City of Emeryville v. The Sherwin-Williams Company

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
CITY OF EMERYVILLE; EMERYVILLE 
REDEVELOPMENT AGENCY,
Plaintiffs-Appellees,
v.
HOWARD F. ROBINSON, JR.;
CHRISTOPHER D. ADAM; HILARY A. No. 09-15018
JACKSON, individually and as
successors to Mary Lou Adam as D.C. No.
Trustee of (a) Trust A /u/t/o the  3:99-cv-03719-
Adam Family Trust Dated October WHA
10, 1997 and related on October OPINION
14, 2003 and (b) the Adam Family
Trust, Survivor’s Share,
Intervenors-Appellees,
THE SHERWIN-WILLIAMS COMPANY,
an Ohio corporation,
Defendant-Appellant.

Appeal from the United States District Court
for the Northern District of California
William H. Alsup, District Judge, Presiding
Argued and Submitted
February 10, 2010—San Francisco, California
Filed September 15, 2010
Before: Cynthia Holcomb Hall, David R. Thompson, and
M. Margaret McKeown, Circuit Judges.
Opinion by Judge Hall
14135
CITY OF EMERYVILLE v. SHERWIN-WILLIAMS 14139
COUNSEL
William D. Wick, Wactor & Wick LLP, Oakland, California,
for the defendant-appellant.
Robert P. Doty, Cox, Castle & Nicholson LLP, San Francisco,
California, for the plaintiff-appellee.
Henry S. Hewitt, Erickson, Beasley & Hewitt LLP, Oakland,
California, for intervenor-appellee Howard F. Robinson, Jr.
Carolyn Nelson Rowan, Miller Starr Regalia, Walnut Creek,
California, for intervenors-appellees Adam and Jackson.
OPINION
HALL, Circuit Judge:
The Sherwin-Williams Company (“Sherwin-Williams”)
appeals from an order of the district court granting in part, and
denying in part, a motion for declaratory and injunctive relief.
Sherwin-Williams brought the motion to enforce a 2001
14140 CITY OF EMERYVILLE v. SHERWIN-WILLIAMS
court-approved settlement (the “2001 Settlement”), which it
negotiated with appellees City of Emeryville and the Emery-
ville Redevelopment Agency (collectively, “Emeryville”) to
resolve a lawsuit filed by Emeryville in 1999 in the Northern
District of California pursuant to the Comprehensive Environ-
mental Response, Compensation, and Liability Act, 42 U.S.C.
§§ 9601-9675 (“CERCLA”). That suit (the “Site A litiga-
tion”) sought to recover clean-up costs as to a 14.5-acre parcel
(“Site A”) where Sherwin-Williams manufactured, stored, and
distributed pesticides from the 1920s through the 1960s.
Under the terms of the 2001 Settlement, Sherwin-Williams
paid Emeryville $6.5 million for Site A clean-up, and agreed
to a cost-sharing formula for future groundwater remediation.
In the instant action, the district court concluded that the
release provision in the 2001 Settlement was intended to bar
the claims Emeryville is currently asserting against Sherwin-
Williams in a separate action, which the Emeryville Redevel-
opment Agency filed in 2006 in Alameda County Superior
Court (the “State Court Action”) to recover $32 million in
clean-up costs from Sherwin-Williams and others for a differ-
ent parcel (“Site B”), but only to the extent the Site B claims
arose from or were related to contaminants that “emanated
from” Site A.
Appellees and intervenors Howard F. Robinson, Jr., Chris-
topher D. Adam, and Hilary A. Jackson (collectively, “Inter-
venors”) are recent or current owners of portions of Site B,
who were also named as defendants in the State Court Action,
but they were not parties to and did not have notice of the Site
A litigation or the 2001 Settlement. Intervenors are also, how-
ever, cross-claimants in the State Court Action, who were
allowed to intervene in this case to prevent the extinguish-
ment of rights of contribution they seek to enforce against
Sherwin-Williams for contamination of their properties at Site
B. In the instant action, the district court ruled that the contri-
bution bar in the 2001 Settlement does not apply to the Inter-
venors’ cross-claims against Sherwin-Williams.
CITY OF EMERYVILLE v. SHERWIN-WILLIAMS 14141
The district court had jurisdiction under the express terms
of the 2001 Settlement, pursuant to the All Writs Act, 28
U.S.C. § 1651. See Sandpiper Village Condominium Ass’n,
Inc. v. Louisiana-Pacific Corp., 428 F.3d 831, 841 (9th Cir.
2005). We have jurisdiction pursuant to 28 U.S.C. § 1291,
and we affirm.
I. Factual and Procedural Background
This case concerns the contamination and clean-up of two
adjacent sites in Emeryville, California, a small Northern Cal-
ifornia city that was once the home of heavy industry, but
currently—after decades of effort by an aggressive local rede-
velopment agency—hosts a plethora of “big box” stores,
hotels, restaurants, and numerous other retail outlets. Site A
consists of the properties commonly known as the former
Sepulveda Property (5600 Shellmound Street), the former
McKinley Property (5500 Shellmound Street), the former Ele-
mentis Property (4650 Shellmound Street), the Old Shell-
mound Street Right of Way, and additional properties south
of 4650 Shellmound Street. Site B borders Site A on the
north, and consists of the C&S Enterprise Property (1535
Powell Street), the Koeckritz Property (5770 Shellmound
Street), the Robinson Property (5760 Shellmound Street), and
the Adam Property (1525 Powell Street and the Rail Spur Prop-
erty).1
1
A map delineating Sites A and B, and each of the individual properties
located therein, is attached to this opinion as “Attachment A.” This map
indicates that the Site A property on which Sherwin-Williams operated
was the “Former Sherwin-Williams Lime Sulfur Plant,” which encom-
passed the Sepulveda, McKinley, and Elementis properties. The map also
shows a separate Sherwin-Williams facility, the “Sherwin-Williams Sher-
win Avenue Plant,” which is located to the east of the southern third of
Site A, on the other side of the Union Pacific Railroad tracks. Citing
reports of the California Environmental Protection Agency, (“Cal/EPA”),
Emeryville contends, in part, that lead-arsenic contaminants on Site B
emanated from the Sherwin-Avenue Plant, not from Site A.
