ESSO STANDARD OIL COMPANY v. PEREZ

Full title: ESSO STANDARD OIL COMPANY, (PUERTO RICO) Plaintiff v. CARLOS E. RODRÍGUEZ…

Court: United States District Court, D. Puerto Rico

Date published: Mar 21, 2005

Civil 01-2012 (SEC) (JA) (D.P.R. Mar. 21, 2005)

Opinion

Civil 01-2012 (SEC) (JA).

March 21, 2005

ORDER

JUSTO ARENAS, Magistrate Judge

I. BACKGROUND

This matter is before the court on motion to vacate judgment filed by co-defendants Carlos E. Rodríguez Pérez, his wife Carmen Ortiz López and the conjugal partnership formed by both (hereinafter "the defendants"). (Docket No. 300.) The defendants argue that the partial judgment issued by me on January 20, 2005 dismissing their counterclaim with prejudice (Docket No. 285) should be vacated pursuant to Federal Rule of Civil Procedure 60(b)(4) ¹ inasmuch said judgment is allegedly void. On February 23, 2005, plaintiff Esso Standard Oil Company (Puerto Rico) (hereinafter "Esso"), filed a preliminary response in opposition to defendants' motion to vacate judgment. (Docket No. 303.) In it, Esso requested an extension of time until March 9, 2005 to oppose defendants' motion to vacate. (Id.) I granted Esso's motion on February 23, 2005 (Docket No. 304) and on March 4, 2005, Esso filed its full response to defendants' motion to vacate. (Docket No. 309.) In the meantime, the defendants filed an opposition to Esso's February 23, 2005 preliminary response. (Docket No. 306.) The defendants also requested until March 17, 2005 to properly reply to Esso's arguments after Esso's full response. (Docket No. 305.)

1 Rule 60 of the Federal Rules of Civil Procedure provides in pertinent part that "[o]n motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons: . . . (4) the judgment is void." Fed.R.Civ.P. 60(b)(4).

Also before the court is Esso's motion to alter or amend judgment pursuant to Federal Rule of Civil Procedure 59(e). (Docket No. 302, February 22, 2005.) Esso moves the court to amend the judgment entered on February 8, 2002 (Docket No. 297) in which I dismissed with prejudice Esso's claim for contribution under section 113(f) of the Comprehensive Environmental Response, Compensation Liability Act, 42 U.S.C. § 9601 et seq. (hereinafter "CERCLA"). Esso requests that the judgment be amended to reflect that dismissal of the contribution claim is without prejudice or in the alternative, an explanation that dismissal is without prejudice of Esso seeking contribution against the defendants under any legal theory other than CERCLA. The defendants opposed Esso's motion on March 4, 2005 on the grounds that it was untimely filed. (Docket No. 310.)

Having considered the arguments of the parties, the applicable law, and for the reasons set forth in this order, defendants' motion to vacate judgment will be DENIED. Esso's motion to alter or amend judgment will be GRANTED.

II. DISCUSSION A. Defendants' Motion to Vacate Judgment

The defendants advance several contentions in support of their motion to vacate judgment. First, the defendants generally argue that I abused my discretion by entering the partial judgment dismissing the counterclaim without giving them an opportunity to move for voluntary dismissal. The defendants specifically mention my order to show cause directed at Esso in which I ordered Esso to show cause why its CERCLA contribution claim should not be dismissed in light of the recent Supreme Court decision inCooper Indus., Inc. v. Aviall Servs., Inc., 125 S. Ct. 577 (2004) (hereinafter "Aviall"). The defendants particularly claim that "out of the blue sky" I issued the partial judgment without directing them to show cause. According to them, by so acting, I denied them the same opportunity that Esso had to move for voluntary dismissal without prejudice. In addition, the defendants maintain that the partial judgment is void because the court did not have subject matter jurisdiction over the case. Defendants are of the opinion that I did not have jurisdiction to dismiss the counterclaim because there was no subject matter jurisdiction over Esso's CERCLA claim. Finally, the defendants complain that the partial judgment was not notified to their counsel because for some reason, the Clerk's office temporarily eliminated his name from the notification list. The essence of defendants' request is that dismissal of their counterclaim be without prejudice to their ability to continue litigating in state court the claims alleged therein.

