Chartis Specialty Insurance Company et al v. United States of America

Filing 148

ORDER Re Supplemental Briefing. Signed by Judge Edward M. Chen on 11/24/2015. (emcsec, COURT STAFF) (Filed on 11/24/2015)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

CHARTIS SPECIALTY INSURANCE

8

COMPANY, et al.,
Plaintiffs,

9

11

UNITED STATES OF AMERICA,
Defendant.

12
For the Northern District of California

ORDER RE SUPPLEMENTAL
BRIEFING
Docket No. 146

v.

10

United States District Court

Case No. 13-cv-01527-EMC

13

Currently pending before the Court is a joint motion to enter a proposed consent decree,

14
15

submitted by (1) one of the plaintiffs in this action, namely, Chartis Specialty Insurance Company

16

(“Chartis”), and (2) the United States. Having reviewed the joint motion, the Court finds that

17

supplemental briefing is appropriate. Accordingly, the Court hereby orders the parties to file a

18

joint supplemental brief on the issues below no later than December 4, 2015.

19

A.

Proposed Consent Decree Between Whittaker and the United States
It appears that there will also be a proposed consent decree between the other plaintiff in

20
21

this case, Whittaker Corporation (Chartis‟s insured), and the United States. The parties shall

22

address whether this motion should be temporarily deferred so that the Court may consider both

23

proposed consent decrees at the same time.

24

B.

25

Contribution Protection
Paragraph 5 of the proposed consent decree provides, inter alia, that, “[w]ith regard to any

26

claims for costs, damages, or other claims against the United States for Covered Matters under or

27

addressed in this Agreement, the United States is entitled to . . . contribution protection consistent

28

with section 113(f) of CERCLA, 42 U.S.C. § 9613(f), the Uniform Comparative Fault Act, and

1

any other applicable provision of federal or state law.” Prop. Consent Decree ¶ 5(a). The parties

2

have submitted a proposed settlement order that incorporates this “contribution protection”

3

language. See Prop. Settlement Order at 2 (“As per Paragraph 5(a) of the Consent Decree, the

4

United States is entitled to contribution protection . . . .”).
The parties shall explain what they mean by “contribution protection” – e.g., is the

5
6

agreement that the United States shall be free from any claims for contribution from any other

7

interested party? If that is, in fact, the parties‟ agreement, then the parties should cite authority in

8

support, particularly as 42 U.S.C. § 9613(f)(2) only applies where “[a] person . . . has resolved its

9

liability to the United States” (emphasis added), and here, the United States is not a person to

agreeing that the United States is entitled to a credit for its settlement payment (should an

12
For the Northern District of California

whom liability is owed but rather a potentially responsible party.1 If the parties are simply

11

United States District Court

10

interested party bring a contribution claim against it), they should so clarify.

13

C.

Pacific Scientific Energy Materials
Paragraph 4 of the proposed consent decree provides, inter alia, that Chartis

14
15

agrees to indemnify the United States against any and all past or
future claims asserted by any person or entity against the United
States that is both proximately related to the Holex/Whittaker Site
and the Policy, except with respect to claims asserted by Whittaker
Corporation in the Action under sections 107(a)(4)(B) and 113(g)(2)
of CERCLA or to claims asserted by Pacific Scientific Energetic
Materials Company, Inc. or any of its predecessors at the
Holex/Whitaker Site or successors.

16
17
18
19
20

Prop. Consent Decree ¶ 4. The parties shall identify who Pacific Scientific Energetic Materials

21

Company, Inc. is and what claims it may have against the United States that relate to the site at

22

issue.

23
24
1

25
26
27
28

Cf. Adobe Lumber, Inc. v. Hellman, No. CIV. 05-1510 WBS EFB, 2009 U.S. Dist. LEXIS
10569, at *18-19 (E.D. Cal. Feb. 3, 2009) (noting, inter alia, that “[t]he text of CERCLA does not
identify the appropriate settlement credit method for settlements between private PRPs[;]
CERCLA section 113(f), which governs contribution claims, explicitly addresses only settlements
reached with the United States or a state and provides that such settlements „reduce the potential
liability of the [nonsettling] defendants by the amount of the settlement‟”; adding, however, that
“CERCLA section 113(f)(1) . . . generally instructs courts to „allocate response costs among liable
parties using such equitable factors as the court determines are appropriate‟”).
2

1
2

D.

United States‟s Covenant Not to Sue
Paragraph 7 of the proposed consent decree consists of, inter alia, the United States‟s

3

covenant not to sue. The covenant states that the United States releases any claims “it may have

4

had, or hereafter have, including, but not limited to, claims under CERCLA sections 107, 112, and

5

113, against Chartis Specialty for Covered Matters.” Prop. Consent Decree ¶ 7. The language

6

used in the release, however, may be problematic given that “Covered Matters” is defined as

7

claims that Chartis has against the United States. See Prop. Consent Decree ¶ 1(d) (defining

8

“Covered Matters” as “any and all claims, known or unknown, that were, could have been, could

9

now be, or could hereafter be asserted by Chartis Specialty against the United States in the Action

otherwise, relating to the Holex/Whittaker Site”). The parties shall address whether ¶ 7 may be in

12
For the Northern District of California

pursuant to the rights afforded Chartis Specialty by virtue of, or arising through, the Policy, or

11

United States District Court

10

need of clarification.

13
14

IT IS SO ORDERED.

15
16
17
18

Dated: November 24, 2015
______________________________________
EDWARD M. CHEN
United States District Judge

19
20
21

22
23
24
25
26
27
28

3