Tutu Wells Contamination Litigation, In re
| Decision Date | 22 July 1997 |
| Docket Number | No. 96-7389,Nos. 96-7385,L,G,E,T,No. 96-7385,F,No. 96-7387,No. 96-7392,No. 96-7390,No. 96-7386,No. 96-7388,No. 96-7391,R,96-7385,96-7386,96-7387,96-7388,96-7389,96-7390,96-7391,96-7392,s. 96-7385 |
| Citation | 120 F.3d 368 |
| Parties | 27 Envtl. L. Rep. 21,494 In re: TUTU WELLS CONTAMINATION LITIGATION. Esso Standard Oil S.A. Ltd.; Esso Virgin Islands, Inc.; Esso Standard Oil Co. (Puerto Rico), Appellants inoldman, Antonetti & Cordova; Francis Torres, Esquire; Jose Cepeda, Esquire, Appellants inugenio C. Romero, An Attorney at Law, Appellant in'Henri, Inc., Appellant inhoda Harthman; Charlotte A. Labarre; Albert E. Harthman; Arthur E. Harthman; Austin E. Harthman; Edgar A. Harthman; Sammy E. Harthman; P.I.D., Inc.; Tutu Services, Limited, Appellants inamsay Motors, Inc., Appellant inexaco Inc.; Texaco Caribbean, Inc.; Vernon Morgan, Appellants inour Winds Plaza Partnership, Appellants into 96-7392. |
| Court | U.S. Court of Appeals — Third Circuit |
Kell M. Damsgaard (Argued), Terri Jacobsen, Morgan, Lewis & Bockius LLP, Philadelphia, PA., Douglas L. Capdeville, Christiansted, St. Croix, VI, for Appellants Esso Standard Oil S.A. Ltd., Esso Virgin Islands, Inc., Esso Standard Oil Co. (Puerto Rico).
Daniel Riesel, Sive, Paget & Riesel, P.C., New York City, Vincent J. Apruzzese (Argued), Apruzzese, McDermott, Mastro & Murphy, Liberty Corner, NJ, Edward H. Jacobs, Jacobs & Brady, Christiansted, St. Croix, U.S. VI, for Appellants Goldman, Antonetti & Cordova, Francis Torres, Esquire, and Jose A. Cepeda, Esquire.
Joel H. Holt (Argued), Holt & Russell, Christiansted, St. Croix, U.S. VI, for Appellant Eugenio C. Romero.
Nancy D'Anna (Argued), Law Office of Nancy D'Anna, St. John, U.S. VI, for Appellants L'Henri, Inc., Rhoda J. Harthman, Charlotte A. Labarre, Albert E. Harthman, Austin E. Harthman, Edgar A. Harthman, Sammy E. Harthman P.I.D., Inc., Water Services, Limited and Tutu Park, Limited.
Carol Ann Rich (Argued), Campbell, Arellano & Rich, Charlotte Amalie, Charlotte Amalie, St. Thomas U.S. VI, for Appellant Ramsay Motors, Inc.
John K. Dema (Argued), Carey-Anne Moody, Law Offices of John K. Dema, P.C., Christiansted, St. Croix U.S. VI, for Four Winds Plaza Partnership.
Addison J. Meyers (Argued), O'Connor & Meyers, P.A., Coral Gables, FL, for Appellants Texaco Inc. and Texaco Caribbean Inc.
John Zebedee, Hymes & Zebedee, P.A., Charlotte Amalie, St. Thomas U.S. VI, for Vernon Morgan.
John R. Coon (Argued), Wright, Coon & Cunningham, P.A., Portland, ME, for Appellee Western Auto Supply Co.
Julio A. Brady, Attorney General, Government of the Virgin Islands, Department of Justice, Christiansted, St. Croix U.S. VI, for Amicus Curiae.
Before: BECKER, SCIRICA, and ALITO, Circuit Judges.
This is an appeal from an order of the district court imposing heavy sanctions upon a law firm, several of its partners, and its client for discovery violations in connection with a large environmental lawsuit. The client, Esso, is charged in the underlying complaint with having "poisoned the wells" in the Estate Tutu area in the eastern end of St. Thomas by releasing from the Esso Tutu service station petroleum hydrocarbons and chlorinated hydrocarbons into the Tutu aquifer which supplies drinking water to much of the east end of the island. The discovery abuse primarily involves the alleged suppression by Esso's former counsel in the litigation, the San Juan, Puerto Rico law firm of Goldman, Antonetti, Ferraiuoli & Axtmayer, of a report by Jose Agrelot, a professional engineer, summarizing the results of soil and liquid tests he had performed at the Esso Tutu site in December 1989. The suppression of this report is claimed to have dramatically increased the discovery time and expense for other parties in connection with their prosecution of the case. There are also other alleged, though less aggravated, instances of obdurate discovery-related behavior.
