Free Motion to Bifurcate - 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- OES
ROBERT FRIEDLAND

Plaintiff

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

Defendants.

DEFENDANT GEOSYNTEC' S MOTION TO BIFURCATE PROCEEDINGS

Defendants GeoSyntec Consultants Inc. , formerly GeoServices , Inc.

("GeoSyntec ), through its undersigned counsel and pursuant to Rule 42(b),
Civ. P.

Fed. R.

, moves the Court for an order bifurcating the proceedings in this action. In

support thereof , GeoSyntec states as follows:

Rule 7. 1 Certification
Undersigned counsel certifies that she has conferred with Plaintiff's counsel and
counsel for co- defendant
TIC - The

Industrial Company ("TIC" ) regarding the relief

requested in this Motion. Plaintiff's counsel stated that Plaintiff opposes this Motion.
Counsel for TIC stated that TIC does not oppose this Motion.

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I.

BACKGROUND

Robert M. Friedland ("Friedland" ), the former President of Summitville

Consolidated Mining Company, Inc. ("SCMCI" ), brought this action to recover

contribution for costs paid in connection with the environmental catastrophe that
occurred under his watch at the Summitville Mine (hereinafter referred to as the " Mine
or the " Site
). Friedland paid these costs

pursuant to a consent decree resolving a cost

recovery action brought against him by the United States and the State of Colorado in
1996 (the " EPA Action

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

contractors who worked at the Site. He brought no claims against GeoSyntec , a firm
that was engaged as a subcontractor to SCMCI' s engineering consultant to inspect a portion of the liner system for the Site s leach pad. Nor did Friedland bring any claims
against TIC , which provided construction services at the Site.
On June 18 , 2004 , Friedland filed this action to recover contribution from

GeoSyntec , TIC , and two other contractors who have since been dismissed from the
case. Friedland seeks

contribution from both Defendants based on allegations that they

were " operators " under CERCLA Section 107(a)(2) and/or " arrangers " as defined by
Section 107(a)(3). (Am.

CampI. ~~ 39 46.

On November 18 , 2005 , GeoSyntec filed a Motion for Summary Judgment

arguing that Friedland' s claims are barred by the doctrine of

res judicata

because a

judgment was entered in favor of GeoSyntec on identical claims in the EPA Action.

),

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(Mot. for Summ. J. at 15- 19. ) GeoSyntec also argued that based on undisputed facts

GeoSyntec lacked the necessary control to render it liable as an " operator" or " arranger

under CERCLA. (kL at 20- 29. )

In the

event GeoSyntec s Motion is denied , GeoSyntec

requests that the Court bifurcate the trial of this matter as more fully described below.

Given the complex nature of the damages issues in this case , in contrast with the

relatively limited issues pertaining to liability, bifurcation would promote the interests of

fairness , efficiency and judicial economy.

II. ARGUMENT
Rule 42(b), Fed. R Civ. P. permits the Court to order a separate trial of any
claims or issues in furtherance of convenience , or when separate trials will be

conducive to expedition and economy. One purpose of Rule 42(b) is to allow costly
and possibly unnecessary discovery proceedings to be deferred until after resolution
of potentially dispositive preliminary issues. Ellingson Timber Co. v. Great N. Ry.

Co.

424 F. 2d 497 499 (9th Cir.

cert. denied

400 U. S.

957 (1970). Bifurcation is intended

to further the convenience of the court and parties , avoid delay and prejudice , and
serve the ends of justice. R.E. Linder Steel Erection

Co. Inc. v. Wedemeyer Cernic

Corrubia , Inc. 585 F. Supp. 1530 , 1534 (D. Md. 1984). Ordering separate trials on
issues such as liability and damages issues is firmly within the discretion of the trial

court , and such orders will not be disturbed on appeal absent an abuse of that
discretion. Martin v. Bell Helicopter

Co. , 85 F. RD. 654 , 658- 60

(D. Colo. 1980).

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Due to the complexity of CERCLA cases , which often involve multiple defendants

and difficult remedial questions , numerous courts have bifurcated the liability and

damages phases of CERCLA litigation. See , e.

Raytheon Constructors,
Amoco Oil Co.

Inc. v.

Asarco , Inc. 368 F. 3d
2d 664
667 (5th Cir. 1989);

1214 , 1216 (10th Cir. 2003);

v. Borden ,

Inc.

889

United States v. Wade

653 F. Supp. 11

, 14- 15 (E.D. Pa.

1984). In doing so , disputed issues pertaining only to liability are resolved before
deciding the more complicated and technical questions of appropriate cleanup
measures and the proportionate fault of liable parties. Amoco Oil

Co. , 889 F. 2d at 667.

