United States v. Alsol Corp.

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 14-3253
_____________
UNITED STATES OF AMERICA,
v.
ALSOL CORPORATION; SB BUILDING ASSOCIATES, LIMITED PARTNERSHIP;
SB BUILDING GP, L.L.C.; UNITED STATES LAND RESOURCES, L.P.;
UNITED STATES REALTY RESOURCES, INC.; LAWRENCE S. BERGER
SB Building GP, L.L.C.; United States Land Resources, L.P.;
United States Realty Resources, Inc.; Lawrence S. Berger,
Appellants
On Appeal from the United States District Court
for the District of New Jersey
(District Court No.: 2-09-cv-03026)
District Judge: Honorable Jose L. Linares
Submitted under Third Circuit LAR 34.1(a)
On June 1, 2015
Before: RENDELL, HARDIMAN, and VANASKIE, Circuit Judges
(Filed: August 7, 2015)
O P I N I O N*
RENDELL, Circuit Judge:
Appellants SB Building GP, L.L.C., United States Land Resources, L.P., United
States Realty Resources, Inc., and Lawrence S. Berger (collectively, “Non-Debtor
Defendants”) appeal from the District Court’s Opinion and Order entered May 9, 2014,
which granted the Government’s motion to enforce a consent decree and denied Non-
Debtor Defendants’ motion to modify the consent decree. Non-Debtor Defendants raise
two related issues on appeal: (1) whether the District Court erred in refusing to modify
the consent decree pursuant to Rule 60(b)(5) of the Federal Rules of Civil Procedure; and
(2) whether the District Court erred in refusing to modify the consent decree pursuant to
Rule 60(b)(6) of the Federal Rules of Civil Procedure. We will affirm.
I. Background
Section 104 of the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (“CERCLA”), 42 U.S.C. § 9604, empowers the Government to
access facilities containing hazardous substances and allows the Government to
commence a civil action if an entity refuses to grant access to such a facility. 42 U.S.C.
§ 9604(e). Here, the Government was denied permission to access and take over the
environmental cleanup of the Michelin Powerhouse Superfund Site in Milltown, New
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
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Jersey (the “Site”). The owners of the Site are Alsol Corporation and SB Building
Associates, Limited Partnership (collectively, “Debtor Defendants”). The Government
filed suit, and, on July 26, 2011, the District Court entered a consent decree. The consent
decree resolved the Government’s civil claims against both Debtor Defendants and Non-
Debtor Defendants and granted the Government continued access to the Site. Both
Debtor Defendants and Non-Debtor Defendants subsequently failed to pay the required
installments under the consent decree, which has triggered additional penalties. The
Debtor Defendants have filed for bankruptcy and are not party to this appeal. On March
7, 2014, the Government moved to enforce the consent decree and the Non-Debtor
Defendants later cross-moved to modify the consent decree. The District Court granted
the Government’s motion and the Non-Debtor Defendants have appealed.
II. Analysis
We review a District Court’s decision refusing to modify a consent decree for
abuse of discretion. See Democratic Nat’l Comm. v. Republican Nat’l Comm., 673 F.3d
192, 201 (3d Cir. 2012).
A. Federal Rule of Civil Procedure 60(b)(5)
Non-Debtor Defendants first urge that the District Court erred by not modifying
the consent decree pursuant to Rule 60(b)(5) of the Federal Rules of Civil Procedure.
Rule 60(b)(5) permits a court to modify a consent decree if “applying it prospectively is
no longer equitable.” Fed. R. Civ. P. 60(b)(5). We have held that “[t]he definitional
limitation in subsection (5) is significant in that it empowers a court to modify a
judgment only if it is ‘prospective,’ or executory.” Marshall v. Bd. of Educ., 575 F.2d
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417, 425 (3d Cir. 1978). Although the Non-Debtor Defendants have not yet paid the
damages owed and although the damages continue to accrue, we have “explicitly noted
that even if the judgment had not yet been satisfied, it would not qualify as prospective
under Rule 60(b)(5) because ‘[a] ‘prospective’ injunction envisions a restraint of future
conduct, not an order to remedy past wrongs when the compensation payment is withheld
from the beneficiaries until some subsequent date.’” Coltec Indus., Inc. v. Hobgood, 280
F.3d 262, 272 (3d Cir. 2002) (quoting Marshall, 575 F.2d at 425 n.27). The Non-Debtor
Defendants are seeking relief from payments that are due or scheduled to become due,
and, therefore, do not meet this prospectivity requirement. Accordingly, Rule 60(b)(5) is
inapplicable here.
B. Federal Rule of Civil Procedure 60(b)(6)
Non-Debtor Defendants also urge that the District Court erred in not modifying
the consent decree pursuant to Rule 60(b)(6) of the Federal Rules of Civil Procedure.
Rule 60(b)(6) permits a court to modify a consent decree for “any other reason that
justifies relief.” Fed. R. Civ. P. 60(b)(6). “A party seeking Rule 60(b)(6) relief must
demonstrate the existence of ‘extraordinary circumstances’ that justify reopening the
judgment.” Budget Blinds, Inc. v. White, 536 F.3d 244, 255 (3d Cir. 2008) (footnote
omitted). Extraordinary circumstances are present when a party “demonstrates that
‘extreme’ and ‘unexpected’ hardship will result absent such relief.” Jackson v. Danberg,
656 F.3d 157, 166 (3d Cir. 2011). “Extraordinary circumstances rarely exist when a
party seeks relief from a judgment that resulted from the party’s deliberate choices.”
Budget Blinds, 536 F.3d at 255.
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Non-Debtor Defendants urge that the “extraordinary inflation” of their debt under
the consent decree is “inequitable” and that they are unable to pay that amount. 1 (Apps.’
Br. 20.) As the District Court correctly points out, “the Non-Debtor Defendants freely
agreed to the terms of the Consent Decree, including the accelerated payment and
stipulated penalty provisions.” (App. 9.) Moreover, the increase from $200,000 to
$896,751.79 in the amount owed by the Non-Debtor Defendants is not extraordinary. It
is not unheard of for courts to uphold stipulated penalties that greatly exceed the amount
originally due under a consent decree. See, e.g., United States v. Rueth Dev. Co., 335
F.3d 598, 601-02 (7th Cir. 2003) (upholding judgment for $4,018,500 in stipulated
penalties where the original penalty was only $23,000). Given the Non-Debtor
Defendants’ deliberate choice to enter into the consent decree, the District Court did not
abuse its discretion in denying the Non-Debtor Defendants’ motion to modify the consent
decree.
III. Conclusion
For the foregoing reasons, we will affirm.
1
Non-Debtor Defendants also contend that the Debtor Defendants’ bankruptcy was an
unforeseen changed circumstance, but, as the District Court correctly noted, “the Non-
Debtor Defendants have offered no evidence suggesting that the Debtor Defendants’
finances prevent them, the Non-Debtor Defendants, from paying what they currently owe
under the Consent Decree.” (App. 6.)
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