Hayes et al v. Chevron Pipe Line Company

Filing 213

ORDER AND MEMORANDUM DECISION granting 180 SEALED MOTION for Partial Summary Judgment on Chevron's Contribution Claims for Settlement Payments. Signed by Judge Tena Campbell on 11/29/16 (alt)

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION

CHEVRON PIPE LINE COMPANY,
Plaintiff,1
ORDER AND
MEMORANDUM DECISION RE:
CONTRIBUTION CLAIMS FOR
SETTLEMENT PAYMENTS

vs.

PACIFICORP, d/b/a ROCKY MOUNTAIN
POWER,

Case No. 2:12-CV-287-TC

Defendant.

In 2010, crude oil from a pipeline owned by Chevron Pipe Line Company (CPL) leaked
into Red Butte Creek in Salt Lake City after an electrical arc from Rocky Mountain Power’s
(RMP) electrical transition station created a hole in the pipeline. Individual residents sued CPL
and RMP. CPL and RMP filed claims against each other. Now RMP asks the court to eliminate
one category of damages that CPL seeks from RMP: settlement payments to the individual
residents. For the reasons set forth below, RMP’s motion for partial summary judgment
concerning CPL’s contribution claim for settlement payments is GRANTED.
FACTS
In June 2010, approximately 800 barrels of crude oil in CPL’s pipeline leaked into Red

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Chevron Pipe Line Company and Pacificorp d/b/a Rocky Mountain Power were
originally co-defendants and counter/cross-claimants in this suit brought by a group of plaintiffs
who have since settled the lawsuit. For the sake of simplicity, the court refers to CPL and RMP
respectively as Plaintiff and Defendant.