What specially marks this case is the character and magnitude of the sanctions imposed. Eschewing the auspices of Fed.R.Civ.P. 37, which authorizes sanctions for failure to make disclosure or cooperate in discovery, the district court imposed the challenged sanctions under its inherent power. The sanction imposed on the lawyers was suspension from practice in the District Court of the Virgin Islands: Jose Cepeda and Francis Torres for three years, and Eugenio Romero for one year. The sanction imposed upon Esso was the payment of $750,000 to a "Community Service Sanction Account" to be utilized to fund construction of a halfway house on St. Thomas, the training of inmates, and renovation of the St. Thomas Criminal Justice Complex. The sanction imposed upon Goldman Antonetti was the payment of $250,000 to the Community Service Sanction Account (for the same purpose), and the sum of $120,000 as counsel fees and costs ($30,000 incurred by each of four moving parties for time they spent in connection with the sanctions proceedings themselves). Esso was similarly assessed a sanction of $30,000 to be paid to each of four other movants, but Esso has paid that sum and does not challenge it on this appeal.
Goldman Antonetti, its three named partners, and Esso appeal the sanctions imposed against them on a variety of grounds. The parties who were awarded sanctions to compensate them for the time expended in the sanctions hearings have cross-appealed, alleging that they are entitled to sizable additional sanctions for discovery misconduct that caused harm in other phases of the lawsuit, and that the district court abused its discretion in summarily dismissing these other sanctions requests on the grounds that the moving papers were insufficiently specific. Finally, several parties against whom Esso has brought claims for contribution in the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") aspect of the underlying district court proceeding (that is all that remains, since the common law claims have been settled) have cross-appealed from the district court's refusal to dismiss those claims as a sanction against Esso for its discovery misconduct.
We will vacate the suspensions imposed upon Cepeda, Torres, and Romero for procedural reasons. They did not receive notice prior to the sanctions hearing that suspension was being considered as a possible sanction. Concomitantly, they did not have the opportunity to properly defend against such a sanction and introduce mitigating evidence. As a result, the court's imposition of sanctions against Cepeda, Torres, and Romero violated due process requirements.
We will also vacate the provision of the district court's order requiring Esso and Goldman Antonetti to pay a total of $1,000,000 to the Community Service Sanction Account. The court simply had no power to order Esso and Goldman Antonetti to pay money to benefit the St. Thomas penal system.
We do, however, affirm the sanction of $120,000 against Goldman Antonetti. Although Goldman Antonetti has made quite forceful arguments that its discovery misconduct with respect to the Agrelot summary memo could not have caused all of the costs and expenses claimed by the movants, particularly in view of its having disclosed the 800 pages of technical material on which the memo was based, we cannot say, reviewing the record as a whole, that the district court abused its discretion in awarding sanctions of $120,000. We also reject Goldman Antonetti's contention that it is relieved of the obligation to pay this sanction by a release by which several of the parties gave up claims against Esso and its attorneys. The district court did not clearly err in concluding that the language in the release was not broad enough to cover Goldman Antonetti, Esso's former attorneys, and that the context of the release did not suggest otherwise.
We are also satisfied that the district court did not abuse its discretion in refusing to award additional sanctions because of the failure of the movants to provide papers adequate to assess the harm caused by the violation. District courts, which are extremely busy, should not be burdened with re-inventing the wheel in incredibly complex litigation in order to sort out voluminous sanctions claims.
The foregoing threshold summary effectively disposes of all appeals except the cross-appeals seeking dismissal of the claims for contribution. However, we do not have appellate jurisdiction over these cross-appeals. Because our review of that aspect of the district court's order would necessarily involve an analysis of the merits of the underlying dispute and because the district court's order is reviewable only after final judgment, we do not have jurisdiction over this non-final order under the only potentially viable basis therefor--the collateral order doctrine. See Cohen v. Beneficial Indus. Loan Co., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). We note in this regard that this aspect of the case differs from the appeal of Goldman Antonetti. Under Eavenson, Auchmuty & Greenwald v. Holtzman, 775 F.2d 535 (3d Cir.1985), we have appellate jurisdiction over an order that finally resolves the imposition of sanctions against attorneys no longer in the underlying case. We also review those aspects of the appeal not brought by, but inextricably intertwined with, the issues raised by Goldman Antonetti, i.e., Esso's contentions pertaining to the Community Service Sanction Account and the claims of other parties pertaining to the level of monetary sanctions awarded them, under the doctrine of pendent appellate jurisdiction. See Kershner v. Mazurkiewicz, 670 F.2d 440 (3d Cir.1982).
We would prefer to be able to adjudicate the cross-appeals concerning the contribution claims because we have spent a great deal of time both in brief reading and at oral argument in familiarizing ourselves with the case. However, as a court of limited jurisdiction, we do not dispose of matters that are not properly the subject of appellate jurisdiction. We...
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