Gould Electronics Inc. v. Livingston County Road Commission
Filing
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OPINION and ORDER Granting in Part and Denying in Part Defendant's Motion to Amend Answer and to File Counter-Complaint (Dkt. 44 ) and Granting Plaintiff's Motion to Strike Defendant's Jury Demand and New Affirmative Defenses (Dkt. 45 ). Signed by District Judge Mark A. Goldsmith. (EKar)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
GOULD ELECTRONICS, INC.,
Plaintiff,
Case No. 17-cv-11130
HON. MARK A. GOLDSMITH
vs.
LIVINGSTON CTY. ROAD COMM’N,
Defendant.
__________________________________/
OPINION & ORDER
GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION TO
AMEND ANSWER AND TO FILE COUNTER-COMPLAINT (Dkt. 44) AND
GRANTING PLAINTIFF’S MOTION TO STRIKE DEFENDANT’S JURY DEMAND
AND NEW AFFIRMATIVE DEFENSES (Dkt. 45)
This matter is currently before the Court on competing motions from the parties regarding
the scope of the claims in this case. Defendant Livingston County Road Commission (“LCRC”)
has filed a motion for leave to amend its answer and to file a counter-complaint (Dkt. 44), and
Plaintiff Gould Electronics, Inc. (“Gould”) seeks to strike LCRC’s jury demand and many of
LCRC’s affirmative defenses (Dkt. 45). The motions have been fully briefed, and a hearing was
held on June 20, 2019. For the reasons that follow, the Court (1) grants in part and denies in part
LCRC’s motion, and (2) grants Gould’s motion. The pleadings in this case shall be limited to
those claims and defenses raised in the prior action, as explained further below.
I.
BACKGROUND
Gould initiated a lawsuit against LCRC, Gould Electronics, Inc. v. Livingston Cty. Rd.
Cmm’n, No. 4:09-cv-12633 (E.D. Mich.), on July 6, 2009 (the “Prior Action”). In short, the
dispute in the Prior Action concerned the “determination of responsibility for costs associated with
the cleanup and remediation of trichloroethylene (TCE) contamination on two adjacent parcels of
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real property and the surrounding area,” located in Howell, Michigan. Gould Electronics, Inc. v.
Livingston Cty. Rd. Cmm’n, No. 09-12633, 2012 WL 5817937, at *1 (E.D. Mich. May 25, 2012).
One parcel is owned by LCRC (the “LCRC Property”); the other is owned by a third party, but
Gould is indisputably responsible for liabilities arising from the property (the “Gould Property”).
Id. Gould alleges that LCRC shares responsibility for the contamination; LCRC contends that
Gould is fully responsible. Id.
On May 29, 2012, the parties stipulated to an order of dismissal without prejudice, in
accordance with a tolling agreement entered into by the parties on May 21, 2012 (the “Tolling
Agreement”). See Stip. Order of Dismissal, Ex. A to Am. Compl. (Dkt. 22-2). The order of
dismissal contained the following provisions relevant to the instant dispute:
2. Either party may revive pursuit of the surviving claims existing
in this lawsuit immediately prior to the entry of this dismissal order
in a new case in accordance with the terms of the Tolling Agreement
by filing a complaint for a new case (the “New Case”) in the United
States District Court for the Eastern District of Michigan . . . .
4. If a New Case is filed, the current record, pleadings, Joint Final
Pretrial Order, discovery, expert reports, legal positions of the
parties, etc. in this lawsuit shall be preserved as applicable and
binding in the New Case as they currently are in this lawsuit. The
New Case shall proceed to trial on an expedited basis, with any new
discovery limited to new data gathered regarding the soil and
groundwater contamination at issue and related analyses conducted
thereon after July 6, 2009.
Id. at PageID.274-275.
Gould initiated the instant case, a New Case within the meaning of the order, on April 11,
2017. LCRC sought to dismiss the action, arguing that it was time-barred; the Court denied
LCRC’s motion. Gould Electronics, Inc. v. Livingston Cty. Road Comm’n, No. 17-11130, 2018
WL 1035714 (E.D. Mich. Feb. 23, 2018). Gould then filed an amended complaint on March 9,
2018, where it alleges violations of the Comprehensive Environmental Response, Compensation
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and Liability Act, 42 U.S.C. § 9607(a) (“CERCLA”); Michigan’s Natural Resources and
Environmental Protection Act, Mich. Comp. Laws §§ 324.20126 and 324.20126a (“NREPA”);
and claims that it should be granted access to LCRC’s property to conduct reasonable response
activities. See generally Am. Compl. (Dkt. 22). LCRC subsequently filed another motion to
dismiss, which the Court also denied. Gould Electronics, Inc. v. Livingston Cty. Road Comm’n,
No. 17-11130, 2019 WL 1002442 (E.D. Mich. Mar. 1, 2019).
