761 F.3d 1005 (9th Cir. 2014), 12-15691, Arizona v. City of Tucson

Docket Nº:12-15691
Citation:761 F.3d 1005
Opinion Judge:M. SMITH, Circuit Judge:
Party Name:STATE OF ARIZONA, Plaintiff-Appellee, v. CITY OF TUCSON, Intervenor-Plaintiff--Appellee, v. ASHTON COMPANY INCORPORATED CONTRACTORS AND ENGINEERS; BALDOR ELECTRIC COMPANY; DON MACKEY OLDSMOBILE CADILLAC, INC.; DUNN-EDWARDS CORPORATION; DURODYNE, INC.; FERSHA CORPORATION; FLUOR CORPORATION; GENERAL DYNAMICS CORPORATION; GOODYEAR TIRE & RUBBER COMPAN
Attorney:Jennifer B. Anderson (argued), Kevin D. Neal, Lori L. Voepel, and Erin E. Richardson, Jones, Skelton & Hochuli, PLC., Phoenix, Arizona; Harlan C. Agnew, Pima County Attorney's Office, Tucson, Arizona; Cynthia T. Kuhn, Kuhn Young Law Firm, PLLC, Tucson, Arizona; Charles A. Bischoff, Jorden Bischof...
Judge Panel:Before: Consuelo M. Callahan and Milan D. Smith, Jr., Circuit Judges, and Edward R. Korman, Senior District Judge.[*] Opinion by Judge Milan D. Smith, Jr.; Partial Concurrence and Partial Dissent by Judge Callahan. CONCUR BY: CALLAHAN (In Part) CALLAHAN, Circuit Judge, concurring, in part, and di...
Case Date:August 01, 2014
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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761 F.3d 1005 (9th Cir. 2014)

STATE OF ARIZONA, Plaintiff-Appellee,

v.

CITY OF TUCSON, Intervenor-Plaintiff--Appellee,

v.

ASHTON COMPANY INCORPORATED CONTRACTORS AND ENGINEERS; BALDOR ELECTRIC COMPANY; DON MACKEY OLDSMOBILE CADILLAC, INC.; DUNN-EDWARDS CORPORATION; DURODYNE, INC.; FERSHA CORPORATION; FLUOR CORPORATION; GENERAL DYNAMICS CORPORATION; GOODYEAR TIRE & RUBBER COMPANY; LOCKHEED MARTIN CORPORATION; HOLMES TUTTLE FORD, INC.; INDUSTRIAL PIPE FITTINGS, LLC; TUCSON FOUNDRY & MANUFACTURING INCORPORATED; ROWE ENTERPRISES INCORPORATED; PIMA COUNTY COMMUNITY COLLEGE DISTRICT; ROLLINGS CORPORATION; TEXTRON INCORPORATED; ABB INCORPORATED; COMBUSTION ENGINEERING INCORPORATED; TEXAS INSTRUMENTS, INC.; TUCSON DODGE INCORPORATED; WARNER PROPELLER & GOVERNOR COMPANY, LLC; FLUOR ENTERPRISES, INC., Defendants-Appellees,

v.

RAYTHEON COMPANY; PIMA COUNTY, Intervenors-Appellants, UNIVERSITY OF ARIZONA; ARIZONA BOARD OF REGENTS; TOMKINS INDUSTRIES, INC.; TUCSON AIRPORT AUTHORITY; TUCSON ELECTRIC POWER COMPANY, Intervenor-Defendants--Appellants

No. 12-15691

United States Court of Appeals, Ninth Circuit

August 1, 2014

Argued and Submitted, San Francisco, California: February 10, 2014.

Counsel Amended August 6, 2014.

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[Copyrighted Material Omitted]

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Appeal from the United States District Court for the District of Arizona. D.C. No. 4:10-cv-00634-CKJ. Cindy K. Jorgenson, District Judge, Presiding.

