Evraz Oregon Steel Mills, Inc. v. Continental Insurance Company
Filing
305
OPINION and ORDER - For the reasons stated, Evraz's motion to consolidate 200 is DENIED without prejudice to Evraz's ability to move for selective consolidation of isolated motions. DATED this 3rd day of December, 2013, by United States Magistrate Judge John V. Acosta. (peg)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
EVRAZ INC., N.A., a Delaware
Corporation,
Civ. No. 3:08-cv-00447-AC
OPINION AND ORDER
Plaintiff,
v.
RIDDELL WILLIAMS P.S.
v.
THE CONTINENTAL INSURANCE
COMPANY, a Pennsylvania Corporation;
CENTRAL NATIONAL INSURANCE
COMPANY OF OMAHA, a Nebraska
Corporation; CENTURY INDEMNITY
COMPANY, a Pennsylvania Corporation;
GRANITE STATE INSURANCE
COMPANY, a Pennsylvania Corporation;
AMERICAN HOME ASSURANCE
COMPANY, a New York Corporation;
HARTFORD FIRE INSURANCE
COMPANY, a Connecticut corporation;
INSURANCE COMPANY OF THE
STATE OF PENNSYLVANIA, a
Pennsylvania corporation; NATIONAL
UNION FIRE INSURANCE COMPANY
OF PITTSBURGH PA, a Pennsylvania
company; RLI INSURANCE COMPANY,
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an Illinois corporation; STONEWALL
INSURANCE COMPANY, a Nebraska
corporation; WESTCHESTER FIRE
INSURANCE COMPANY, a New York
corporation; WESTPORT INSURANCE
CORPORATION, a Missouri corporation;
ZURICH-AMERICAN INSURANCE
COMPANY, a New York corporation;
Defendants,
THE CONTINENTAL INSURANCE
COMPANY, a Pennsylvania corporation,
Third-Party Plaintiff,
v.
INSURANCE COMPANY FOR THE
STATE OF PENNSYLVANIA, a
Pennsylvania corporation; and AMERICAN
HOME ASSURANCE COMPANY, a
foreign insurance company,
Third Party Defendants,
CONTINENTAL INSURANCE
COMPANY, a Pennsylvania corporation,
Counterclaimant,
v.
EVRAZ OREGON STEEL MILLS, INC., a
Delaware corporation
Counter Defendant,
INSURANCE COMPANY OF THE
STATE OF PENNSYLVANIA, a
Pennsylvania corporation; and AMERICAN
HOME ASSURANCE COMPANY, a
foreign insurance company,
Third-Party Plaintiffs,
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v.
TIG INSURANCE COMPANY;
Third-Party Defendant,
TIG INSURANCE COMPANY;
Counterclaimant,
v.
CONTINENTAL INSURANCE
COMPANY, a Pennsylvania corporation,
Counterdefendant.
___________________________________
ACOSTA, Magistrate Judge:
Introduction
Plaintiff Evraz Inc., N.A. (“Evraz”) moves to consolidate Evraz Inc., N.A. v. The
Travelers Indemnity Co., 3:11-cv-233-AC (the “Travelers Action”), with Evraz Inc., N.A. v. The
Continental Ins. Co., 3:08-cv-447-AC (the “Continental Action”) (collectively “Actions”).
Evraz filed the Continental Action on April 10, 2008, and the Travelers Action on February 23,
2011.
In both Actions, Evraz seeks relief in the form of money damages and judicial
declarations of the rights, duties, and liabilities of the parties with respect to insurance coverage
for Evraz’s environmental damages liability. According to Evraz, consolidation is warranted
because both Actions involve common issues of law and fact and judicial interests weigh in
favor of consolidation. Defendant Travelers Indemnity Company (“Travelers”) opposes the
motion and argues that consolidation will prejudice it and fail to advance the interests of judicial
economy.
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Background
Both Actions arise from Evraz’s environmental liabilities at the Portland Harbor
Superfund Site and the Vancouver Shipyard. Evraz owns real property adjacent to the Portland
Harbor Superfund Site and has been found liable by the Environmental Protection Agency and
Oregon Department of Environmental Quality for investigation and mitigation of Natural
Resources Damages (“NRD”). Evraz has incurred significant liability in furtherance of its
investigation and clean-up efforts.
Evraz and its predecessor-in-interest maintained liability insurance to protect the business
from the liability it now faces in connection with the environmental clean-up. According to
Evraz, its insurers have breached the insurance contracts by failing to reimburse it for defense
costs and clean-up liabilities. Evraz now seeks a declaratory judgment and money damages to
remedy the defendants’ alleged breach of the insurance policies.
Each case is in a different procedural posture. The Continental Action commenced in
April 2008, and was originally assigned to Judge Jelderks. On January 13, 2009, Judge Jelderks
issued, and Judge Mosman adopted, a Finding and Recommendation which granted partial
summary judgment for Evraz. In that Findings and Recommendation, Judge Jelderks held that
Continental owes Evraz a general duty to defend, but reserved judgment on whether particular
defense costs claimed by Evraz were appropriate for reimbursement. Since that determination,
Evraz joined ten new defendants to the Continental matter. On the other hand, Evraz did not file
the Travelers Action until 2011, and to date, the court has not ruled on any dispositive motions.
Both Actions were assigned to this court in April 2013. Evraz now moves to consolidate the two
cases.
