Mallinckrodt v. USA ( 2006 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 05-1598
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United States of America, *
*
Plaintiff - Appellee, *
*
v. * Appeal from the United States
* District Court for the
Metropolitan St. Louis Sewer District, * Eastern District of Missouri.
*
Defendant - Appellee, *
*
v. *
*
Mallinckrodt, Inc., *
*
Intervenor - Appellant. *
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Submitted: November 16, 2005
Filed: March 6, 2006
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Before SMITH, HEANEY, and BENTON, Circuit Judges.
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SMITH, Circuit Judge.
Mallinckrodt, Inc. intervened in a Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") contribution action between the
Metropolitan St. Louis Sewer District ("MSD") and the Environmental Protection
Agency ("EPA"). Mallinckrodt opposed the entry of a Consent Decree between the
parties. Over Mallinckrodt's objections, the district court1 entered the Consent Decree.
Thereafter, Mallinckrodt filed motions for reconsideration based on newly discovered
evidence pursuant to Federal Rules of Civil Procedure 59(e) and 60(b)(3). The district
court denied these motions. For the reasons stated below, we affirm.
I. Background
CERCLA grants the Executive Branch substantial authority and broad
discretion to provide for the cleanup of hazardous-substance sites. The government,
however, does not bear the complete cost of site cleanup. CERCLA provides that
monies spent by federal and state governments to clean up hazardous substances will,
whenever possible, be recovered from responsible parties, including owners and
operators of facilities where hazardous substances are disposed.
The United States spent $9,237,244.30 cleaning up the contamination of
hazardous substances at the Great Lakes Container Corporation Superfund Site ("the
Site") in St. Louis, Missouri. From 1952 to 1986, a facility that reconditioned used
steel drums operated on the Site. During this period, the Site became contaminated
with various hazardous substances. The larger portion of this Site consists of a 10-
acre, roughly rectangular, parcel on which the drum reclamation facility was located.
Mallinckrodt operated a drum recycling plant there between 1970 and 1976. Prior to
that time, Mallinckrodt's corporate predecessor ran the plant. The remainder of the
Site, just west of the former facility, is a one-acre parcel that was owned by the St.
Louis Metropolitan Bridge Terminal Railway Company until MSD bought the
property for expansion of its secondary treatment facilities. However, MSD never
built additional facilities, and its property remained vacant.
1
The Honorable E. Richard Webber, United States District Judge for the Eastern
District of Missouri.
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In early 2001, the EPA invited MSD and Mallinckrodt to negotiate a settlement
on the clean up costs. The EPA initially assigned a share of approximately 4% of the
total cost to MSD for clean up of the Site. The EPA concluded that MSD was most
likely a "passive landowner" that neither participated in nor profited from the
contamination of its property by hazardous substances, even though approximately
26% of the contaminated soil that was removed from the Site, by volume, came from
the one-acre tract owned by MSD. After extensive negotiations, MSD and the EPA
negotiated a Consent Decree, which required MSD to reimburse the United States
$230,000 in response costs. This reduced MSD's share of the clean up costs to about
2.52% of the total.
EPA and MSD filed this Consent Decree with the district court, and a thirty-day
public comment period ensued. During this period, the United States received
comments from Mallinckrodt, a defendant in a companion CERCLA case involving
the same Site, arguing that the amount to be paid by MSD was too small and that
Mallinckrodt and other potentially responsible parties ("PRPs") would be unfairly
saddled with the remainder of the costs. Since CERCLA provides for joint and several
liability for all PRPs, any reduction in MSD's liability could increase Mallinckrodt's.
Mallinckrodt formally intervened in the district court case between MSD and the EPA
and filed its opposition to the United States' motion to enter the Consent Decree. After
considering the parties' briefing and argument, the district court entered the Consent
Decree.
After entry of the Consent Decree, Mallinckrodt timely filed a Fed. R. Civ. P.
59(e) motion to alter or amend the judgment, alleging the discovery of new evidence.
Mallinckrodt claimed that an expert report prepared in its companion CERCLA case,
which interpreted aerial photographs of the Site, established that MSD actively
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participated in the transportation and disposal of wastes on its part of the Site.2
Mallinckrodt also submitted three documents it obtained from the EPA in support of
this claim. The district court denied Mallinckrodt's motion, stating that the evidence
was not "new."