Environmental Law

The panel affirmed in part and reversed in part the district court's order approving consent decrees in an action under the Comprehensive Environmental Response Compensation and Liability Act.

The panel reaffirmed that a district court has an obligation to independently scrutinize the terms of CERCLA consent decrees by, among other things, comparing the proportion of total projected costs to be paid by the settling parties with the proportion of liability attributable to them. The panel concluded that the district court properly declined to issue declaratory relief regarding intervening parties' future CERCLA liability because the intervenors did not request such relief in their complaints. The panel further held that the district court erred in entering the parties' proposed CERCLA consent decrees, because the court failed to independently scrutinize the terms of the agreements, and in so doing, afforded undue deference to the Arizona Department of Environmental Quality.

Judge Callahan concurred in part and dissented in part. She agreed with Part I of the majority's decision where it concluded that the district court properly denied the intervenors' request for declaratory relief. She dissented from Part II of the majority's decision because she would conclude that the district court properly approved the proposed consent decrees.

Jennifer B. Anderson (argued), Kevin D. Neal, Lori L. Voepel, and Erin E. Richardson, Jones, Skelton & Hochuli, PLC., Phoenix, Arizona; Harlan C. Agnew, Pima County Attorney's Office, Tucson, Arizona; Cynthia T. Kuhn, Kuhn Young Law Firm, PLLC, Tucson, Arizona; Charles A. Bischoff, Jorden Bischoff & Hiser, PLC, Scottsdale, Arizona; James J. Dragna and Denise G. Fellers, Bingham & McCutchen, Los Angeles, California; James Francis Murphy, Adler Murphy & McQuillen LLP, Chicago, Illinois; and Robert M. Jackson, Honigman Miller Schwartz & Cohn, Detroit, Michigan, for Intervenor--Defendants--Appellants.

Jeffrey Cantrell (argued), Tom Horne, Tamara Huddleston, and Anthony Young, Office of the Arizona Attorney General, Phoenix, Arizona, for Plaintiffs-Appellees.

Christopher D. Thomas (argued) and Matthew L. Rojas, Squire Sanders, LLP, Phoenix, Arizona; Patrick J. Paul and Martha E. Gibbs, Snell & Wilmer LLP, Phoenix, Arizona; Eric Lukingbeal, Robinson & Cole LLP, Hartford, Connecticut; Edward A. Cohen, Thompson Coburn LLP, St. Louis, Missouri; Carla A. Consoli and Jon Weiss, Lewis and Roca LLP, Phoenix, Arizona; Richard M. Yetwin, Michael R. Urman, John C. Richardson, and John Charles Emerson Barrett, DeConcini McDonald Yetwin & Lacey, P.C., Tucson, Arizona; Randolph G. Muhlestein, Musick Peeler & Garrett, LLP, Los Angeles, California; John F. Cermak, Jr. and Sonja A. Inglin, Baker & Hostetler LLP, Los Angeles, California; Phillip F. Fargotstein and Theresa Dwyer-Federhar, Fennemore Craig PC, Phoenix, Arizona; Joel L. Herz, Law Offices of Joel L. Herz, Tucson, Arizona; Charles S. Price and Mariscal Weeks, McIntyre & Friedlander, PA, Phoenix, Arizona; Mary T. Holohan, Fluor Enterprises, Inc., Irving, Texas; Howard T. Roberts, Jr., Goering, Roberts, Rubin, Brogna, Enos & Treadwell-Rubin, P.C., Tucson, Arizona; Alan N. Bick and Heather D. Hearne, Gibson, Dunn & Crutcher LLP, Irvine, California; Jeffrey G. Baxter and Sean E. Brearcliffe, Rusing Lopez & Lizardi, PLLC, Tucson, Arizona; Dennis A. Rosen, Law Offices of Dennis A. Rosen, Tucson, Arizona; Mitchell J. Klein, Polsinell Shughart, PC, Phoenix, Arizona; Jeremy A. Lite, Quarles & Brady LLP, Tucson, Arizona; Stephen D. Hoffman, Lewis Brisbois Bisgaard & Smith, LLP, Phoenix, Arizona, for Defendants-Appellees.

