Rohm and Haas Co. v. American Cyanamid Co.
| Decision Date | 20 November 2001 |
| Docket Number | Civil Action Nos. 95-1865(DMC), 99-1891(DMC). |
| Citation | 187 F.Supp.2d 221 |
| Parties | ROHM AND HAAS COMPANY, Plaintiff, v. AMERICAN CYANAMID COMPANY, Ashland, Inc., GAF Corporation, General Electric Company and Monsanto Company, Defendants. |
| Court | U.S. District Court — District of New Jersey |
Steven L. Lapidus, Robinson, Lapidus & Livelli, Newark, NJ, Robert N. Feltoon, Conrad O'Brien Gellman & Rohn, PC, Mount Laurel, NJ, for Plaintiff.
James L. McKenna, McKenna, Walker & Capriotti, PC, Cherry Hill, NJ, Theodore Ellis Baker, Lummis, Fisher, Kress & Baker, Bridgeton, NJ, Russell Lyle Hewitt, Dughi and Hewitt, Cranford, NJ, Vincent J. Rizzo, Jr., Fitzgerald & Baker, Rutherford, NJ, Daniel Kinburn, Dwyer, Kinburn & Hall, PC, Totowa, NJ, Anthony Bartell, McCarter & English, LLP, Newark, NJ, Philip R. Sellinger, Stills Cummis Zuckerman Radin Tischman Epstein & Gross, P.A., Newark, NJ, John M. Armstrong, Schnader, Harrison, Segal & Lewis, LLP, Cherry Hill, NJ, for Defendants.
This matter comes before the Court on motion, filed as an Order to Show Cause, by Defendant, American Cyanamid Company ("American Cyanamid"), to disqualify counsel for Plaintiff, Rohm and Haas Company ("Rohm and Haas"). Pursuant to Rule 78 of the Federal Rules of Civil Procedure, oral argument was heard on November 5, 2001. After carefully reviewing the record and for the reasons set forth below, Defendant's motion to disqualify Plaintiff's counsel is denied.
This case involves many individuals and entities, therefore, the following dramatis personae should prove helpful in understanding the Court's analysis.
Rohm and Haas—Plaintiff in both consolidated actions and one of the parties held jointly and severally liable for contaminating the Picillo site in other cases.
Ellen Friedell—In-house counsel for Rohm and Haas.
Schnader, Harrison, Segal & Lewis, LLP—The law firm representing Rohm and Haas in both consolidated actions since on or about April 11, 1995.
John Armstrong—Attorney from the firm of Schnader, Harrison, Segal & Lewis, LLP representing the Rohm and Haas Company.
Dennis Suplee—Attorney from the firm of Schnader, Harrison, Segal & Lewis, LLP representing the Rohm and Haas Company.
American Cyanamid—Defendant in the 99-1891 action and co-plaintiff with Rohm and Haas in the 95-1865 action.
Margaret Tribble—In-house counsel for the American Cyanamid Company.
Sills Cummis Radin Tischman Epstein & Gross—Counsel representing American Cyanamid Company in this present matter, primarily through attorney Mark S. Olinsky.
Deming Sherman of Edwards & Angell —Represented American Cyanamid Company between approximately 1980 and 1995.
Ashland Inc.—A primarily responsible party participating in the cleanup of the Picillo site.
GAF Corp.—A primarily responsible party participating in the cleanup of the Picillo site.
General Electric Company—A primarily responsible party participating in the cleanup of the Picillo site.
Monsanto Company—A primarily responsible party participating in the cleanup of the Picillo site.
The Performing Group—American Cyanamid Company, along with Ashland Inc., GAF Corp., General Electric Company, Monsanto Company refer to themselves collectively as the Performing Group because they have entered negotiations with the United States resolve their liability for contaminating the site by agreeing to "perform" part of the decontamination procedures on the Picillo site. It is Rohm and Haas Company's disagreements with the Performing Group that has prompted the present litigation (especially in 99-1891).
At some point in the mid-1970's, the Picillo pig farm in Rhode Island was used by dozens of companies for the illegal dumping of hazardous waste. See Rohm and Haas' Brief in Opposition to the Motion to Disqualify the Law Firm of Schnader Harrison Segal & Lewis, LLP ("Opposition Brief") at 7. This dumping became public on or about September 30, 1977, when the site caught fire. See Opposition Brief at 7. A series of legal disputes have arisen since then. In 1988 and 1990, Rohm and Haas and American Cyanamid, the present litigants and two of many companies partially responsible for the contamination, were held jointly and severally liable for past and future response costs for contaminating the Picillo site. See Brief in Support of the Performing Group's Motion to Disqualify the Law Firm of Schnader Harrison Segal & Lewis, LLP ("Supporting Brief") at 3. In each action, Deming Sherman, Esq. represented both parties. See Certification of Margaret Tribble ("Tribble Cert."), ¶ 2; Supporting Brief at 3.
