Free Brief in Support of Motion - District Court of Colorado - Colorado

Case 1:01-cv-01807-MSK-MJW

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No.: 01-cv-01807-MSK-MJW BANK ONE, COLORADO, N.A. and, BANK ONE TRUST COMPANY, N.A., As Trustee of the Frank G. Jamison Marital Trust and the Frank G. Jamison Family Trust, Plaintiffs, v. C.V.Y. CORPORATION, d/b/a Your Valet Cleaners; and, JOHNNY ON THE SPOT, INC. Defendants.

BOULDER CLEANERS, INC. and, JOHN'S CLEANER'S, INC., Cross-Plaintiffs, v. C.V.Y. CORPORATION, d/b/a Your Valet Cleaners, Cross-Defendant. ______________________________________________________________________________ CVY'S AND JOS' REPLY IN SUPPORT OF JOINT MOTION FOR FILING EXHIBIT 1 TO JOINT MOTION FOR APPROVAL OF SETTLEMENT AGREEMENT WITH CONTRIBUTION PROTECTION UNDER SEAL PURSUANT TO D.C.COLO.L.CIVR 7.2 _____________________________________________________________________________ COME NOW, Defendant and Cross-Defendant C.V.Y. Corporation ("CVY"), and Defendant Johnny On The Spot, Inc. ("JOS"), and for their Reply in support of motion to file settlement agreement under seal, state as follows: The following two motions are pending before the Court: (1) Joint Motion for Approval of Settlement Agreement with Contribution Protection ("Contribution Motion") and (2) Joint Motion for Filing Exhibit 1 to the Joint Motion for Approval of Settlement Agreement with Contribution

Case 1:01-cv-01807-MSK-MJW

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Protection Under Seal Pursuant to D.C.Colo.L.CivR 7.2 ("Motion to Seal"). Cross-Plaintiffs Boulder Cleaners, Inc. and John's Cleaners, Inc. (collectively "BCI/JCI") have objected to both motions and filed responses to the same. In responding to both motions, BCI/JCI prematurely raise issues and concerns which may properly be the subject of future motions and briefing, but which are not relevant to the pending motions. The only issue before the Court is whether to approve the Contribution Motion and whether for this purpose counsel for BCI/JCI should be permitted to see the Settlement Agreement. The Settlement Agreement contains confidential information. Absent the Contribution Motion, BCI/JCI would have no valid argument, and perhaps not even any standing, to request that their counsel see the Settlement Agreement. Indeed, there is ample case law to suggest that BCI/JCI are not entitled to see the Settlement Agreement even for purposes of responding to the Contribution Motion, in that disclosure of the amount of a settlement, any allocations, and other matters that may be contained in a settlement agreement are not required in order to obtain court approval of a settlement agreement with contribution protection. 1 Nevertheless, counsel for CVY and JOS has always been willing to work with BCI/JCI to provide them limited access to the Settlement Agreement for purposes of responding to the pending Contribution Motion. However, counsel for BCI/JCI should be permitted to see the same only to the extent necessary and only for the purpose of responding to the Contribution Motion.

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See U.S. v. Gencorp, Inc., 935 F.Supp. 928 (N.D. Ohio 1996); U.S. v. Kramer, 19 F.Supp.2d 273 (D. New Jersey 1998); In re Energy Coop, Inc., 173 B.R. 363 (N.D. Ill. 1994); U.S. v. Mid-State Disposal, Inc. 131 F.R.D. 573 (W.D. Wis. 1990); and New York v. Solvent Chemical Co., Inc., 214 F.R.D. 106 (W.D. N.Y. 2003).

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BCI/JCI's statements in their Response that CVY and JOS want this Court to approve the settlement without providing counsel for BCI/JCI the opportunity to view the Settlement Agreement and that CVY and JOS have imposed onerous terms on their ability to gain access to it are simply untrue. The parties have exchanged numerous e-mails regarding this issue. See Exhibit "A." Counsel for CVY and JOS further provided all parties with a proposed Joint Status Report to deal with the issue. See Exhibit "B." The position taken by CVY and JOS as evidenced by the e-mails and Joint Status Report was and is a very reasonable one. However, BCI/JCI refused to agree. Instead, BCI/JCI chose to oppose the Motion to Seal and to argue at this juncture not only that they should be permitted access to the Settlement Agreement, but that they also should be able to use it for whatever purpose they deem appropriate. Whether BCI/JCI should be permitted to use the Settlement Agreement at a later date for unknown and unspecified reasons is not currently before the Court and has no bearing on the pending motions. This request and any associated arguments can be raised later, if and when an identifiable issue making the terms and conditions of the Settlement Agreement relevant arises. At this time, however, the only reason BCI/JCI could arguably need access to the Settlement Agreement is to respond to the Contribution Motion, and this Honorable Court should enter an order to that effect, restricting such access in the manner suggested by CVY and JOS in their proposed attached Joint Status Report. BCI/JCI also argue that, since their settlement agreement with the Plaintiffs was not confidential, that somehow CVY's and JOS' should not be either. Such an argument is without merit. The fact that BCI/JCI and Plaintiffs did not feel it necessary to make their settlement agreement confidential has no bearing on the confidential nature of CVY's and JOS' Settlement 3

