McDonald v. Sun Oil Company, Civ. 03-1504-HA.
| Decision Date | 14 March 2006 |
| Docket Number | No. Civ. 03-1504-HA.,Civ. 03-1504-HA. |
| Citation | 423 F.Supp.2d 1114 |
| Parties | Thomas McDONALD; Marian McDonald; and Alex E. McDonald, Plaintiffs and Counterclaim Defendants, v. SUN OIL COMPANY, Sunoco, Inc., and Cordero Mining Company, Defendants and Counterclaim Plaintiffs, Thomas McDonald and Marian McDonald, and Alex E. McDonald, Third-Party Plaintiffs, v. J.T. Batterson and Susan Batterson, Third-Party Defendants. |
| Court | U.S. District Court — District of Oregon |
Brian D. Chenoweth, Christopher A. Rycewicz, Rycewicz & Chenoweth, LLP, Portland, OR, for Plaintiffs and Counterclaim Defendants.
Amy Edwards, Per A. Ramfjord, Stoel Rives, LLP, Portland, OR, Harold L. Segall, James T. Esselman, Beveridge & Diamond, P.C., Washington, DC, for Defendants and Counterclaim Plaintiffs.
Steven L. Naito, Jeanne O'Shea Gumusoglu, Tarlow Naito & Summers, LLP, Portland, OR, for Third-Party Defendants.
This suit arises out of a deed sale to plaintiffs Thomas McDonald and Marian McDonald of more than 2600 acres of real property located in Jefferson County, Oregon. The purchase included the Horse Heaven Mine Property, an allegedly contaminated property (hereinafter referred to as the "Site" or "Horse Heaven").
In 2003, plaintiffs filed a Complaint against the sellers alleging breach of contract and fraud. Plaintiffs also allege violations of O.R.S. § 465.250 et seq. (Oregon's "Superfund" statute) and 42 U.S.C. § 9600 et seq. (CERCLA) and seek cost recovery, contribution, and a declaratory judgment regarding alleged contamination that defendant's1 mining operations caused on the Site and to plaintiffs' residence property (hereinafter referred to as the "McDonald Ranch").
Defendant counterclaimed against plaintiffs for contribution and cost recovery for the Site. In April 2004, plaintiffs filed a third-party complaint against J.T. Batterson and Susan Batterson (the Battersons) seeking cost recovery and contribution if plaintiffs were found liable to defendant on the counterclaims.
Plaintiffs, defendant, and third-party defendants each seek summary judgment [110, 107, 101]. Defendant filed two motions to strike portions of the declarations of Thomas McDonald, Alex McDonald, and Marian McDonald [120, 160]. Plaintiffs also filed a motion in limine for sanctions and to remedy spoliation of evidence [172]. Oral argument on the motions was heard on January 30, 2006.
Mercury mining operations began on the Site in 1934 under the direction of Horse Heaven Mines, Inc. (HHM). In 1936 defendant acquired all of HHM's stock. Mining operations continued until 1944 when a fire destroyed the mining facilities. In 1846, HHM sold all of its mining interests in Jefferson County to Cordero Mining Company, a solely owned subsidiary of defendant, and defendant dissolved HHM. Mining operations began again at the Site in 1955 and ceased in 1958.
In 1973, defendant conveyed over 2600 acres to plaintiffs, including the Site, via a Bargain and Sale Deed (1973 Deed). At the time of this purchase, the Site contained calcine tailings. Calcine tailings are remnants left after mercury has been extracted from rocks. According to plaintiffs, Wally Freeman (Freeman), a representative of defendant, informed Mr. McDonald that the calcine tailings had been put through a process whereby all mercury and any residual contaminants were removed. The 1973 Deed expressly reserved defendant's interests in the subsurface mineral rights located at the Site, but transferred defendant's rights in the calcine tailings to plaintiffs.
In 1976 plaintiffs sold all their property by Warranty Deed except the forty acres containing the Site. In 1982, plaintiffs deeded these forty acres to Ray Whiting (Whiting), one of HHM's original founders, as payment for advice and assistance given during plaintiffs' purchase of the real property from defendant. In that transaction, plaintiffs reserved their rights to the calcine tailings on the Site until 2007. The Site was then conveyed to Whiting's daughter and grandson, third-party defendants Susan Batterson and J.T. Batterson (collectively the Battersons).