After the district court denied its Rule 59(e) motion, Mallinckrodt filed a
motion pursuant to Rule 60(b)(3), asking the district court to reconsider. Mallinckrodt
claimed that counsel for MSD and the EPA made fraudulent statements at the hearing
on the Consent Decree. The district court denied Mallinckrodt's Rule 60(b)(3) motion.
Mallinckrodt filed a timely notice of appeal of the district court's entry of the Consent
Decree and its rulings on the post-judgment motions.
II. Discussion
On appeal, Mallinckrodt contends that the district court granted the Consent
Decree settlement because MSD falsely represented itself as a passive owner, and this
misrepresentation prevented Mallinckrodt from fairly presenting its objections. In
addition, Mallinckrodt suggests that newly discovered evidence establishes that MSD
actually materially contributed to the contamination, and this new evidence is both
material and outcome determinative. Specifically, Mallinckrodt argues that the expert
report submitted after the Consent Decree was entered, prepared by Wayne Grip, an
expert in interpreting aerial photographs, established that MSD was a substantial
contributor to the contamination of the Site. Therefore, Mallinckrodt contends that the
district court abused its discretion in denying its post-judgment motions for relief. We
disagree and affirm.
2
Mallinckrodt's expert report, prepared by Wayne Grip, suggests that: (1) MSD
was responsible for the majority of the buried drums on the Site; (2) MSD was also
responsible for uncovering and then re-burying some of those drums; and (3) MSD
was directly responsible for depositing toxic sludge ash on the property and on a piece
of property directly to the south.
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A. Rule 59(e) Motion3
A district court has broad discretion in determining whether to grant or deny a
motion to alter or amend judgment pursuant to Rule 59(e), and this court will not
reverse absent a clear abuse of discretion. Innovative Home Health Care v. P.T.-O.T.
Assoc. of the Black Hills, 141 F.3d 1284, 1286 (8th Cir. 1998). It should be noted that
Rule 59(e) motions serve the limited function of correcting "'manifest errors of law
or fact or to present newly discovered evidence.'" Id. (quoting Hagerman v. Yukon
Energy Corp., 839 F.2d 407, 414 (8th Cir. 1988)). "Such motions cannot be used to
introduce new evidence, tender new legal theories, or raise arguments which could
have been offered or raised prior to entry of judgment." Id. To prevail on a Rule 59(e)
motion, the movant must show that (1) the evidence was discovered after trial; (2) the
movant exercised due diligence to discover the evidence before the end of trial; (3) the
evidence is material and not merely cumulative or impeaching; and (4) a new trial
considering the evidence would probably produce a different result. See U.S. Xpress
Enter. Inc. v. J.B. Hunt Transp., Inc., 320 F.3d 809, 815 (8th Cir. 2003) (discussing
factors one must show to prevail under Rule 60(b)(2), which are the same under Rule
59(e)).
Mallinckrodt argues that the district court should have granted its motion for
a new trial pursuant to Rule 59(e) based on newly discovered evidence, namely, the
newly acquired Grip analysis of MSD's activities on the Site. First, Mallinckrodt states
that it did not discover the evidence that MSD materially contributed to the
contamination of the Site until 11 days after the judgment, when Grip completed his
3
Rule 59(e) and Rule 60(b)(2) are analyzed identically. Rule 59(e) states in
relevant part, "[a]ny motion to alter or amend a judgment shall be filed no later that
10 days after entry of judgment." Rule 60(b)(2) states in relevant part, "[o]n motion
and upon such terms as are just, the court may relieve a party or a party's legal
representative from a final judgment, order, or proceeding for the following reasons:
. . . (2) newly discovered evidence which by due diligence could not have been
discovered in time to move for a new trial under Rule 59(b)."
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expert report. Second, Mallinckrodt avers that it exercised due diligence to discover
the evidence. Mallinckrodt asserts that the focus of the hearing on the Consent Decree
was whether MSD knowingly allowed others to contaminate its property—not
whether MSD itself had materially contributed to the contamination. The district court
found that the documents and photographs underlying the Grip report were in
Mallinckrodt's possession or readily available prior to the Consent Decree.
Mallinckrodt responds by stating that this finding ignores the context in which
Mallinckrodt acted. Mallinckrodt argues that it had no reason to doubt the EPA and
MSD's representations that MSD had not contributed to the contamination.
Consequently, Mallinckrodt claims that it had no reason to look for this evidence.
