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General Elec. Co. v. Berkshire Gas Co.

ELR Citation: 33 ELR 20029
Nos. No. 00-30614-MAP, (D. Mass., 08/09/2002)

The court denies a corporation's Rule 11 motion to recover attorneys fees and costs from a gas company that the corporation sought contribution from under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The gas company manufactured gas on a site until 1973 when it sold the site to the corporation. In 1999, after years of debate and negotiation, the corporation and the U.S. Environmental Protection Agency entered into a CERCLA consent decree for the cleanup of the site. In 2000, the corporation sought CERCLA contribution from the gas company. Although its liability under CERCLA as a site owner that disposed of hazardous materials was relatively clear, the gas company refused to admit liability in its answer to the corporation's contribution action, in the court scheduling statement, and at the scheduling conference. In light of these denials, the corporation filed a partial summary judgment motion on the issue of the gas company's liability, but the gas company filed no opposition to the motion and was, thereby, found liable as a CERCLA owner. The corporation moved for Rule 11 sanctions against the gas company in the form of the attorney fees and costs associated with its filing the motion for partial summary judgment.

The court first holds that the corporation's Rule 11 motion fails. Although the threshold requirement that the gas company make a presentation in court is met, the corporation failed to prove that the gas company violated a specific subsection of Rule 11(b). The corporation argued that the company violated Rule 11(b)(4) by denying factual contentions that are warranted on the evidence, but the gas company only denied liability, not the factual contentions, such as release, that constitute CERCLA liability. Likewise, the corporation also argued that the gas company violated Rule 11(b)(4) by making a presentation to the court with the improper purpose of delay, but despite the unreasonable delay caused by the gas company's denials, the corporation cannot show that the gas company acted with an improper purpose. However, the court notes that the corporation can seek attorney fees and costs under state law.

Counsel for Plaintiff
Jeffrey R. Porter
Mintz, Levin, Cohn, Ferris, Glovsky & Popeo
One Financial Ctr., Boston MA 02111
(617) 542-6000

Counsel for Defendant
K. Jill Rizzotti
Law Offices of K. Jill Rizzotti
94 Woodside Rd., Sudbury MA 02301