San Diego Unified Port District v. General Dynamics Corporation et al

Filing 133

ORDER Denying without Prejudice Plaintiff San Diego Unified Port District's Motion to Enforce Settlement (ECF No. 118 ). Signed by Judge Cynthia Bashant on 02/08/2024. (All non-registered users served via U.S. Mail Service)(mjw)

1
2
3
4
5
6
7
8
9
10

UNITED STATES DISTRICT COURT

11

SOUTHERN DISTRICT OF CALIFORNIA

12
13

SAN DIEGO UNIFIED PORT
DISTRICT,

14
15
16
17
18
19

Plaintiff,
v.
GENERAL DYNAMICS
CORPORATION; LOCKHEED
MARTIN CORPORATION;
LOCKHEED MARTIN
ENGINEERING & SCIENCES
COMPANY,

Case No. 07-cv-1955-BAS-WVG
ORDER DENYING WITHOUT
PREJUDICE PLAINTIFF SAN DIEGO
UNIFIED PORT DISTRICT’S MOTION
TO ENFORCE SETTLEMENT
(ECF No. 118)

Defendants.

20
21
22

These consolidated actions arise out of environmental contamination emanating from

23

two properties located alongside the San Diego Bay. The San Diego Unified Port District

24

sued General Dynamics Corporation and Lockheed Martin Corporation for allegedly

25

contaminating sediment in the San Diego Bay while conducting industrial activities at the

26

properties.

27

In 2017, the Court approved the parties’ 300-page Settlement Agreement. As part of

28

the settlement, Lockheed Martin agreed to take remedial action that satisfies the San Diego
-107cv1955

1

Regional Water Quality Control Board. Events, however, have not gone as planned.

2

Lockheed Martin and the Regional Water Board are embroiled in a dispute over the scope

3

of the remediation. Lockheed Martin claims the Regional Water Board drastically moved

4

the goalposts for the cleanup, leading to a petition for writ of mandate in the San Diego

5

Superior Court. That lawsuit seeks to force the Regional Water Board to restore cleanup

6

terms similar to those Lockheed Martin contends the parties contemplated in their

7

Settlement Agreement. The petition also argues the settlement in this Court has been

8

“vitiated” by the agency’s new cleanup terms. The Regional Water Board is not a party to

9

the lawsuit in this Court, however. The dispute in this Court instead concerns how liability

10

for the contamination should be allocated among the three potentially responsible parties.

11

The Port District now moves to enforce the Settlement Agreement, arguing Lockheed

12

Martin is in breach of its promises. The Port District asks the Court to compel Lockheed

13

Martin to complete the cleanup and withdraw pleadings in the lawsuit against the Regional

14

Water Board. The motion also asks the Court to enjoin the state court “from entering any

15

rulings on the subject matter of the Settlement.” Lockheed Martin contends the Port

16

District’s motion is unripe because if the company succeeds in state court, this Court’s

17

ruling would likely be moot. General Dynamics weighs in, too, arguing concessions in

18

Lockheed Martin’s response address the gravamen of the Port District’s motion, and the

19

parties have not complied with their dispute resolution procedure.

20

The Court agrees. To leave no doubt, the Settlement Agreement approved in this

21

Court remains in full force and effect and binds the Port District, Lockheed Martin, and

22

General Dynamics. This Court has exclusive jurisdiction to interpret and enforce the

23

Settlement Agreement. That said, the Court is unpersuaded that intervening in Lockheed

24

Martin’s dispute with the Regional Water Board is appropriate. The Court is likewise

25

unconvinced that the Port District has complied with the Settlement Agreement’s dispute

26

resolution procedure. Hence, for the following reasons, the Court DENIES WITHOUT

27

PREJUDICE the Port District’s Motion to Enforce Settlement (ECF No. 118).

28
-207cv1955

1

I.

BACKGROUND

2

The Court summarized the history of this long-running dispute in its Order Granting

3

Motion to Confirm Settlement and Bar and Dismiss Claims (“Dismissal Order”). (ECF

4

No. 105.) Hence, the Court provides only a snapshot here.

5

Settlement. Under the Settlement Agreement, the parties deny liability but agree to

6

contribute time and resources toward remediating the contamination.

