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Hobart Corp. v. The Dayton Power and Light Co.

United States District Court, S.D. Ohio, Western Division

August 29, 2017

HOBART CORPORATION, et al., Plaintiffs,
v.
THE DAYTON POWER AND LIGHT COMPANY, et al., Defendants.

         DECISION AND ENTRY SUSTAINING IN PART AND OVERRULING IN PART PLAINTIFFS' MOTION TO DISMISS COUNTERCLAIMS TO FIFTH AMENDED COMPLAINT (DOC. #473); SUSTAINING PLAINTIFFS' MOTION TO DISMISS FLOWSERVE'S PROTECTIVE AND CONTINGENT COUNTERCLAIM TO PLAINTIFFS' FIFTH AMENDED COMPLAINT (DOC. #535)

          WALTER H. RICE UNITED STATES DISTRICT JUDGE.

         This matter is currently before the Court on Plaintiffs' Motion to Dismiss Counterclaims to Fifth Amended Complaint (Doc. #473), and on Plaintiffs' Motion to Dismiss Flowserve's Protective and Contingent Counterclaim to Plaintiffs' Fifth Amended Complaint (Doc. #535).

         I. Background and Procedural History

         Plaintiffs Hobart Corporation, Kelsey-Hayes Company and NCR Corporation, filed suit under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as amended, 42 U.S.C. §§ 9601 et seq., against numerous defendants, seeking contribution for response costs incurred in connection with the South Dayton Dump and Landfill Site ("the Site"). Many of those defendants filed counterclaims against Plaintiffs, and some defendants also filed crossclaims against each other. Defendants alleged that, if they are found liable for cleanup costs at the Site, they are entitled to contribution from Plaintiffs and from each other under 42 U.S.C. § 9613(f)(1).

         On October 16, 2014, the Court issued a Decision and Entry Sustaining Plaintiffs' Motion to Dismiss All Counterclaims. Doc. #277. It found that Plaintiffs were entitled to contribution protection for response costs arising from the 2013 Administrative Settlement and Order on Consent ("2013 ASAOC") between Plaintiffs and the United States Environmental Protection Agency ("EPA"). In addition, the Court found that, although Plaintiffs might be entitled to a declaratory judgment concerning Defendants' liability for future response costs for other contamination at the Site, see 42 U.S.C. § 9613(g)(2), Plaintiffs could not actually recover those future response costs in the context of this lawsuit. Therefore, Defendants' counterclaims for contribution with respect to future response costs outside the scope of the 2013 ASAOC were premature. The Court dismissed them without prejudice to refiling in a subsequent suit. Doc. #277, PageID#2976.

         With respect to Plaintiffs' claim of unjust enrichment, seeking contribution for costs incurred in identifying other potentially responsible parties ("PRPs"), the Court concluded that, because the Court is required, under 42 U.S.C. § 9613(f)(1), to equitably allocate response costs among all liable parties, Defendants' interests were already adequately protected, rendering the counterclaims superfluous. Id. at PageID##2977-78. The Court also dismissed the counterclaims for indemnification, finding that Defendants had failed to adequately plead the existence of an express or implied contract. Id. at PageID#2979.

         On April 11, 2016, the Court issued an Omnibus Scheduling Order, Doc. #373, in which it rejected Defendant Dayton Power and Light Co.'s ("DP&L") request that each defendant be deemed to have asserted a cross-claim against all other defendants. The Court noted that, "because Defendants have incurred no response costs at the Site, they have no valid crossclaims against each other." Id. at PageID#5562 n.4. This footnote prompted several Defendants to file motions to dismiss the crossclaims that had been filed against them. Docs. ##398, 400, 401, 404, 454, 472.

         While those motions were pending, Plaintiffs filed a Fifth Amended Complaint, seeking additional contribution for response costs arising out of a new ASAOC ("the 2016 ASAOC"). Doc. #414. Thereafter, several Defendants reasserted counterclaims and crossclaims in their Answers to the Fifth Amended Complaint. See Docs. ##427, 430, 433, 434, 436, 437, 443, 446, 449, 452.[1]

         Although Defendants acknowledged the Court's earlier ruling dismissing the counterclaims, they reasserted them to preserve the issue for appeal. They again alleged that, if they are found liable for response costs at the Site, they are entitled to contribution and/or indemnification from Plaintiffs. Id. In addition, Defendants DP&L and Valley Asphalt alleged that, because they had themselves incurred response costs, they are entitled to contribution and/or indemnification from Plaintiffs. Docs. ##437, 443.

         On September 26, 2016, the Court issued a Decision and Entry Overruling Defendants' motions to dismiss the crossclaims. Doc. #477. The Court noted that Federal Rule of Civil Procedure 13(g) specifically provides for contingent crossclaims: "The crossclaim may include a claim that the coparty is or may be liable to the cross-claimant for all or part of a claim asserted in the action against the cross-claimant." Fed.R.Civ.P. 13(g) (emphasis added). The Court reiterated its view that "the equitable allocation scheme of §113 largely eliminates the need for counterclaims and crossclaims, " but found that, to the extent that the parties disagreed with the Court's allocation, contingent crossclaims were permissible to preserve Defendants' right to seek contribution from others. Doc. #477, PageID##6825-26.

