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Detroit, City of v. Simon

ELR Citation: 31 ELR 20589
Nos. 99-1073, -1128, 247 F.3d 619/(6th Cir., 04/16/2001)

The court holds that a district court erred when it declined to order a corporation to adhere to the terms of a settlement agreement it reached with a city regarding the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and state-law cost recovery claims. The city sought recovery of cleanup costs for a site once owned by the corporation's predecessors. The claims went to trial, but the city and the corporation reached a settlement. At the district court's request, the settlement terms were memorialized on the record in court. The city offered to protect the corporation from all contribution claims arising from the city's claims against other parties, and the corporation agreed to the city's contribution protection. Nevertheless, seven weeks after the terms were memorialized in court, the corporation claims that the contribution protection had never been clarified. Thus, it proposed a new settlement agreement containing contribution protection indemnifying the corporation for all claims brought by any and all persons. After the city refused the new agreement, the corporation moved to reset the trial, and the city moved for entry of the original settlement. The district court granted the corporation's motion, and the case proceeded to trial.

The court first holds, however, that the record memorializing the settlement's terms clearly manifests a meeting of the minds as to the scope of the city's contribution protection. The city's lawyers clearly stated that the city would only indemnify the corporation for exoneration of claims asserted by the city and that broader indemnification was not available. The corporation voiced no objection to this limitation, and its lawyer explicitly agreed to this limited protection. The court next holds that the corporation is bound by the terms it agreed to in the courtroom even though the agreement's details would be fleshed out in writing at a later time. The court further holds that the city's settlement of its claims against the corporation did not entitle the corporation to CERCLA §113(f)(2)'s contribution protection because such protection exists only in settlements with federal or state governments, and the city is neither. The court additionally holds, however, that the district court did not err in limiting the corporation's and other potentially responsible parties' total liability for future costs that would be necessary to reach the state-law industrial cleanup level.

Counsel for Plaintiff
Ruben Acosta
Fink, Zausmer & Kaufman
2430 First National Bldg., Detroit MI 48201
(313) 963-3873

Counsel for Defendants
Eric J. Magnuson
Rider, Bennett, Egan & Arundel
333 S. 7th St., Ste. 200, Minneapolis MN 55402
(612) 340-7951

Nelson, J. Before Siler and Clay, JJ.