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Legal Standard
Federal Rule of Civil Procedure (“FRCP”) 42(a) authorizes the court to consolidate
actions involving “common question[s] of law or fact.” FED. R. CIV. P. 42(a)(1). The court may
consolidate for hearing or trial any and all matters at issue, including the entire case. Id. In
making this determination, the court must weigh “the interest in judicial convenience against the
potential delay, confusion and prejudice caused by consolidation.” Paxonet Commc’ns, Inc. v.
TranSwitch Corp., 303 F. Supp. 2d 1027, 1028 (N.D. Cal. 2003). The district court has broad
discretion to decide whether to consolidate cases for trial. In re Adams Apple, Inc., 829 F.2d
1484, 1487 (9th Cir. 1987).
Discussion
Consolidation is appropriate only if there are common questions of law or fact and
judicial interests weigh in favor of consolidation. Evraz argues there are no legal or factual
issues unique to either Action. It asserts the Second Amended Complaints in each case “are
identical apart from the named defendants and insurance policies involved,” and were a
necessary step toward making the two Actions “a comprehensive coverage litigation capable of
providing all parties with complete relief and finality on all issues.” (Pl.’s Mem. in Supp. at 5.)
Because of the similar issues, Evraz argues that consolidation is appropriate in order to conserve
judicial resources and avoid the risk of inconsistent rulings. Evraz also points out that Travelers
is the only defendant in either case to oppose consolidation, as the defendants in the Continental
Action took no position on the issue. Travelers argues that there are potentially dispositive
issues in the Travelers Action not at issue in the Continental Action, thus consolidation would
unfairly prejudice Travelers and create the potential for delay, confusion, and increased expenses
for all parties and the court. Although common issues exist between the two Actions, the court
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finds that the interests of judicial economy and ensuring consistent results weigh against wholesale consolidation at this time.
I. Common Issues of Law and Fact
Evraz first argues that both Actions share common issues of law and fact. Travelers
argues that there are potentially dispositive issues in this Action that are not at issue in the
Continental Action. Specifically, Travelers argues that there are “lost policy” issues in this
Action, and the Continental Action has been proceeding for nearly five years without any such
issues. Evraz replies that the lost policy issue has been raised in the Continental Action, making
the issue present in both cases.
Evraz asserts, and the court agrees, that the Second Amended Complaints in each case
are identical apart from the named parties and the policies at issue. Furthermore, Evraz correctly
points out that the lost policy issues raised by Travelers have also been raised by Hartford Fire
Insurance Company (“Hartford”), a defendant in the Continental Action. Therefore, the court
finds there are no uncommon issues of law or fact that would make consolidation inappropriate.
II. Relative Weight of Judicial Interests
Evraz argues that the interests of fairness, judicial economy, and consistency weigh in
favor of consolidation. The court disagrees. Given the different procedural postures of the
cases, and the fact that both cases are assigned to the same judge, Evraz has not met its burden of
demonstrating that judicial interests weigh in its favor.
A. Potential for Prejudice
Travelers argues that consolidation at this stage would be unfairly prejudicial because the
parties in the Continental Action have already briefed and the court has already decided key
issues that Evraz will try to apply to Travelers. Evraz replies and asserts that FED.R.CIV.P. 42
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does not permit Travelers automatically be held to the summary judgment ruling already issued
in the Continental Action.
Due to the relative complexity and advanced procedural posture of the Continental
Action, Travelers arguably would be prejudiced by consolidation.
Evraz is correct that
Travelers’ liability would be unaffected by Judge Jelderks’s partial summary judgment decision
in the Continental Action. However, Travelers likely would be prejudiced in several ways if it
were joined as a defendant in the Continental Action. First, litigation would be significantly
more complex. A matter involving twelve defendants, an intervenor, and third-party practice
would be more difficult for Travelers to manage than a simple case involving one plaintiff and
one defendant. Second, the Continental Action is a complex case, will take longer to get to trial,
and, thus, is likely to be more costly to litigate. This argument is even more compelling
considering Evraz intentionally filed the Travelers Action and Continental Action separately
instead of joining Travelers to the existing Continental Action in 2011.
B. Judicial Resources and Inconsistent Results
Evraz argues consolidation will conserve judicial resources and reduce the threat of
inconsistent rulings between the two cases. Travelers argues that consolidation will create
inefficiencies due to the differing procedural posture of each case. Additionally, Travelers
argues that the threat of inconsistent rulings is low considering both Actions have been assigned
to the same judge who has knowledge of the facts and procedural background of both Actions.
The court finds that judicial economy and the need for consistent results weigh against
consolidation. The primary factor weighing against complete consolidation is that both the
Travelers Action and Continental Action are assigned to this court. To the extent that judicial
economy is served by consolidation, the court may selectively join the two Actions for
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individual motions and hearings. Further, selective consolidation will also prevent inconsistent
results. When one judge manages two related cases, that judge will be aware of the rulings in
each case and can ensure that inconsistent rulings on similar issues are avoided. Such an
arrangement also makes it possible for the parties to brief the court on how best to avoid
potential inconsistencies.
Because Evraz’s concerns of judicial economy and the threat of inconsistent results at
this time are remedied by assignment of both cases to the same judge, the court will not
consolidate the Travelers Action and the Continental Action at this time. This determination is
without finding that the two cases are unsuitable for consolidation at a later time, and is without
prejudice to Evraz’s ability to request consolidation of isolated motions and hearings.
Conclusion
For the reasons stated, Evraz’s motion to consolidate is DENIED without prejudice to
Evraz’s ability to move for selective consolidation of isolated motions.
IT IS SO ORDERED.
DATED this 3rd day of December, 2013.
/s/ John V. Acosta
JOHN V. ACOSTA
United States Magistrate Judge
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