Satsky v. Paramount Communications, Inc., 92-1037
| Decision Date | 24 September 1993 |
| Docket Number | No. 92-1037,92-1037 |
| Citation | 7 F.3d 1464 |
| Parties | , 24 Envtl. L. Rep. 20,001 Stuart SATSKY; Wendy A. Satsky; Gary L. Hand; Patricia K. Hand; Darryl J. Bangert; Eagle River White Water, Inc., a Colorado corporation; Mark C. Lokay, also known as Vail Fishing Guides; Gore Creek Flyfisherman, Inc., a Colorado corporation; Beaver Creek Flyfisher, a Division of Gore Creek Flyfisherman, Inc., on their own behalf and as representatives of a class of similarly situated individuals, residents, property owners, and operators of businesses, Plaintiffs-Appellants, v. PARAMOUNT COMMUNICATIONS, INC., a Delaware Corporation, Defendant-Appellee, Natural Resources Defense Council, Colorado Trial Lawyers Association, State of Colorado, State of California, State of Kansas, State of Montana, State of Nevada, State of New Mexico, State of Oklahoma, State of Utah, State of Washington, State of Wyoming, Amici Curiae. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Herbert Anthony Delap of Reinhart, Boerner, Van Deuren, Norris & Rieselbach, Denver, CO, for plaintiffs-appellants.
Neil Peck (Thomas S. Nichols, Gail L. Wurtzler, and Karen L. Page, with him on the brief) of Davis, Graham & Stubbs, Denver, CO, for defendant-appellee.
James R. May, Sp. Cooperative Counsel, Widener University School of Law, Wilmington, DE, Larry Trattler of Malman, Trattler & Dehncke, Denver, CO, and Priscilla Budeiri and Arthur Bryant, Trial Lawyers for Public Justice, P.C., Washington, DC, filed brief for amicus curiae Natural Resources Defense Council.
Kevin S. Hannon of The Firm of Kevin S. Hannon, Denver, CO, filed a brief for amicus curiae Colorado Trial Lawyers Ass'n.
Gale A. Norton, Atty. Gen., Raymond T. Slaughter, Chief Deputy Atty. Gen., Timothy M. Tymkovich, Sol. Gen., Patricia S. Bangert, Deputy Atty. Gen., Casey A. Shpall, First Asst. Atty. Gen., Mary Capdeville and Stephen M. Brown, Asst. Attys. Gen., CERCLA Litigation Unit, Natural Resources Section, Denver, CO, for amicus curiae State of Colo.
Before SEYMOUR, MOORE, and ANDERSON, Circuit Judges.
Plaintiffs brought this diversity action against Paramount Communications, Inc. (Paramount) alleging a variety of private property claims. They contend that Paramount's operation of a mine produced hazardous waste that was disposed of in a manner that damaged their property and livelihoods. 1 The district court held that certain of plaintiffs' claims were barred under the doctrine of res judicata by a consent decree between Paramount and the State of Colorado in a prior action. Satsky v. Paramount Communications, Inc., 778 F.Supp. 505 (D.Colo.1991). It therefore entered partial summary judgment for Paramount on these issues. 2 Plaintiffs appeal, and we reverse and remand.
This suit is one of several in ten years of litigation surrounding the mining activity at Eagle Mine Facility in Eagle County, Colorado, and the hazardous waste produced from that activity. Mining at the site began as early as 1916 and continued until 1981. During that time, the facility was owned by a series of corporate entities, culminating with ownership by Paramount in 1983. Paramount acquired ownership through a corporate merger with the prior owner, Gulf + Western Industries, Inc. During the period of active mining, waste production from the mine was placed in five different locations in the area surrounding Eagle Mine and Eagle River. The waste contained hazardous substances that caused environmental harm to the areas in which it was placed. 3
In 1983, the State of Colorado filed a complaint against Gulf + Western Industries, Inc. for natural resource damages under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9601-9675 (CERCLA) (1988). 4 In 1985, the State added a claim for CERCLA response costs, including all costs of removal of the waste during any "clean up" of the Eagle Mine site. In addition, the State asserted pendant state claims for statutory nuisance, common law nuisance, strict liability in tort, and negligence. Upon a motion by Paramount, the pendent state claims were dismissed by the district court. After three years of negotiations, the State and Paramount entered into a consent decree. The decree contained a mandatory injunction requiring the performance of a Remedial Action Plan (RAP). The RAP contained provisions in which the mine waste would be removed from the mine as well as from four of the previous waste dumping sites, and transported to a site known as the New Tailings Pond. The RAP provided for plugging various leaks in the mine to prevent drainage of hazardous wastes into Eagle River. The decree also required Paramount to pay the State for natural resources damages, response costs, and the costs of continuing oversight of Eagle Mine.