14142 CITY OF EMERYVILLE v. SHERWIN-WILLIAMS
A. The 1999 Site A Litigation in the District Court
From the 1920s through the 1960s, Sherwin-Williams
owned and occupied the northern third of Site A, and used the
property for formulation, storage, and distribution of pesti-
cides. In the late 1990s, significant soil and groundwater con-
tamination was found on the former Sherwin-Williams
property. In August 1999, Emeryville filed a lawsuit against
Sherwin-Williams and other defendants, not including Inter-
venors, alleging that the defendants were responsible for con-
taminants “in the soil and groundwater at and beneath [Site A]
and migrating from [Site A].” See City of Emeryville v. Ele-
mentis Pigments, 2001 WL 964230 (N.D. Cal. 2001). Emery-
ville sought cost recovery, contribution, and damages from
the defendants under federal, state, and common law theories
of liability.
B. The 2001 Settlement of the Site A Litigation
A mediated settlement of the Site A litigation was reached
in November 2000, and approved by the district court in Feb-
ruary 2001 in an order granting a “Motion for Approval of
Settlement and Determination of Good Faith,” which was
filed by Emeryville, and joined by Sherwin-Williams. In the
order approving the 2001 Settlement, the district court found
that the Settling Defendants2 were entitled to “such protection
as is provided in” § 113(f) of CERCLA, 42 U.S.C. § 9613(f),
and the California good faith settlement statute, Cal. Code
Civ. P. §§ 877 and 877.6, as well as an order “dismissing the
cross-claims asserted in the [Site A litigation], and barring
contribution or equitable indemnity claims.” Under the terms
of the 2001 Settlement, Sherwin-Williams agreed to pay
Emeryville a lump sum of $6.5 million, and agreed to share
2
In addition to Sherwin-Williams, the Settling Defendants included the
so-called Baker Hughes and Sepulveda parties to the 2001 Site A litiga-
tion.
CITY OF EMERYVILLE v. SHERWIN-WILLIAMS 14143
future costs of ongoing response actions “arising from
groundwater at, on, under, or emanating from” Site A.3
In return for remediation cost-sharing, the parties to the
2001 Settlement released one another “from any and all
claims, demands, actions, and causes of action arising from or
related to [Site A], including without limitation, claims arising
from the release(s) of hazardous substances and/or contami-
nants at, on, under or emanating from [Site A], whether pres-
ently known or unknown, suspected or unsuspected,” and
waived the protections of California Civil Code section 1542.
The parties specifically agreed that “[t]he releases provided
herein shall not extend to any party or entity other than
Emeryville, Sherwin-Williams, [and the other Settling Defen-
dants].”
The district court retained jurisdiction to enforce the 2001
Settlement. The parties further agreed that the “prevailing
party” in such a dispute would be entitled to recover reason-
able attorney’s fees and other costs.
C. The 2006 State Court Action as to Site B
In 2005, Emeryville began investigating contamination at
Site B. A November 2005 report concluded that “[p]otential
offsite sources of chemicals of concern” included the adjacent
properties “formerly occupied by a Sherwin-Williams arsenic-
based pesticide manufacturing facility” and that elevated arse-
nic at Site B’s southern border was “most likely due to residu-
ally contaminated soil from former Sherwin-Williams
pesticide manufacturing site.”
3
Specifically, Emeryville agreed to pay the first $200,000, Emeryville
and Sherwin-Williams agreed to bear equally the next $1,314,000, and the
parties agreed to bear subsequent costs “95% by Sherwin-Williams and
5% by Emeryville.” There is no dispute that Sherwin-Williams made all
payments required by the 2001 Settlement.
14144 CITY OF EMERYVILLE v. SHERWIN-WILLIAMS
In May 2006, the Emeryville Redevelopment Agency filed
the State Court Action, Emeryville Redevelopment Agency v.
Robinson, No. RG06267594, alleging that Sherwin-Williams
and other defendants were liable for “hazardous substances
discharged, deposited, disposed of, or released onto or at [Site
B] and/or emanating to and from [Site B].” The other defen-
dants, including Intervenors and the City of Emeryville, each
denied liability and filed cross-claims against Sherwin-
Williams and each other, seeking contribution and/or indem-
nity.4
D. The Instant Proceedings to Enforce the 2001
Settlement
On July 31, 2008, Sherwin-Williams commenced the
instant action by filing a motion in the district court for the
Northern District of California. In its motion, Sherwin-
Williams sought to enforce the 2001 Settlement, including the
release and contribution bar, and to obtain a dismissal with
prejudice of the claims and cross-claims filed against it in the
State Court Action. More specifically, with respect to the
State Court Action, Sherwin-Williams sought an order (i)
confirming that the 2001 Settlement released all of the claims
asserted against it by Emeryville, and provided protection
against any cross-claims for contribution asserted by Emery-
ville and the other parties; (ii) compelling the dismissal of the
complaint and all cross-complaints against it, including those
filed by Intervenors; and (iii) awarding attorney’s fees and
4
In its first amended complaint in the State Court Action, Emeryville
seeks to acquire Robinson’s property by eminent domain and to recover
environmental remediation costs pursuant to the Polanco Redevelopment
Act, Cal. Health & Safety Code, §§ 33459 et seq., and asserts state com-
mon law claims for public and private nuisance, trespass, and equitable
indemnity. Robinson’s cross-claims seek equitable indemnity and/or con-
tribution from other defendants, including Sherwin-Williams. The Adams’
property has already been acquired by Emeryville by eminent domain, but
they also seek equitable indemnity and/or contribution from Sherwin-
Williams and other defendants.
CITY OF EMERYVILLE v. SHERWIN-WILLIAMS 14145
costs it incurred in filing the motion and defending itself.
Emeryville opposed Sherwin-Williams’s motion, and sought
to recover its own fees and costs. Sherwin-Williams served its
motion to enforce the 2001 Settlement on Intervenors and
several other neighboring property owners.