After the 1990 case, American Cyanamid joined with four other primarily responsible parties, Ashland Inc., GAF Corp., General Electric Company and the Monsanto Company (collectively referred to as the Performing Group) and Rohm and Haas to attempt to account for future response costs at the Picillo site. See Tribble Cert., ¶ 4; Supporting Brief at 3. These negotiations allegedly led to a rough allocation of financial responsibility (by percentage), contingent, in part, on the contribution of some outside groups. See Tribble Cert., ¶ 5, 12; Supporting Brief at 3-4. These outside groups eventually decided not to participate in negotiations with the Performing Group and the United States with regard to the Picillo Site. As a result, all six responsible parties were called upon to assume a greater percentage of responsibility in their proposed consent decree with the United States. See Tribble Cert., ¶ 5; Supporting Brief at 4. American Cyanamid asserts that Rohm and Haas objected to this potential increase in financial responsibility and opted out of the negotiations in March 1995. See Tribble Cert., ¶ 14; Supporting Brief at 4.
Rohm and Haas opted out of the negotiations toward developing a consent decree because it disagreed with the method of allocation used by the Performing Group. The Performing Group advocates a drums-on-site approach. Under this approach, liability is determined by calculating the percentage of identifiable drums attributable to each of the primarily responsible parties (Rohm and Haas and the five members of the Performing Group). Rohm and Haas asserts that this method is improper because a mere 700 out of an estimated 20,000 drums of waste were identified at the Picillo site. In contrast, Rohm and Haas advocates a "transhipment" theory that seeks to assess the percentage of responsibility through a more roundabout analysis. First Rohm and Haas would obtain discovery on the total amount of waste sent out by American Cyanamid to various waste haulers or "transhippers," then Rohm and Haas would subtract the amount of waste that was dumped in sites other than the Picillo site by these transhippers. The remaining waste, under a transhipment theory, constitutes an approximation of the amount of waste dumped by American Cyanamid at the Picillo site.1
In March 1995, American Cyanamid and Rohm and Haas were held jointly and severally liable for contaminating at the Picillo site. Subsequently, in-house counsel for both companies began exploring the option of utilizing joint counsel to file contribution actions in order to recover expenditures incurred in litigation. See Tribble Cert, ¶ 7; Supporting Brief at 4-5. These discussions appear, at least in part, to have been motivated by an impending statute of limitations, set to run on April 20, 1995. See Suplee Cert, ¶ 3; Armstrong Cert., ¶ 9; Friedell Cert., ¶ 29. Rohm and Haas hired the law firm of Schnader, Harrison, Segal & Lewis, LLP ("the Schnader firm") on April 11, 1995 and American Cyanamid did the same on April 19, 1995, one day before the running of the applicable limitations statute. See Tribble Cert., ¶ 7; Tribble Reply Cert., ¶ 2. On April 20, 1995, the Schnader firm filed contribution suits in the Districts of Rhode Island and New Jersey on behalf of Rohm and Haas and American Cyanamid.
The Schnader firm was provided with extensive files by Deming Sherman, former counsel to Rohm and Haas and American Cyanamid. See Supporting Brief at 5-6. At the time the Schnader firm began the representation in 1995, Dennis Suplee, a Schnader attorney, conducted a routine conflict check and found no conflict. A few months later in May 1995, American Cyanamid notified the Schnader firm that a potential conflict was perceived and separate counsel would be retained to represent American Cyanamid. See Armstrong Cert., ¶¶ 22-24; Supporting Brief at 2; Certification of Dennis R. Suplee ("Suplee Cert."), ¶¶ 16-17; Certification of Ellen Friedell ("Friedell Cert."), 39, 41. Separate counsel was not actually retained until about September 1995. See Armstrong Cert., ¶ 28-29; Tribble Cert., ¶ 14.
All the while, the Performing Group continued negotiating with the United States toward a consent decree (which Rohm and Haas opted out of, prompting American Cyanamid to refer to Rohm and Haas as "recalcitrant"). To entice settlement, the Performing Group offered to name settling parties on the consent decree, thus insulating any settling parties from future contribution liability under CERCLA. See Supporting Brief at 7. American Cyanamid reached settlement with approximately thirty-six contributing parties. See Certification of John Armstrong ("Armstrong Cert."), ¶ 36. In light of notes by American Cyanamid's in-house counsel stating that Rohm and Haas should be "thrown to the wolves," Rohm and Haas refers to the settlement negotiations as a smear campaign meant to eliminate Rohm and Haas' potential sources of contribution. See Reply Certification of Margaret Tribble ("Tribble Reply Cert."), ¶ 13.
American Cyanamid maintains that the conflict at issue in this case was apparently discovered on August 16, 2001 during preparation for a deposition of Margaret Tribble, in-house counsel...
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