Third, Mallinckrodt suggests that this evidence is material, not cumulative,
because it is the only evidence on the topic of MSD's contribution to the Site
contamination. For that same reason, Mallinckrodt states that a new trial considering
this new evidence would produce a different result. Under CERCLA, the settlement
is to reflect the relationship of the settlement figure to the proportion of the settling
party's waste. Based on its purported new evidence, Mallinckrodt claims MSD's 2.5%
settlement is unfair and contrary to the aims of CERCLA. It further avers that it has
offered far more than speculation, and for that reason, the district court abused its
discretion in denying its Rule 59(e) motion.
The appellees respond by stating that Mallinckrodt has failed to show any of the
four elements necessary to prevail under Rule 59(e). First, the Grip report was created,
not discovered, after the district court entered judgment. Second, Mallinckrodt failed
to complete the Grip report in time to present it during the Consent Decree hearing
and thus did not exercise due diligence. Third, the Grip report is highly conclusory,
and at best, cumulative. Lastly, the district court's consideration and rejection of the
Grip report shows that even if the report had been timely presented, it would not have
prevented approval of the Consent Decree.
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We agree with the appellees. After reviewing the opinion of the district court,
we find no abuse of discretion in denying Mallinckrodt's Rule 59(e) motion. In
support of its ruling, the district court stated the following:
This Court finds that Mallinckrodt has presented no new evidence. The
documents relied on by Mallinckrodt and several of the aerial
photographs relied on by Mr. Grip in his report were in Mallinckrodt's
possession or readily available for months prior to this Court entering the
Consent Decree. Arguing a new application of these facts under a new
strategic theory cannot be considered "new evidence." . . . Mr. Grip's
analysis does not raise new facts; instead, it raises only new opinions and
suspicions about the extent to which MSD contributed to the
contamination at the GLCC Site. Because Mallickrodt fails to provide
"new evidence" as required under FRCP 60(b)(2), this Court finds that
Mallinckrodt's motion should be denied.
This court has consistently held that Rule 59(e) motions cannot be used to introduce
new evidence, tender new legal theories, or raise arguments which could have been
offered or raised prior to the entry of judgment. See Innovative Home Health Care,
141 F.3d at 1286 (8th Cir. 1998); Garner v. Arvin Indus. Inc./Arvin North Am.
Automotive, 77 F.3d 255, 258–59 (8th Cir. 1996). In this case, Mallinckrodt has not
advanced a persuasive explanation for its failure to obtain or produce this "new"
evidence before the Consent Decree hearing. All information used in formulating the
Grip report was available to Mallinckrodt well before the Consent Decree hearing. In
fact, the aerial photographs analyzed by Mr. Grip were obtained through a commercial
vendor, and the documents from the EPA, used by Mallinckrodt, were given to
Mallinckrodt 17 months before the Consent Decree hearing.
Because this evidence was available to Mallinckrodt, it should have been
presented prior to the entry of judgment. The Grip report is merely a newly created
opinion based on facts known to or accessible by Mallinckrodt at the time of the
Consent Decree hearing and cannot warrant relief under Rule 59(e). Mallinckrodt
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controlled the timing of the production and proffer of its own expert's opinion. Thus,
the district court did not abuse its discretion in refusing to consider Mallinckrodt's new
evidence. See Crowell v. Campbell Soup Co., 264 F.3d 756, 764 (8th Cir. 2001)
(holding that the allegedly new evidence appeared to come from public records and
not from any misrepresentation of the appellee, therefore, the district court did not
abuse it discretion in denying the appellant's motion for reconsideration under Rule
59(e)); Liberty Mutual Ins. Co. v. FAG Bearings Corp., 153 F.3d 919, 924 (8th Cir.
1998) (holding that the appellant failed to show that it exercised due diligence to
discover the new evidence and failed to show why such evidence could not have been
discovered earlier).