Bifurcation and the use of summary judgment provide efficient approaches to these cases by narrowing the issues at each phase , avoiding remedial questions if no liability
attaches and promoting settlement discussions if liability is determined. Id.

at 667 -68.

The issues related to damages in this case are far more complex than those related to liability, and require the presentation of different evidence.
Friedland brought this action under Section 113 of CERCLA , which allows a

settling party in a cost recovery action to seek contribution from other potentially
responsible parties. 42 U.
C. ~ 9613(f)(1). To resolve contribution claims ,

the court

may allocate response costs among liable parties using such equitable factors as the
court determines are appropriate. Id.

In a given case , a court may consider several

factors , a few factors , or only one determining factor , depending on the totality of the
circumstances presented to the court. United States v. Colorado Eastern R.R.

Co.

50 F. 3d 1530 , 1536 (10th Cir. 1995).

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In allocating response costs in contribution actions , many courts look to the

Gore Factors " which include: (1) The ability of the parties to demonstrate that their
contribution to a discharge , release or disposal of a hazardous waste can be

distinguished; (2) the amount of the hazardous waste involved; (3) the degree of toxicity
of the hazardous waste involved; (4) the degree of involvement by the parties in the

generation , transportation , treatment , storage , or disposal of the hazardous waste;
(5) the degree of care exercised by the parties with respect to the hazardous waste
concerned; and (6) the degree of cooperation by the parties with the Federal , State or
local officials to prevent any harm to the public health or the environment. Id.

at n.

citing Environmental Transp.

Sys. Inc. v. ENSCO , Inc. 969 F. 2d 503 508- 09 (7th

Cir. 1992).

As these factors reflect , the allocation of costs in this case will require extensive
inquiry into the nature and extent of hazardous discharges at the Site; the role

performed by each contractor at the Site; the extent to which other contractors , prior

owners and other potentially responsible parties may have contributed to the discharges; and the toxicity of the hazardous discharges at relevant time periods , to

name just a few of the issues raised. These complexities greatly increase the scope of
discovery, require substantial reliance on expert witnesses , and will lengthen the trial of

this matter considerably.
In contrast , the determination of liability will focus solely on GeoSyntec s work at
the Site ,

and the same is true with respect to TIC. In order to be liable as an " operator

a person must " manage , direct , or conduct operations specifically related to pollution.

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United States v. Bestfoods

524 U. S. 51

, 66- 67 (1998). In applying this standard , the

key issue is the degree of control the person is able to exert over the activity causing
the pollution.

Id.

see

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

Corp.

731 F. Supp. 783

788 (W. D.

Mich. 1989). Thus , the factual inquiry into liability is much narrower

discovery for this phase will be more limited , the need for experts will be minimal , and
less trial time will be required.
In addition , evidence bearing on the apportionment of costs focusing on a
is different

broad range of issues external to GeoSyntec and highly technical in nature -

from the evidence that will be relevant to establishing liability, focusing on the degree of

operational control GeoSyntec exercised in the course of its work.
supra

See

Bestfoods

at 66- 67. Because different witnesses and evidence will be relevant to each

phase , trying the issues of liability and damages separately will be efficient and will not
result in the presentation of duplicative evidence.

Plaintiff will not be prejudiced by bifurcation because he has not yet

determined the amount of damages he is seeking.
Bifurcation also is appropriate because to date , no significant work has been

done on the damages portion of this case. In fact , Friedland has not calculated the
amount of damages he is seeking from the defendants , nor has he even determined
what method will be used to make the calculation.
In the Scheduling Order entered in this case , Plaintiff stated that he paid

$20 723 181 to the United States and the State of Colorado to settle their claim for
response costs , and incurred unspecified " additional costs " in responding to releases or

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threatened releases of hazardous substances at the Site. (Scheduling Order dated

1/19/05 at 4. )

In his

initial disclosures , Plaintiff stated that he paid $20 288 081 for this

settlement and that he paid additional costs of $435 100 , but did not confirm the total

damages he is seeking in this case or how much responsibility he attributes to each

Defendant. (Excerpts from Plaintiff's Rule 26(a)(1) Initial Disclosures , attached hereto
as

Ex. A

at 11. )

Because GeoSyntec could not determine the amount Friedland is

seeking to recover from this defendant , GeoSyntec issued an interrogatory to Friedland
on June 17 , 2005 stating:

Describe the response costs You allege should be allocated to GeoSyntec , including but not limited to , the dollar amount You allege should be allocated to GeoSyntec , the percentage of the total response costs You allege should be allocated to GeoSyntec , the method used to compute or determine such allocation , and Identifying the facts and Documents used that form the basis for such allocation.

