Aluminum Co. of America v. Beazer East, Inc., No. 96-3420

• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
• Writing for the Court: STAPLETON
• Citation: 124 F.3d 551
• Parties: , 27 Envtl. L. Rep. 21,510 ALUMINUM COMPANY OF AMERICA, a Pennsylvania corporation v. * BEAZER EAST, INC., a Delaware corporation; Chicago Bridge & Iron Company, an Illinios corporation Beazer East, Inc., a Delaware corporation, Appellant
• Docket Number: No. 96-3420
• Decision Date: 02 September 1997

Page 551

124 F.3d 551 45 ERC 1228, 27 Envtl. L. Rep. 21,510 ALUMINUM COMPANY OF AMERICA, a Pennsylvania corporation
v.
^*BEAZER EAST, INC., a Delaware corporation;
Chicago Bridge & Iron Company, an Illinios corporation
Beazer East, Inc., a Delaware corporation, Appellant No. 96-3420. United States Court of Appeals,
Third Circuit. Argued March 26, 1997.
Decided Sept. 2, 1997.

Page 554

Christopher J. McNevin (argued), William K. Dial, Pillsbury, Madison & Sutro, Los Angeles, CA, Debra B. Todd, Cathy R. Gordon, Todd & Silverberg, Pittsburgh, PA, for Appellant.

Richard W. Gladstone, II (argued), Joel L. Lennen, Eckert, Seamans, Cherin & Mellott, Pittsburgh, PA, for Appellee Aluminum Company of America.

Lloyd S. Guerci (argued), Gary A. Winters, Mayer, Brown & Platt, Washington, DC, Russell R. Eggert, Mayer, Brown & Platt,

Page 555

Chicago, IL, and David G. Ries, Thorp, Reed & Armstrong, Pittsburgh, PA, for Appellee Chicago Bridge & Iron Company.

Before: SLOVITER, Chief Judge, STAPLETON and ALDISERT, Circuit Judges.

STAPLETON, Circuit Judge.

This appeal involves important questions about the final order requirement of 28 U.S.C. § 1291 and our appellate jurisdiction. We conclude that the district court's resolution of all claims other than those the parties agreed to submit to arbitration produced a final order because it resolved all that the parties chose to present to the court. Since we have jurisdiction, we must also address issues of "operator" and "owner" liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq. We will affirm the judgment of the district court.

I. THE FACTUAL AND PROCEDURAL CONTEXT

The facts giving rise to this dispute began in the years preceding 1934. At that time, appellees Aluminum Company of America ("Alcoa") and Chicago Bridge and Iron Company ("CBI") maintained business relationships with American Lumber and Treating Corporation ("ALT Corp.") and American Wood Impregnation Corporation ("AWIC"). ALT Corp. and AWIC were in the business of using and promoting Wolman Salts for the treatment and preservation of wood. Alcoa sold Wolman Salts to both ALT Corp. and AWIC. CBI constructed wood treatment facilities.

In August 1934, ALT Corp. and AWIC merged to form the American Lumber and Treating Company ("ALT"). Alcoa and CBI were heavily involved in recommending and implementing the merger, and both immediately became large shareholders of the new company. Each simultaneously purchased 27.5% of ALT's authorized shares. ALT's third principal shareholder, Galena Corporation, granted Alcoa and CBI, jointly, a proxy enabling Alcoa and CBI to each appoint two directors to ALT's seven-member board of directors.

Between 1934 and 1954, ALT operated eighteen wood treatment plants around the country. Throughout this period, Alcoa and CBI continued to provide ALT withproducts and services. Both also increased their holdings in ALT stock, so that by 1954 they together held 95% of ALT's outstanding shares. Each year Alcoa and CBI elected a total of four of ALT's seven board members.

In April 1954, Alcoa, CBI, and appellant Beazer East, Inc. ("Beazer") ¹ entered into a purchase agreement whereby Alcoa and CBI agreed to transfer to Beazer all of their ALT stock in exchange for newly-issued Beazer stock. Two months after execution of the purchase agreement, in June 1954, ALT and Beazer executed a liquidation agreement. Under the terms of the liquidation agreement, Beazer received immediate transfer and assignment of all of ALT's rights, titles, property, and assets. Beazer also assumed ALT's liabilities: Beazer "for itself, its successors and assigns, fully intending to become legally bound thereby, does hereby assume all of the liabilities and obligations of [ALT] of whatsoever nature." A5158. All of ALT's capital stock was redeemed and canceled and ALT was soon dissolved.

Years later, environmental damage was discovered at numerous sites where ALT had operated wood treatment plants between 1934 and 1954. CBI and Beazer each incurred costs in cleaning up these sites. In 1990, Beazer notified Alcoa that it considered Alcoa a potentially responsible party for the costs Beazer was incurring at the ALT sites, that Beazer expected Alcoa to assist in the cleanup, and that, if Alcoa refused, then Beazer would take legal action seeking contribution and indemnification from Alcoa.

