Tronox Incorporated v. Anadarko Petroleum Corporation

CourtDistrict Court, S.D. New York
DecidedFebruary 19, 2021
Docket1:14-cv-05495
StatusUnknown

This text of Tronox Incorporated v. Anadarko Petroleum Corporation (Tronox Incorporated v. Anadarko Petroleum Corporation) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tronox Incorporated v. Anadarko Petroleum Corporation, (S.D.N.Y. 2021).

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

IN RE TRONOX INCORPORATED, et al. 14-CV-5495 (JPO)

TRONOX INCORPORATED, et al., OPINION AND ORDER Plaintiffs,

-v-

ANADARKO PETROLEUM CORPORATION, et al., Defendants.

J. PAUL OETKEN, District Judge: In 2014, Anadarko Petroleum Corporation and affiliated companies entered into a $5.15 billion environmental and toxic-tort settlement to end an adversary proceeding in bankruptcy court. (See Dkt. No. 32.) Critical to that settlement was a permanent injunction (the “Injunction”) prohibiting the litigation of claims that are derivative or duplicative of the settled claims. (See Dkt. No. 34 (“Inj.”).) In 2020, Larry Ashworth filed a complaint in the Western District of Louisiana alleging environmental harm, including claims against Anadarko and Occidental Petroleum Corporations (collectively, “Anadarko”). See Ashworth v. International Paper Co., 2020 WL 4043186 (W.D. La. July 17, 2020). Anadarko now moves before this Court to enforce the Injunction, which it alleges bars Ashworth’s claims against it in Louisiana, and asks the Court to hold Ashworth and his counsel in contempt. (Dkt. No. 102.) For the reasons that follow, Anadarko’s motion is denied. I. Background The Court assumes familiarity with the pre-2014 factual background of this case from the prior opinion by then-Judge Forrest. (See Dkt. No. 32.) After overruling all objections and adopting the Bankruptcy Court’s findings of facts and conclusions of law, Judge Forrest approved the Settlement Agreement in its entirety and issued the Injunction. (Id.) In doing so, this Court and the Bankruptcy Court retained jurisdiction over all disputes relating to the opinion and order, and the parties to the Settlement Agreement were authorized to act to effectuate the

Settlement Agreement’s terms. (Id.) The Injunction, using capitalized terms defined in the Settlement Agreement, mandates: (i) any Debtor(s),

(ii) any creditor of any Debtor who filed or could have filed a claim in the Chapter 11 Cases,

(iii) any other Person whose claim (A) in any way arises from or is related to the Adversary Proceeding, (B) is a Trust Derivative Claim, or (C) is duplicative of a Trust Derivative Claim, and

(iv) any Person acting or purporting to act as an attorney for any of the preceding

is hereby permanently enjoined from asserting against any Anadarko Released Party

(I) any Trust Derivative Claims or

(II) any claims that are duplicative of Trust Derivative Claims, whether or not held or controlled by the Litigation Trust, or whether or not the Litigation Trust could have asserted such claims against any Anadarko Released Party.

(Inj.) The Settlement Agreement (Dkt. No. 1-1 (“Agr.”)) provides the following definitions: “Trust Derivative Claims” are “any and all claims and/or remedies that are held and/or controlled by, and which were or could have been asserted by, the Litigation Trust against any Anadarko Released Party, seeking relief or recovery arising from harm to any Debtor or any Debtor’s estate, based on any legal theory including, without limitation, such claims and/or remedies under federal or state law, statutory or common law, in equity or otherwise, arising out of or in any way related to (i) the Adversary Proceeding; (ii) the Chapter 11 Cases; (iii) the Bankruptcy Claims; (iv) the Covered Sites; and/or (v) any Anadarko Released Party’s ownership, management, operation, status, tenure, conduct, omission, action or inaction at any time as a stockholder, affiliate, owner, partner, member, manager, director, officer, employee, servant, agent, representative, attorney, creditor, successor, assign or other relationship with a Debtor and/or any of its predecessors, in each case, including, without limitation, such claims and/or remedies that are actions, causes of action, . . . , including Unknown Claims to the maximum extent allowed under the law, whether pled or unpled, fixed or contingent, choate or inchoate, matured or unmatured, foreseen or unforeseen, accrued or unaccrued, past, present or future for fraudulent transfer, fraudulent conveyance, preference, turnover, breach of fiduciary duty, negligence, gross negligence, mismanagement, civil conspiracy, aiding and abetting, unjust enrichment, constructive trust, equitable subordination, equitable disallowance, agency, joint venture, alter ego, corporate veil piercing, usurpation of corporate opportunity, successor liability, breach of contract, fraud, intentional, reckless or negligent misrepresentation, contribution, indemnity, and all other such claims and/or remedies.” (Agr. ¶ 1.82 (emphasis added).)