7

Agreement §§ 2.1–2.3, 5.1, ECF No. 106-1.) Lockheed Martin agreed to implement the

8

Remedial Action Plan required under the Regional Water Board’s Cleanup and Abatement

9

Order (“CAO”). (Id. § 2.1(a).) Based on the then-proposed Remedial Action Plan, the

10

estimated cost to remediate the premises was $3.3 million. (Gigounas Decl. ¶¶ 13–14, ECF

11

No. 105-5.)

12

improvements under a proposed demolition plan. (Settlement Agreement § 2.1(b).) As for

13

General Dynamics, it promised to contribute to the cleanup by paying $850,000 to

14

Lockheed Martin. (Id. § 2.3.) Meanwhile, the Port District agreed to abate rent for

15

Lockheed Martin, contribute staff time for a Coastal Development Permit, and waive

16

certain claims for reimbursement and damage to natural resources. (Id. § 2.2(a), (d).)

17

Finally, the parties agreed to a dispute resolution process:

18
19
20
21
22
23
24
25
26
27
28

(Settlement

Lockheed Martin also agreed to remove certain installations and

Each Party agrees to provide the other Parties no fewer than thirty calendar
days’ notice of any dispute, claim, or difference arising out of or in connection
with this Agreement, or the breach or invalidity thereof, including disputes
related to disposal of contaminated dredge spoils in the future, prior to
commencing any proceedings in any court or tribunal. During the thirty day
notice period, the Settling Parties agree to attempt in good faith to resolve the
issue. If the Settling Parties do not reach resolution of the issue, any dispute
concerning this Agreement or disposal costs must be resolved first by
participation in a mediation with Timothy Gallagher, or with another mediator
mutually agreed upon by the parties. Only if such mediation is unsuccessful
shall the parties seek relief in the United States District Court for the Southern
District of California. To the maximum extent permitted by law, the Settling
Parties agree to personal jurisdiction, subject matter jurisdiction, and venue in
that Court for purposes of resolving disputes under this Agreement.
-307cv1955

1

(Id. § 7.3 (emphasis added).)

2

After a hearing, the Court approved the parties’ settlement. (ECF Nos. 111, 112.)

3

The Court incorporated the Settlement Agreement throughout its Dismissal Order. (E.g.,

4

Dismissal Order 7:10–8:13, 20:14–22:2.) Further, upon dismissing the parties’ claims with

5

prejudice, the Court expressly retained jurisdiction:

6
7
8
9
10
11
12

The Court shall retain jurisdiction over both the subject matter of this
Settlement Agreement and the parties for the duration of the performance of
the terms and provisions of the Settlement Agreement for the purpose of
enabling the parties, and each of them, to apply to the Court at any time for
such further order, direction, and relief as may be necessary or appropriate to
construe, implement, or enforce compliance with the terms of the Settlement
Agreement, which rights and obligations shall survive the dismissal of these
actions.
(Id. 21:15–21.)

13

Petition. Events did not unfold as expected. In 2023, Lockheed Martin filed a

14

Verified Petition for Writ of Mandate and Request for Stay against the Regional Water

15

Board and the California State Water Resources Control Board. (State Pet., ECF No. 118-

16

11.) Lockheed Martin’s lawsuit allegedly follows several years’ worth of negotiations and

17

disputes with Regional Water Board on the scope of the cleanup. (Id. ¶¶ 36–68.)

18

In the Petition, Lockheed Martin claims it “is ready, willing, and able to execute the

19

background cleanup that was mutually agreed upon” in the Settlement Agreement. (State

20

Pet. ¶ 2.) Lockheed Martin contends, however, that the Regional Water Board violated

21

state law by “dramatically moving the goal posts” for the cleanup and issuing “an entirely

22

new CAO in August 2022.” (Id. ¶¶ 3, 5.) This new CAO allegedly upends the Settlement

23

Agreement “and decades of work by multiple parties and consultants—an administrative

24

process that took nearly fifteen months, during which time the Site could have been

25

remediated.” (Id. ¶ 5 (emphasis omitted).) Hence, Lockheed Martin advances various

26

theories to convince the San Diego Superior Court to require the Regional Water Board to

27

rescind the 2022 CAO and return to the 2017 cleanup proposal. (Id. ¶¶ 167–215.)

