Cyprus Amax Minerals Company v. TCI Pacific Communications, Inc. et al
Filing
355
OPINION AND ORDER by Judge Claire V Eagan - Defendant's Motion to Amend Findings of Fact pursuant to Fed. R. Civ. P. 52(b) (Dkt. # 337) is denied. The Court Clerk is directed to send a copy of this Opinion and Order to the Tenth Cir cuit Court of Appeals in reference to Appeal No. 21-5038. ; denying 337 Motion to Alter Order/Judgment (Re: 337 MOTION to Alter Order/Judgment /Findings of Fact Pursuant to Fed.R.Civ.P. 52(b), 332 Findings of Fact and Conclusions of Law,,,,,,,,,,, ) (RGG, Chambers)
UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF OKLAHOMA
CYPRUS AMAX MINERALS COMPANY,
Plaintiff,
v.
TCI PACIFIC COMMUNICATIONS, LLC,
Defendant.
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Case No. 11-CV-0252-CVE-CDL
OPINION AND ORDER
Now before the Court is Defendant’s Motion to Amend Findings of Fact pursuant to Fed. R.
Civ. P. 52(b) (Dkt. # 337). Defendant TCI Pacific Communications, LLC (TCI) asks the Court to
amend the findings of fact and conclusions of law (Dkt. # 332) to include additional findings
concerning direct operator liability under the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. § 9601 et seq. (CERCLA). Plaintiff Cyprus Amax
Minerals Company (Cyprus) responds that the Court had no reason to decide this issue and the Court
did not fail to resolve an essential issue that requires additional findings of fact. Dkt. # 349.
Cyprus filed this case seeking contribution from TCI under CERCLA, and Cyprus alleged
that TCI could be held liable as a former owner or operator of the Tulsa Fuel and Management
Company’s (TFMC) zinc smelter located in Collinsville, Oklahoma. TFMC was a subsidiary of the
New Jersey Zinc Company (NJZ), and TCI is the corporate successor to NJZ. The amended
complaint contains the following allegations concerning NJZ’s alleged control over TFMC:
12.
At all relevant times, TFMC was dominated and controlled by, was operated
for the benefit of, and was the “alter ego” of, [NJZ], a corporation organized
under the laws of the State of New Jersey. As a result of this domination and
control of TFMC, [NJZ] was the “alter ego” of TFMC, and as such, is liable
for all liabilities of TFMC.
13.
Also at all relevant times, [NJZ] directly participated in, managed, controlled
and directed the workings of and conducted the operations of the TFM
Smelter, and as such, is liable for all liabilities arising from the operations of
the TFM Smelter.
Dkt. # 106, at 4. The Court directed the parties to file 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’s motions (Dkt. ## 151, 161) focused primarily on
whether TFMC was the alter ego of NJZ, but the motions briefly raised the issue of whether NJZ
directly operated TFMC’s smelter. The Court entered an opinion and order (Dkt. # 183) finding that
NJZ disregarded the corporate separateness of TFMC, and TCI could be subject to CERCLA liability
“under a theory of indirect liability.” Dkt. # 183, at 30. The Court did not consider the parties’
arguments concerning TCI’s direct operator liability based on a theory that NJZ directly controlled
the operations of TFMC’s smelter.
The parties subsequently filed motions for summary judgment as to the elements of Cyprus’
claims for contribution under CERCLA, and Cyprus argued that TCI was a “covered person” based
on the Court’s ruling that TCI could be held indirectly liable under CERCLA. Dkt. # 213, at 5, 25.
TCI argued that Cyprus failed to establish a claim for direct operator liability under a theory that NJZ
actually controlled TFMC’s operations and the disposal of hazardous substances at the TFMC
smelter. Dkt. # 216, at 36-37. Cyprus responded that TCI could held liable on a theory of direct
operator liability based on the same facts used by the Court to establish indirect liability. Dkt. # 227,
at 42-43. However, the parties did not offer new evidence on the issue of NJZ’s control over the
operations of the TFMC smelter, and any ruling on this issue would have been based on the summary
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judgment record from the prior opinion and order (Dkt. # 183). The Court focused on the elements
of CERLCA liability and did not consider direct operator liability as an additional basis to hold TCI
liable for the disposal of hazardous substances at the TFMC smelter. Dkt. # 244. The Court noted
that TCI was making arguments that it did not own or operate the TFMC smelter, but these
arguments appeared to be a request for reconsideration of the Court’s prior opinion and order (Dkt.
# 183). Dkt. # 244, at 31. The Court noted the difference between indirect and direct liability under
CERCLA and declined to make a finding as to direct liability, because the Court’s prior finding as
to indirect liability independently permitted Cyprus to proceed with its contribution claims against
TCE. Id. at 32.
The case was set for a non-jury trial and the Court entered a pretrial order (Dkt. # 302).
Cyprus stated in the pretrial order that it believed the Court had fully resolved the issue of whether
TCI was a covered person, and it did not request a ruling that TCI was directly liable under
CERCLA. Dkt. # 302, at 5. TCI did not agree that this issue was resolved and it generally asked
the Court to find that it could not be held liable as a former owner or operator under CERCLA. Id.
at 7. TCI also claimed that there were disputed issues of fact concerning its ownership, management,
or operation of a facility within the town of Collinsville. Id. at 12. The Court held a non-jury trial,
which TCI moved for judgment as a matter of law on several issues, including whether TCI could
be held directly liable under CERCLA. Dkt. # 319, at 11-12. Cyprus advised the Court that it was
not seeking a ruling on this issue, and Cyprus believed that the Court’s prior ruling concerning alter
ego liability was sufficient to establish that TCI is a “covered person” under CERCLA. Id. at 13.
