Prudential Ins. Co. of America v. U.S. Gypsum Co., CIV. 87-4227 HAA.

• Decision Date: 20 June 2001
• Docket Number: No. CIV. 87-4238 HAA.,No. CIV. 87-4227 HAA.,CIV. 87-4227 HAA.,CIV. 87-4238 HAA.
• Citation: 146 F.Supp.2d 643
• Parties: The PRUDENTIAL INSURANCE COMPANY OF AMERICA, et al., Plaintiffs, v. UNITED STATES GYPSUM COMPANY et al., Defendants.
• Court: U.S. District Court — District of New Jersey

146 F.Supp.2d 643

The PRUDENTIAL INSURANCE COMPANY OF AMERICA, et al., Plaintiffs, v. UNITED STATES GYPSUM COMPANY et al., Defendants.

No. CIV. 87-4227 HAA.

No. CIV. 87-4238 HAA.

United States District Court, D. New Jersey.

June 20, 2001.

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OPINION

ACKERMAN, District Judge.

This matter comes before the Court on a motion by defendant United States Gypsum Company ("Gypsum") for partial summary judgment against plaintiff, the Prudential Insurance Company of America ("Prudential") on the grounds of res judicata or lack of subject matter jurisdiction; for summary judgment dismissing Prudential's Racketeer Influenced and Corrupt Organizations Act ("RICO") claims as barred by the statute of limitations; and for summary judgment dismissing Prudential's RICO claims on substantive grounds. For the reasons stated below, Gypsum's requests are granted in part and denied in part.

I. Background

In 1987, Prudential brought a complaint against seven former manufacturers of asbestos-containing materials ("ACMs") to recover costs for monitoring, removing and dealing with ACMs used in Prudential's buildings. Prudential's complaint originally encompassed sixty-one buildings and now includes eighteen buildings. The current active defendants in the action are U.S. Gypsum and United States Mineral Products Company ("USMP"). Prudential also has outstanding claims against Asbestospray Corporation ("Asbestospray")¹ and W.R. Grace & Co.-Conn ("Grace"). Grace and Gypsum filed papers joining their defenses of the motions presently before this court. Grace, however, filed a voluntary petition for relief pursuant to Chapter 11, Title 11 U.S.C. on April 2, 2001, prior to oral argument of this motion. As a result of provisions of 11 U.S.C. § 362(a), this matter is automatically stayed against Grace. Having found no unusual circumstances that would cause the matter to be stayed as to the remaining co-defendants (See McCartney v. Integra National Bank North, 106 F.3d 506, 510 (3d Cir.1997)), this matter will proceed as to the remaining defendants.

Subject matter jurisdiction for Prudential's original Complaint was based solely on a claim arising under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"). The court dismissed Prudential's CERCLA claim on March 28, 1989, but granted Prudential's motion for leave to file a First Amended Complaint that added nine new counts, including a RICO claim, which then became the sole basis for federal jurisdiction.

U.S. Gypsum and Grace had previously defended against a class action in which Prudential was initially determined to be a member of the plaintiff class, Prince George Center, Inc., et al. v. United States Gypsum Co. et al., 1997 WL 1433730, No. 5388 (Pa.Com.Pl.)(hereinafter "Prince George Center"), litigated in the state courts of Pennsylvania. Prince George Center settled claims relating to buildings that "were leased in whole or in part to the United States or any agency thereof at any time between April 30, 1984 and December 22, 1994 inclusive and contained asbestos-containing products at any time during such period...." Plaintiff's Second Brief in Opposition to Motions by Defendants For Partial Summary Judgment, p4. Prudential subsequently petitioned the Pennsylvania Court of Common Pleas to be excluded from the class. Prudential's arguments included assertions that it had inadvertently failed to send a letter opting out of the class; that it was unaware of its inclusion in the class settlement; and that the defendants knew of the Prudential's failure to opt out but did not notify either this court or Prudential of the settlement prior to its finalization. Prudential appealed the Court of Common Plea's adverse decision to the highest court of Pennsylvania and to the United States Supreme Court without success.

In the motions currently before the court, Gypsum asserts that Prudential's claims as to eight of the eighteen buildings are precluded by the Prince George Center class action.² Gypsum also asserts that under the Rooker-Feldman doctrine, this court lacks subject matter jurisdiction to hear Prudential's claims in this case. Prudential responds that Gypsum is estopped from using the Prince George Center judgment in this case for three reasons: because Gypsum stipulated to try claims related to all eighteen buildings in this court; because Gypsum breached its ethical duties; and because Gypsum made affirmative misrepresentations in interrogatory answers. Prudential further contends that Gypsum waived the use of the Prince George Center judgment in this action. Even if this court finds that Gypsum is not estopped and did not waive use of the Prince George Center decision, Prudential argues that Gypsum has not proven that the eight buildings fall within the Prince George Center class.

