Free Reply to Response to Motion - District Court of Colorado - Colorado

Case 1:04-cv-01263-REB-KLM

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 04-cv- 1263- PSF- MEH
ROBERT FRIEDLAND

Plaintiff

TIC - THE INDUSTRIAL COMPANY and GEOSYNTEC CONSULTANTS , INC. flk/a GEOSERVICES , INC.

Defendants.

DEFENDANT GEOSYNTEC' S REPLY TO PLAINTIFF' S RESPONSE TO MOTION TO BIFURCATE PROCEEDINGS

Defendant GeoSyntec Consultants Inc. , formerly GeoServices , Inc.

("GeoSyntec ), through its undersigned counsel , submits the following Reply to
Plaintiff's Response to GeoSyntec s Motion to Bifurcate Proceedings:

I. INTRODUCTION
In this CERClA action , Plaintiff Robert M. Friedland ("Friedland" ) seeks
contribution for payments made to resolve a cost recovery action brought against him
by the United States and the State of Colorado in 1996 (the " EPA Action
). Friedland

alleges that both defendants in this case are liable as " operators " under CERClA
Section 107(a)(2) and/or " arrangers " as defined by Section 107(a)(3). (Am. CampI.

~~ 39 , 46).

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In the EPA Action , Friedland asserted third- party complaints against the major

contractors who worked at the Summitville mine (the " Site ), which was owned and
operated by Friedland' s company, Summitville Consolidated Mining Company, Inc.
("SCMCI" ). However , while as many as twenty parties were involved in the EPA Action

at various times , Friedland asserted no claims against GeoSyntec , which had been

engaged as a subcontractor to SCMCI' s engineering consultant , or against defendant

TIC - The Industrial Company ("TIC" ), which provided construction-related services at
the Site.
On November 18 , 2005 , GeoSyntec filed a Motion for Summary Judgment

arguing that based on undisputed facts , GeoSyntec lacked the control necessary to render it liable under CERCLA , and that Friedland' s claims are barred by the doctrine
of res judicata.

(Mot. for Summ. J. filed 11/18/05 , Doc. No. 41 at 15- 19; 20- 29. )

TIC

filed a similar motion several weeks later , arguing that TIC is neither an " operator" nor
an " arranger" under CERCLA. (Mot. for Summ. J. filed 2/8/06 , Doc. No. 62 at 13- 23.

On January 20 , 2006 , GeoSyntec filed a Motion to Bifurcate Proceedings (the
Motion ), requesting that the Court bifurcate this case so that issues of liability may be

addressed before proceeding to a determination of damages and allocation , if

necessary. (Motion at 3-

) Friedland then

filed a Response to the Motion (the

Response ), arguing that bifurcation should be denied because it would be likely to
create uncertainty, cause duplication of efforts , increase the costs for parties and
burdens on the Court , and discourage settlement. (Response at 1-

. . .

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As discussed more fully below , however , this is precisely the kind of case where

bifurcation is warranted. If the defendants ' respective summary judgment motions are

granted , they will be fully dispositive of the case , and the Motion will become moot. If
summary judgment is denied , a trial on liability would focus on relatively narrow issues
of fact related to the defendants ' status as " covered persons " under CERCLA. If liability

is found , then a trial on damages will involve a much broader group of issues , including
a comparison of the relative degree of responsibility and fault of these defendants against the relative responsibility and fault of all other parties who contributed to

contamination at the Site.
ARGUMENT

II.

Whether bifurcation is appropriate depends on a case- by-case analysis.
Friedland first argues that because the issues of liability and damages are

inextricably intertwined " bifurcation would lead to confusion and duplicative discovery.
(Response at 4) In

support of this argument , Friedland cites
788 F. Supp. 951

Anspec

Co.

Inc. v.

Johnson Controls,

Inc.

, 955 (ED. Mich. 1992) for the general

proposition that " (r)egarding the liability and damage issues of a prima facie CERCLA

case , courts hold that the issues are ' inextricably intertwined under the statutory

scheme.

'" (Response at 4. )

However

Anspec

did not purport to establish a

blanket rule for all CERCLA cases. Unlike the instant case , one of the two key issues
determining the defendant' s liability was " whether the costs associated with the alleged

response action were necessary and consistent with the NCP.

