Emhart Industries, Inc. v. New England Container Company, Inc et al

Filing 1034

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 )
Defendant,
)
)
v.
)
C.A. No. 06-218 WES
)
NEW ENGLAND CONTAINER COMPANY,
)
INC.; et al.,
)
)
Defendants and Counterclaim )
Plaintiffs.
)
___________________________________)
)
EMHART INDUSTRIES, INC.,
)
)
Plaintiff and Counterclaim )
Defendant,
)
)
v.
)
C.A. No. 11-023 WES
)
UNITED STATES DEPARTMENT OF THE
)
CONSOLIDATED
AIR FORCE; et al.,
)
)
Defendants, Counterclaim
)
Plaintiffs, and Third-Party )
Plaintiffs,
)
)
v.
)
)
BLACK & DECKER, INC.; et al.,
)
)
Third-Party Defendants.
)
___________________________________)
ORDER

In this long-lived litigation 1, the United States moves to
dismiss two counterclaims brought by CNA Holdings LLC.

1

See United

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.
The

first

government.

counterclaim

seeks

contribution

from

the

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.

See

Resisting dismissal anyway,

CNA Holdings attacks the validity of the Consent Decree.

See CNA

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

2

All docket numbers refer to Case No. 11-023.
2

(along with other parties) 3: the first from September 2003 and the
second from August 2013.
n.1.

Acting

under

Countercl. 21-22; see Mot. to Dismiss 7

these

specific response actions.

agreements,

CNA

Holdings

performed

Now, through this counterclaim against

the government, CNA Holdings seeks to recover the costs that it
expended in doing so.

Countercl. 22.

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

in

September

2012;

that

Third

Party

Complaint,

CNA

Holdings argues, nullified the covenants, and its counterclaim
therefore survives.

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
(same).
CNA
“arise[s]

Holdings’

argument

from

same

the

assumes

response

that

action,

its

counterclaim

response

costs,

or

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).
3

3

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
these agreements.

Countercl. 21-22.

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
physical

survey

of

soil

and

potential

buried

waste

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.

The government’s

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
4

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
deficiencies.
4

5

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
District Judge
Date: July 14, 2021

6