LCRC filed its answer on March 14, 2019 (Dkt. 36), and an amended answer on April 4,
2019 (Dkt. 39). On May 7, 2019, LCRC filed a motion to amend/correct its answer (Dkt. 44).
LCRC seeks to “streamline” its defenses, Def. Br. at 5, as well as to file a counter-complaint
asserting claims under CERCLA and NREPA. Gould then filed its own motion (Dkt. 45), seeking
to strike LCRC’s jury demand (Dkt. 38) and any affirmative defenses raised in LCRC’s answer
that were not raised in the Prior Action.
II.
STANDARD OF REVIEW
The Federal Rules of Civil Procedure provide that “a party may amend its pleading only
with the opposing party’s written consent or the court’s leave. The court should freely give leave
when justice so requires.” Fed. R. Civ. P. 15(a)(2). “In the absence of any apparent or declared
reason—such as undue delay, bad faith or dilatory motive on the part of the movant, repeated
failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing
party by virtue of allowance of the amendment, futility of amendment, etc.—the leave sought
should, as the rules require, be ‘freely given.’” Foman v. Davis, 371 U.S. 178, 182 (1962).
III.
ANALYSIS
The parties’ disagreement essentially centers around the impact of the Tolling Agreement
and the JFPO on the current proceeding. As Gould points out, the parties agreed that the JFPO
and legal positions of the parties “shall be preserved as applicable and binding” in this litigation.
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Order of Dismissal at PageID.275; see also Tolling Agreement, Ex. B to Am. Compl., ¶ 5 (Dkt.
22-3).
LCRC claims that Gould has expanded the instant case beyond the scope of the Prior
Action, and LCRC needs to effectively defend itself against new claims. LCRC argues that
allowing it to file a counter-complaint, seeking relief from Gould under CERCLA and NREPA,
will ensure that all of the claims between LCRC and Gould will be adjudicated in one case, rather
than requiring LCRC to file a separate lawsuit at the conclusion of the instant case. Def. Br. at 6.
It further argues that Gould will not be prejudiced by these counterclaims, as they involve the same
facts and witnesses as in Gould’s case-in-chief. Id.
Gould argues that LCRC’s request comes too late. Its position is that the Joint Final Pretrial
Order (“JFPO”) filed in the Prior Action is binding – as agreed by the parties in the Tolling
Agreement and ordered by the Court – and LCRC cannot now raise defenses or claims that were
not in the JFPO. See Pl. Mot. at 7-8. Gould also points out that LCRC asked to file its countercomplaint more than two years after this case was initiated. Gould further argues that, if the Court
permits LCRC to file counterclaims, LCRC should be limited to the counterclaims previously
identified in the JFPO. Pl. Resp. at 16-17 (Dkt. 46).
The language in the Tolling Agreement and order of dismissal is clear. The “record,
pleadings, Joint Final Pretrial Order, discovery, expert reports, legal positions of the parties, etc.
in the [Prior Action] shall be preserved as applicable and binding” in the instant case. Tolling
Agreement, ¶ 5; Order of Dismissal at PageID.275 (emphasis added in both). Despite this
language, both parties now seek to expand the scope of the current proceedings beyond what was
agreed upon in the Prior Action.