Shortly thereafter, Intervenors sent letters to the district
court indicating their desire to intervene in the instant action.
On September 19, 2008, the district court granted twenty days
for filing motions to intervene and responses to Sherwin-
Williams’s motion to enforce the 2001 Settlement. On Octo-
ber 9, 2008, Intervenors filed their motions to intervene pur-
suant to Federal Rule of Civil Procedure 24(a) (hereafter,
“Rule 24(a)”) and CERCLA § 113(i), 42 U.S.C. § 9613(i),
along with a brief in opposition to Sherwin-Williams’s motion
to enforce the 2001 Settlement. A week later, all parties were
heard on all pending motions.
In its final Amended Order entered on November 25, 2008
(“the Amended Order”), the district court granted Sherwin-
Williams’s motion to enforce the 2001 Settlement in part, and
denied it in part. The motion was granted to the extent it
sought confirmation that the release in the 2001 Settlement
applied to the claims asserted against Sherwin-Williams by
Emeryville in the State Court Action and dismissal of those
claims, but only “insofar as those claims arise from or relate
to contaminants that emanated from Site A.” Sherwin-
Williams’s motion was denied to the extent it sought an order
dismissing the cross-claims for contribution and/or indemnity
filed by Intervenors and other defendants in the State Court
Action. The district court denied both Sherwin-Williams’s
and Emeryville’s requests for attorney’s fees and costs.
Sherwin-Williams timely appealed from the Amended
Order on December 23, 2008. Emeryville filed a notice of
cross-appeal on January 26, 2009.5
5
On March 4, 2009, Sherwin-Williams filed a further motion in the dis-
trict court, ostensibly seeking enforcement of the Amended Order and
14146 CITY OF EMERYVILLE v. SHERWIN-WILLIAMS
II. Discussion
Because Emeryville’s cross-appeal has been dismissed, the
issues remaining for decision are those raised by Sherwin-
Williams, i.e., whether: (1) the district court erred by allowing
Intervenors to intervene in this action; (2) as a result of the
2001 Settlement, the cross-claims for contribution in the State
Court Action are barred by CERCLA § 113(f), 42 U.S.C.
§ 9613(f), or by the California statutes providing for confir-
mation of “good faith settlements,” Cal. Civ. Code §§ 877 and
877.6; and (3) the district court erred in denying its request for
attorney fees against Emeryville. We will address each of
these issues in turn.
A.
Rule 24(a) traditionally receives a liberal construction in
favor of applicants seeking intervention.6 Arakaki v. Caye-
contempt sanctions against Emeryville, but primarily challenging the dis-
trict court’s decision to deny its request for attorney’s fees. The gist of
Sherwin-Williams’s motion was that Emeryville was acting in bad faith by
refusing to dismiss outright any of its claims against Sherwin-Williams in
the State Court Action, and was instead attempting to recast them as
claims seeking recovery of costs for cleaning up contaminants other than
those that “emanated from Site A.” On April 7, 2009, the district court
issued an order denying Sherwin-Williams’s post-judgment motion, clari-
fying that the Amended Order did not include an injunction requiring
Emeryville to dismiss its pending claims, and that it was merely a declara-
tory judgment as to the meaning of the 2001 Settlement. Because Sherwin-
Williams did not appeal from this post-judgment order, and did not chal-
lenge the district court’s ruling limiting the release to claims arising from
or relating to contaminants that “emanated from Site A” in its opening
brief, that issue is not before us on appeal. For the same reasons, Emery-
ville filed an unopposed motion to dismiss its protective cross-appeal on
June 26, 2009. We hereby grant that motion.
6
Rule 24(a) provides for intervention as of right, as follows:
On timely motion, the court must permit anyone to intervene
who:
CITY OF EMERYVILLE v. SHERWIN-WILLIAMS 14147
tano, 324 F.3d 1078, 1083 (9th Cir. 2003). CERCLA § 113(i)7
gives nonparties a right to intervene in pending litigation on
essentially the same terms, except that the burden of proving
that the existing parties will not adequately represent the
interests of the proposed intervenor is on the government, not
the proposed intervenor. See United States v. Aerojet Gen.
Corp., 606 F.3d 1142, 1149 (9th Cir. 2010); United States v.
Union Electric, 64 F.3d 1152, 1157-58, 1160 (8th Cir. 1995).
We review a district court’s decision allowing intervention
as of right pursuant to Rule 24(a) de novo, except for the ele-
ment of timeliness, which we review for an abuse of discre-
tion. United States v. Alisal Water Corp., 370 F.3d 915, 918-
19 (9th Cir. 2004).
Sherwin-Williams attacks the district court’s order allowing
intervention primarily on the basis that Intervenors have no
“significantly protectable” interest at stake in the instant
action, so as to warrant intervention as of right under Rule
24(a)(2) or CERCLA § 113(i). See California ex rel. Lockyer
v. United States, 450 F.3d 436, 441 (9th Cir. 2006). Interve-
nors counter that they have significant, protectable state law
(1) is given an unconditional right to intervene by a federal stat-
ute; or
(2) claims an interest relating to the property or transaction that
is the subject of the action, and is so situated that disposing of the
action may as a practical matter impair or impede the movant’s
ability to protect its interest, unless existing parties adequately
represent that interest.
7
In relevant part, CERCLA § 113(i), 42 U.S.C. § 9613(i), provides:
In any action commenced under [CERCLA] . . . in a court of the
United States, any person may intervene as a matter of right when
such person claims an interest relating to the subject of the action
and is so situated that the disposition of the action may, as a prac-
tical matter, impair or impede the person’s ability to protect that
interest, unless the President or the State shows that the person’s
interest is adequately represented by existing parties.
14148 CITY OF EMERYVILLE v. SHERWIN-WILLIAMS
contribution rights as to clean-up costs at Site B, which would
have been extinguished if the district court had granted
Sherwin-Williams’s motion to enforce the contribution bar in
the 2001 Settlement against them.
