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Interstate Power Co. v. Kansas City Power & Light Co.

Citation: 23 ELR 21246
No. No. 92-1910, 992 F.2d 804/(8th Cir., 05/06/1993) appeal dismissed for lack of jurisdiction

The court holds that the district court abused its discretion by determining that there was no reason to delay entering final judgment under Rule 54(b) of the Federal Rules of Civil Procedure on a power company's third-party claim for contribution against a contractor under the Comprehensive Environmental Response, Liability, and Compensation Act (CERCLA). The contractor allegedly contributed to a release of coal gas contaminants. The district court entered summary judgment against cross-claiming power company on the issue of whet her it was entitled to indemnification from the contractor. While the company moved for reconsideration on grounds that were alleged in its complaint but not raised in opposition to the summary judgment motion, the district court refused to reconsider. However, the district court agreed to enter the order as a Rule 54(b) final judgment, appropriate for immediate appeal.

The appellate court first holds that a final judgment as to one or more, but fewer than all, of the parties is permissible only where the court has expressly determined that there is no just reason for delay. Only special cases warrant immediate appeal from pretrial resolution. The court holes that the district court erred in refusing to address any of the company's arguments on the merits. The original order was not final when the company moved for reconsideration, and thus was subject to revision at any time before the entry of judgment. The company did not abandon its substantive claims by failing to raise them in its opposition to the summary judgment motion. The claims, under the district court's reading of the facts, raise a serious question as to whether defendant might be liable under CERCLA § 107(a)(2). Therefore, the court should have heard argument on the issue before entering final judgment. The court also holds that the order should not have been entered as a Rule 54(b) order even if the district court had resolved CERCLA's contribution claim. A third-party contribution or indemnity claim is necessarily collateral and should not be certified for appeal prior to consideration of the existence of any primary liability. Third party contribution or indemnification claims could become moot, moreover, if they do not become moot, the district court should retain the authority to reconsider its dismissal of the third-party defendant, which is not possible if summary judgment is entered under Rule 54(b).

Counsel for Appellant
Terry Schackmann
Spencer, Fane, Britt & Browne
1400 Commerce Bank Bldg., 1000 Walnut St., Kansas City MO 64106
(816) 474-8100

Counsel for Appellee
Stephen D. Hardy
Grefe & Sidney
2222 Grand Ave., P.O. Box 10434, Des Moines IA 50306
(515) 245-4300

Before BOWMAN, Circuit Judge, LAY, Senior Circuit Judge, and LOKEN, Circuit Judge.