28
-407cv1955

1

As part of its arguments, Lockheed Martin also casts doubt on the continued viability

2

of the Settlement Agreement. One of Lockheed Martin’s state court arguments is that the

3

Regional Water Board improperly omitted the Port District and General Dynamics from

4

the 2022 CAO as responsible parties. (State Pet. ¶¶ 125–139.) Lockheed Martin contends

5

that “while the terms of the 2017 Settlement Agreement have not changed, the 2017

6

Settlement Agreement itself was vitiated upon issuance of an entirely new and substantially

7

different CAO and that Lockheed Martin does not agree to be the sole implementing party

8

of the expanded cleanup.” (Id. ¶ 130.) Thus, Lockheed Martin claims the Settlement

9

Agreement “does not govern [the parties’] respective allocation of liability at the

10

[properties] under the 2022 CAO.” (Id. ¶ 134.)

11

The Port District now moves to enforce the Settlement Agreement in light of

12

Lockheed Martin’s Petition and failure to complete the cleanup. (ECF No. 118.) Lockheed

13

Martin opposes. (ECF No. 129.) Both the Port District and General Dynamics reply. (ECF

14

Nos. 130, 131.) The Court finds this Motion suitable for determination on the papers

15

submitted and without oral argument. See Fed. R. Civ. P. 78(b); Civ. L. R. 7.1(d)(1).

16

II.

ANALYSIS

17

The Court begins by confirming its jurisdiction. A court may retain ancillary

18

jurisdiction to enforce a settlement agreement if the parties agree and the court embodies

19

the agreement in its dismissal order. Kelly v. Wengler, 822 F.3d 1085, 1095 (9th Cir. 2016)

20

(citing Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 381 (1994)). As recapped

21

above, the Court incorporated the parties’ Settlement Agreement throughout its Dismissal

22

Order and expressly retained jurisdiction at the parties’ request.

23

unequivocally subjected itself to this Court’s jurisdiction and panoply of enforcement

24

powers. (Dismissal Order 21:15–21.) The Court thus can consider the Port District’s claim

25

that Lockheed Martin is in breach of the Settlement Agreement and has therefore violated

26

the Dismissal Order. See id. at 1095–96 (affirming court’s civil contempt finding and

27

award of attorneys’ fees based on breach of an incorporated settlement agreement).

Lockheed Martin

28
-507cv1955

1

The Port District contends Lockheed Martin breached the parties’ deal by failing to

2

complete the cleanup, by challenging the enforceability of the Settlement Agreement in

3

state court, and by neglecting to complete certain demolition in a timely manner. (Mot.

4

7:17–20:15.)

5

resolution of its state court action “will narrow the outcomes of the Port’s Motion” and

6

likely moot this Court’s ruling. (Opp’n 11:2–3, 12:10–13:7.) In addition, Lockheed Martin

7

admits that “this Court presides over the Settlement” and contends it would be improper to

8

presume the state court will rule that Lockheed Martin can escape the Settlement

9

Agreement. (Id. 1:16, 14:13–15:13.) General Dynamics weighs in last. It argues the Port

10

District’s motion is moot because Lockheed Martin’s Opposition addresses the substance

11

of the Port’s demands. (Reply 1:14–16.)

Lockheed Martin counters that the Motion is premature because the

12

At this juncture, the Court is persuaded that wading into the state court dispute is

13

unnecessary. The Court has reviewed Lockheed Martin’s Verified Petition for Writ of

14

Mandate. The linchpin of Lockheed Martin’s suit is that the Regional Water Board’s

15

conduct is unlawful under state law. The Court expresses no opinion on the merits of

16

Lockheed Martin’s claims. It is enough to say here, however, that the Court finds

17

interfering with Lockheed Martin’s action against a nonparty is unwarranted—without

18

reaching the parties’ arguments concerning the Anti-Injunction Act. See Flanagan v.

