P.H. Glatfelter Co. v. Windward Prospects Ltd., s. 15-3847

• Decision Date: 31 January 2017
• Docket Number: & 16-1310,Nos. 15-3847,16-1197,s. 15-3847
• Citation: 847 F.3d 452
• Parties: P.H. GLATFELTER CO., Plaintiff–Appellant/Cross–Appellee, v. WINDWARD PROSPECTS LTD., Defendant–Appellee/Cross–Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

847 F.3d 452

P.H. GLATFELTER CO., Plaintiff–Appellant/Cross–Appellee,

v.WINDWARD PROSPECTS LTD., Defendant–Appellee/Cross–Appellant.

Nos. 15-3847

16-1197

& 16-1310

United States Court of Appeals, Seventh Circuit.

Argued January 19, 2017

Decided January 31, 2017

Francis A. Citera, Attorney, Greenberg Traurig, LLP, Chicago, IL, Brigid F. Cech Samole, Elliot H. Scherker, Attorneys, Greenberg Traurig, LLP, Miami, FL, Caleb Jonathan Holmes, David G. Mandelbaum, Attorneys, Greenberg Traurig LLP, Philadelphia, PA, for Plaintiff–Appellant.

Jeremy McGuire King, Attorney, Olshan Frome Wolosky LLP, New York, NY, for Defendant–Appellee.

Before Flaum, Manio n, and Williams, Circuit Judges.

Flaum, Circuit Judge.

These three appeals arise out of a discovery dispute between P.H. Glatfelter Co., a paper manufacturer, and Windward Prospects Ltd., an English company on which Glatfelter served a non–party subpoena. Two of the appeals are taken by Glatfelter from the district court's orders denying both Glatfelter's motion to compel responses to its subpoena and Glatfelter's motion for reconsideration. The third appeal, which we treat as a cross–appeal, was taken by Windward to seek an award of fees and costs under Federal Rule of Civil Procedure 37. For the reasons that follow, we dismiss all three appeals for lack of jurisdiction.

I. Background

The present appeals are ancillary to an ongoing multi–party effort to clean up polychlorinated biphenyls (PCBs) in the bed of the Lower Fox River in northeastern Wisconsin. See generally United States v. P.H. Glatfelter Co. , 768 F.3d 662, 665–67 (7th Cir. 2014) ; NCR Corp. v. George A. Whiting Paper Co. , 768 F.3d 682, 686–89 (7th Cir. 2014) ; United States v. NCR Corp. , 688 F.3d 833, 835–36 (7th Cir. 2012). From the mid–1950s through the 1970s, several paper mills and a coating plant discharged wastewater containing PCBs into the Lower Fox River. By 1979, when the EPA banned PCB use, approximately 250,000 pounds of PCBs had been released into the river bed. Beginning in the 1990s, the EPA and the Wisconsin Department of Natural Resources began investigating the contamination to develop a cleanup plan under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The EPA's final plan, adopted in 2002, proposed a cleanup proceeding in stages through a combination of dredging and capping at various sites.

The remediation cost for the Lower Fox River is estimated to be approximately $700 million. See, e.g. , P.H. Glatfelter Co. , 768 F.3d at 667. Under CERCLA, the obligation to pay for the cleanup falls on the parties responsible for creating the hazard, and potentially responsible parties (PRPs) may be liable for the full costs of remediation. Paper manufacturers NCR Corporation and Appvion, Inc. were named by the EPA as PRPs and have funded the ongoing cleanup. Other companies with a potential role in the discharge of PCBs, including Glatfelter, also were named as PRPs and agreed to perform remedial work.

In late 2007, the EPA issued a unilateral administrative order directing the PRPs to begin remedial work in the last four operable units of the Lower Fox River. NCR and Appvion undertook many of those remedial efforts. They then sued other PRPs, including Glatfelter, in the Eastern District of Wisconsin, seeking to recover the cleanup costs and to require other PRPs to pay for future remedial work.¹ The district court initially ruled on summary judgment that NCR and Appvion were not entitled to any equitable contribution from the other paper mills involved. In 2014, we reversed and remanded the cost recovery action back to the district court. See NCR Corp. , 768 F.3d at 687, 689–90, 713. That action remains pending, with Appvion seeking recovery against Glatfelter and other PRPs for the Lower Fox River cleanup costs Appvion has incurred, in addition to subrogation and declaratory relief.

Windward is an English entity allegedly conducting Appvion's defense of CERCLA claims and managing Appvion's responsibility for the Lower Fox River cleanup operations. Windward ratified the commencement of the cost recovery action by Appvion and has stated that Windward will be bound by the result. To defend against Appvion in the cost recovery action, Glatfelter sought discovery relating to Appvion's costs from both Appvion and Windward. Glatfelter contends that identifying those costs (and any potential offsets from insurance, settlements, or indemnification payments) depends on understanding how funds changed hands between Appvion and its insurers or indemnitors, including Windward.