Before: Consuelo M. Callahan and Milan D. Smith, Jr., Circuit Judges, and Edward R. Korman, Senior District Judge.[*] Opinion by Judge Milan D. Smith, Jr.; Partial Concurrence and Partial Dissent by Judge Callahan.

OPINION

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M. SMITH, Circuit Judge:

In this appeal, we address a district court's obligation to scrutinize the terms of a proposed consent decree under the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. § 9601-75 (CERCLA). In so doing, we reaffirm that a district court has an " obligation to independently scrutinize the terms of [such agreements]," by, inter alia, comparing " the proportion of total projected costs to be paid by the [settling parties] with the proportion of liability attributable to them." United States v. Montrose Chem. Corp. of Cal., 50 F.3d 741, 747 (9th Cir. 1995) (internal quotation marks and emphasis omitted).

We conclude that the district court properly declined to issue declaratory relief regarding the intervening parties' (Intervenors) future CERCLA liability. We further hold that the district court erred in entering the parties' proposed CERCLA consent decrees, because the court failed to independently scrutinize the terms of the agreements, and in so doing, afforded undue deference to the Arizona Department of Environmental Quality(ADEQ). We therefore affirm in part, reverse in part, and remand for further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND

This case concerns liability under CERCLA and its state law counterpart, the Arizona Water Quality Assurance Revolving Funds (WQARF), A.R.S. § 49-281-391, for cleanup costs resulting from the contamination of the Broadway-Patano Landfill Site (the Site)--a hazardous waste site in Tucson, Arizona.

In January 2009, following an extensive investigation by the ADEQ, the State of Arizona filed a petition in the United States District Court for the District of Arizona, seeking to preserve the testimony of Ernest Joseph Blankinship--an elderly witness who had extensive knowledge of the Site's contamination. During the course of the proceedings, several parties, who were potentially responsible for the Site's contamination (i.e., potentially responsible parties), approached the State seeking to enter into early settlement agreements, releasing them from additional liability under CERCLA and WQARF.

On June 18, 2010, the State sent early settlement offers to those parties who requested early agreements, and the State ultimately reached eighteen proposed agreements with twenty-two parties. The proposed agreements require the settling parties to pay specified damages to the State, in exchange for a full release of liability under CERCLA and WQARF. Consistent with Section 113(f)(2) of CERCLA, the proposed agreements further release the settling parties from any obligation to pay contribution to non-settling parties in the future. See 42 U.S.C. § 9613(f)(2).

In order to obtain judicial approval of the proposed agreements under 42 U.S.C. § 9613(f)(2), the State initiated this action against the settling parties (Defendants-Appellees), alleging liability for the Site's cleanup under CERCLA and WQARF. Shortly thereafter, the State filed public notice of its intent to enter into consent

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decrees with the Defendants-Appellees. A number of non-settling parties filed comments objecting to the proposed consent decrees and the State filed responses.

On March 11, 2011, the State filed a motion to enter the consent decrees. The State's motion explained that the total estimated cost of remediation was $75 million, and that the State calculated the liability of the settling parties to be de minimis --0.01% to 0.2% of the total cost. Several potentially responsible parties, who were not parties to the settlements, subsequently moved to intervene in the action.1 The district court granted these motions over the State's objection.2

Intervenors opposed the State's motion to enter the consent decrees. In so doing, they primarily argued that the State did not provide sufficient information for the parties or the court to determine whether the consent decrees were substantively " fair, reasonable, and consistent with CERCLA's objectives." Montrose, 50 F.3d at 748. Intervenors' brief in opposition to the motion further requested a court order declaring that the State could not, in the future, hold Intervenors jointly and severally liable for costs related to the Site's cleanup.3

The district court denied Intervenors' request for declaratory relief and issued a twelve-page opinion approving the consent decrees. The district court's opinion...

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