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Gould brought a NREPA contribution claim in the Prior Action. 2d Am. Compl., Gould
Elec. v. Livingston Cty. Rd. Cmm’n, No. 09-12633, at 8 (E.D. Mich.) (Dkt. 40) (“Contribution
claim against LCRC and Livingston County pursuant to M.C.L. 324.20129”). However, the
designation of a “contribution claim” is omitted from the operative complaint in this action, and
Gould stated in its response to LCRC’s motion to dismiss that it was pursuing a claim for cost
recovery pursuant to Mich. Comp. Laws § 324.20126a, not a contribution claim. See Pl. Resp. to
Mot. to Dismiss at 20 (Dkt. 29). Gould’s amended complaint in this action goes beyond the
pleadings in the Prior Action by referencing salt contamination, in addition to TCE contamination,
which had been the sole identified contamination referenced in Gould’s complaint in the Prior
Action.1
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Gould argues that claims regarding salt contamination were part of the Prior Action. The Court
disagrees. Gould, in both its brief and at the hearing, pointed to a portion of the JFPO where LCRC
stated:
The MDEQ’s identification of the LCRC property as a “facility”
was based on two separate contaminant plumes of salt and volatile
organic compounds (VOCs). LCRC has recently met with MDEQ
officials to acknowledge responsibility for the salt plume and
provide data which establishes that all of the VOC contamination on
the LCRC property migrated from the Gould property. Accordingly,
LCRC is in the process of submitting to MDEQ a request for no
further action (NFA) report with respect to the VOC contamination
on its property. If the NFA report is approved, LCRC will not be
obligated to take any further action with respect to the VOC
contamination. LCRC is also in the process of submitting to MDEQ
a corrective action plan with respect to the salt contamination along
with an affidavit to support unremediated releases pursuant to R
299.5534 of the Part 201 Administrative Rules which provides the
reasons LCRC has no liability for the VOC contamination.
JFPO, Gould Elec. v. Livingston Cty. Rd. Cmm’n, No. 09-12633 (E.D. Mich.), at 4 (Dkt. 147).
LCRC was simply responding to Gould’s allegation that LCRC’s property had been designated as
a “facility.” Gould points to nothing in the JFPO or in its second amended complaint in the Prior
Action suggesting that it was seeking any relief based on salt contamination. Indeed, the portion
of the JFPO devoted to Gould’s CERCLA and NREPA claims is devoid of any mention of salt.
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LCRC also seeks to expand its claims in this action, adding a CERCLA contribution
counter-claim even though the JFPO reflects that LCRC only had asserted claims for CERLA cost
recovery, NREPA contribution, and NREPA cost recovery. JFPO, Gould Elec. v. Livingston Cty.
Rd. Cmm’n, No. 09-12633, at i (Dkt. 147). LCRC also set forth six defenses in the JFPO – four
defenses to Gould’s CERCLA claim and two defenses to Gould’s NREPA claim – but it seeks to
assert eighteen in its proposed second amended answer. See Proposed 2d Am. Answer, Ex. B to
Def. Mot., at 8-10 (Dkt. 44-2). LCRC also now requests a jury trial, despite having agreed to a
bench trial in the Prior Action.
The parties agreed to be bound by the legal positions that they had asserted in the Prior
Action and the record that had been established in that case. This action was never conceived as
an entirely new opportunity to litigate, as if the Prior Action had never been filed. The Prior Action
had absorbed the energies of the parties and the Court, culminating in a 26-page summary
judgment opinion and a 137-page JFPO. With trial less than three weeks away, the parties decided
to terminate that action without prejudice, in an effort to resolve this sprawling dispute without the
need for further litigation. As the language of the dismissal order confirms, the parties were to
pick up where they left off should the settlement effort fail. The Court will enforce that agreement.
LCRC’s motion to amend its answer and file a counter-complaint is granted insofar as
LCRC seeks to file an answer and counter-complaint asserting only the defenses and counterclaims, respectively, that are set forth in the JFPO. The Court grants Gould’s motion to strike
LCRC’s newly-added affirmative defenses and jury demand, finding that LCRC waived its jury
demand in the Prior Action and agreed to be bound by that decision.2 Any allegation in the
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Counsel for LCRC also represented at the hearing that it would withdraw the jury demand if the
Court limited the scope of Gould’s claims in the instant action in accordance with the JFPO. The
Court has done so.
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Amended Complaint that is inconsistent with the JFPO or goes beyond the relief previously sought
– such as Gould’s current effort to seek relief regarding salt contamination – is deemed inoperative.
IV.
CONCLUSION
For the reasons provided, LCRC’s motion to amend its answer and to file a countercomplaint (Dkt. 44) is granted in part and denied in part. Gould’s motion to strike LCRC’s jury
demand and new affirmative defenses (Dkt. 45) is granted. Gould must file a second amended
complaint in conformity with this Opinion and Order on or before July 8, 2019. LCRC must file
an amended answer and counter-complaint in conformity with this Opinion seven days after
service of the amended complaint. No other changes will be made to the scheduling order (Dkt.
40) at this time. Any party wishing to amend the schedule must file a motion setting forth good
cause, such as circumstances arising that could not have been reasonably anticipated prior to
setting the current schedule.
SO ORDERED.
Dated: June 27, 2019
Detroit, Michigan
s/Mark A. Goldsmith
MARK A. GOLDSMITH
United States District Judge
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