Id.

at 955. Noting that

, "

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in order to prove compliance with the

NCP the plaintiff would have to present evidence
what were the plaintiffs ' costs and were they
Id.

on what is typically a damage issue , i.

reasonable

" the court denied bifurcation.

Similarly, the court' s

decision to deny bifurcation in

Elf Atochem North America

Inc. v. United States 161 F. RD. 35 (ED. Pa. 1995)(cited in Response at 6), was
based on facts which differed significantly from this case. In E/~

the plaintiff had

shouldered almost the entire financial burden of remediating the site at issue , while the

defendants intentionally delayed progress of the case; the defendants had previously
sought bifurcation of the issues , a year before the subject motion was filed; fact

discovery on all issues in the case was complete; and expert discovery was nearly

complete , so that if the case were bifurcated , almost all of the experts would have to
be recalled for additional depositions on " phase two " issues.
In Id.

at 36.

this case , however , the

EPA

shouldered most of the financial burden of

remediating the Summitville site in the mid- 1990' s; Friedland has already received a

substantial amount of contribution from other parties; GeoSyntec has not previously
requested bifurcation; and the only fact discovery that has been completed is one

round of written discovery requests by each party and the beginning of Robert

Friedland' s

deposition. As described in the Motion ,

Friedland has provided no

discovery responses regarding the amount of his damages , and expert discovery has

not even begun. (Motion at 6-

In

fact , Friedland himself requested that expert

disclosure and discovery regarding damages be delayed until after the Motion is

decided

, effecting a

de facto

bifurcation in the meantime. (See Plaintiff's Unopposed

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Motion to Extend or Stay Deadline for Submitting Expert Reports Regarding Damage
Issues filed 1/25/06 , Doc. No. 53.
In United States v. New Castle County,

116 F. RD.

19 (D. Del. 1987), another

case cited by Friedland , the third- party defendants had requested " trifurcation " of the

case , under which the first phase would determine the defendants ' liability to plaintiff
and an apportionment of that liability among the defendants; the second phase would
determine the appropriate remedy; and in the third phase , a series of hearings would be held to determine the liability of the third- party defendants and apportion that
liability among those defendants. Id.

at 27. Nothing remotely approaching that level of

complexity is contemplated by GeoSyntec s Motion.
Similarly, in

United States v. Dravo Corp. 2002 WL 1832274 (D. Neb. March 6

2002), also cited by Friedland , the court denied a motion to trifurcate discovery and
trial. Id.

at * 5.

The

plaintiff proposed that the first phase would involve discovery and

trial regarding the liability of the two defendants , the second would involve the amount

of response costs these defendants would be required to pay, if found liable in the first

phase , and the third would determine " contribution , contractual and other third- party
issues.
Id.

at *2.

The court found

separation of the issues unnecessary at that point

but stated that " (i)f . . . the presence of third- party claims prove to thwart the

expeditious adjudication of the plaintiffs ' claim , the court may revisit the (trifurcation)
issue at a date later in the discovery process.
Id.

at *

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As these cases illustrate , there is no blanket rule holding that in CERCLA cases
issues of liability and damages can never be cleanly separated , or that bifurcation is

always inappropriate. In this particular case , bifurcation would allow disputed factual
and legal issues pertaining to liability to be resolved before deciding the more

complicated technical questions of damages and proportionate fault.
Co.

See

Amoco Oil

v. Borden , Inc. 889 F. 2d 664 667- 68 (5th Cir. 1989).

Issues related to liability, or more specifically, the defendants ' status as " covered persons " under CERCLA , can be separated from issues

related to damages.
The decision to separate the trial of separate issues in a case must be grounded
upon a clear understanding between the court and counsel of the issues involved in

each phase , and what proof will be required to pass from one phase to the next.
Martin v. Bell Helicopter

Co. , 85 F. RD. 654 , 658 (D. Colo. 1980) (citing cases). As

explained in the summary judgment motions filed by both defendants , the key issue
affecting their liability in this case is whether they are " covered persons " under

CERCLA , as either operators or arrangers. (See GeoSyntec Mot. for Summ. J. filed

11/18/05 , Doc. No. 41 at 19- 29; TIC Mot. for Summ. J. filed 2/8/06 , Doc. No. 62 at
13- 23.

To establish the defendants ' liability as " operators " under CERCLA , Friedland
must prove that they " manage(d), direct(ed), or conducte(ed) operations specifically
related to pollution.

