Aviall Services, Inc. v. Cooper Industries, LLC, Civil Action No. 3:97-CV-1926-D.

CourtUnited States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Texas
Citation572 F.Supp.2d 676
Decision Date11 August 2008
Docket NumberCivil Action No. 3:97-CV-1926-D.
PartiesAVIALL SERVICES, INC., Plaintiff-counterdefendant, v. COOPER INDUSTRIES, LLC, Defendant-counterplaintiff.
572 F.Supp.2d 676
AVIALL SERVICES, INC., Plaintiff-counterdefendant,
v.
COOPER INDUSTRIES, LLC, Defendant-counterplaintiff.
Civil Action No. 3:97-CV-1926-D.
United States District Court, N.D. Texas, Dallas Division.
August 11, 2008.

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Richard O. Faulk, Jose A. Berlanga, Gardere Wynne Sewell, Houston, TX, Cynthia J. Bishop, Douglas Steward Lang, Joan Krajewski, Paul Edward Kennedy, Gardere Wynne Sewell, Dallas, TX, for Plaintiff-counterdefendant.

Charles Michael Moore, Elizabeth E. Mack, Locke Liddell & Sapp, Dallas, TX, Dale E. Stephenson, Squire Sanders & Dempsey Cleveland, OH, for Defendant-counterplaintiff.

MEMORANDUM OPINION AND ORDER

SIDNEY A. FITZWATER, Chief Judge.


In this lawsuit seeking recovery under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. §§ 9601-9675,

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and on other federal- and state-law claims, the court must decide whether the plaintiff-land purchaser has established the defendant-land seller's liability under CERCLA and whether some or all of the plaintiff's other claims must be dismissed. For the reasons that follow, the court grants in part and denies in part both parties' summary judgment motions, and, pending receipt of supplemental briefing, defers final rulings on the recoverability of certain costs incurred in cleaning up two of the four facilities at issue.

I
A

Defendant Cooper Industries, Inc. (now Cooper Industries, LLC) ("Cooper") owned four sites at which it operated an aircraft engine maintenance business. Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 163, 125 S.Ct. 577, 160 L.Ed.2d 548 (2004). These were known as the Forest Park Facility ("Forest Park"), Love Field Facility ("Love Field"), Carter Field Facility ("Carter Field"), and Lemmon Terminal Facility ("Lemmon Terminal"). In 1981 it sold the business to plaintiff Aviall Services, Inc. ("Aviall"), who later discovered that both Aviall and Cooper had contaminated the soil and groundwater at the sites with hazardous substances. Id.1 Aviall later sold the properties but retained contractual liability for the cleanup.

During the period when Aviall was the owner, it notified the Texas Natural Resource Conservation Commission ("TNRC") of the pollution. Id. at 164, 125 S.Ct. 577.2 The TNRC advised Aviall that it was violating state environmental laws, directed it to clean up the sites, and threatened enforcement action if Aviall failed to undertake remediation. Id. Aviall voluntarily cleaned up the properties, and neither the U.S. Environmental Protection Agency ("EPA"), the TNRC, nor any other governmental entity has undertaken judicial or administrative measures against Aviall or Cooper. Id. No third party has sued Aviall or Cooper concerning any of the conditions or the facilities.

Aviall brought the instant action against Cooper seeking to recover the cleanup costs it had expended and those that it anticipated incurring in the future. Id. It asserted claims for cost recovery under CERCLA § 107(a), 42 U.S.C. § 9607(a), for contribution under CERCLA § 113(f)(1), 42 U.S.C. § 9613(f)(1), and for a declaratory judgment under the federal Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202, and it alleged various pendent state law claims.3 Id. Aviall amended its complaint, dropping the independent § 107(a) claim and alleging instead that it was entitled under § 113(f)(1) to seek contribution

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from Cooper, as a potentially responsible party ("PRP"), for response costs and other liability. Id.

Both parties moved for summary judgment, and the court held that Aviall could not maintain a § 113(f)(1) claim because it had not alleged any prior or pending CERCLA enforcement action against it. Aviall Servs., Inc. v. Cooper Indus., Inc., 2000 WL 31730, at *4 (N.D.Tex. Jan.13, 2000) (Fitzwater, J.) ("Aviall I"), rev'd, 312 F.3d 677 (5th Cir.2002) (en banc), rev'd, 543 U.S. 157, 125 S.Ct. 577, 160 L.Ed.2d 548 (2004). The court dismissed the claim without prejudice. Id. The CERCLA claim was the sole basis for the court to exercise subject matter jurisdiction (the parties are not diverse). Having dismissed that claim on the merits, the court declined in its discretion to exercise supplemental jurisdiction over Aviall's pendent state-law causes of action. Id. at *5.