[1] “The requirement of a significantly protectable interest
is generally satisfied when ‘the interest is protectable under
some law, and [ ] there is a relationship between the legally
protected interest and the claims at issue.’ ” Arakaki, 324 F.3d
at 1084 (quoting Sierra Club v. EPA, 995 F.3d 1478, 1484
(9th Cir. 1993)). “[A] party has a sufficient interest for inter-
vention purposes if it will suffer a practical impairment of its
interests as a result of the pending litigation.” Lockyer, 450
F.3d at 441; see also Alisal, 370 F.3d at 919. “Although the
intervenor cannot rely on an interest that is wholly remote and
speculative, the intervention may be based on an interest that
is contingent upon the outcome of the litigation.” Union Elec-
tric, 64 F.3d at 1162; see also Aerojet, 606 F.3d at 1150.
[2] Applying these standards, we recently held that a con-
tribution claim subject to extinction pursuant to CERCLA
§ 113(f)(2), 42 U.S.C. § 9613(f)(2), is a “significantly protect-
able interest” warranting an order allowing third parties, in
that case non-settling potentially responsible parties (“PRPs”),
to intervene as of right pursuant to Rule 24(a)(2), upon timely
application, in an action to obtain court approval for a CER-
CLA consent decree entered into by the United States and
would-be “settling PRPs”—i.e., those who have agreed to pay
a specific share of clean-up costs at a designated site, in
exchange for protection against contribution claims from the
non-settling PRPs and others regarding matters addressed in
the settlement. Aerojet, 606 F.3d at 1149-51; see also United
States v. Albert Inv. Co., Inc., 585 F.3d 1386, 1394-96 (10th
Cir. 2009); Union Electric, 64 F.3d at 1163-67.
As the Aerojet panel explained:
[The] non-settling PRPs . . . in this case are poten-
tially liable for response costs under § 107(a) of
CITY OF EMERYVILLE v. SHERWIN-WILLIAMS 14149
CERCLA . . . . § 113(f)(2) provides that approval of
a consent decree will cut off their contribution rights
under § 113(f)(1). The proposed consent decree in
the EPA’s suit against the [would-be settling PRPs]
will therefore directly affect [the non-settling PRPs’]
interest in maintaining their right to contribution.
Further, because non-settling PRPs may be held lia-
ble for the entire amount of response costs minus the
amount paid in a settlement, [they] have an obvious
interest in the amount of any judicially-approved set-
tlement.
606 F.3d at 1150 (citations omitted). The Aerojet panel also
rejected the argument that the non-settling PRPs’ contribution
rights were too “contingent and speculative” because they had
not yet been found liable for any response costs or made to
bear a disproportionate share of response costs. Id.; see also
Union Elec., 64 F.3d at 1167 (although “inchoate” to the
extent the value of any contribution claim has not been deter-
mined, the interest is nonetheless sufficiently certain to sup-
port intervention once a person has been identified as a PRP).
The Aerojet analysis and finding of a “significant, protect-
able interest” of the non-settling PRPs in that case apply with
even greater force in the present context. Intervenors here
faced imminent extinction of their state law rights of contribu-
tion for Site B clean-up costs when Sherwin-Williams sought
enforcement of the 2001 Settlement of the Site A litigation—
of which they had no effective prior notice, and as to which
they were not PRPs—and they could not count on their adver-
sary in the current State Court Action, Emeryville, to defend
their interests in the federal court proceedings. Intervenor
Robinson also faced the loss of substantial value of his prop-
erty in the consolidated eminent domain proceedings.
In the present context, moreover, we do not face the
“policy-based” concerns that allowing intervention might
scuttle a recently negotiated, hard-won partial settlement of a
14150 CITY OF EMERYVILLE v. SHERWIN-WILLIAMS
complex CERCLA action. Cf. Aerojet, 606 F.3d at 1151.
Unlike the non-settling PRPs in Aerojet, the Intervenors here
were not seeking to block court approval of a partial settle-
ment of a cost-recovery action. They merely sought to ensure
that the district court would give full and fair consideration to
their arguments that, as neither PRPs nor parties to the Site A
litigation, their contribution claims were not barred by the
2001 Settlement.
[3] As Intervenors observe, it is simply incongruous that
Sherwin-Williams would bring a separate action to enforce
the 2001 Settlement to extinguish the pending state law con-
tribution and indemnity claims of both the City of Emeryville
and other persons with no prior connection to the Site A liti-
gation, and simultaneously assert that those other persons
lacked a sufficient interest to intervene to oppose the motion.
If the matter was important enough for Sherwin-Williams to
bring the instant motion, it was surely important enough to
warrant the intervention of the parties who stood to be directly
and adversely affected. Thus, we conclude that the district
court did not err in granting Intervenors’ motion to intervene
as of right pursuant to Rule 24(a)(2).8
B.
At the heart of this appeal is the issue whether the 2001
Settlement provides Sherwin-Williams with any “protection”
against the cross-claims for contribution asserted by Interve-
nors and other defendants who are on the hook for Site B
clean-up costs in the pending State Court Action.
8
Because we conclude that Intervenors had a right to intervene in this
action pursuant to Rule 24(a)(2), we need not decide whether permissive
intervention would also have been proper under Rule 24(b). We note,
however, that there was no prejudicial delay caused by Intervenors, who
promptly sought leave to intervene and filed their motions approximately
two months after Sherwin-Williams commenced this action.
CITY OF EMERYVILLE v. SHERWIN-WILLIAMS 14151
Interpretation of a settlement agreement is a question of
law subject to de novo review, Congregation ETZ Chaim v.
City of Los Angeles, 371 F.3d 1122, 1124 (9th Cir. 2004), but
we defer to any factual findings made by the district court in
interpreting the settlement agreement unless they are clearly
erroneous. Labor/Community Strategy Ctr. v. Los Angeles
County Metropolitan Trans. Auth., 263 F.3d 1041, 1048 (9th
Cir. 2002). Our review of the district court’s interpretation of
CERCLA is also de novo. California v. Montrose Chem.
Corp., 104 F.3d 1507, 1512 (9th Cir. 1997).