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Agreement. As all parties are well aware by now, in conjunction with providing BCI/JCI contribution protection, the Court ordered that CVY and JOS could only be liable for their proportionate share of any damages. Thus, the amount paid by BCI/JCI in settlement with Plaintiffs was of no consequence to CVY and JOS. Likewise, the amount paid by or on behalf of CVY and JOS to settle Plaintiffs' claims against them is irrelevant to the cross-claims of BCI/JCI or to whether such claims, or the state court claims against, inter alia, the officers, directors and shareholders of CVY and JOS, could be barred by the contribution protection afforded by CERCLA, other statutes or common law. "Whether judicial records and other case-related information should be sealed or otherwise withheld from the public is a matter left to the sound discretion of the district court." Mann v. Boatright, 477 F.3d 1140, 1149 (10th Cir. 2007); citing Nixon v. Warner Commc'ns, Inc., 435 U.S. 589, 98 S.Ct. 1306 (1978). 2 The Settlement Agreement at issue here contains various terms, conditions and settlement amounts that are confidential. The amount paid in settlement and the identity of any insurance carriers or other entities that might fund the settlement are confidential and the public has no interest whatsoever in this information. Further, any releases in the Settlement Agreement of or by any insurance carrier are irrelevant, and, as referenced in the proposed Joint Status Report, even counsel for BCI/JCI does not contest this. BCI/JCI have identified no public interest that will be prejudiced by having the Settlement Agreement filed under seal. Moreover,
2

BCI/JCI's reliance on Mann in their Response is misplaced. The court's discussion of whether "privacy concerns" outweighed the public's interest dealt with the plaintiff's request to file her complaint under seal and her own privacy concerns that she put at issue by filing suit. The court described plaintiff's complaint as being "unintelligible" due to her "scattering and concealing in a morass of irrelevancies the few allegations that matter," and that it "neither identifies a concrete legal theory nor targets a particular defendant." Mann, 477 F.3d at 1148. Such is not the case with the

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BCI/JCI admit in their response that they do "not anticipate objecting to the settlement between Plaintiffs and CVY/JOS, or to the contribution bar per se." See Response, footnote 4. Rather, BCI/JCI want to transform a routine Motion for Contribution Protection and a routine Motion to Seal into a full blown argument as to what effect the settlement may have on the future of BCI/JCI's cross-claims and their state court action. As mentioned earlier, it is simply premature and unnecessary to address these issues at this time for purposes of resolving the present motions. Given the confidential nature of the Settlement Agreement and that CVY, JOS and Plaintiffs agreed to confidentiality as a condition of settlement, CVY and JOS were required to file the Settlement Agreement under seal. In Toon v. Wackenhut Corrections Corp., 250 F.3d 950 (5th Cir. 2001), the court upheld sanctions imposed by the trial court on counsel who filed a motion to enforce a confidential settlement agreement and did not file the agreement under seal. In so doing, the Fifth Circuit noted, "There is simply no good faith reason for counsel not to have filed the motion to enforce under seal given that the settlement agreement clearly required them to do so." Toon, 250 F.3d at 953. That same requirement applies here. Contrary to BCI/JCI's assertions, CERCLA does not require full disclosure of the terms and conditions of a settlement agreement when one seeks court approval of the settlement and requests contribution protection. See U.S. v. Gencorp, Inc., 935 F.Supp. 928 (N.D. Ohio 1996); U.S. v. Kramer, 19 F.Supp.2d 273 (D. New Jersey 1998); In re Energy Coop, Inc., 173 B.R. 363 (N.D. Ill. 1994); U.S. v. Mid-State Disposal, Inc. 131 F.R.D. 573 (W.D. Wis. 1990); and New York v. Solvent Chemical Co., Inc., 214 F.R.D. 106 (W.D. N.Y. 2003). The disclosure of settlement amounts and

Settlement Agreement or the confidentiality of the same.