Although a panel of the Fifth Circuit initially affirmed,4 the en banc Fifth Circuit reversed, holding that § 113(f)(1) authorizes one PRP to seek contribution from other PRPs for cleanup costs when no civil action has been brought under § 106 or § 107(a). Aviall Servs., Inc. v. Cooper Indus., Inc., 312 F.3d 677, 691 (5th Cir.2002) (en banc), rev'd, 543 U.S. 157, 125 S.Ct. 577, 160 L.Ed.2d 548 (2004). The Supreme Court granted certiorari, Cooper Industries, Inc. v. Aviall Services, Inc., 540 U.S. 1099, 124 S.Ct. 981, 157 L.Ed.2d 811 (2004), and reversed and remanded, holding that § 113(f) "authorizes contribution claims only `during or following' a civil action under § 106 or § 107(a), and it is undisputed that Aviall has never been subject to such an action." Cooper Indus., 543 U.S. at 168, 125 S.Ct. 577.

Aviall and an amicus contended that if Aviall could not recover under § 113(f), it could still recover under § 107(a), despite its own status as a PRP under CERCLA. Id. The Supreme Court noted that neither this court, the Fifth Circuit panel, nor the en banc Fifth Circuit had considered a § 107(a) claim. Id. It concluded that both the § 107(a) claim and the question whether Aviall had waived the claim "merit[ed] full consideration by the courts below." Id. at 169, 125 S.Ct. 577 ("Both the question whether Aviall has waived this claim and the underlying § 107 question (if it is not waived) may depend in part on the relationship between §§ 107 and 113."). Accordingly, the Court remanded for further proceedings consistent with its opinion.

B

On remand to the Fifth Circuit, the en banc court ordered the case remanded to this court "with instructions to permit Aviall ... to amend its complaint, if necessary, to assert, free of any challenge of waiver or forfeiture, whatever statutory claims it urges in light of the Supreme Court's decision, without prejudice to Cooper['s] ... other defenses." Aviall Servs., Inc. v. Cooper Indus., Inc., No. 00-10197, order at 1-2 (5th Cir. Feb. 15, 2005) (en banc) (order).5 Under the Fifth Circuit's

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order, this court permitted Aviall to file a third amended complaint ("third complaint"). In the third complaint, Aviall sues Cooper on theories of cost recovery under CERCLA § 107(a) and for response costs incurred or to be incurred under CERCLA; in the alternative, contribution under CERCLA § 107(a); declaratory judgment; common law contribution under state and federal law to recover its response costs attributable to Cooper; contribution under the Texas Solid Waste Disposal Act, Tex. Health & Safety Code Ann. § 361.344(a) (Vernon 2001); contribution under the Texas Water Code, Tex. Water Code Ann. § 26.3513(j) (Vernon 2008); breach of contract; breach of express warranty; contractual indemnification; quantum meruit; and attorney's fees.6

In 2005 Aviall and Cooper both moved for summary judgment.7 Cooper sought, inter alia, summary judgment dismissing all of Aviall's federal claims. The court granted the motion, concluding that § 107(a) did not afford Aviall a cause of action for cost recovery, and that neither § 107(a) nor federal common law provided Aviall a claim for contribution. Aviall Servs., Inc. v. Cooper Indus., LLC, 2006 WL 2263305, at *10 (N.D.Tex. Aug.8, 2006) (Fitzwater, J.) ("Aviall II"), remanded, 235 Fed.Appx. 222 (5th Cir.2007) (per curiam). Because the court had dismissed Aviall's federal claims,8 it declined to exercise supplemental jurisdiction over the remaining state-law claims. Id.

While Aviall's appeal of Aviall II was pending, the Supreme Court decided United States v. Atlantic Research Corp., ___ U.S. ___, 127 S.Ct. 2331, 168 L.Ed.2d 28 (2007), which held that CERCLA § 107(a)(4)(B) does provide a cost recovery cause of action for PRPs such as Aviall. Id. at 2339. In response to Atlantic Research, this court filed an order stating, in relevant part:

In view of the Supreme Court's decision today in United States v. Atlantic Research Corp., the court advises the United States Court of Appeals for the Fifth Circuit that if it remands this case to this court, the court will vacate its judgment entered August 8, 2006 and reconsider its decision so as to comply with Atlantic Research Corp.

Aviall Servs., Inc. v. Cooper Indus., LLC, No. 3:97-CV-1926-D, order (N.D. Tex. June 11, 2007) (Fitzwater, J.) (citation omitted). The Fifth Circuit, in turn, remanded the case "to the district court for

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reconsideration in light of the Supreme Court's recent decision in United States v. Atlantic Research Corp." Aviall Servs. Inc. v. Cooper Indus. Inc., 235 Fed.Appx. 222 (5th Cir.2007) (per curiam).

C

On remand, the parties have filed supplemental briefs in support of the crossmotions for summary judgment that they initially filed in 2005.9 In its most recent briefing, Aviall seeks summary judgment establishing that Cooper is liable under CERCLA § 107(a), and it reserves the damages issue for trial. Cooper moves for summary judgment dismissing all of Aviall's federal claims, and it also moves to exclude the testimony of Aviall's expert, Jeffrey Zelikson ("Zelikson"), or, in the alternative, for a Fed.R.Civ.P. 56(f) continuance.

II

In Aviall II the court dismissed Aviall's CERCLA- and federal common law-based contribution claims. Aviall II, 2006 WL 2263305, at *9-*10. Because nothing in Atlantic Research calls into question this court's decision in Aviall II regarding these claims, the court adheres to Aviall II and grants Cooper's November 14, 2005 motion to that extent.

II

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