In relevant part, the contribution bar in Section VIII of the
2001 Settlement provided:
All matters that are the subject of the releases in Sec-
tion VII and all matters alleged in the Complaint
filed in the Action are defined to be “covered mat-
ters” within the meaning of CERCLA. With regard
to any claims for costs, damages, or other relief
asserted against the Settling Defendants by persons
not party to this Agreement on account of the
release(s) of hazardous substances at the Site, the
Parties agree that Settling Defendants are, and each
of them is, entitled to such protection as is provided
in § 113(f) of CERCLA, 42 U.S.C. § 9613(f), Cali-
fornia Code of Civil Procedure Sections 877 and
877.6, and any other applicable provision of federal
or state law, as well as an order dismissing the cross-
claims asserted in the Action and barring contribu-
tion or equitable indemnity claims.
(Emphasis added.) The 2001 Settlement further provided that
“protection from contribution and/or indemnity claims . . . [is]
integral and nondivisible to this Settlement Agreement.” In
addition, in the order section of the 2001 Settlement, the dis-
trict court declared:
The Court further finds that the Settling Defendants
are entitled to protection from contribution and/or
14152 CITY OF EMERYVILLE v. SHERWIN-WILLIAMS
indemnity claims pursuant to federal and state law,
including but not limited to California Code Civil
Procedure Sections 877 and 877.6.
All claims, cross-claims and/or counterclaims
asserted in this matter against the Settling Defen-
dants are hereby dismissed with prejudice as are all
claims asserted against Emeryville by any of the Set-
tling Defendants. Further claims, cross-claims or
counterclaims against the Settling Defendants or any
one of them for matters addressed in the Settlement
Agreement are barred.
(Emphasis added.)
Sherwin-Williams contends that the district court erred by
declining to interpret these provisions as establishing a contri-
bution bar against all of the cross-claims asserted against it in
the State Court Action. Emeryville and Intervenors respond
that neither CERCLA nor California Code of Civil Procedure
sections 877 and 877.6 provides Sherwin-Williams with “pro-
tection” against the cross-claims for contribution in that case.
They contend that the federal and state contribution bars pro-
tect only against claims by non-parties who received notice of
the settlement and had an opportunity to object before the set-
tlement took effect. There is no dispute that Intervenors had
no notice of the Site A litigation or the 2001 Settlement.
Sherwin-Williams simply contends that lack of notice was no
barrier to recognition of a contribution bar as to the cross-
claims in the State Court Action. Emeryville and Intervenors
have the better of this argument.
1.
The centerpiece of Sherwin-Williams’s motion to enforce
the 2001 Settlement was a contention that CERCLA
§ 113(f)(2), 42 U.S.C. § 9613(f)(2), which bars all “claims for
contribution regarding matters addressed in” a court-approved
CITY OF EMERYVILLE v. SHERWIN-WILLIAMS 14153
settlement between any “person” and “the United States or a
State,” provided it with protection against the contribution
claims alleged in the State Court Action. That argument
hinged on an assertion that the district court had previously
found that Emeryville was a “State” within the meaning of
§ 113(f)(2). It was only after the hearing on its motion to
enforce the 2001 Settlement, when forced to concede that it
had materially misrepresented the district court’s prior ruling,9
that Sherwin-Williams switched gears and—for the first time
in its supplemental briefing after the hearing—began to rely
on a nebulous argument that § 113(f)(1) provides district
courts with “authority” to bar contribution claims of persons
who neither had notice of nor participated in a CERCLA
action that was resolved with a court-approved settlement.10
Sherwin-Williams also suggests that § 113(f)(1) “preempts”
the contribution claims Intervenors assert in the State Court
Action. We reject these strained, eleventh-hour arguments,
which ignore the plain language of § 113(f)(1), and cannot be
reconciled with recent Supreme Court authority.
[4] On its face, CERCLA § 113(f)(1) expressly authorizes
claims for contribution, and includes a “saving” clause that
precludes any finding of preemption as to state law claims for
contribution such as those asserted by Intervenors in the State
Court Action, as follows:
9
In fact, the district court had previously ruled that CERCLA’s defini-
tion of “State” does not include municipalities. See Elementis Pigments,
2001 WL 964230 at *10. In its Amended Order in November 2008, the
district court confirmed its prior ruling that Emeryville was not a “State”
for any purpose under CERCLA. We express no opinion on that issue.
10
By failing to address the issue in its opening brief except in a footnote,
Sherwin-Williams waived any claim that CERCLA § 113(f)(2), bars Inter-
venors’ cross-claims in the State Court Action. See Greenwood v. FAA, 28
F.3d 971, 977 (9th Cir. 1994) (court of appeals will not review issues
which are not argued specifically and distinctly in a party’s opening brief,
especially where a host of other issues are raised); see also Acosta-Huerta
v. Estelle, 7 F.3d 139, 144 (9th Cir. 1992) (contentions raised only in foot-
note in opening brief, without supporting argument and citation to relevant
authorities, are deemed abandoned).
14154 CITY OF EMERYVILLE v. SHERWIN-WILLIAMS
Any person my seek contribution from any other
person who is liable or potentially liable under sec-
tion 9607(a) of this title, during or following any
civil action under section 9606 of this title or under
section 9607(a) of this title. Such claims shall be
brought in accordance with this section and the Fed-
eral Rules of Civil Procedure, and shall be governed
by Federal law. In resolving contribution claims, the
court may allocate response costs among liable par-
ties using such equitable factors as the court deter-
mines are appropriate. Nothing in this subsection
shall diminish the right of any person to bring an
action for contribution in the absence of a civil
action under section 9606 of this title or section
9607 of this title.
42 U.S.C. § 9613(f)(1) (emphasis added). As such, § 113(f)(1)
does not directly “provide” any protection against contribu-
tion claims, and cannot serve as the statutory basis for contri-
bution protection referenced in the 2001 Settlement.
