723 F.3d 82 (1st Cir. 2013), 11-2477, Colon-Cabrera v. Esso Standard Oil Co. (Puerto Rico), Inc.

Docket Nº:11-2477.
Citation:723 F.3d 82
Opinion Judge:LIPEZ, Circuit Judge.
Party Name:Manuel A. COL
Attorney:Carlos E. Monta
Judge Panel:Before TORRUELLA, LIPEZ, and HOWARD, Circuit Judges.
Case Date:July 17, 2013
Court:United States Courts of Appeals, Court of Appeals for the First Circuit

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723 F.3d 82 (1st Cir. 2013)

Manuel A. COLÓ N CABRERA, Plaintiff, Appellant,



No. 11-2477.

United States Court of Appeals, First Circuit.

July 17, 2013

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[Copyrighted Material Omitted]

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Carlos E. Montañez Alvarado, for appellant.

Tynan Buthod, with whom Baker Botts L.L.P., Carla García-Benítez, and O'Neill & Borges, were on brief, for appellee.

Before TORRUELLA, LIPEZ, and HOWARD, Circuit Judges.

LIPEZ, Circuit Judge.

Appellant Manuel Colón Cabrera filed suit against appellee Esso Standard Oil Company under the Resource Conservation and Recovery Act (" RCRA" ), 42 U.S.C. § 6972, seeking to compel Esso to remediate environmental contamination at a gas station he owned. After lengthy proceedings in the district court and in a concurrent action in the Puerto Rico commonwealth courts, Colón Cabrera filed a motion for voluntary dismissal under Federal Rule of Civil Procedure 41(a)(2), stating that the federal lawsuit was no longer necessary in light of Esso's alleged concession that it would clean up his gas station. The district court held its ruling on the motion in abeyance while the parties engaged in settlement negotiations. Although it appeared for a time that the parties would be able to resolve the matter, the negotiations were ultimately unsuccessful. The district court subsequently granted Colón Cabrera's motion, but chose to dismiss the case with prejudice pursuant to Rule 41(a)(2) and assess attorneys' fees and costs against him.

Colón Cabrera filed this appeal, arguing that the district court abused its discretion in dismissing the case with prejudice. The parties offer different portrayals of the proceedings below, but the issue that concerns us here is the district court's emphasis on Colón Cabrera's refusal to accept Esso's settlement offers. We conclude that dismissing the case with prejudice based on appellant's refusal to settle was an abuse of discretion. We therefore vacate the dismissal order and remand for further proceedings.1


To understand the parties' positions in this case, we must explain not only the procedural history of this litigation, but also the path of the concurrent Commonwealth action between the same parties that alleged similar, if not identical, claims.

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A. The Concurrent Commonwealth Action

The parties' dispute arises out of Colón Cabrera's operation of a gas station under the Esso trademark. The property on which the gas station is located turned out to be contaminated with various pollutants, and the responsibility for and extent of the necessary remediation has been a subject of much contention between the parties.

In 2005, Colón Cabrera initiated a proceeding in the Puerto Rico commonwealth courts against Esso, asserting various claims arising under Puerto Rico law and seeking damages. In late 2007, he filed a motion for partial summary judgment in that case, which Esso opposed in addition to filing its own motion for summary judgment. In March 2009, the Puerto Rico Superior Court resolved the motions in Colón Cabrera's favor, holding that Esso had made a " unilateral declaration of intent" that bound the defendant to remediate the contamination at the gas station. The Commonwealth court's order required Esso to investigate the extent of the contamination on appellant's property and engage in the necessary remediation, as well as pay any related expenses. Esso appealed the decision to the Court of Appeals of Puerto Rico.

On October 29, 2010, the appellate court upheld the court of first instance's grant of partial summary judgment in Colón Cabrera's favor, and remanded for further proceedings. Esso filed a petition for certiorari with the Supreme Court of Puerto Rico challenging this decision. On May 13, 2011, the Supreme Court of Puerto Rico denied Esso's petition, leaving undisturbed the grant of partial summary judgment.

B. The Federal Action and the Parties' Initial Settlement Efforts

While the litigation in the Commonwealth courts was in its appellate stages, Colón Cabrera filed a complaint in federal court on October 6, 2009, alleging violations of RCRA. This complaint sought, inter alia, civil penalties and an injunction mandating that Esso conduct environmental remediation at the site. The company responded with a motion to dismiss, invoking Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6).

While this motion was pending, the parties engaged in settlement negotiations. The parties' attempts to settle the federal case broke down in late 2010, and they decided to resume litigation. After the district court denied Esso's long-pending motion to dismiss on January 26, 2011, the company filed an answer and counterclaim in February of that year. This pleading asserted that Esso had repeatedly tried to implement a remediation plan at the gas station, but that Colón Cabrera had denied it access to the property.

C. Colón Cabrera's Rule 41 Motion and the Subsequent Proceedings

On March 16, 2011, Colón Cabrera filed a motion for voluntary dismissal under Rule 41(a)(2). He stated that the parties' dispute may have arisen from a " miscommunication" between Esso and appellant's retained environmental expert, as well as a misunderstanding regarding the scope of the appropriate remediation. Contending that Esso's pleading was the first time that it had expressed a willingness to " clean up the contamination of the property," 2 and believing that this purported concession would resolve the federal case, Colón Cabrera

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sought dismissal of the federal action without prejudice and without the imposition of attorneys' fees or costs.

On its own initiative, the district court immediately issued an order holding appellant's motion in abeyance and directed the parties to meet and confer regarding settlement terms. After further negotiations, Esso sent appellant an offer on April 7, which stated...

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