         The Court also amended the Omnibus Scheduling Order to allow Defendants who had not already filed a cross-claim to do so no later than November 1, 2016. Doc. #477, PageID#6826. Several did. Defendant Flowserve Corporation, which had not previously filed crossclaims or counterclaims, filed a "Protective and Contingent Counterclaim against Plaintiffs, and Protective and Contingent Crossclaim against Certain Defendants." Doc. #503.

         Pursuant to Federal Rule of Civil Procedure 12(b)(6), Plaintiffs have filed a Motion to Dismiss Counterclaims to Plaintiffs' Fifth Amended Complaint, Doc. #473. They have also filed a Motion to Dismiss Flowserve's Protective and Contingent Counterclaim to Plaintiffs' Fifth Amended Complaint, Doc. #535.[2]

         II. Rule I2(b)(6) Standard of Review

         Federal Rule of Civil Procedure 8(a) provides that a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." The complaint must provide the defendant with "fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp, v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)).

         Federal Rule of Civil Procedure 12(b)(6) allows a party to move for dismissal of a complaint on the basis that it "fail[s] to state a claim upon which relief can be granted." The moving party bears the burden of showing that the opposing party has failed to adequately state a claim for relief. Direc TV, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007) (citing Carver v. Bunch, 946 F.2d 451, 454-55 (6th Cir. 1991)). In ruling on a 12(b)(6) motion, a court must "construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff." Handy-Clay v. City of Memphis, 695 F.3d 531, 538 (6th Cir. 2012) (quoting Treesh, 487 F.3d at 476).

         Nevertheless, to survive a motion to dismiss under Rule 12(b)(6), the complaint must contain "enough facts to state a claim to relief that is plausible on its face." Twombly, 550 U.S. at 570. Unless the facts alleged show that the plaintiff's claim crosses "the line from conceivable to plausible, [the] complaint must be dismissed." Id. Although this standard does not require "detailed factual allegations, " it does require more than "labels and conclusions" or "a formulaic recitation of the elements of a cause of action." Id. at 555. "Rule 8 . . . does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions." Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). Legal conclusions "must be supported by factual allegations" that give rise to an inference that the defendant is, in fact, liable for the misconduct alleged, id. at 679.

         III. Analysis

         A. Plaintiffs' Motion to Dismiss Flowserve's Protective and Contingent Counterclaim to Plaintiffs' Fifth Amended Complaint (Doc. #535)

         As previously noted, Defendant Flowserve Corporation did not include a counterclaim or crossclaims in its Answer to the Fifth Amended Complaint. Doc. #429. However, after the Court amended the Omnibus Scheduling Order and gave the parties leave to file crossclaims, Flowserve asserted crossclaims and a counterclaim. Doc. #503.

         Plaintiffs argue that Flowserve's belated, free-standing counterclaim must be dismissed because it was filed without leave of Court, and is not permitted by the Federal Rules of Civil Procedure. As a general rule, a counterclaim must be asserted as part of a recognized pleading. See Allied Med. Care Assocs. v. State Farm Mut. Auto. Ins. Co., No. 08-2434, 2009 WL 839063, at *2 (E.D. Pa. Mar. 26, 2009) (dismissing free-standing counterclaim as a "procedural nullity"); Bernstein v. IDT Corp., 582 F.Supp. 1079, 1089 (D. Del. 1984) (striking freestanding counterclaim).

         Flowserve argues that it would have asserted the counterclaim earlier "but for the Court's Omnibus Scheduling Order that prohibited such counterclaims." Doc. #615, PageID#7762. Nothing in that Scheduling Order, however, prohibited a party from filing a counterclaim to a subsequently-filed amended Complaint. See Doc. #373, PageID#5562. In fact, ten other Defendants did f\\e counterclaims along with their Answers to the Fifth Amended Complaint. See Docs. ##427, 430, 433, 434, 436, 437, 443, 446, 449, 452.

         Because Flowserve's free-standing counterclaim was filed without leave of Court and is not permitted by the Rules, the Court SUSTAINS Plaintiffs' Motion to Dismiss Flowserve's Protective and Contingent Counterclaim. Doc. #535.

         B. Plaintiffs' Motion to Dismiss Counterclaims to Plaintiffs' Fifth Amended Complaint (Doc. #473)

         In the Fifth Amended Complaint, Plaintiffs seek contribution for response costs incurred in performance of the work required by the 2013 and 2016 ASAOCs. All parties are in agreement that, under 42 U.S.C. § 9613(f)(2), Plaintiffs are entitled to contribution protection for these response costs.

         However, Plaintiffs also seek contribution for response costs falling outside the scope of the 2013 and 2016 ASAOCS. More specifically, they seek contribution for the cost of identifying other potentially responsible parties ("PRPs").[3] In addition, Plaintiffs seek a declaratory judgment concerning Defendants' ...


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