“Unknown Claims” means “any and all claims that the owner of the claim is not aware of or does not suspect to exist for any reason.” (Agr. ¶ 1.83.)

“Litigation Trust” refers to the Anadarko Litigation Trust, plaintiff in the underlying proceedings. (Agr. at 1; ¶ 1.49.)

In 2019, Ashworth discovered toxic waste contamination on his property. (Dkt. No. 104-4 (“La. Compl.”) ¶ 25.) In early 2020, Ashworth filed suit in the Western District of Louisiana alleging toxic waste contamination from creosote treatment sites located 5.1 miles from his property that were shut down in 1989. (See La. Compl.; La. Compl. ¶¶ 10, 20.) Ashworth named both Anadarko Petroleum Company and Occidental Petroleum Company as two of six defendants, alleging they are liable as successors in title to the companies that caused the contamination. (See La. Compl.; La. Compl. ¶ 9.) Shortly thereafter, Anadarko’s counsel contacted Ashworth’s counsel, explaining their belief that the Injunction barred Ashworth’s case and asking him to dismiss the claims against Anadarko. (Dkt. No. 104-5.) Ashworth’s counsel disagreed, and they continued to discuss the matter for months. (Dkt. Nos. 104-6, -7, -8.) In July 2020, Anadarko moved to enforce the Injunction by barring Ashworth’s claims against it and to hold Ashworth and his counsel in contempt. (Dkt. No. 102.) II. Legal Standard Generally, a federal court has an interest in “orderly, expeditious proceedings.’” Berger v. Heckler, 771 F.2d 1556, 1568 (2d Cir. 1985) (quoting Hutto v. Finney, 437 U.S. 678, 696, (1978)). Such interest “justifies any reasonable action taken by the court to secure compliance

with its orders.” Berger, 771 F.2d at 1568 (quoting Gates v. Collier, 616 F.2d 1268, 1271 (5th Cir. 1980)). Where “a right and a violation have been shown, the scope of a district court’s equitable powers to remedy past wrongs is broad, for breadth and flexibility are inherent in equitable remedies.” Swann v. Charlotte-Mecklenburg Bd. of Educ., 402 U.S. 1, 15 (1971). III. Discussion A. Motion to Enforce Judgment 1. Whether Ashworth’s Claims are Trust Derivative Claims This motion requires this Court to determine whether the Injunction blocks Ashworth’s claims against Anadarko in the Western District of Louisiana. Anadarko argues that Ashworth’s Louisiana claims are Trust Derivative Claims or duplicative of such claims and therefore must be

dropped. Ashworth, who discovered the contamination in 2019, responds that his claims arose long after resolution of the original bankruptcy petition and, as a result, are not forbidden Trust Derivative Claims that “were or could have been asserted” by the plaintiffs in the underlying lawsuits.1 (Agr. ¶ 1.82.) This issue turns on when Ashworth’s claims arose, legally speaking: Anadarko contends the claims arose when the contamination occurred (Dkt. No. 103 at 22),

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Tronox Incorporated v. Anadarko Petroleum Corporation, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tronox-incorporated-v-anadarko-petroleum-corporation-nysd-2021.