Cyprus Amax Minerals Company v. TCI Pacific Communications, Inc. et al

Filing 243

OPINION AND ORDER by Judge Claire V Eagan that defendant's Motion to Declare the Temporal Scope of the Court's February 2, 2015 Order on Alter Ego Status (Dkt. # 215) is denied. ; denying 215 Motion to Clarify (RGG, Chambers)

UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF OKLAHOMA

CYPRUS AMAX MINERALS COMPANY,
Plaintiff,
v.
TCI PACIFIC COMMUNICATIONS, INC.,
Defendant.

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Case No. 11-CV-0252-CVE-PJC

OPINON AND ORDER
Now before the Court is defendant’s Motion to Declare the Temporal Scope of the Court’s
February 2, 2015 Order on Alter Ego Status (Dkt. # 215). Plaintiff Cyprus Amax Mineral Company
(Cyprus) filed this case seeking contribution under the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. § 9601 et seq. (CERCLA), from defendant TCI Pacific
Communications, Inc. (TCI). Cyprus alleges that TCI is the successor-in-interest to New Jersey
Zinc Company (NJZ), and that Tulsa Fuel and Management Company (TFMC) was a subsidiary of
NJZ. Cyprus claims that TCI is liable for environmental harm caused by TFMC’s operations in
Collinsville, Oklahoma, because TFMC was the alter ego of NJZ and TCI has assumed
responsibility for the liabilities of NJZ. On February 2, 2015, the Court entered an opinion and order
(Dkt. # 183) finding that TFMC was the alter ego of NJZ. TCI asks the Court to find that TFMC
was the alter ego of NJZ only between February 26, 1918 and June 9, 1923. Dkt. # 215.
On April 26, 2011, Cyprus filed this case alleging that NJZ was the parent company of
TFMC and, under an alter ego theory, that NJZ was responsible for the debts and liabilities of
TFMC. TFMC and NJZ are no longer in existence, but Cyprus claimed that TCI, Viacom, CBS
Corporation, and CBS Operations, Inc. were the successors-in-interest of NJZ. TCI has admitted

that it is the successor-in-interest to NJZ. Dkt. # 143, at 1. Cyprus voluntarily dismissed defendants
Viacom and CBS Corporation. Dkt. ## 59, 63. The remaining defendants, TCI and CBS
Operations, Inc., filed a motion (Dkt. # 53) for a ruling as to whether Kansas or Oklahoma law
applied to the issue of piercing the corporate veil under an alter ego theory. The judge then assigned
to the case, the Honorable Gregory K. Frizzell, found that Kansas law applied to this case, because
laws of the state of incorporation ordinarily governed the disputed issue and TFMC was
incorporated in Kansas. Dkt. # 89. The case was reassigned to the Honorable John E. Dowdell.
Dkt. # 105. TCI and CBS Operations, Inc. filed a motion to dismiss (Dkt. # 114) Cyprus’ claims
for failure to state a claim upon which relief can be granted. The motion to dismiss was granted in
part and denied in part. Dkt. # 142. All pending claims against CBS Operations, Inc. were
dismissed with prejudice, and the unjust enrichment claim and certain of Cyprus’ CERCLA claims
were dismissed as to TCI. However, Counts III through VII of the amended complaint remain
pending against TCI. The case was randomly reassigned to the undersigned following the recusal
of Judge Dowdell. Dkt. # 144. The undersigned directed the parties to submit motions for summary
judgment “on the issue of TFMC’s and [NJZ’s] corporate relationship, including any arguments as
to piercing the corporate veil . . . .” Dkt. # 145, at 20. Cyprus and TCI filed motions for summary
judgment (Dkt. ## 151, 161) concerning the corporate relationship of TFMC and NJZ.
On February 2, 2015, the Court entered a 31 page opinion and order granting Cyprus’ motion
for summary judgment and found that TFMC was the alter ego of NJZ. The Court provided a
detailed review of the history concerning the formation and operation of TFMC, and discussed
NJZ’s involvement with TFMC from TFMC’s formation in 1906 to its dissolution in 1926. Dkt. #
183, at 2-9. The parties and their experts noted that gaps in the historical record made it difficult

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to determine the financial condition of TFMC, and each side asked the Court to make certain
inferences based on the limited evidence as to TFMC’s day-to-day operations. Id. at 3, 18-20, 25.
Records from 1912 showed that the president of NJZ, Edgar Palmer, owned the vast majority of
TFMC’s stock, and the rest of TFMC’s stock was owned by persons with close connections to NJZ.
Id. at 16. When TFMC was dissolved in 1926, the individual stock owners did not receive a
dividend, but NJZ received a dividend of $500,000. Id. The Court relied on statements made by
officers of NJZ in proceedings before the Interstate Commerce Commission (ICC) as evidence that
NJZ wholly dominated and controlled the operations of TFMC and that NJZ held out to others that
TFMC was operated as a department or division of NJZ. Id. at 14, 16, 18, 22, 24, 28-29. In a brief
submitted to the ICC, NJZ stated that it “in fact and in constant practice manages and directs the
operations of its subsidiary companies, including [TFMC] without regard to corporate lines of
separation, and constantly exercises its authority to act for and in behalf of its subsidiaries in any
and all matters . . . .” Dkt. # 153-1, at 37. The Court declined to give significant weight to the
competing opinions of the parties’ accounting experts due to the lack of historical evidence, and the
Court did not make a conclusive finding that TFMC was undercapitalized or that NJZ financed the
operations of TFMC. Dkt. # 183, at 20-21. The Court considered statements by NJZ officers in
issues of Zinc magazine and a report submitted to the Federal Trade Commission that subsidiaries
of NJZ were operated for the benefit of NJZ, and any profit generated by subsidiaries, such as
TFMC, flowed to and was credited to NJZ. Id. at 8-9, 25. Evidence showed that TFMC had a
stockholder’s meeting in 1912, but there was little other evidence showing that TFMC observed
corporate formalities. Id. at 26. The Court provided a summary explaining that its decision was
based on all of the evidence, not just the ICC proceedings. Id. at 30-31.

