Town of Boothbay v. Getty Oil Co.

No. 99-1046 (1st Cir. October 21, 1999)

The court holds that under Maine law, the doctrine of res judicata bars a town from suing a gasoline company for environmental damage affecting the town's water supply insofar as the state previously litigated and settled claims against the same company for the same environmental damage. The court first rejects the town's argument that the state did not adequately represent the town's interest in restoring a clean water supply to the contaminated area. The record demonstrates that the state vigorously pursued the demand that the company finance a waterline extension until it determined that alternative measures would adequately solve the contamination problem. The court also rejects the town's argument that because the state environmental statutes under which the state brought the earlier action reserve to the town a right to bring their own lawsuits, the defense of res judicata is inapplicable in this case. The town asserts a claim for relief that is not supplemental to but rather the same as that previously brought by the state, and nothing suggests that the state legislature wanted to give others the opportunity to bring the same environmental enforcement claim where the state has already done so.

Counsel for Plaintiff
David J. Van Dyke
Berman & Simmons
129 Lisbon St., Lewiston ME 04243
(207) 784-3576

Counsel for Defendants
John J. Aromando
Pierce Atwood
One Monument Sq., Portland ME 04101
(207) 791-1100

Before Cohen, Boudin, Bownes, and Stahl, JJ.

[30 ELR 20164]

Per curiam:

This appeal concerns the question whether, under Maine law, the doctrine of res judicata bars a town from suing a private party for environmental damage affecting the town's water supply insofar as the state has previously litigated and settled claims of environmental damage against the same private party for the same environmental harm. A detailed description of background facts and issues is set forth in the magistrate judge's thorough opinion below, see Town of Boothbay v. Getty Oil Co., Civ. No. 98-125-P-DMC, Mem. Dec. at 2-8 (D. Me. Dec. 7, 1998), to which we add only a few brief comments addressed to the specific issues raised on this appeal.

In this case, the defendants are allegedly responsible for the discharge between 1939 and 1976 of gasoline from underground storage equipment at their service station in the Town of Boothbay, Maine ("the Town") into the surrounding groundwater. The Maine Department of Environmental Protection ("the State") subsequently discovered the contamination and began cleanup efforts. In 1990, the State discovered that the contamination had spread to surrounding wells, and brought suit against the defendants in Maine Superior Court pursuant to several state environmental statutes, see Me. Rev. Stat. Ann. tit. 38, §§ 347-A, 541-60, 561-70-G (West 1989 & Supp. 1998), seeking reimbursement for the costs of cleanup and remediation of the affected area.

A central demand by the State was that the defendants finance an extension of the water line from the Town's water supply to the contaminated properties. Partway into the litigation, however, the State determined that other remediation schemes would obviate the need for a water line extension; it thus dropped its demand for a water line extension and settled with the defendants for a lump-sum payment calculated to cover the alternative remediation costs. The lawsuit was subsequently dismissed with prejudice. The Town evidently did not learn of the settlement until after it occurred, but it was aware of the State's lawsuit and opted not to intervene.

In 1998, subsequent to the dismissal of the state court action, the Town brought a diversity action against the defendants in the federal district court in Maine grounded not in the state environmental statutes but instead in state common law claims of trespass, negligence, nuisance, and strict liability. The most significant component of relief sought by the Town was for the same water line extension previously sought by the State. The magistrate judge granted summary judgment on this claim in favor of the defendants, reasoning that the same claim for environmental damage was previously brought and settled by the state, and that the Town was bound by this resolution because the issue was res judicata and the Town was in privity with the State.

The Town also claimed economic damages to itself due to an alleged reduction in the property tax base. As to that claim, the magistrate judge held that it was not barred by res judicata but that the amount was insufficient to meet the jurisdictional minimum so the claim should be dismissed without prejudice. Neither party has pursued this latter claim on appeal, but the Town has appealed from the dismissal of its claim for environmental harm to its citizens because of the inadequate remediation, specifically, the failure to extend the water line.

On this appeal, the Town mounts two attacks on the magistrate's finding that the claim for environmental damage was barred by res judicata. The Town's first argument is that there was a divergence of interests between the State and the Town such that the former did not adequately represent the latter's interest in restoring a clean water supply to the contaminated area because the State was only interested in recouping expenses that it had incurred. This, says the Town, precludes a finding of privity. See Restatement (Second) Judgments § 42(e) & cmt. f(1982). However, it appears from the record that the State vigorously pursued the demand that the defendants finance a water line extension until it determined that alternative measures would adequately solve the contamination problem. The Town fails to point to any facts in support of its contention that the State acted in bad faith or unreasonably, and its say-so is insufficient to make out a showing of misaligned interests or inadequate representation.

The Town's second argument is that because the state environmental statutes under which the State brought the earlier action reserve to municipalities and others a right against the state environmental funds as well as a right to bring their own lawsuits, see Me. Rev. Stat. Ann. tit. 38, §§ 551(2), 569-A(2) (West 1989 & Supp. 1998), the defense of res judicata is inapplicable in this context. It is true that the determination whether a party is deemed in privity with the state and thus barred from bringing supplemental claims against a defendant subsequent to a suit brought by the state is affected by the legislature's implicit or explicit reservation of their right to bring such claims. See generally Restatement (Second) of Judgments §§ 41, cmt. d. Yet in this case, the Town asserts a claim for relief which is not supplemental to but rather the same as that previously brought by the State. The legislature has empowered the Department of Environmental Protection to enforce its environmental laws, see Me. Rev. Stat. Ann. tit. 38, §§ 541, 561 (West 1989 & Supp. 1998), and nothing suggests that the legislature wanted to give others the opportunity to bring the same environmental enforcement claim where the state has already done so. See Department of Human Servs. v. Richardson, 621 A.2d 855 (Me. 1993).

Affirmed.