None of the arguments presented by the defendants warrant relieving them from the partial judgment. First, I disagree that they should have been afforded an opportunity to move for voluntary dismissal. It is also incorrect that I should have issued an order to show cause like the one I issued on January 20, 2005 to Esso. They are not similarly situated. I issued the order to show cause after learning that the Supreme Court had decided a case that effectively deprived the court of jurisdiction to consider Esso's CERCLA contribution claim. The partial judgment dismissing defendants' counterclaim came after they had ample opportunity to litigate the issues before the court. I explain.

On June 28, 2004, Esso filed a motion for summary judgment with respect to defendants' counterclaim. (Docket No. 229.) Among other things, Esso maintained that the causes of action asserted in the counterclaim were time barred or that the defendants had failed to state a claim upon which relief could be granted. (Id.) I granted Esso's motion for summary judgment on October 4, 2004, finding that Esso was entitled to judgment as a matter of law and that there was no controversy as to any material fact. (Docket No. 250.) Defendants had not filed an opposition to Esso's motion for summary judgment and such failure ultimately proved fatal to their allegations in the counterclaim. The defendants moved for reconsideration of my October 4, 2004 opinion and order (Docket Nos. 252, 253, October 12, 2004.) I also denied said motions. (Docket No. 283, January 20, 2005.) Clearly, the defendants had ample opportunity to litigate the merits of the allegations made in their counterclaim. Partial judgment in this case was entered only after the issues had been fully addressed and although their failure to oppose summary judgment undoubtedly contributed to the adverse decision, that alone cannot be the basis for voiding an otherwise properly entered judgment.

Second, the defendants incorrectly maintain that the court lacked subject matter jurisdiction over the counterclaim. They argue that since the court lacked jurisdiction over Esso's CERCLA contribution claim, that the court also lacked jurisdiction over the counterclaim under 28 U.S.C. § 1367. But the defendants misunderstand the concept of supplemental jurisdiction and the procedural posture of this case. In its second amended complaint, Esso brought two main causes of action. One was for contribution under section 113(f) of CERCLA, and the other one was for injunctive relief under section 7002(a)(1)(B) of the Resource Conservation and Recovery Act (hereinafter "RCRA"). (Second Amended Complaint, Docket No. 38.) The cause of action under CERCLA could not be maintained after the Supreme Court's decision in Aviall. However, the court retained federal question jurisdiction over the cause of action for injunctive relief under the RCRA and consequently over any and all supplemental claims by virtue of 28 U.S.C. § 1367. Section 1367 specifically provides that

in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties.

28 U.S.C. § 1367(a). There can be no serious dispute that the court had original, federal question jurisdiction over the RCRA² claim and accordingly, supplemental jurisdiction over the state law counterclaim.³ See Iglesias v. Mut. Life Ins., Co., 156 F.3d 237, 241 (1^st Cir. 1998); see also Toste Farm Corp. v. Hadbury, Inc., 70 F.3d 640, 646 (1^st Cir. 1995) (holding that jurisdiction over a counterclaim depends on whether the counterclaim falls within the court's supplemental jurisdiction or if it has an independent jurisdictional basis). Therefore, the defendants are wrong when they argue that the court lacked jurisdiction over the entire case, including the counterclaim, once it was determined that no subject matter jurisdiction existed over the CERCLA cause of action.