19

Arnaiz, 143 F.3d 540, 545 (9th Cir. 1998) (noting the exceptions to the Anti-Injunction Act

20

“allow federal courts to enjoin state courts in cases where ‘some federal injunctive relief

21

may be necessary to prevent a state court from so interfering with a federal court’s

22

consideration or disposition of a case as to seriously impair the federal court’s flexibility

23

and authority to decide that case’” (quoting Atl. Coast Line R. Co. v. Bhd. of Locomotive

24

Engineers, 398 U.S. 281, 295 (1970))). There is a dispute between Lockheed Martin and

25

the Regional Water Board over the scope of the cleanup required, and any ruling by the

26

state court would either moot this Court’s determination or require the parties to overhaul

27

their briefing and positions. Indeed, if Lockheed Martin prevails, it will need to complete

28

the cleanup contemplated by the 2017 CAO and will lack a justification if it fails to do so.
-607cv1955

1

If Lockheed Martin does not prevail, it will need a determination from this Court

2

interpreting the Settlement Agreement as not applying to the 2022 CAO. Lockheed Martin

3

will otherwise be in breach of the Settlement Agreement and in violation of the Court’s

4

Dismissal Order.

5

At the same time, the Court appreciates the Port District’s concern over Lockheed

6

Martin’s arguments addressing the “vitiation” of the Settlement Agreement. The Court

7

underscores that the Dismissal Order remains in full force and effect. The incorporated

8

Settlement Agreement binds the Port District, Lockheed Martin, and General Dynamics.

9

And this Court’s jurisdiction over the matter is exclusive. Even where a court’s retention

10

of jurisdiction does “not include the word ‘exclusive,’” the Ninth Circuit reasons

11

“exclusivity is inferred” because “it would make no sense for the district court to retain

12

jurisdiction to interpret and apply its own judgment to the future conduct contemplated by

13

the judgment, yet have a state court construing what the federal court meant in the

14

judgment.” Flanagan, 143 F.3d at 545; accord Republic Bldg. Co., Inc. v. Charter Twp.

15

of Clinton, Michigan, 81 F.4th 662, 668 (6th Cir. 2023) (“When a consent judgment

16

contains a provision stating that a court retains jurisdiction over its interpretation and

17

enforcement, that jurisdiction is presumed exclusive.”).

18

enforce compliance with the Dismissal Order or determine that the Settlement Agreement

19

has been “vitiated.” Moreover, federal courts like this one presume state courts follow the

20

law. E.g., Jeffers v. Lewis, 38 F.3d 411, 415 (9th Cir. 1994). Thus, given these rules and

21

Lockheed Martin’s admission that this Court presides over the Settlement Agreement, the

22

Court finds granting further relief is not warranted.

Hence, only this Court may

23

The Court turns to one final issue. General Dynamics argues the parties’ multi-step

24

dispute resolution process has not been followed and “asks the Court to ensure that the

25

parties comply with the Settlement Agreement’s dispute resolution provisions to ensure

26

that its rights are protected.” (Reply 2:17–18.) This point is well taken. The Port District

27

does not demonstrate it complied with the process excerpted above, including for its

28

argument that Lockheed Martin has failed to complete certain demolition under the
-707cv1955

1

Settlement Agreement. The Court thus will deny without prejudice the Port District’s

2

motion. The Court reminds Lockheed Martin, too, that any claim that the Settlement

3

Agreement has been invalidated will need to proceed under this process and include

4

General Dynamics’s participation. The Court therefore will order the parties to comply

5

with the Settlement Agreement’s dispute resolution process and require that any future

6

request submitted to this Court include evidence of this compliance.

7

III. CONCLUSION

8

In light of the foregoing, the Court DENIES WITHOUT PREJUDICE the Port

9

District’s Motion to Enforce the Settlement Agreement (ECF No. 118). The Court

10

confirms that the Dismissal Order and the Settlement Agreement incorporated therein

11

remain in full force and effect. Further, the Court ORDERS the parties to comply with the

12

Settlement Agreement’s “Disputes” provision—§ 7.3. Any dispute submitted to this Court

13

concerning the Settlement Agreement, including a renewal of the Port District’s Motion,

14

must be accompanied by a declaration attesting that each step of the dispute resolution

15

process has been satisfied.

16

IT IS SO ORDERED.

17
18

DATED: February 8, 2024

19
20
21
22
23
24
25
26
27
28
-807cv1955