Sherwin-Williams does not even try to grapple with the
plain language of § 113(f)(1). It simply claims that this sec-
tion can be construed as giving district courts broad equitable
authority to approve a settlement which, by its terms, bars
third-party contribution claims like the ones Intervenors have
asserted in the State Court Action. Apart from the important
point that the 2001 Settlement is not such a settlement,
Sherwin-Williams misconstrues the reach of § 113(f)(1).
Sherwin-Williams also fails to explain why it is not within the
“expansive” authority and discretion of the district court to
determine that it would be inequitable to truncate Intervenors’
contribution rights without prior notice, given Sherwin-
Williams’s failure to provide notice.
[5] In Cooper Industries, Inc. v. Aviall Services, Inc., 543
U.S. 157 (2004), the Supreme Court construed § 113(f)(1).
The Court held that the section’s first sentence, “the enabling
CITY OF EMERYVILLE v. SHERWIN-WILLIAMS 14155
clause,” grants a right of contribution only to PRPs who are
or have been subject to an enforcement or cost-recovery
action under §§ 106 or 107(a), 42 U.S.C. §§ 9606 or 9607(a).
543 U.S. at 165-68. “[A] private party who has not been sued
under § 106 or § 107” may not “obtain contribution under
§ 113(f)(1) from other liable parties.” Id. at 160-61; see also
Kotrous v. Goss-Jewett Co. of N. Cal., Inc., 523 F.3d 924, 931
(9th Cir. 2007). As relevant here, however, the Aviall court
further held that:
The sole function of the [“saving clause” in the last
sentence of § 113(f)] is to clarify that § 113(f)(1)
does nothing to “diminish” any cause(s) of action
for contribution that may exist independently of
§ 113(f)(1). . . . The sentence, however, does not
itself establish a cause of action; nor does it expand
§ 113(f)(1) to authorize contribution actions not
brought “during or following” a § 106 or § 107(a)
civil action; nor does it specify what causes of action
for contribution, if any, exist outside § 113(f)(1).
Aviall, 543 U.S. at 166-67 (emphasis added).
The third sentence of § 113(f)(1) is the only one that
addresses the court’s authority with respect to contribution
claims. To the extent Sherwin-Williams makes any argument
based on the actual language of § 113(f)(1), it points to this
sentence as the source of the district court’s “authority” to
approve a settlement which operates as a bar to contribution
claims such as those asserted by Intervenors in the Site B liti-
gation. Otherwise, the main thrust of Sherwin-Williams’s
argument is that CERCLA’s “policy” favoring settlement
gives district courts authority to bar any and all contribution
claims that might impede settlement. We reject these atextual
“policy” arguments for several reasons.
[6] First, Intervenors could not bring, and have not
brought, a contribution claim under § 113(f)(1) because they
14156 CITY OF EMERYVILLE v. SHERWIN-WILLIAMS
were never sued under §§ 106 or 107(a) with respect to Site
A. Indeed, since they were not PRPs with respect to Site A,
such a suit was not even a possibility. The claims they assert
in the State Court Action as to Site B are therefore not contri-
bution claims subject to the district court’s authority under
§ 113(f)(1) to “allocate response costs among liable parties
using such equitable factors as the court determines are appro-
priate.” Because Intervenors’ contribution claims do not come
within § 113(f)(1), we believe it is clear that Congress did not
intend that provision to be a source of judicial authority to bar
such claims. This conclusion is only buttressed by
§ 113(f)(1)’s savings clause, which provides that the subsec-
tion does nothing to ‘diminish’ any cause of action for contri-
bution that may exist independently of § 113(f)(1)—in this
case, the state law contribution claims asserted in the State
Court Action.
Even if CERCLA § 113(f)(1) could be construed as grant-
ing district courts the authority to approve settlements barring
the contribution claims of non-parties, where appropriate, that
authority is properly limited to claims by non-parties who are,
at a minimum, PRPs with respect to the site at issue. CER-
CLA establishes a complex statutory framework designed to
ensure, inter alia, that polluters, not taxpayers or innocent
adjoining property landowners, pay for their pollution; that
settlements are encouraged through specified contribution
protection; and that PRPs, depending on their procedural cir-
cumstances, can achieve an equitable apportionment of costs
through contribution actions under § 113(f) or cost recovery
actions under § 107(a). See United States v. Atlantic Research
Corp., 551 U.S. 128, 138-39 (2007); Kotrous, 523 F.3d at
930-31. This framework, however, is necessarily based on the
common-sense premise that the litigation is limited to the site
placed at issue by the complaint and the persons identified as
PRPs with respect to that site. CERCLA’s policy of encourag-
ing settlements by authorizing contribution protection to set-
tling parties should not be construed in a manner that
ambushes persons, like Intervenors, who had no connection
CITY OF EMERYVILLE v. SHERWIN-WILLIAMS 14157
with, and no responsibility for, the pollution on the site at
issue in the settlement, here Site A.
In any event, permitting Intervenors’ Site B contribution
claims to proceed will not undermine CERCLA’s policy
favoring settlement. CERCLA seeks to “encourage” settle-
ment by penalizing identified non-settling PRPs with a bar on
contribution claims, and the corresponding risk of having to
pay a disproportionate share of response costs. This policy is
not advanced by applying the contribution bar to Intervenors.
They were not PRPs in the Site A litigation and could not
have been settling parties in that action. In these circum-
stances, application of a contribution bar would be irrational
and punitive.
Moreover, while PRPs may be hesitant to settle if non-
settling PRPs (whether or not parties) are allowed to pursue
post-settlement contribution claims against them, they are not
likely to be influenced by the risk of being sued by a non-
PRP, since instances in which non-PRPs are implicated by a
settlement are extremely rare. In this case it is evident that
Site B contamination, and the cost of cleanup at that site, were
not matters expressly contemplated by the parties in entering
into the 2001 Settlement.
The cases upon which Sherwin-Williams relies for its con-
tention that § 113(f)(1) impliedly bars Intervenors’ contribu-
tion claims do not support its arguments. In United States v.