Plaintiffs contend that the activities which took place as a result of the consent decree had a disastrous effect upon the Eagle River and the surrounding community. As a result of the alleged harm caused by the mining activity and the clean up efforts, plaintiffs filed suit against Paramount on behalf of themselves and a class of similarly situated parties, alleging negligence, strict liability, nuisance, trespass, and misrepresentation. The complaint requests CERCLA response costs, punitive damages, and an injunction requiring Paramount to abate its past and present practices of releasing toxic substances. Plaintiffs also seek to recover for property damage and economic losses.
Paramount moved for summary judgment on all of plaintiffs claims except for the response costs. Paramount argued that plaintiffs' claims were precluded by the doctrine of res judicata due to the consent decree in Paramount I. The district court agreed with Paramount's position and dismissed the claims for negligence, strict liability, nuisance, and trespass.
Plaintiffs argue on appeal that the consent decree has no preclusive effect as to their claims, contending that the consent decree is not a final judgment and has no binding effect on third parties. They argue there is no identity of claims or parties between Paramount I and the instant case. They also contend that the consent decree cannot bar claims which arose after the decree was entered. Paramount disputes these arguments and contends that the district court was correct in dismissing the claims.
"Under res judicata, or claim preclusion, a final judgment on the merits of an action precludes the parties or their privies from relitigating issues that were or could have been raised in the prior action." Northern Natural Gas v. Grounds, 931 F.2d 678, 681 (10th Cir.1991). Res judicata is intended to relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, prevent inconsistent decisions, and encourage reliance on adjudication. Id. A claim is barred by res judicata if three elements exist: (1) a final judgment on the merits in the prior suit; (2) the prior suit involved identical claims as the claims in the present suit; and (3) the prior suit involved the same parties or their privies. See Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 414, 66 L.Ed.2d 308 (1980); Northern Natural Gas, 931 F.2d at 681, 682.
Whether the doctrine of res judicata applies to the case before us is a question of law which we review under the de novo standard. Northern Natural Gas, 931 F.2d at 681. We review a grant or denial of a motion for summary judgment under the de novo standard as well. Applied Genetics Int'l, Inc. v. First Affiliated Sec., Inc., 912 F.2d 1238, 1241 (10th Cir.1990). With this in mind, we turn now to an examination of each element.
Plaintiffs argue that Paramount I does not constitute a final judgment on the merits because the private property claims raised there by the State were dismissed without prejudice and such a dismissal is not an adjudication on the merits. Plaintiffs also assert that the consent decree should be interpreted as a contract and should therefore not be considered a final judgment.
Plaintiffs are correct that a dismissal without prejudice "is a dismissal that does not 'operat[e] as an adjudication upon the merits,' Rule 41(a)(1), and thus does not have a res judicata effect." Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 396, 110 S.Ct. 2447, 2456, 110 L.Ed.2d 359 (1990). However, a consent decree is afforded the same effect as any other judgment. "A consent decree ... is an agreement that the parties desire and expect will be reflected in and be enforceable as a judicial decree that is subject to the rules generally applicable to other judgments and decrees." Rufo v. Inmates of Suffolk County Jail, --- U.S. ----, ----, 112 S.Ct. 748, 757, 116 L.Ed.2d 867 (1992). In Rufo, the Supreme Court held consent decrees to be subject to Federal Rule of Civil Procedure 60(b) which governs "a final judgment, order, or proceeding."
While a consent decree is accorded the weight of a final judgment, it "is to be construed ... basically as a contract." United States v. ITT Continental Baking Co., 420 U.S. 223, 238, 95 S.Ct. 926, 935, 43 L.Ed.2d...
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