Tucson Airport Authority v. General Dynamics Corp.

• Decision Date: 05 April 1996
• Docket Number: No. CIV-94-355-TUC-ROS.,CIV-94-355-TUC-ROS.
• Citation: 922 F. Supp. 273
• Parties: TUCSON AIRPORT AUTHORITY and City of Tucson, Plaintiffs, v. GENERAL DYNAMICS CORPORATION, Defendant. GENERAL DYNAMICS CORPORATION, Third-Party Plaintiff, v. UNITED STATES of America, William Perry, Secretary of Defense, Sheila E. Widnall, Secretary of the Air Force, Third-Party Defendants.
• Court: U.S. District Court — District of Arizona

922 F. Supp. 273

TUCSON AIRPORT AUTHORITY and City of Tucson, Plaintiffs, v. GENERAL DYNAMICS CORPORATION, Defendant.

GENERAL DYNAMICS CORPORATION, Third-Party Plaintiff, v. UNITED STATES of America, William Perry, Secretary of Defense, Sheila E. Widnall, Secretary of the Air Force, Third-Party Defendants.

No. CIV-94-355-TUC-ROS.

United States District Court, D. Arizona.

April 5, 1996.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Walter Grochowski, Junker Penfield Shiaras & Harrington, Phoenix, AZ, John W. Adler, Jr., Adler Murphy & McQuillen, Chicago, IL, David Alwin Paige, Anderson Kill Olick & Oshinsky, Tucson, AZ, for Tucson Airport Authority.

Stephen Lawrence Wetherell, Tucson, AZ, Edwin F. Hendricks, Meyer Hendricks Victor Ruffner & Bivens PLC, Phoenix, AZ, Shane Ray Swindle, Dalton Gotto Samson & Kilgard PLC, Phoenix, AZ, for City of Tucson.

David Charles Anson, DeConcini McDonald Brammer, Yetwin & Lacy PC, Tucson, AZ, Herbert L. Fenster, McKenna & Cuneo, Washington, DC, for General Dynamics Corporation.

Eugene R. Bracamonte, United States Attorney, Tucson, AZ, Steven M. Talson, U.S. Department of Justice, Washington, DC, Cameron C. Powell, U.S. Department of Justice, Environmental Defense Section, Washington, DC, for William Perry, Sheila E. Widnall and U.S.

ORDER

SILVER, District Judge.

This case arises out of the environmental enforcement and private tort actions filed in response to the discovery of groundwater contamination near the Tucson International Airport. General Dynamics Corporation ("General Dynamics"), along with other public and private entities, has been sued in a number of these actions for the costs of cleaning up the contamination and for personal injuries and/or property damages caused by the contamination.

In this case, General Dynamics filed a Third-Party Complaint against the United States, the Secretary of Defense, and the Secretary of the Air Force ("Defendants"), seeking declaratory and injunctive relief to force the government to defend General Dynamics in the pending actions, and to indemnify the company for all liabilities, costs and expenses arising from these actions. Counts I and II allege violations of the Contract Settlement Act of 1944, 41 U.S.C. §§ 101-125, and the Administrative Procedure Act, 5 U.S.C. §§ 701-706, respectively. Counts III through V alleged constitutional violations under the Public Debt Clause, the Fourteenth Amendment Due Process Clause, and the Fifth Amendment Takings Clause. Count VI involves a claim for mandamus relief pursuant to 28 U.S.C. § 1361. Count VII alleges breach of contract. Finally, Count VIII alleges that the government is solely responsible for any cleanup costs that may be assessed against General Dynamics under CERCLA.

Defendants' Motion for Partial Judgment on the Pleadings is pending before the Court. Pursuant to Fed.R.Civ.P. 12(c), Defendants move to dismiss Counts I through VII because the United States has not waived sovereign immunity for these claims in federal district court, and because the Tucker Act vests exclusive subject matter jurisdiction over these claims in the Court of Federal Claims. Alternatively, Defendants move to dismiss all eight counts to the extent they seek injunctive relief on the ground that the United States has not waived sovereign immunity for this type of relief in district court. Defendants also move to dismiss part of Count VIII on the ground that the recovery sought is barred by the Consent Decree of June 5, 1991.

The Court has considered the parties' briefs and oral arguments. For the following reasons, Defendants' Motion for Partial Judgment on the Pleadings is granted in all respects.

Background

In 1981, authorities discovered groundwater contamination near the Tucson International Airport. A suspected source of contamination is past industrial operations at a three-hangar facility at the airport (the so-called "Tucson Modification Center"). During World War II, Consolidated Vultee Aircraft Corporation ("Consolidated") modified aircraft for the United States Department of War at the Modification Center. General Dynamics is the successor-in-interest to Consolidated.