B. Rule 60(b)(3) Motion4
To prevail on a Rule 60(b)(3) motion, the movant must show, "'with clear and
convincing evidence, that the opposing party engaged in a fraud or misrepresentation
that prevented the movant from fully and fairly presenting its case.'" Harley v. Zoesch,
413 F.3d 866, 870 (8th Cir. 2005) (quoting Atkinson v. Prudential Property Co., Inc.,
43 F.3d 367, 372–73 (8th Cir. 1994)). "It is within the trial court's discretion to
determine whether the Rule 60(b)(3) test has been met, and on review the only inquiry
is whether there has been an abuse of discretion." E.F. Hutton & Co., Inc. v. Berns,
757 F.2d 215, 217 (8th Cir. 1985).
Mallinckrodt states that shortly after the entry of the Consent Decree, it
unearthed evidence not previously available that clearly established that MSD played
a principal role in burying the drums on the Site and adding to the contamination. In
4
Rule 60(b)(3) states in relevant part, "[o]n motion and upon such terms as are
just, the court may relieve a party or a party's legal representative from a final
judgment, order, or proceeding for the following reasons: . . . (3) fraud (whether
heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct
of an adverse party . . ."
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support of its Rule 60(b)(3) motion, first, Mallinckrodt argues that counsel for both
MSD and the EPA misrepresented MSD's status as a purely passive owner. Based
upon the Grip report, Mallinckrodt asserts that it is clear that the statements made by
MSD and the EPA were erroneous. Although Mallinckrodt does not allege that the
appellees made any intentional misrepresentations, Mallinckrodt urges that Rule
60(b)(3) applies to unintentional misrepresentations, as well as intentional. Thus,
Mallinckrodt contends that the district court erred in finding that it failed to show that
the EPA and MSD intentionally misled the Court.
Second, Mallinckrodt argues that the EPA's and MSD's misrepresentations
prevented it from fully and fairly presenting its objections to the Consent Decree.
Because no discovery was permitted, Mallinckrodt claims that it was even more
critical that counsel for the EPA and MSD make absolutely certain that MSD had not
materially contributed to the contamination before repeatedly representing such to the
district court. Forced to rely on the EPA's and MSD's assertions, Mallinckrodt
contends that it was prevented from fully and fairly presenting its objections to the
Consent Decree, and, as a result, the district court erred in denying it relief pursuant
to Rule 60(b)(3).
We find no abuse of discretion in the district court's denial of Mallinckrodt's
Rule 60(b)(3) motion. Under Rule 60(b)(3), Mallinckrodt was required to show that
the appellees engaged in fraud or misrepresentation, and that it was prevented from
fully and fairly litigating this case. Mallinckrodt has shown neither. The district court
stated the following in its Rule 60(b)(3) opinion:
Mr. Grip's analysis of the aerial photographs presented in support of this
motion by Mallinckrodt does not raise new facts; instead it raises only
new opinions and suspicions about the extent to which MSD contributed
to the contamination at the Great Lakes Corporation Site. Because
Mallinckrodt is unable to even prove the falsity of the statements made
by the Environmental Protection Agency and the Metropolitan St. Louis
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Sewer District with clear and convincing evidence, much less provide
evidence that the EPA and MSD were intentionally misleading the Court,
Mallinckrodt has not convinced this Court that it was prevented from
fully and fairly presenting its case. This Court holds that Mallickrodt has
not met its burden under FRCP 60(b)(3), and its motion should be
denied.
We agree. "This is not a case in which the [appellees] withheld information that they
alone possessed. A copy of the [evidence] was in [Mallinckrodt's] possession the
entire time. . . . [it] had a fair opportunity to discover [the evidence] simply by going
through [its] files." Atkinson, 43 F.3d at 373. Mallinckrodt presented no evidence to
support its assertion that the appellees withheld evidence, giving rise to a claim of
fraud or misrepresentation. See Harley, 413 F.3d at 871 (holding that the participant
in this case did not present the kind of clear and convincing evidence of
misrepresentation necessary to prevail on a Rule 60(b)(3) motion).
Moreover, Mallinckrodt's claim that it relied on the appellees' assertion that
MSD was a "passive landowner" is completely unconvincing. Mallinckrodt intervened
in this case and presented evidence that MSD's allocation of the clean up costs was
disproportionate. Mallinckrodt's expert report would have been relevant in advancing
its position during the Consent Decree hearing and could have been prepared and
presented at that time. As such, the district court did not err in refusing to give
Mallinckrodt a second bite at the apple. Mallinckrodt was given a full and fair
opportunity to litigate this case in the first instance and cannot blame deficiencies in
presenting its case on the appellees. Therefore, the district court did not abuse its
discretion in denying Mallinckrodt's Rule 60(b)(3) motion.
III. Conclusion
For the reasons stated above, the district court's rulings on Mallinckrodt's post-
judgment motions are affirmed.
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