Mallinckrodt, Inc., 2006 WL 3331220 (E.D. Mo. 2006), the
court approved a private party settlement agreement barring
contribution claims against the settling defendants “by any
Person (whether or not a Party to the lawsuit) in relation to the
Site.” Id. at *1, n.2. Thus, while recognizing that a district
court may have authority to approve a contribution bar in a
private party case based on CERCLA’s policy of encouraging
settlement and § 113(f)(1)’s grant of authority to allocate
cleanup costs, the decision does not address whether CER-
CLA authorizes settlements barring claims that are not related
14158 CITY OF EMERYVILLE v. SHERWIN-WILLIAMS
to the site which was the subject of the settlement agreement.
Likewise, in Barton Solvents, Inc. v. Southwest Petro-Chem,
Inc., 834 F. Supp. 342 (D. Kan. 1993), the court approved a
private party settlement barring contribution claims of non-
settlers, but did not face the issue presented here of precluding
claims of non-PRPs. Id. at 345-47. In reaching its decision,
the Barton Solvents court adopted the same reasoning
employed in Mallinckrodt. Id.
Finally, we note that Intervenors do not argue that courts
can never find a CERCLA contribution bar in a private-party
settlement agreement given that the statute expressly provides
for a contribution bar only as to court-approved settlements
with the United States or a State. Thus, Boeing Co. v. Cas-
cade Corp., 207 F.3d 1177 (9th Cir. 2000), which Sherwin-
Williams cites to refute this proposition, has no bearing on the
analysis here. We also note, however, that the overwhelming
majority of courts that have imposed or enforced a CERCLA
contribution bar in a private-party settlement have done so
only where the persons subject to the bar were either parties
to the action, PRPs who were involved in or aware of settle-
ment discussions, or non-parties who otherwise had at least
constructive notice that their contribution claims stood to be
extinguished. See Boeing, 207 F.3d at 1191-92 (contribution
claims among existing parties); City of Bangor v. Citizens
Commc’ns Co., 532 F.3d 70, 93-99 (1st Cir. 2008) (“non-
settling third and fourth parties” that were “active” in case
after settlement discussions began); United States v. Alexan-
der, 771 F. Supp. 830, 840-41 (S.D. Tex. 1991), vacated in
part on other grounds, 981 F2d 250 (5th Cir. 1993) (contribu-
tion claims of a nonsettling party already in the litigation);
Lyncott Corp. v. Chemical Waste Management, Inc., 690 F.
Supp. 1409, 1418-19 (E.D. Pa. 1988) (contribution bar
addressed “nonsettlers” and there were no due process con-
cerns because all affected parties were apparently before the
court); Barton Solvents, 834 F. Supp. at 345-47 (contribution
bar only purported to bar parties); Foamseal, Inc. v. Dow
Chem. Co., 991 F. Supp. 883, 885 (E.D. Mich. 1998) (nonset-
CITY OF EMERYVILLE v. SHERWIN-WILLIAMS 14159
tling parties were already before the district court); United
States v. Pretty Products, Inc., 780 F. Supp. 1488, 1494-97
(S.D. Ohio 1991) (non-settling party withdrew from settle-
ment discussions at its own risk and with knowledge that con-
tribution claims against settling parties would be barred under
§ 113(f)(2)); cf. Gurley v. City of West Memphis, 489 F. Supp.
2d 876, 878-80 (E.D. Ark. 2007) (settlement with some PRPs
expressly giving city protection from contribution “equivalent
to the protection provided by CERCLA Section 113(f)(2),”
did not bar contribution claims of PRP who was not a party
to court proceedings that yielded the settlement).
[7] As we have noted, it is undisputed that Intervenors
were not PRPs as to Site A, and they had neither actual nor
constructive notice of the Site A litigation or the 2001 Settle-
ment. In these circumstances, we reject Sherwin-Williams’s
claim that § 113(f)(1) should be construed to provide it with
protection against the cross-claims for contribution and equi-
table indemnity asserted in the State Court Action.
2.
The district court, Emeryville, and Intervenors have cited
copious, dispositive authority from the California courts refut-
ing Sherwin-Williams’s claim that the “good faith settlement”
determination in this case under sections 877 and 877.6 of the
California Code of Civil Procedure erected a bar to the cross-
claims asserted in the State Court Action. Nonetheless,
Sherwin-Williams persists in arguing that, notwithstanding its
failure to give Intervenors any form of notice of the 2001 Set-
tlement, those provisions bar Intervenors’ claims for contribu-
tion and/or equitable indemnity.
The California “good faith settlement” statutes provide that
when a settlement is judicially determined to have been made
in good faith, it will “bar any other joint tortfeasor or co-
obligor from any further claims against the settling tortfeasor
or co-obligor for equitable comparative contribution, or par-
14160 CITY OF EMERYVILLE v. SHERWIN-WILLIAMS
tial or comparative indemnity, based on comparative negli-
gence or comparative fault.” Cal. Code Civ. P. § 877.6(c).
The party applying for a “good faith settlement” determina-
tion is expressly required to give notice of its application only
to other parties and the court. Id., § 877.6(a).
[8] As the California Courts of Appeal have construed sec-
tion 877.6, however, only those non-parties with constitution-
ally sufficient prior notice will be bound by a “good faith
settlement” determination:
“Fundamental constitutional principles of due pro-
cess compel us to conclude that an unnamed joint
tortfeasor whose potential liability is known, or rea-
sonably should be known, to the settling parties but
who is given no opportunity to be heard . . . is not
bound by a good faith determination; he has the right
to challenge that finding once he has been brought
into the litigation.”
Singer Co. v. Superior Court, 179 Cal. App. 3d 875, 890-91
(1986); see also Gackstetter v. Frawley, 135 Cal. App. 4th
1257, 1273 (2006) (“A settling tortfeasor’s section 877.6, sub-
division (c) good faith settlement determination discharges
indemnity claims by other tortfeasors, whether or not named
as parties, so long as the other tortfeasors were given notice
and an opportunity to be heard.”).