Glatfelter first attempted to obtain discovery from Windward through Appvion, which refused to accept service on Windward's behalf. Glatfelter next sent a copy of its discovery request by certified mail to Windward's counsel at his home office in New Hampshire. He returned the envelope unopened. Glatfelter then filed a motion to compel responses to its discovery requests in the Eastern District of Wisconsin. The district court denied the motion, ruling that Windward's ratification of Appvion's action did not, on its own, give Glatfelter an independent right to seek discovery from the former under Federal Rules of Civil Procedure 33 or 34, but that there are other ways to obtain discovery from non–parties.

Glatfelter next issued a subpoena to Windward at its attorney's New Hampshire address. Windward's counsel informed Glatfelter that Windward would not be making any production because it was not subject to the jurisdiction of the United States federal courts. Windward also objected to the subpoena to the extent that it sought documents or information available from another more convenient, less burdensome, or less expensive source (i.e. , Appvion).

Glatfelter then instituted this ancillary proceeding in the District of Massachusetts,² seeking to compel Windward to respond to the subpoena. Glatfelter also simultaneously moved under Rule 45(f) to transfer the case to the Eastern District of Wisconsin, where the cost recovery action was pending before Judge Griesbach, who had presided over the case since it was first filed. Following a hearing, the magistrate judge in Massachusetts ordered a transfer to the Eastern District of Wisconsin, and the ancillary action was docketed before Judge Griesbach. After receiving additional arguments and evidence, he denied the motion to compel, concluding that the court lacked personal jurisdiction over Windward and that Glatfelter had not established which documents it sought that were not already subject to production by Appvion. Glatfelter filed a motion for reconsideration, which the district court also denied.

Glatfelter appealed the district court's denial of its motions, and Windward filed a third appeal regarding fees, which we treated as a cross-appeal. In our order dated July 25, 2016, we directed that Windward's cross-appeal be taken with the other appeals, and instructed the parties to address all jurisdictional issues in their briefs.

On January 17, 2017, two days before oral argument was scheduled in this case, Glatfelter notified this Court of a proposed consent decree among NCR, Appvion, the United States, and the state of Wisconsin that had been submitted to the district court. If approved and entered, the proposed decree would potentially resolve Appvion's claims against Glatfelter in the cost recovery action that gave rise to these ancillary proceedings.

II. Discussion

"The initial inquiry in any appeal is whether the court to which the appeal has been taken has jurisdiction to entertain the appeal." Sik Gaek, Inc. v. Harris , 789 F.3d 797, 799 (7th Cir. 2015) (citation omitted). The federal courts of appeal have jurisdiction over all final decisions of the federal district courts. See 28 U.S.C. § 1291. A final decision is one that "ends the litigation on the merits, leaving nothing for the [district] court to do but execute the judgment." Midland Asphalt Corp. v. United States , 489 U.S. 794, 798, 109 S.Ct. 1494, 103 L.Ed.2d 879 (1989) (citation omitted). The general rule is that pretrial discovery orders, such as those at issue here, are not final in terms of winding up the underlying lawsuit. See Sik Gaek, Inc. , 789 F.3d at 799. An exception exists, however, under the collateral order doctrine, where an order "conclusively determine[s] the disputed question, resolve[s] an important issue completely separate from the merits of the action, and [is] effectively unreviewable on appeal from a final judgment." Coopers & Lybrand v. Livesay , 437 U.S. 463, 468, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978) (citing Abney v. United States , 431 U.S. 651, 658, 97 S.Ct. 2034, 52 L.Ed.2d 651 (1977) ; United States v. MacDonald , 435 U.S. 850, 855, 98 S.Ct. 1547, 56 L.Ed.2d 18 (1978) ).

Glatfelter emphasizes that this ancillary discovery issue has been conclusively decided by the district court's two orders and is collateral to the underlying cost recovery suit, and that this appeal is, for all practical purposes, Glatfelter's only chance to obtain discovery from Windward, a non–party to the main action. See, e.g. , Carter Prods., Inc. v. Eversharp, Inc. , 360 F.2d 868, 870 (7th Cir. 1966) (finding jurisdiction over an appeal from the Illinois district court's denial of a motion to compel deposition testimony of non–party to underlying California litigation, because, "[f]or all practical purposes[,] ... this appeal [is appellants'] only opportunity for review of the district court's order denying access to the information"). Thus, Glatfelter contends, the collateral order doctrine ought to apply.

The problem for Glatfelter is that this ancillary action was transferred from the District of Massachusetts to the Eastern District of Wisconsin prior to this appeal. In our Circuit, we have recognized the appealability of pretrial discovery orders only where they were issued by a district court in an ancillary proceeding and said district court was not within the jurisdiction of the...