Alcoa initiated this litigation in 1991. It sought a declaratory judgment, pursuant to sections 107 and 113 of CERCLA, 42 U.S.C. §§ 9607 and 9613, finding that Alcoa was not

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an "operator" of ALT's facilities between 1934 and 1954 and, therefore, is not liable for response costs at the former ALT sites. Beazer counterclaimed against Alcoa and added CBI to the action. Beazer sought a declaratory judgment that Alcoa and CBI are liable as operators and sought to recover from Alcoa and CBI for monies Beazer had expended on clean-up of the sites. ² CBI then filed its own claims against Beazer, seeking declaratory judgments that it was not liable as an operator, that Beazer was liable as ALT's successor, and that a prior settlement between Beazer and CBI concerning CERCLA liability at some of the sites involved in this litigation ("1986 settlement agreement") is valid and binding. CBI also sought to recover from Beazer, under CERCLA and as a matter of equitable indemnity, for clean-up costs it had incurred at some of the ALT sites. Finally, Alcoa and CBI cross-claimed against one another for indemnification and contribution, in the event the court found them liable as operators of ALT's wood treatment plants.

On March 23, 1992, CBI and Beazer entered into a stipulation order requiring Beazer to comply with the 1986 settlement agreement. Under the district court's order, "[CBI] and Beazer expressly stipulate and agree that the [1986 settlement agreement is] valid and legally enforceable." A311. CBI and Beazer also "affirm that they shall comply with all of the terms of the Settlement Agreement...." Id.

Under a pretrial order entered by the court on March 13, 1996, the parties agreed that the trial would only concern issues of liability. They agreed that all non-liability issues, including determination of how much money any of the parties were entitled to collect from one another, would not be resolved by the court but would instead be settled in private arbitration or mediation. The court's consent order states:

Following the trial on liability, this Court shall enter a final judgment. Subject to the parties' agreement, any issues remaining after the liability trial, i.e., allocation or apportionment of any liability and amount of any response costs and/or damages, shall be referred to a private binding mediation/arbitration process, to occur following entry of final judgment on the liability issues and full and final resolution of any and all appeals following final disposition as to liability by this Court.

A316.

A bench trial was held in March and April of 1996. The district court issued a memorandum opinion and order on June 27, 1996, concluding that Alcoa and CBI were not liable for contribution as "operators" of the ALT plants and that Beazer was liable for response costs as ALT's successor. The court further ordered that Alcoa and CBI's cross-claims for indemnification were dismissed as moot and directed that the clerk mark the case closed.

CBI moved to amend the judgment, arguing that the district court's June order might not be a final judgment because damages issues remained to be resolved through arbitration. CBI asked the court to certify, pursuant to Federal Rule of Civil Procedure 54(b), that there was no just reason for delaying entry of a final judgment. It also sought a ruling in its favor on its claim concerning the validity of the 1986 settlement agreement between CBI and Beazer.

Subsequently, on July 22, 1996, the district court amended its earlier memorandum and order to correct two typographical errors. The court also stated: "With respect to CBI's request that the court amend the judgment order to reflect that the September 30, 1986 settlement between CBI and Beazer is binding and enforceable, the record shows that this issue was addressed and resolved ... by order of court dated March 23, 1992." The court did not address CBI's concern about the possible lack of a final judgment or its Rule 54(b) request.

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After Beazer filed this appeal, CBI moved to dismiss the appeal for lack of appellate jurisdiction. Both the appeal and the motion to dismiss are before us. ³

II. JURISDICTION

The parties all agree that the district court had jurisdiction over this case pursuant to 42 U.S.C. § 9613(b), 28 U.S.C. § 1331, and 28 U.S.C. § 1367. There is a dispute, however, as to whether we have jurisdiction to hear this appeal. Our jurisdiction, if we have it, is based on 28 U.S.C. § 1291, which gives courts of appeals jurisdiction over "appeals from all final decisions of the district courts." ⁴ CBI contends that the district court never entered a final order, and thus it has moved to dismiss this appeal as premature. Whether we have jurisdiction turns on whether there is a "final decision" of the district court within the meaning of § 1291.

A. General Rules of Finality

"Whether an order is 'final' depends on its effect." Marcus v. Township of Abington, 38 F.3d 1367, 1370 (3d Cir.1994). Ordinarily, a final decision will have two effects. First, the decision will fully resolve all claims presented to the district court. Second, after the decision has been issued, there will be nothing further for the district court to do. See Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 633, 89 L.Ed. 911 (1945) ("A 'final decision' generally is one which ends the litigation on the merits and leaves nothing for the court to do but execute the judgment."); Isidor Paiewonsky Assocs., Inc. v. Sharp Properties, Inc., 998 F.2d...