The Court entered its findings of fact and conclusions of law (Dkt. # 332), relying on its prior
opinion and order to establish that TCI was indirectly liable under an alter ego theory, and the Court
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did not reach the issue of whether TCI could be held directly liable under CERCLA. Dkt. # 332, at
16.
Under Fed. R. Civ. P. 52(a), a court must make findings of fact and conclusions of law in an
action tried without a jury. Upon motion by any party, a court may “amend its findings–or make
additional findings–and may amend the judgment accordingly.” Fed. R. Civ. P. 52(b). Rule 52(b)
permits a district court to “correct manifest errors of law or fact, make additional findings or take
other action that is in the interests of justice.” Ashraf-Hassan v. Embassy of France, 185 F. Supp.3d
94, 108 (D.D.C. 2016). A Rule 52(b) motion to amend findings of fact and conclusions of law
should be granted only if the proposed additional findings would be material to district court’s ruling.
Lyons v. Jefferson Bank & Trust, 793 F.Supp. 989, 991 (D. Colo. 1992). “Such a motion should not
be employed, however, ‘to introduce new evidence that was available at the time of trial but was not
proffered, to advance new theories, or to secure a rehearing on the merits.’” Deem v. Baron, 2020
WL 4437297, *1 (D. Utah Aug. 3, 2020) (quoting Lyons, 793 F. Supp. at 991).
In United States v. Bestfoods, 524 U.S. 51 (1998), the Supreme Court considered the
circumstances under which a parent corporation could be held liable for the disposal of hazardous
substances by a subsidiary company. The mere fact that a subsidiary owns or operates a polluting
facility is not a sufficient basis to impose liability on the parent company, and the well-settled
principle of piercing the corporate veil applies to CERCLA claims. Id. at 62-63. State corporation
law was not displaced by CERCLA, and a parent company can be subject to derivative or indirect
liability under a veil-piercing theory. Id. at 63. However, CERCLA provides a separate basis to hold
a parent company liable as the owner or operator of a polluting facility. Any party, including a
parent corporation, may be liable as an “operator” under CERCLA if it manages, directs, or conducts
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operations related to pollution or the disposal of a hazardous substance. Id. 66-67. In making this
inquiry, a court must take into account the general presumption that an officer or director can wear
“two hats,” and courts should not disregard the “time-honored” rule that dual officers or directors
of parent and subsidiary companies can act in separate capacities. Id. at 70. Instead, a court must
distinguish between normal acts of interference by a parent company and acts that are “eccentric
under accepted norms of parental oversight of a subsidiary’s facility.” Id. at 71-72. A court need
not find that a parent company is liable under theories of direct and indirect liability, and these are
separate and independent bases to hold a parent company liable for pollution at a subsidiary’s
facility. New Mexico on behalf of New Mexico Environmental Department v. United States
Environmental Protection Agency, 310 F. Supp. 3d 1230, 1244 (D.N.M. 2020); United States v.
Friedland, 173 F. Supp. 2d 1077 (D. Colo. 2001).
The Court finds that the issue of TCI’s direct operator liability under CERCLA was not an
issue that was required to be resolved at the non-jury trial and there is no need for the Court to issue
amended findings of fact and conclusions of law. The Supreme Court was clear in Bestfoods that
direct and indirect liability of a parent company are separate and independent bases for liability, and
the Court’s finding that TCI is indirectly liable under an alter ego theory is sufficient to resolve
Cyprus’ CERCLA claims. In its reply, TCI accuses Cyprus of engaging in a “last-ditch effort to
revive its failed claim of direct operator liability against TCI . . .” Dkt. # 353, at 1. To the contrary,
Cyprus expressly asks the Court not to make additional findings on the issue of direct operator
liability, and this is consistent with the position taken by Cyprus in its closing argument at trial. Dkt.
# 319, at 13 (Cyprus’ counsel argued that the Court’s prior ruling on alter ego liability satisfied the
element of Cyprus’ CERCLA claim and asking the Court not to consider direct operator liability in
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its findings of fact and conclusions of law); Dkt. # 349, at 7-8 (“once this Court decided that
CERCLA liability could be imposed based on an indirect operator theory, there was no need for the
Court to further consider or rule on Cyprus’ alternative argument as to NJZ’s direct operator liability
under CERCLA as part of its post-trial Findings of Fact and Conclusions of Law”). TCI argues that
the issue of direct operator liability was “disputed” by the parties and, therefore, should have been
resolved by the Court in its findings of fact and conclusions of law. However, the Court relied on
the parties’ arguments and the evidence offered at trial to determine which issues were necessary and
material to the Court’s ruling on Cyprus’ CERCLA claims. Cyprus was not seeking a ruling on this
issue and it was not material to the disposition of the case, and the Court was not required to resolve
every possible “disputed” issue that could arise at trial. TCI has not shown that the Court failed to
make findings on a material issue in it findings of fact and conclusions of law (Dkt. # 332), and
TCI’s motion pursuant to Rule 52(b) (Dkt. # 337) is denied.
IT IS THEREFORE ORDERED that Defendant’s Motion to Amend Findings of Fact
pursuant to Fed. R. Civ. P. 52(b) (Dkt. # 337) is denied.
IT IS FURTHER ORDERED that the Court Clerk is directed to send a copy of this Opinion
and Order to the Tenth Circuit Court of Appeals in reference to Appeal No. 21-5038.
DATED this 14th day of June, 2021.
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