2 Section 7002(a)(1)(B) authorizes private citizen suits against any person or entity "who has contributed or who is contributing to the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste which may present an imminent and substantial endangerment to health or the environment[.]" 42 U.S.C. § 6972(a)(1)(B); see also Interfaith Cmty. Org. v. Honeywell Int'l, Inc., 188 F. Supp. 2d 486, 494-95 (D.N.J. 2002). Esso's cause of action for injunctive relief under this subsection of the RCRA undoubtedly confers federal question jurisdiction to the court notwithstanding the fact that the court lacks subject matter jurisdiction over the CERCLA contribution claim. 28 U.S.C. § 1331.

3 Defendants' counterclaim was a compulsory counterclaim under Federal Rule of Civil Procedure 13(a) as the allegations contained in it arose out of the same transaction or occurrence. Therefore, the counterclaim could be brought invoking this court's supplemental jurisdiction. Iglesias v. Mut. Life Ins., Co., 156 F.3d at 241 ("Only compulsory counterclaims can rely upon supplemental jurisdiction; permissive counterclaims require their own jurisdictional basis.").

Finally, the defendants cannot claim that the alleged failure to be notified of the partial judgment somehow makes the judgment void. That is simply not so. I have already determined that subject matter jurisdiction existed over the counterclaim. Hence, the partial judgment dismissing the counterclaim was valid and the failure to be notified does not render the same void. In addition, the partial judgment was entered after the parties had ample opportunity to litigate the issues and is therefore an adjudication on the merits. Thus, dismissal with prejudice was appropriate. Defendants' motion to vacate the judgment is DENIED.

B. Esso's Motion to Alter or Amend Judgment

Esso moves the court to amend the judgment entered on February 8, 2005 dismissing its contribution action under CERCLA with prejudice. It is claimed that dismissal should have been without prejudice inasmuch as it was based on a finding that the court lacked subject matter jurisdiction over the particular claim. In the alternative, Esso requests an express statement by the court that "the dismissal is without prejudice to Esso's ability to file or maintain its claim for contribution" in any court of competent jurisdiction under any legal provision other than CERCLA. The defendants responded arguing that the motion was filed outside the ten day period provided by Federal Rule of Civil Procedure 59(e) for the filing of such motion.

I start with the timeliness issue. Rule 6 of the Federal Rules of Civil Procedure governs the computation of time periods prescribed by the same civil procedure rules. Specifically, Rule 6(a) provides in relevant part that "[w]hen the period of time prescribed or allowed is less than 11 days, intermediate Saturdays, Sundays, and legal holidays shall be excluded in the computation." Fed.R.Civ.P. 6(a). Therefore, since the judgment at issue was entered on February 8, 2005, Esso had until February 23, 2005 to file its motion to alter or amend judgment under Rule 59(e), that is excluding intermediate Saturdays and Sundays and February 21, 2005, which was a legal holiday. Esso filed its motion on February 22, 2005, or one day before the deadline. The motion was timely brought.

In regards to Esso's request that the judgment be amended because dismissal of the CERCLA contribution cause of action should have been without prejudice, I also find that Esso is entitled to the relief requested. The First Circuit has recently held that "dismissals for lack of jurisdiction should generally be without prejudice." Torres-Fuentes v. Motorambar, Inc., 396 F.3d 474, 475 (1^st Cir. 2005). Therefore, I find that the judgment must be amended to reflect that dismissal of Esso's contribution claim under CERCLA is without prejudice. I only add the following.

I granted dismissal with prejudice because following the Supreme Court's decision in Aviall, it became clear that Esso was barred from bringing a contribution claim under CERCLA against the defendants. The judgment should not have been read as precluding Esso from bringing a contribution claim under any other legal theory in a court of competent jurisdiction. In any event, it makes little difference, if any at all, whether the dismissal of the contribution claim is with or without prejudice because Esso cannot bring said claim under CERCLA given the holding in Aviall. Esso's motion to alter or amend judgment is GRANTED. An amended judgment will be issued.

III. CONCLUSION

In view of the above, defendants' motion to vacate judgment is DENIED. Esso's motion to alter or amend judgment is GRANTED.

SO ORDERED.