Butte Creek. In December 2010, a second release of crude oil occurred. RMP was not
associated with the December release.
Approximately sixty homeowners living along the path of the spill filed claims against
CPL for trespass, nuisance, negligence, and breach of contract, and sought payment of damages
caused by the June spill and the December spill. CPL settled with the Homeowners in one lump
sum. In the meantime, CPL filed a counterclaim against RMP alleging negligence, trespass,
private nuisance, and violation of the federal Oil Pollution Act (OPA). Among other damages,
CPL seeks reimbursement of some, if not all, of the settlement money on the theory that RMP
tortious actions caused the Homeowners’ damages.
ANALYSIS
RMP moves for partial summary judgment on CPL’s claim for reimbursement, asserting
that CPL’s request is a claim for contribution, which is barred by the Utah Liability Reform Act
(ULRA), Utah Code Ann. § 78B-5-820.
Summary Judgment Standard
A court must grant summary judgment when the moving party “shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a).
CPL contends that RMP’s request for partial summary judgment on certain damages
arising under separate causes of action is procedurally improper. The court disagrees.
The plain language of Rule 56 allows a court to grant partial summary judgment on a
portion of a claim. “A party may move for summary judgment, identifying each claim or
defense—or the part of each claim or defense—on which summary judgment is sought.” Fed. R.
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Civ. P. 56(a) (emphasis added); see also Fed. R. Civ. P. 56(g) (authorizing a court to grant
partial relief on “an item of damages . . . that is not genuinely in dispute”); Hamblin v. British
Airways PLC, 717 F. Supp. 2d 303, 307 (E.D.N.Y. 2010) (“[T]he word ‘claim’ in Rule 56 is not
limited to the theory of liability that a plaintiff asserts. A theory of liability is useless to a
plaintiff without remedies flowing from that claim[.]”). Accordingly, RMP’s motion for partial
summary judgment on the narrow and discrete damage issue is proper under Rule 56.
Utah Liability Reform Act
Citing to the ULRA, RMP contends that CPL may not recover the settlement money paid
to the Homeowners.
The ULRA abolished contribution claims. “‘Contribution’ is a method for tortfeasors
forced to pay damages greater than their proportion of fault to recover from other joint tortfeasors
in a separate action.” Nat’l Servs. Indus., Inc. v. B.W. Norton Mfg. Co., 937 P.2d 551, 554 (Utah
Ct. App. 1997). Under the plain language of the ULRA, “[a] defendant is not entitled to
contribution from any other person.” Utah Code Ann. § 78B-5-820(2); see also Sanns v.
Butterfield Ford, 94 P.3d 301, 307 (Utah Ct. App. 2004) (with the passage of the ULRA, “fault
can no longer be apportioned to one defendant with the idea that it may later seek
indemnification or contribution from another.”). Instead, the ULRA applies the comparative
fault doctrine under which a joint tortfeasor pays only an amount proportionate to its fault. Utah
Code Ann. § 78B-5-818(3) (“No defendant is liable to any person seeking recovery for any
amount in excess of the proportion of fault attributed to that defendant[.]”).
CPL asserts that the ULRA does not apply here because CPL did not bring a separate suit
for contribution. According to CPL, the “ULRA’s contribution ban applies not to ‘claims’ but to
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separate contribution actions that would circumvent the apportionment of fault as between joint
tortfeasors under the ULRA.” (CPL’s Opp’n Mem. at 4, ECF No. 186.) But the purpose of the
ULRA is to ban contribution and ensure that a party does not pay more than its fair share of
liability. How a party characterizes its claims has no bearing on whether the contribution ban
applies. “[W]e must not become mired in semantics or allow parties to circumvent the [the
ULRA’s] clear ban on contribution suits merely by relabeling their causes of action.” Nat’l
Servs. Indus., 937 P.2d at 555 (holding that plaintiff’s “‘reimbursement’ and ‘indemnification’
causes of action . . . are indistinguishable from a contribution suit inasmuch as they seek to
redistribute liability based on degree of fault.”). The rules of the ULRA apply to CPL’s
counterclaim against RMP.
The ULRA ban on contribution extends to attempts to recover previously-paid settlement
money. See id. at 553, 555-56 (citing the ULRA, the court barred the party’s claim to recover
damages paid in a separate settlement with tort plaintiffs); Shipley v. Forest Labs., Case No.
1:06-CV-48-TC-DBP, 2014 WL 3563440, at *2 (D. Utah July 18, 2014) (“Defendant cannot
obtain any contribution . . . for its damages based on amounts paid in [an earlier] settlement.”)
(citing the ULRA § 78B-5-820(2)).
The ban also applies to intentional tort damages. Graves v. N.E. Servs., Inc., 345 P.3d
619, 636 (Utah 2015) (interpreting the ULRA and holding that “the statutory principle of
apportionment for ‘fault’ extends to cases involving intentional torts.”). Accordingly, damages
that CPL paid to the Homeowners for trespass and nuisance may not be recovered from RMP.
CPL’s claim for reimbursement of the settlement money is also problematic for practical
reasons. The settlement with the Homeowners covered damages associated with the June spill as
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well as the December spill. Nothing in the settlement record differentiates between the two, and
any attempt to allocate fault to RMP would be based on speculation. Moreover, even if a
principled basis existed for dividing and allocating the settlement payment to the June spill on
the one hand and the December spill on the other, CPL, by definition, calculated and paid its
proportion of fault for each spill. Accordingly, it has no basis for asserting that it overpaid the
Homeowners or for redistributing its payment, in whole or in part, to RMP.
For the foregoing reasons, CPL is barred from recovering the settlement damages it paid
to the Homeowners.2
ORDER
Rocky Mountain Power’s Motion for Partial Summary Judgment on Chevron Pipe Line
Company’s Contribution Claims for Settlement Payments (ECF No. 180) is GRANTED.
SO ORDERED this 29th day of November, 2016.
BY THE COURT:

TENA CAMPBELL
U.S. District Court Judge

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CPL expressed concern that RMP’s motion would negatively affect CPL’s Oil Pollution
Act claim. Specifically, CPL contends that RMP is improperly asking the court to eliminate
CPL’s statutory right to contribution under OPA. (See CPL Sur Response at 3, ECF No. 204.)
CPL’s concern is unfounded. Nothing in RMP’s motion asks the court to bar recovery
under OPA. Also, the Homeowners’ claims (all tort-based) did not include a claim under OPA.
It follows that CPL’s claim under OPA has no relation to the damages it paid in its settlement
with the Homeowners. Given that CPL’s claim for payment of settlement monies is the only
damage claim at issue in RMP’s motion, OPA has no bearing on the court’s ruling. Indeed, the
court need not, and does not, make any findings or conclusions concerning CPL’s OPA claim
against RMP.
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