United States v. Bestfoods

524 U. S. 51

, 66-67 (1998). The most

commonly adopted yardstick for determining whether a party is an owner-operator
under CERCLA is the degree of control that party is able to exert " over the activity

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causing the pollution.

CPC Int'l, Inc. v. Aerojet- General

Corp.

731 F. Supp. 783 , 788

(W. D. Mich. 1989). To be liable under CERCLA as an arranger , a party must: (1) be
a " person " under CERCLA; (2) " own " or " possess "

the hazardous substance at issue;

and (3) by contract , agreement or otherwise , arrange for the transport or disposal of
such hazardous substances.

Raytheon Constructors, Inc. v. A

sa

reo , Inc. 368 F.

1214 1219 (10th Cir. 2003).
As these authorities reflect , the evidence relevant to a determination of whether
the defendants are " covered persons " relates primarily to

the defendants

' work

at the

Site , and the relationship between the work performed and a discharge of hazardous

materials. Thus , relevant witnesses would include the defendants ' employees who
worked at the site and employees of contractors who worked directly with them.

Relevant documents would include those reflecting the tasks performed and the

defendants ' communications with the owner and other contractors at the site.
In contrast , damages issues will require a great deal of evidence that is

external

to the defendants such as contribution to the discharges made by various entities at
the Site who are not parties to this action (see Motion at 5 , citing Gore Factor No. 1);
the quantities of hazardous materials discharged (kL, citing Gore Factor No. 2); the degree of toxicity of the hazardous waste involved (kL, citing Gore Factor No. 3); as

well as the environmental damage caused by the discharges , the amount of cleanup
costs incurred ,

the amounts Friedland paid , and the amounts he has already received

in contribution from other parties. Most evidence regarding these issues would have

no relevance to the defendants ' status as " covered persons " under CERCLA.

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It is true that evidence regarding the Defendants' activities at the Site may have
some relevance to certain of the " Gore Factors " affecting allocation. For example

GeoSyntec representatives will testify regarding the work GeoSyntec was engaged to

perform at the Site , the manner in which they performed their work , and how their work
related to that of the owner , the liner installer and the engineering firm that hired them.
This evidence may also be relevant to " Gore Factors "
four through six ,

such as

GeoSyntec s lack of involvement in the disposal of hazardous waste , the degree of
care exercised , and GeoSyntec s lack of contact with federal , state or local officials

who investigated the leach pad leakage. (See Motion at 5. ) However , the mere fact
that some testimony may have relevance to both phases does not pose a barrier to

bifurcation.
To the contrary, as the court pointed out in

United States v. Wade 653 F. Supp.

11 (ED. Pa. 1984):
To the extent any testimony is relevant to both phases of the trial , it can be presented at the liability phase and merely referred to at the cost hearing if one is necessary. While (the Court) may find it necessary or helpful during the course of the cost hearing to review transcripts of prior testimony, certainly no prior testimony will need to be repeated.
Id.

at 14. Thus , bifurcation would not require two depositions of each witness with

knowledge of the defendants ' activities at the Site , as argued by Friedland (Response

at 6), nor would it require duplicative trial testimony. On the other hand , bifurcation
would defer discovery that has no

relevance at all to the defendants ' status as

covered persons " - regarding the pollution itself , the cleanup costs incurred , the roles

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of other entities at the site , and Friedland'
trial focused on the activities of TIC

s recovery from other parties - until

after a

and GeoSyntec is completed , if a second phase

becomes necessary.
Friedland' s failure to disclose his damages precludes any meaningful settlement discussions , regardless of the Court' s decision on bifurcation.
Friedland also argues that bifurcation will hinder , rather than facilitate efforts to

settle this case. (Response at 7-

) Friedland

contends that if bifurcation is granted

GeoSyntec will have no incentive to settle until after the liability phase is completed.