Gypsum also contends that the statute of limitations had run on Prudential's RICO claim, the only claim tying the case to federal court, before Prudential filed its case in October of 1987. U.S. Mineral joins Gypsum in this motion. Prudential responds that it only learned of its injuries when it undertook abatement of asbestos in conjunction with the demolition of one of its buildings in 1984, and only understood the extent of its injuries after commissioning a study of the ACMs in its holdings in 1985. Prudential also claims that the statute of limitations period was tolled by Gypsum's fraudulent concealment of the hazards of ACM.

This court will first address Gypsum's claims as to the court's subject matter jurisdiction and the preclusive effects of the Prince George Center judgment on this case. The court will then turn to Gypsum's statute of limitations claims.

II. Subject Matter Jurisdiction and Preclusion

A. Summary Judgment Standard

Rule 56 of the Federal Rules of Civil Procedure provides that summary judgment may be granted only if the pleadings, supporting papers, affidavits, and admissions on file, when viewed with all inferences in favor of the nonmoving party, demonstrate that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. See also Todaro v. Bowman, 872 F.2d 43, 46 (3d Cir.1989); Chipollini v. Spencer Gifts, Inc., 814 F.2d 893, 896 (3d Cir.), cert. dism'd, 483 U.S. 1052, 108 S.Ct. 26, 97 L.Ed.2d 815 (1987). Put differently, "summary judgment may be granted if the movant shows that there exists no genuine issues of material fact that would permit a reasonable jury to find for the nonmoving party." Miller v. Indiana Hospital, 843 F.2d 139, 143 (3d Cir.), cert. denied, 488 U.S. 870, 109 S.Ct. 178, 102 L.Ed.2d 147 (1988). An issue is "genuine" if a reasonable jury could possibly hold in the nonmovant's favor with regard to that issue. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is material if it influences the outcome under the governing law. Id. at 248, 106 S.Ct. 2505.

The party seeking summary judgment always bears the initial burden of production, i.e., of making a prima facie showing that it is entitled to summary judgment. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). This may be done either by demonstrating there is no genuine issue of fact and that as a matter of law, the moving party must prevail or by demonstrating that the moving party has not produced evidence relating to an essential element of the issue for which it bears the burden of proof at trial. Id. at 322-23, 106 S.Ct. 2548. Once either showing is made, the burden shifts to the nonmoving party who must demonstrate facts supporting each element for which it bears the burden of proof as well as establish the existence of genuine issues of material fact. Id. at 324, 106 S.Ct. 2548.

At the summary judgment stage, however, a court may not weigh the evidence or make credibility findings-these tasks are left to the factfinder. Petruzzi's IGA v. Darling-Delaware, 998 F.2d 1224, 1230 (3rd Cir.1993). Therefore, to raise a genuine issue of material fact, "`the [summary judgment] opponent need not match, item for item, each piece of evidence proffered by the movant,' but simply must exceed the `mere scintilla' standard." Id. See also Anderson, 477 U.S. at 252, 106 S.Ct. 2505 ("the mere existence of a scintilla of evidence in support of the [nonmovant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [nonmovant].")

B. Rooker-Feldman

Gypsum contends that under the Rooker-Feldman doctrine, Prudential is barred from bringing its claims of estoppel and waiver. The Rooker-Feldman doctrine holds that a federal district court does not have jurisdiction to review a final adjudication of a state court or to consider claims that are inextricably intertwined with the state court decision. Rooker v. Fidelity Trust Co., 263 U.S. 413, 44 S.Ct. 149, 68 L.Ed. 362 (1923); District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983); In re: General Motors Corp. Pick-Up Truck Fuel Tank Products Liability, 134 F.3d 133 (3d Cir.1998). The Third Circuit has found that Rooker-Feldman is a jurisdictional doctrine grounded in the principle that appellate jurisdiction over state court decisions lies with the Supreme Court of the United States, not with federal district courts. Parkview Associates Partnership v. Lebanon, 225 F.3d 321, 329 (3d Cir. 2000). As such, it is distinct from preclusion doctrines, which rest upon the Full Faith and Credit Statute. Id. Moreover, as a jurisdictional doctrine, Rooker-Feldman "must override preclusion doctrine where it applies." Id. Therefore, this court will first consider whether the Rooker-Feldman doctrine applies in this case.

Gypsum contends that because the Pennsylvania Court of Common Pleas already decided issues essential to Prudential's claims of...