at 161. Because, like the plaintiff in Cooper
Industries, Esso had not been sued under § 106 or § 107(a) of
CERCLA, it could not maintain its § 113(f)(1) CERCLA claim and the
magistrate judge properly dismissed it.
B. Esso's RCRA claim
Defendants argue that Esso's RCRA claim, like its CERCLA
claim, was not properly before the magistrate judge. As a result,
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because there was no pending question of federal law, there was no
supplemental jurisdiction over Defendants' state law counterclaims,
and they could not have been dismissed with prejudice. See 28
U.S.C. § 1367(a) ("[I]n any civil action of which the district
courts have original jurisdiction, the district courts shall have
supplemental jurisdiction over all other claims that are so related
to claims in the action . . . that they form part of the same case
or controversy under Article III."); BIW Deceived v. Local S6,
Indus. Union of Marine and Shipbuilding Workers of Am., 132 F.3d
824, 833 (1st Cir. 1997) ("A federal court that exercises federal
question jurisdiction over a single claim may also assert
supplemental jurisdiction over all state-law claims that arise from
the same nucleus of operative facts.").
Defendants base their argument on 42 U.S.C.
§ 6972(b)(1)(B), which details one of the limitations on filing a
citizen suit2 pursuant to RCRA. It states that a citizen suit may
not be commenced "if the Administrator or State has commenced and
is diligently prosecuting a civil or criminal action in a court of
the United States or a State to require compliance with such
permit, standard, regulation, condition, requirement, prohibition,
2
A citizen suit is "[a]n action under a statute giving
citizens the right to sue violators of the law . . . and to seek
injunctive relief and penalties." Black's Law Dictionary, 8th ed.
(2004). Typically, citizen suits, where they exist, function as a
form of statutory enforcement in addition to, or in conjunction
with, enforcement by an administrative agency or other governmental
entity.
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or order." However, the plain language of the statute undermines
Defendants' position. While it is true that the Puerto Rico
Environmental Quality Board is prosecuting an administrative case
involving the Station, the statutory provision precludes a citizen
suit under RCRA only if the suit is "a civil or criminal action in
a court of the United States or a State." An administrative
proceeding does not take place in a "court of the United States or
a State." The RCRA claim was properly before the magistrate judge,
and there was supplemental jurisdiction over the state law
counterclaims.
C. Abstention
Defendants also assert that the magistrate judge should
have abstained from hearing and determining their state law
counterclaims. Defendants raised this argument for the first time
on March 14, 2005 in a reply to an opposition to one of their
motions for reconsideration. This demand for abstention came more
than three-and-a-half years after Esso's RCRA claim was first filed
in district court, and, more importantly, after Defendants had
litigated the state law counterclaims on the merits, culminating in
the magistrate judge's summary judgment ruling on those
counterclaims. Defendants did not raise their abstention argument
in a timely fashion, and we will not entertain it here. See
Marshall v. Marshall, 126 S.Ct. 1735, 1746 n.3 (2006) (upholding a
bankruptcy court's decision to reject a motion for mandatory
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abstention as untimely because the motion was filed eight months
after adversary proceeding had begun).
D. The merits
In their appellate reply brief, Defendants invite us to
review the merits of the magistrate judge's summary judgment
decision on their state law counterclaims. Defendants contend that
the magistrate judge was in error because their state law
counterclaims were not time-barred. In the proceedings below,
Defendants challenged the magistrate judge's dismissal of their
state law counterclaims solely on jurisdictional grounds; they did
not challenge the merits of the magistrate judge's decision. We do
not address any of these merits arguments because they were not
properly raised by Defendants before the magistrate judge. See
Boston Beer Co. Ltd. P'ship v. Slesar Bros. Brewing Co., Inc., 9
F.3d 175, 180 (1st Cir. 1993)("The law in this circuit is
crystalline: a litigant's failure to explicitly raise an issue
before the district court forecloses that party from raising the
issue for the first time on appeal."). Additionally, arguments
made on appeal normally cannot be made for the first time in a
reply brief. Aulson v. Blanchard, 83 F.3d 1, 7 (1st Cir. 1996)
("[R]elief from an appellate court, requested for the first time in
a reply brief, is ordinarily denied as a matter of course.").
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E. Rule 41(a)(2)
Finally, Defendants contend that the magistrate judge
could not dismiss the state law counterclaims with prejudice, while
at the same time dismissing Esso's CERCLA and RCRA claims without
prejudice. Defendants base this argument on Fed. R. Civ. P.
41(a)(2). Rule 41(a)(2), which provides for voluntary dismissals,
states in relevant part that:
[i]f a counterclaim has been pleaded by a defendant prior
to the service upon the defendant of the plaintiff's
motion to dismiss, the action shall not be dismissed
against the defendant's objection unless the counterclaim
can remain pending for independent adjudication by the
court. Unless otherwise specified in the order, a
dismissal under this paragraph is without prejudice.
This language does not support Defendants' position.
Esso did not move for voluntary dismissal of its CERCLA and RCRA
claims until after the magistrate judge had granted partial summary
judgment on Defendants' counterclaims. Because the state law
counterclaims were no longer pending at the time of the magistrate
judge's voluntary dismissal of Esso's federal claims, Rule 41(a)(2)
does not apply.
Affirmed.
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