Emhart Industries, Inc. v. New England Container Company, Inc et al
ORDER granting (923) Motion to Dismiss in case 1:06-cv-00218-WES-LDA; granting (740) Motion to Dismiss in case 1:11-cv-00023-WES-LDA. So Ordered by District Judge William E. Smith on 7/14/2021. Associated Cases: 1:11-cv-00023-WES-LDA, 1:06-cv-00218-WES-LDA, 1:18-cv-00316-WES-LDA(Jackson, Ryan)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
EMHART INDUSTRIES, INC.,
Plaintiff and Counterclaim )
C.A. No. 06-218 WES
NEW ENGLAND CONTAINER COMPANY,
INC.; et al.,
Defendants and Counterclaim )
EMHART INDUSTRIES, INC.,
Plaintiff and Counterclaim )
C.A. No. 11-023 WES
UNITED STATES DEPARTMENT OF THE
AIR FORCE; et al.,
Plaintiffs, and Third-Party )
BLACK & DECKER, INC.; et al.,
In this long-lived litigation 1, the United States moves to
dismiss two counterclaims brought by CNA Holdings LLC.
This Order assumes familiarity with those that precede it.
States of America’s Mot. to Dismiss CNA Holdings’ Countercl. (“Mot.
to Dismiss”) 2-3, ECF No. 740. 2
For the reasons below, the Motion
is GRANTED as to both claims.
See Answer and Countercl. of CNA Holdings LLC to Am.
Third Party Compl. of the Unites [sic] States (“Countercl.”) 22,
ECF No. 617.
However, the Consent Decree bars such claims.
Consent Decree ¶¶ 84-85, ECF No. 715.
Resisting dismissal anyway,
CNA Holdings attacks the validity of the Consent Decree.
Holdings LLC’s Mem. in Opp’n to the United States’ Mot. to Dismiss
3-5, ECF No. 742.
At the time of briefing on the instant Motion,
an appeal of the Consent Decree was pending before the First
Circuit, and this Court accordingly held the Motion in abeyance
pending resolution of that appeal.
See Oct. 17, 2019 Text Order.
The First Circuit recently affirmed this Court’s ruling approving
the Consent Decree, see generally Emhart Indus., Inc. v. U.S. Dep’t
of the Air Force, 988 F.3d 511 (1st Cir. 2021); with that, CNA
Holdings is left with no defense of its contribution counterclaim,
and so it is dismissed.
The second counterclaim seeks recovery of costs relating to
two administrative agreements between the EPA and CNA Holdings
All docket numbers refer to Case No. 11-023.
(along with other parties) 3: the first from September 2003 and the
second from August 2013.
Countercl. 21-22; see Mot. to Dismiss 7
specific response actions.
Now, through this counterclaim against
the government, CNA Holdings seeks to recover the costs that it
expended in doing so.
Importantly, though, each agreement includes (functionally
identical) covenants not to sue.
See Mot. to Dismiss Ex. 1 (“Sept.
2003 Order”) ¶ 102, ECF No. 740-1; Mot. to Dismiss Ex. 2 (“Aug.
2013 Order”) ¶ 69, ECF No. 740-2.
Ordinarily, those clauses would
bar CNA Holdings’ counterclaim.
But the government sued CNA
Holdings argues, nullified the covenants, and its counterclaim
See Sept. 2003 Order ¶ 103 (carving out
exception to covenant not to sue if “the United States brings a
cause of action”, “but only to the extent that [CNA Holdings’]
claims arise from the same response action, response costs, or
damages that the United States is seeking”); Aug. 2013 Order ¶ 70
It is appropriate for the Court to consider these agreements
at the motion-to-dismiss stage. See In re Fid. Erisa Fee Litig.,
990 F.3d 50, 53-54 (1st Cir. 2021).
damages” as the government’s suit.
Aug. 2013 Order ¶ 70.
See Sept. 2003 Order ¶ 103;
The government says no: its 2012 suit falls
outside the scope of the covenants not to sue, so the prohibition
remains in place.
For this reason, it is important to lay out the specifics of
the relevant claims.
As pleaded, CNA Holdings’ counterclaim seeks
recovery for costs it expended in performing discrete work under
Specifically, the work
performed pursuant to the September 2003 Order involved a removal
action, generally including “(1) control of storm drain runoff and
sedimentation entering the tailrace; and (2) construction and
short-term maintenance of a protective cap over the tailrace area.”
Sept. 2003 Order ¶ 53; see also Countercl. 21.
And the work
performed pursuant to the August 2013 Order involved a pre-design
investigation, which included, ”inter alia, the performance of a
characterization in the Source Area of the Site, including test
pits/trenching and sampling for dioxin and other contaminants.”
Aug. 2013 Order ¶ 31; see also Countercl. 22.
2012 claims against CNA Holdings (now dismissed, see July 11, 2019
Text Order) sought recovery for “all response costs incurred by
the United States to date relating to the Site.”
Compl. 22, ECF No. 112.
Am. Third Party
Examples of work for which the government
sought response costs included “conducting sampling for hazardous
substances” and “overseeing response actions.”
Id. at 21 (giving
other examples of actions for which the government incurred costs).
On its face, CNA Holdings’ counterclaim does not arise from
the same response action, response costs, or damages that the
government sought in its 2012 suit.
For one, the government’s
suit sought recovery of its costs expended related to the Site,
while CNA Holdings’ counterclaim seeks recovery of costs that it
expended under the agreements.
And, as pleaded, the response
actions performed by each are distinct.
The government’s suit,
having to do with a different response action and different costs,
did not void the covenants not to sue.
Remaining in effect, the
covenants bar CNA Holdings’ cost recovery counterclaim, which is
therefore dismissed because it fails to state a claim upon which
relief can be granted. 4
See Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007).
CNA Holdings requests a chance to amend its counterclaims
to address deficiencies, but, based on the defects necessitating
dismissal, it is hard to see how an amendment could cure these
The Court GRANTS the United States of America’s Motion to
Dismiss CNA Holdings’ Counterclaim, ECF No. 740.
IT IS SO ORDERED.
William E. Smith
Date: July 14, 2021
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