In 2001, the Oregon Department of Environmental Quality (DEQ) requested information from defendant regarding possible contamination on the Site. In 2002, DEQ determined that plaintiff's handling of the tailings had created an environmental release and ordered plaintiffs to refrain from removing or disturbing the tailing piles on the Site without DEQ approval.
Plaintiffs aver that when they purchased the 2600 acres, defendant made intentionally or recklessly false representations that the calcine tailings present on the Site portion of the acreage were commercially valuable and that all traces of mercury had been extracted out of the tailings. Plaintiffs further aver that defendant made these representations with the intent to induce plaintiffs to purchase the property. Plaintiffs claim that they relied on these representations regarding the calcine tailings in deciding to purchase the entire 2600 acres, and were damaged as a result of this reliance.
Under Federal Rule of Civil Procedure 56(c), summary judgment is appropriate only where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." The moving party has the burden of demonstrating the absence of a genuine issue of fact for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct 2505, 91 L.Ed.2d 202 (1986). If the moving party satisfies this burden, the opponent must set forth specific facts showing that there remains a genuine issue for trial. Fed.R.Civ.P. 56(c).
A non-moving party who bears the burden of proof at trial to an element essential to its case must make a showing sufficient to establish a genuine dispute of fact with respect to the existence of that element of the case or be subject to summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Such an issue of fact is only a genuine issue if it can reasonably be resolved in favor of either party. Anderson, 477 U.S. at 250-51, 106 S.Ct. 2505. This burden to demonstrate a genuine issue of fact increases where the factual context makes the non-moving party's claim implausible. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Mere disagreement or the bald assertion that a genuine issue of material fact exists no longer precludes invoking summary judgment. Cal. Architectural Bldg. Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir.1987). In other words, "[w]hen the moving party has carried its burden under Rule 56(c), its opponent must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586, 106 S.Ct. 1348 (footnote omitted). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50, 106 S.Ct. 2505 (citations omitted).
Defendant's experts, Mr. Donald Haas and Dr. Kathryn Johnson, prepared reports setting forth their opinions and provided plaintiffs with all materials considered in developing those opinions. They included no notes or drafts in that submission. Plaintiffs also omitted any notes or drafts in their expert submissions to defendant.
Defendant submitted a request to plaintiffs under Federal Rule of Civil Procedure 34 (Rule 34) for all documents reviewed or relied upon by plaintiffs' experts, including notes and drafts. Plaintiffs did not serve such a request on defendant. Following the deposition of Mr. Haas, plaintiffs sent an e-mail to defense counsel requesting expert report drafts and notes. This request was made at the close of discovery, in conjunction with a motion to extend discovery deadlines for a seventh time. Defense counsel filed an objection to the request to extend discovery.
On July 1, 2005, plaintiffs withdrew their request to extend discovery and did not submit a request for the information pursuant to Rule 34. Six weeks later, plaintiffs filed their first Motion in Limine for Sanctions and to Remedy Spoliation of Evidence.
Despite the lack of a Rule 34 request, in early August defendant produced to plaintiffs (1) copies of all draft reports prepared by the experts, including those with defense counsel's red-lined editorial comments; (2) all e-mail and postal mail correspondence between counsel and the experts; (3) all available handwritten notes taken by the experts; and (4) copies of articles and other publications reviewed by the experts, including highlighting, underlining and/or notes. Plaintiffs then withdrew their motion in limine.
Over four months after defendant's production, and after the summary judgment motions were briefed, plaintiffs filed a second Motion in Limine for Sanctions and to Remedy Spoliation of Evidence. Plaintiffs assert that defendant's experts destroyed drafts of their expert reports and other discoverable notes, resulting in prejudice to plaintiffs and compelling exclusion of the expert testimony or an appropriate jury instruction. Plaintiffs contend there was spoliation of handwritten notes taken by the experts and that this spoliation deprives them of any opportunity to either determine the admissibility of the experts or to properly cross-examine them. Plaintiffs also allege that defense counsel improperly exerted control over the experts' opinions.
Federal Rule of Civil Procedure 26(a)(2)(B) (Rule 26) requires the disclosure of an expert's identity, a handwritten report containing a statement of all opinions and the...
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