[9] Sherwin-Williams’s attempt to distinguish Singer’s
notice requirement as applying only where the joint tortfea-
sors seeking to avoid a contribution bar were “known, or rea-
sonably should [have been] known” to them, is unavailing. It
is implausible for Sherwin-Williams to suggest that potential
impacts on adjoining properties were neither known nor rea-
sonably should have been known to Sherwin-Williams when
it was seeking to resolve its liability for contamination caused
by its operations at Site A in February 2001. The fact that
Sherwin-Williams did not notify any Site B neighbors at that
CITY OF EMERYVILLE v. SHERWIN-WILLIAMS 14161
time is proof it had no belief or expectation that it was resolv-
ing its potential Site B liability through the 2001 Settlement
as to Site A. In sum, the district court did not err in finding
that the “good faith settlement” determination as to the 2001
Settlement is not a bar to the contribution claims asserted in
the State Court Action.11
C.
As to its request for attorney’s fees against Emeryville,
Sherwin-Williams relies upon California Civil Code Section
1717(a) and Hsu v. Abbara, 9 Cal. 4th 863 (1995), to argue
that it was entitled to attorney’s fees as a matter of law. We
disagree.
Where opposing litigants can legitimately claim some suc-
cess in an action on a contract, a court’s decision that there
was no “prevailing party on the contract” is subject to review
under the abuse of discretion standard of review. See Cal. Civ.
Code § 1717(b)(1); Hsu, 9 Cal. 4th at 875-76; see also Berkla
v. Corel Corp., 302 F.3d 909, 917 (9th Cir. 2002).
California Civil Code section 1717(a) states:
In any action on a contract, where the contract
specifically provides that attorney’s fees and costs,
which are incurred to enforce that contract, shall be
awarded either to one of the parties or to the prevail-
ing party, then the party who is determined to be the
party prevailing on the contract, whether he or she is
the party specified in the contract or not, shall be
11
Because we conclude that none of the statutory provisions referenced
in the 2001 Settlement bars the cross-claims for contribution against
Sherwin-Williams in the State Court Action, we need not and do not
decide whether recognition of a contribution bar in this case against
Intervenors—who were not PRPs, and were neither named as parties to
nor given any form of notice of the Site A litigation or the 2001 Settlement
—would violate their due process rights.
14162 CITY OF EMERYVILLE v. SHERWIN-WILLIAMS
entitled to reasonable attorney’s fees in addition to
other costs.
Section 1717 goes on, however, to define the “prevailing
party on the contract” as “the party who recovered a greater
relief in the action on the contract,” and further provides that
a trial court “may also determine that there is no party prevail-
ing on the contract for purposes of this section.” Cal. Civ.
Code § 1717(b)(1).
[10] In Hsu, the California Supreme Court traced the outer
limits of the trial court’s discretion to deny fees pursuant to
section 1717(b)(1), concluding that “[w]hen a defendant
obtains a simple, unqualified victory by defeating the only
contract claim in the action, section 1717 entitles the success-
ful defendant to recover reasonable attorney fees incurred in
defense of that claim if the contract contained a provision for
attorney fees.” Hsu, 9 Cal. 4th at 877. Conversely, however,
“when the ostensibly prevailing party receives only a part of
the relief sought,” the result is “mixed,” and the trial court has
“discretion to find no prevailing party.” Id. at 875-76 (internal
quotation marks omitted). To determine whether the party
seeking fees has obtained an unqualified win, as opposed to
a “mixed result,” the trial court must examine the parties’ “lit-
igation objectives as disclosed by the pleadings, trial brief,
opening statement and similar sources,” and “the extent to
which each party has succeeded and failed to succeed in its
contentions.” Id. at 876 (internal quotation marks omitted).
[11] As relevant to this issue, Sherwin-Williams’s objec-
tives in bringing this action were to obtain an order (1) con-
firming that the 2001 Settlement released all of the claims
Emeryville asserted against it in the State Court Action, and
(2) providing protection against any claims for contribution in
the State Court Action. Resolution of the motion thus required
interpretation of two provisions of the settlement agreement:
the release and the contribution bar. As the district court
found, Sherwin-Williams prevailed, in part, in its objectives
CITY OF EMERYVILLE v. SHERWIN-WILLIAMS 14163
as to the former—to the extent Emeryville was seeking to
recover clean-up costs at Site B for contaminants emanating
from Site A—and failed as to the latter.
Despite this “mixed” result, Sherwin-Williams maintains
that it obtained a “simple, unqualified win” by prevailing
against Emeryville on the “only contract claim” in the case—
namely, that related to the release provision. It maintains that
its failure to prevail on the “separate claim” for contribution
protection was not “on the contract” and did not render the
results mixed. We disagree.
“An action is ‘on the contract’ when it is brought to enforce
the provisions of the contract.” MBNA America Bank, N.A. v.
Gorman, 147 Cal. App. 4th Supp. 1, 7 (2006). The contribu-
tion bar was no less a provision of the contract than was the
release provision. Indeed, Sherwin-Williams spends six pages
of its opening brief arguing—ultimately fruitlessly—that the
district court’s error in rejecting its contribution bar argu-
ments flowed from the court’s flawed application of princi-
ples of contract interpretation. In a similar action involving
construction and enforcement of a contract, the California
Court of Appeal deemed an argument akin to Sherwin-
Williams’s “patently absurd.” City and Cty. of San Francisco
v. Union Pac. R.R. Co., 50 Cal. App. 4th 987, 1000 (1996).
[12] Viewed in isolation, Sherwin-Williams substantially
prevailed against Emeryville with respect to the release provi-
sion in the 2001 Settlement. Nonetheless, an important second
issue concerned the contribution bar in which Emeryville had
a substantial indirect stake, as any recovery against other
defendants in the Site B action can now be passed on to
Sherwin-Williams via contribution, all to the indirect benefit
of Emeryville. This was a “mixed” result, and the district
court did not abuse its discretion by denying Sherwin-
Williams’s fee application based on a finding that there was
no “prevailing party” in this action. See Hsu, 9 Cal. 4th at
875-76.
14164 CITY OF EMERYVILLE v. SHERWIN-WILLIAMS
III. CONCLUSION
For all the foregoing reasons, the district court’s Amended
Order of November 25, 2008, is AFFIRMED.