(kL) However , regardless of whether bifurcation is granted , no meaningful settlement
discussions can occur until Friedland discloses his damages. As explained in the
Motion , based on the sparse information provided to date , it is impossible to determine

whether Friedland seeks to recover $20 000 or $20 million from GeoSyntec. (Motion
at 6- ) Thus , even if bifurcation is denied , or if it is granted and one or both

defendants are found liable , no settlement dialogue will take place until the defendants have received the discovery necessary to fully evaluate their potential exposure.
In

his Response , Friedland argues that one means of promoting settlement

providing certainty, and streamlining the litigation would be for the parties to negotiate

and settle on a damage figure in advance of trial on liability. (Response at 8. ) Under

this scenario , if defendants were found liable , they would pay the agreed-upon
damage amount , and both sides would be spared a trial on damages. (kL) Through

this proposal , Friedland acknowledges the practicality of avoiding a trial on damages
if it can be avoided. However , the proposal is untenable because it asks the

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defendants to commit to an amount they must pay,

without

the benefit of any

disclosure or expert discovery on damages or allocation. The information necessary
for defendants to make an informed assessment of their exposure would not only be

delayed , but denied altogether. Clearly, between these alternative ways to streamline

the case , bifurcation is more likely to result in " a fair and impartial trial to all litigants.
See

Martin 85 F. RD. at 658.

III. CONCLUSION
As argued in their respective summary judgment motions , the defendants believe
that Friedland cannot prove a fundamental element of his case , that each defendant is a
covered person "

under CERCLA. Both the legal standards and the key facts that will

govern this determination have been discussed at length in these motions. Should the
Court determine that factual issues preclude summary judgment , the interests of judicial

economy and efficiency will best be served by holding a trial addressing the disputed

facts and narrow issues of liability already before the Court , prior to any discovery or
trial on damages issues.
In the EPA Action , Friedland obviously considered many other parties to have

been more responsible for contamination at the Site than GeoSyntec , whom he did not
even name as a third- party defendant. That comparative analysis will involve evidence

and issues which go far beyond the narrow questions related to liability, and this
imbalance cries out for bifurcation.

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For all of the foregoing reasons , GeoSyntec respectfully requests that the Court

enter an Order bifurcating the case for discovery and trial into two phases , the first
devoted to determining whether the Defendants are " covered persons " under CERCLA

~ 9607(a), and the second to determining the amount of damages owed by the

defendants , if any.
Respectfully submitted this 6th day of March , 2006.

sl

Marian L. Carlson Marian L. Carlson
Terence M. Ridley
Wheeler Trigg Kennedy

LLP

1801 California Street , Suite 3600

Denver, CO 80202- 2617 Telephone No. : 303-292-2525 Telecopier No. : 303- 294- 1879 Mail: carlson~wtklaw. com
Paul J. Sanner Hanson , Bridgett , Marcus , Vlahos & Rudy LLP

333 Market Street , Suite 2100 San Francisco , CA 94105- 2122 Telephone No. : 415- 995- 0517 T elecopier No. : 415- 541- 9366 Mail: psanner~hansonbridgett. com
Attorneys for Defendant
GeoSyntec Consultants , Inc

()
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CERTIFICATE OF SERVICE
I hereby certify that on March 6th , 2006 , I electronically filed the foregoing Defendant GeoSyntec s Reply in Support of Motion to Bifurcate Proceedings with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following email addresses:

Lauren C. Buehler Ibuehler~fognanilaw. com cvega~fognanilaw. com
Marian Lee Carlson carlson~wtklaw. com carpenter~wtklaw. com
Colin Christopher Deihl

. Steven

Matthew Kelso kelso~wtklaw. com hand~wtklaw. com

. Richard Kirk Mueller

rmueller~fognanilaw. com cvega~fognanilaw. com
. Terence M. Ridley

cdeihl~faegre. com jsullivan~faegre. com
Michael Stephen Freeman mfreeman~faegre. com cdaniels~faegre. com dcopeland~faegre. com

ridley~wtklaw. com
norriscw.wtklaw. com
. Kristina

I. Mattson

kmattson~fognanilaw. com cvega~fognanilaw. com
and I hereby certify that a copy of the document has been served to the following nonCM/ECF participant in the manner indicated by the non- participant' s name:
Paul J. Sanner Hanson , Bridgett , Marcus , Vlahos & Rudy,
LLP
( ) First

Class Mail Hand Delivery

( ) Facsimile

333 Market Street , #2100
San Francisco , CA 94105- 2122

Overnight Delivery (X) E- Mail

sl

Marian L. Carlson by Cindy Carpenter

Marian L. Carlson
Wheeler Trigg Kennedy

LLP

1801 California Street , Suite 3600

Denver, CO 80202- 2617
Telephone No. : 303-292-2525

Mail: carlson~wtklaw. com
Attorney for Defendant GeoSyntec

Consultants , Inc.