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The Court entered a scheduling order for discovery and dispositive motions as to TCI’s
potential liability under CERCLA. Dkt. ## 186, 196. The parties’ dispostive motions were due no
later than July 22, 2016. Dkt. # 196. Cyprus and TCI have filed motions for summary judgment
(Dkt. ## 213, 216) as to TCI’s CERCLA liability, but TCI has also filed a motion (Dkt. # 215)
seeking a declaration as to the temporal scope of the Courts’ alter ego ruling. TCI argues that the
Court found that TFMC was the alter ego of NJZ based exclusively on the evidence related to the
ICC proceedings, and the Court should limit TCI’s liability under CERCLA to acts that occurred
between February 26, 1918 and June 9, 1923.1 Dkt. # 215. The Court has reviewed TCI’s motion
and finds that it should be treated as a motion to reconsider the Court’s opinion and order (Dkt. #
183). Although TCI claims that it is not challenging the Court’s summary judgment ruling, TCI’s
motion (Dkt. # 215) is based on the same factual and legal arguments already presented to the Court,
and TCI implies that Court erred by not expressly placing a temporal limitation on TCI’s liability.
It is clear that TCI is attempting to avoid having its motion treated as a request for reconsideration,
but granting the relief sought by TCI would significantly alter or amend the Court’s prior alter ego
ruling and the issue raised by TCI could have been raised in TCI’s motion on that issue (Dkt. # 161).
The Court treats TCI’s motion (Dkt. # 215) under Fed. R. Civ. P. 54(b), as the underlying order is
not a final order or judgment. See Raytheon Constructors, Inc. v. Asarco Inc., 368 F.3d 1214, 1217
(10th Cir.2003). The Court may call into play the legal standards applicable to a Rule 59(e) motion
to alter or amend judgment. See e.g., Official Committee of Unsecured Creditors of Color Tile, Inc.

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TCI has selected these dates based on the tenure of C.H. George’s employment with NJZ and
the date of the last filing in the ICC proceedings. Dkt. # 215, at 20. George was the primary
witness at an administrative hearing before the ICC. Dkt. # 183, at 6. However, these dates
are not found in the Court’s opinion and order and the Court did not consider the length of
George’s employment or the dates of filings with the ICC as factors in its decision.
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v. Coopers & Lybrand LLP, 322 F.3d 147, 167 (2d Cir. 2003). A motion to reconsider, like a
motion to alter or amend judgment, should be granted only upon the following grounds: “(1) an
intervening change in the controlling law, (2) new evidence previously unavailable, [or] (3) the need
to correct clear error or prevent manifest injustice.” Servants of the Paraclete v. Does, 204 F.3d
1005, 1012 (10th Cir. 2000); see Adams v. Reliance Standard Life Ins. Co., 225 F.3d at 1186 n. 5
(10th Cir. 2000). The Court will exercise its discretion to review TCI’s motion to reconsider under
the standards applicable to Rule 59(e) motions. When ruling on a Rule 59(e) motion, a party may
not attempt to “revisit issues already addressed or advance arguments that could have been raised
in prior briefing.” Servants of the Paraclete, 204 F.3d at 1012.
The Court finds that TCI could have raised the issue of a temporal limitation as to alter ego
status in its motion on that issue or in its response to Cyprus’ motion on that issue, and this argument
is not based on newly discovered evidence or a change in the law. Dkt. ## 161, 174. The Court also
notes that TCI’s motion (Dkt. # 215) was filed almost a year and a half after the Court entered its
opinion and order denying TCI’s earlier motion for summary judgment. If TCI believed that the
Court failed to address an issue in its summary judgment ruling, TCI should have promptly raised
the issue instead of waiting until the dispositive motion cutoff for the next stage of the litigation to
raise this issue. See Dkt. # 196 (amended scheduling order setting dispositive motion cutoff of July
22, 2016 for summary judgment motions). TCI’s motion for a temporal limitation as to its potential
CERCLA liability can be denied solely on the ground that it is an improper and untimely motion to
reconsider. However, the Court also finds that the motion lacks merit. The Court has reviewed all
of the factual findings in its opinion and order (Dkt. # 183) and finds no basis for the temporal
limitation requested by TCI. Although the Court relied on the ICC proceedings, this was not the

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only evidentiary support for Cyprus’ argument that TFMC was the alter ego of NJZ, and the Court
relied on evidence dating from 1906 to 1926 in ruling on the parties’ motions. The Court did not
find that TFMC was the alter ego of NJZ solely due to George’s testimony, and TCI’s motion is
based on an unreasonably narrow reading of the Court’s opinion and order. TCI’s motion to impose
a temporal limitation on the Court’s finding that TFMC was the alter ego of NJZ is denied.
IT IS THEREFORE ORDERED that defendant’s Motion to Declare the Temporal Scope
of the Court’s February 2, 2015 Order on Alter Ego Status (Dkt. # 215) is denied.
DATED this 31st day of March, 2017.

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