(Excerpts from Def. GeoSyntec s
attached hereto as

First Set of Interrogs.

and Req. for Produc.

of Docs.

Ex. B

at 6 , No.

) In response , Friedland stated:

Plaintiff has not prepared an allocation of specific costs it believes are to be attributable to GeoSyntec. If Plaintiff does prepare such an allocation , it will be in the context of an expert report that will be produced pursuant to the Federal Rules of Civil Procedure and/or the

Scheduling Order for this case.
(Excerpts from Robert M. Friedland' s Resp. to Def. GeoSyntec s First Set of Interrogs.
and Req. for Produc. , attached hereto as

Ex. C

at 7.

) Friedland

gave an identical

answer to TIC , in response to a similar interrogatory regarding the response costs he

would allocate to TIC. (See Robert M. Friedland' s Resp. to Def. The Industrial

Company s First Set of Interrogs. and Req. for Produc.

, attached hereto as

Ex. D

at 15.

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On August 5 , 2005 , counsel for GeoSyntec sent a letter to Friedland' s counsel
stating, among other things , that his response to Interrogatory No. 6 was insufficient

because it provided no notice of the amount of damages Friedland seeks from

GeoSyntec. (Letter from Marian L. Carlson to R. Kirk Mueller dated
hereto as Ex.

8/5/05 attached

at 2.

) From the sparse

information Friedland provided , GeoSyntec

could not (and still cannot) determine whether he claims that its share of liability is

$20 000 or $20 million. (kL)
Friedland' s counsel responded to this inquiry by stating that " we have not yet
determined a specific ' dollar amount' or ' percentage ' of Mr. Friedland' s response costs

that should be allocated to GeoSyntec , nor the ' method' for computing this figure. . . .
We will supplement our response as additional information is identified. "
R. Kirk Mueller to Marian L. Carlson dated

(Letter

from
) As

8/30105

attached hereto as

Ex.

at 1.

Friedland never supplemented his response , it appears he still has not determined what

amount of damages he is seeking from each defendant , nor even selected a method of

calculation. Without knowing the actual amounts Friedland is seeking, what documents
he will refer to in calculating damages , or even the general methodology by which the
damages might be allocated , it has been impossible to conduct any meaningful

discovery on the subject of damages. Given Friedland' s lack of progress with respect to

damages , bifurcation will not cause prejudice or the duplication of efforts; it will merely
postpone work that the parties have not yet begun , and may avoid the necessity of such
work altogether.

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Bifurcation will benefit all parties and reduce potential prejudice to the

Defendants.
All three parties can benefit by the cost savings that could result from avoiding a
trial on damages , either because liability is determined in favor of defendants , and the
case is dismissed , or because liability is determined against one or both defendants

providing incentive to reach a settlement.
In addition , bifurcating this case will help alleviate prejudice to the Defendants.
As discussed

supra Friedland has been involved in litigation over the Site on and off for

the last nine years. Having participated in discovery in the EPA Action , deposed most
of the potentially responsible parties , and reviewed reports by dozens of experts Friedland and his counsel have a substantial advantage in litigating the damages phase

of this trial. If the case is bifurcated , Defendants may either avoid a trial on damages , if
liability is determined in their favor , or have additional time to digest the massive

amounts of information generated in the EPA Action , if the case must proceed.

The fact that none of the parties has requested a jury trial also supports
bifurcation of this case , as the Court will try both phases. If a liability is found , the
Court' s familiarity with the case background , the roles of various parties , and the key

legal issues will facilitate the determination of cost allocation in the latter phase.

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III. CONCLUSION
Bifurcation will assist in the efficient judicial administration of this case , delineate

the issues and clarify the factual questions presented. In addition , bifurcation may save
the parties substantial costs if no liability is found , a savings that will benefit the Plaintiff

as well as the Defendants. Bifurcation will not make a finding of liability more or less
likely, or cause prejudice to any party.
For these reasons , Defendant GeoSyntec respectfully requests that the Court

enter an Order bifurcating the case into two trials , the first devoted to liability issues and the second devoted to the allocation of costs among any responsible parties.

Respectfully submitted this 20th day of January, 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 January 20 , 2006 I electronically filed the foregoing Defendant GeoSyntec s Motion to Bifurcate Proceedings with the Clerk of Court using the CMIECF 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 ridley~wtklaw. com norris~wtklaw. com

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

and I hereby certify that a copy of the document has been served to the following nonCMIECF 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.