In particular, from February 1942 to September 1945, Consolidated modified aircraft, principally B-24 "Liberator" bombers, under a series of contracts with the United States Army Air Forces. Consolidated performed most of this work pursuant to a contract designated as W 535 ac-26999 (the "Modification Center Contract"). The contract contained a "Termination Article," which set forth the respective obligations of the parties in the event of termination by the United States. This article provides:

ARTICLE 9 — TERMINATION OF CONTRACT BY GOVERNMENT

. . . . .

(b) Upon termination of this contract as hereinbefore provided, full and complete settlement of all claims of the Contractor arising out of this contract shall be made as follows:

(1) The Government shall assume and become liable for all obligations, commitments and claims that the Contractor may have theretofore in good faith undertaken or incurred in connection with said work and in accordance with the provisions of this contract, and the Contractor shall, as a condition to receiving the payments mentioned in this Article, execute and deliver all such papers and take all steps as the Contracting Officer may require for the purpose of fully vesting in the Government the rights and benefits of the Contractor under such obligations and commitments.

. . . . .

(c) Upon the making of said payments all obligations of the government to make further payments or to carry out other undertakings hereunder shall cease forthwith and forever; ... except that all rights and obligations of the respective parties in respect of costs, expenses and liabilities which may thereafter be imposed on, or incurred by, the Contractor, without its fault or neglect, which are then undetermined or incapable of determination as to either existence, validity, or amount, shall remain in full force and effect (except to the extent that responsibility therefor may have been assumed by the Government under or pursuant to the provisions of subparagraph (1) of paragraph (b) of this Article).

(Defs.' Exh. A at 14.)

On June 30, 1944, the government suspended work on the Modification Center Contract.¹ On November 9, 1945, Consolidated and the government entered into a Settlement Agreement which purported to settle the rights and responsibilities of the parties arising out of their contracts. The Settlement Agreement incorporated Article Nine of the Modification Center Contract.

In 1988, the United States Environmental Protection Agency ("EPA") notified General Dynamics that it might be a potentially responsible party ("PRP") under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9607, for groundwater contamination near the Tucson airport.

In September 1990, the EPA filed a CERCLA enforcement action against several PRPs in a case captioned United States v. Tucson Airport Authority, No. CIV 90-587-TUC-JMR. General Dynamics was not named as a defendant. On June 5, 1991, the Court entered a Consent Decree resolving the action and implementing a remediation plan. The signatories to the Consent Decree included the EPA, Hughes Aircraft Company, McDonnell Douglas Corporation, the City of Tucson, the Tucson Airport Authority, and the United States (on behalf of the Air Force). Under the Consent Decree, the signatories are protected from future contribution actions relating to groundwater remediation in the airport area.

On September 26, 1991, the EPA notified General Dynamics that it might be a PRP under CERCLA for soil contamination near the airport. At about the same time, General Dynamics was named as a defendant in Cordova v. Hughes Aircraft Co., No. CIV-284168, a tort and property action pending in Pima County Superior Court. General Dynamics has also been named as a third-party defendant in two other tort suits, Yslava v. Hughes Aircraft Co., No. CIV-91-525-TUC-ROS, and Lanier v. Hughes Aircraft Co., No. CIV-92-564-TUC-ROS.

On June 3, 1994, the Tucson Airport Authority filed the instant action to obtain an order requiring General Dynamics to contribute to the costs of investigation and remediation of groundwater contamination near the Tucson airport. General Dynamics then filed its Third-Party Complaint against the United States, claiming that under the Modification Center Contract the federal government assumed any and all liabilities of Consolidated (and its successor-in-interest) arising out of performance of the contract, including all costs, expenses and claims arising out of the pending CERCLA and tort proceedings. General Dynamics seeks declaratory and injunctive relief compelling Defendants to, among other things, assume the company's defense in the underlying proceedings and to indemnify the company for any resulting liabilities. (Third-Party Compl. at 35-38.)

Governing Legal Principles

In considering a motion for judgment on the pleadings, all factual allegations in the plaintiff's pleadings are taken as true and all contravening assumptions in the defendants' pleadings are taken as false. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1550 (9th Cir.1990). Judgment on the pleadings is proper where the defendant clearly establishes on the face of the pleadings that no material issue of fact remains to be resolved and that it is entitled to judgment as a matter of law. Id.

Discussion

COUNTS I and II

In Count I, General Dynamics asserts a claim under the Contract Settlement Act of 1944, 41 U.S.C. §§ 101-125. The Act established uniform procedures for the quick and equitable resolution of contractors' claims resulting from the government's termination of wartime contracts. See 41 U.S.C. § 101; Monolith Portland Midwest Co. v. Reconstruction Finance Corp., 102 F.Supp. 951, 952 (C.D.Cal.1952). Section 103(m)...