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any allocation among PRPs is not required for a finding that a settlement agreement meets the fairness and reasonableness requirements of CERCLA. Gencorp, Inc., 935 F.Supp. at 934. This is because "the process itself assures the conclusion that settlements are fair, reasonable and satisfy CERCLA requirements. The proponent parties, standing at risk of collecting too little, have every incentive to ensure that each settling party pays its full share. Each settling party has every incentive to pay whatever is necessary to extricate itself from the case." Id. BCI/JCI cite 42 U.S.C. § 9622 and United States v. Alcan Aluminum Corp., 990 F.2d 711 (2nd Cir. 1993) for the proposition that settlements under CERCLA are required to be published or made available for public comment. BCI/JCI's reliance is misplaced, as § 9622 does not apply to this action. See Acme Printing Ink Co. v. Menard, Inc., 812 F.Supp. 1498, 1507 (E.D. Wis. 1992). Unlike this case, Alcan Aluminum involved consent decrees and agreements between a PRP and the EPA. It did not involve or discuss a settlement reached with an entity in a citizen suit related to claims brought pursuant o 42 U.S.C. § 9607. Furthermore, CERCLA §9622 deals with agreements entered into by the President of the United States. Section 122(a) authorizes the President to "enter into an agreement with any person (including the owner or operator of a facility from which a release or substantial threat of release emanates, or any other potential responsible person), to perform any response action ... if the President determines that such action will be done properly by such person." Section 122 governs settlement between the EPA and potentially responsible parties. Menard, 812 F.Supp. at 1507. In fact, §9622(a) notes that, the President's decision to "use or not use the procedures in this section is not subject to judicial review." 42 U.S.C. § 9622(a).

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Case 1:01-cv-01807-MSK-MJW

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Consequently, CERCLA § 9622 is not relevant to the instant action. In any event, CVY and JOS have offered to allow BCI/JCI access to the Settlement Agreement, provided information related to any insurance carrier is deleted (BCI/JCI apparently do not object to this); provided BCI/JCI agree to a protective order which protects the confidentiality of the terms of the Settlement Agreement (BCI/JCI apparently to not object to his); and provided BCI/JCI agree, at this time, to limit their use of the Settlement Agreement to responding to the Contribution Motion (this appears to be the only disagreement between the parties). These requested restrictions by CVY and JOS on granting BCI/JCI access to the Settlement Agreement are eminently reasonable and should be adopted by the Court. This Honorable Court should grant the Motion to Seal and enter a protective order that permits BCI/JCI confidential access to the Settlement Agreement, with reference to any insurance carriers redacted, but only for the limited purpose of responding to the Contribution Motion. DATED: October 9, 2007. Respectfully submitted, MONTGOMERY, KOLODNY, AMATUZIO & DUSBABEK, L.L.P. s/ Max K. Jones, Jr. C. Michael Montgomery Max K. Jones, Jr. Ryan C. Gill 1775 Sherman St., 21st Floor Denver, Colorado 80203 Phone: 303-592-6600 [email protected] [email protected] [email protected] ATTORNEYS FOR THE DEFENDANTS C.V.Y. CORPORATION, d/b/a YOUR VALET 7

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CLEANERS, and JOHNNY ON THE SPOT, INC.

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CERTIFICATE OF MAILING I hereby certify that on October 9, 2007 a true and correct copy of the CVY'S AND JOS' REPLY IN SUPPORT OF JOINT MOTION FOR FILING EXHIBIT 1 TO JOINT MOTION FOR APPROVAL OF SETTLEMENT AGREEMENT WITH CONTRIBUTION PROTECTION UNDER SEAL PURSUANT TO D.C.COLO.L.CIVR 7.2 was filed with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses: Scott Jurdem, Esq. Buchanan Jurdem & Cederburg, P.C. 1621 18th Street, Suite 260 Denver, Colorado 80202 [email protected] Laura J. Riese, Esq. Jonathan W. Rauchway, Esq. Davis Graham & Stubbs LLP 1550 Seventeenth Street, Suite 500 Denver, CO 80202 [email protected] [email protected]

s/ Karen Wood Karen Wood Montgomery, Kolodny, Amatuzio & Dusbabek 1775 Sherman Street, 21st Floor Denver, CO 80203 Telephone: 303-592-6600 [email protected]

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