Tdy Holdings, LLC v. United States

• Court: Court of Appeals for the Ninth Circuit
• Decided: October 15, 2020
• Docket: 19-55804
• Status: Unpublished

Opinion

FILED NOT FOR PUBLICATION OCT 15 2020 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

TDY HOLDINGS, LLC; TDY No. 19-55804 INDUSTRIES, LLC, D.C. No. Plaintiffs-Appellants, 3:07-cv-00787-CAB-BGS

v. MEMORANDUM* UNITED STATES OF AMERICA; et al.,

Defendants-Appellees.

Appeal from the United States District Court for the Southern District of California Cathy Ann Bencivengo, District Judge, Presiding

Argued and Submitted October 6, 2020 Seattle, Washington

Before: GRABER and W. FLETCHER, Circuit Judges, and FREUDENTHAL,** District Judge.

Plaintiff TDY Holdings, LLC, timely appeals from the district court’s

allocation of remediation costs between TDY and the government, in this action

under the Comprehensive Environmental Response, Compensation, and Liability

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Nancy D. Freudenthal, United States District Judge for the District of Wyoming, sitting by designation. Act of 1980, 42 U.S.C. §§ 9601–75. Reviewing for abuse of discretion the district

court’s selection of factors and for clear error in its allocation of costs according to

those factors, Boeing Co. v. Cascade Corp., 207 F.3d 1177, 1187 (9th Cir. 2000),

we affirm.

1. The district court did not violate our mandate in TDY Holdings, LLC v.

United States, 885 F.3d 1142 (9th Cir. 2018) ("TDY I") because, on remand, the

district court (1) considered the parties’ course of dealings; (2) permissibly

analyzed and applied United States v. Shell Oil Co., 294 F.3d 1045 (9th Cir. 2002),

and Cadillac Fairview/California, Inc. v. Dow Chemical Co., 299 F.3d 1019 (9th

Cir. 2002); and (3) allocated at least some cleanup costs to the government. TDY

Holdings, LLC v. United States, 372 F. Supp. 3d 1091, 1098–99, 1101 (S.D. Cal.

2019) ("TDY II"). Read holistically, our prior opinion did not require that the

district court’s reconsideration of the parties’ course of dealings and our precedents

reach a predetermined result. See United States v. Alpine Land & Reservoir Co.,

983 F.2d 1487, 1492 (9th Cir. 1992) (holding that a district court on remand is to

read our opinion "in its entirety" and in "context").

2. In allocating costs on remand, the district court did not abuse the "broad

discretion" that we emphasized in our prior opinion. TDY I, 885 F.3d at 1149.

The district court permissibly tailored the government’s allocation to approximate

2 only cleanup costs for contamination that was inherent to the use of chemicals that

the government had required. See id. at 1148 (holding that the district court

properly considered "that TDY’s own repair and maintenance practices caused the

contamination").

Thus, the district court did not clearly err in allocating to the government 5%

of the cleanup costs linked to chromium, because it permissibly found that "micro-

quantities" of contamination through aeration represented the only inherent

contamination from chromium’s mandated use. TDY II, 372 F. Supp. 3d at 1100;

see also ASARCO LLC v. Atl. Richfield Co., No. 18-35934, 2020 WL 5509748, at

*7 (9th Cir. Sept. 14, 2020) (holding that a district court "need not allocate

response costs to a mathematical certainty, and . . . [can] apply general principles

of fairness and equity in deciding whether to err on the side of over- or

under-compensation"). Similarly, the district court did not clearly err in allocating

to the government 10% of the cleanup costs for a groundwater plume linked to

chlorinated solvents, because it permissibly found that the sewer

dumping—authorized by a municipal permit before modern environmental laws’

passage—was "most equitably related" to the "government’s role." TDY II, 372 F.

Supp. 3d at 1100–01. Finally, the district court did not clearly err in allocating to

TDY all of the cleanup costs linked to polychlorinated biphenyls, because the

3 government did not mandate their use. Although a reasonable jurist may have

reached a different allocation, discretion’s very nature allows for such divergent

approaches.

3. The district court did not clearly err in allocating to TDY all cleanup

costs for contamination that occurred after 1979, when the government ceased to

own equipment at TDY’s plant. To the extent that the district court erred in

concluding that sovereign immunity shielded the government from post-1979

costs, id. at 1099 n.5, any error was harmless. We already had allowed the district

court to consider how long the government had owned equipment at the site as an

equitable factor. TDY I, 885 F.3d at 1148. The district court also gave no

indication that it would have extended the government’s liability if only it believed

that it could have done so.

4. Finally, the district court did not clearly err when it allocated to TDY all

post-2012 remediation costs. All remediation for which the government was

responsible was completed or very nearly completed by the end of 2012, the year

of trial.

AFFIRMED.