JMS Devmt Co v. Bulk Petroleum Corp ( 2003 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 02-1674
JMS DEVELOPMENT COMPANY,
Plaintiff-Appellee,
v.
BULK PETROLEUM CORPORATION
and DARSHAN DHALIWAL,
Defendants-Appellants.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 95 C 3275—Marvin E. Aspen, Judge.
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ARGUED FEBRUARY 11, 2003—DECIDED JULY 24, 2003
____________
Before EASTERBROOK, ROVNER, and WILLIAMS, Circuit
Judges.
ROVNER, Circuit Judge. Bulk Petroleum Corporation
(“Bulk”) operated a gas station on a parcel of property
adjacent to land owned by JMS Development Company
(“JMS”). The operations of the gas station polluted both
pieces of property. JMS filed this suit, seeking relief for the
contamination under the federal Resource Conservation and
Recovery Act, 42 U.S.C. § 6972 (“RCRA”), as well as Illinois
law. Bulk and its principal, Darshan Dhaliwal (“Dhaliwal”),
have appealed from an order authorizing JMS to clean up
both of the properties and requiring Bulk and Dhaliwal
2 No. 02-1674
to deposit money into an escrow account to pay for the
anticipated cost of the clean-up. Because the district
court’s order is not final, see 28 U.S.C. § 1291, we lack
jurisdiction and therefore must dismiss the appeal.
I.
For a number of years, Bulk leased a property in Des
Plaines, Illinois (a suburb of Chicago), where it operated a
gas station. Title to that property is held by a trust, the
beneficiaries of which are Arthur and Evelyn Zaltzman.
Leaks from petroleum storage tanks located on the property
contaminated not only the Zaltzman property, but also the
adjacent commercial property, which JMS owns.
In 1995, JMS filed suit in the district court seeking
injunctive, declaratory, and monetary relief for the con-
tamination of its property from Bulk and the Zaltzmans,
among others. Two years later, on the motion of Bulk and
Dhaliwal, the district court approved a consent decree
resolving JMS’s claims and dismissed the suit with preju-
dice. The court retained jurisdiction to enforce the terms
of the consent decree.
The 1997 consent decree assigned to Bulk the obligation
of cleaning up JMS’s property at its own expense. Toward
that end, the consent decree called for Bulk to file an
application with the Illinois Environmental Protection
Agency (“IEPA”) to participate in the IEPA’s Site Re-
mediation Program (“SRP”) within 60 days following the
execution of the consent decree. Bulk was also to “use its
best efforts” to secure, “within a reasonable time,” what the
parties describe as “administrative closure” of the JMS
property from the IEPA, which was to take the form of a
letter indicating that the JMS property required no further
remediation.
Following execution of the consent decree, Bulk’s actions
did not take the path that JMS expected. Rather than
No. 02-1674 3
pursuing clean-up of the JMS property through the SRP,
Bulk elected instead to proceed under the IEPA’s Leaking
Underground Storage Tank (“LUST”) Program. Bulk was
already proceeding under the LUST Program to address the
contamination of the Zaltzman property. Evidently believ-
ing that it would simplify and expedite clean-up and
administrative closure of the JMS property, Bulk simply
amended its plans for the Zaltzman property to include the
JMS parcel as well rather than pursuing each property in
a separate proceeding.
Years passed, and by 2001, Bulk had neither begun to
clean up the JMS property nor obtained administrative
closure for that property, although by this time it was on its
fourth set of attorneys and second set of environmental
consultants (later it would engage a third set of environ-
mental consultants). Repeated delays had prompted JMS to
file multiple petitions urging the district court to order Bulk
and Dhaliwal to show cause why they should not be held in
contempt for failing to honor their obligations under the
consent decree and to award attorneys fees to JMS for its
own efforts to enforce the decree. Judge Aspen referred
these petitions to Magistrate Judge Keys. In June of 2001,
Magistrate Judge Keys issued a report and recommendation
citing Bulk and Dhaliwal for “bad faith” and a record of
“abysmal noncompliance” with the consent decree. 2001 WL
686676, at *2, *3, *4, *6 (N.D. Ill. June 15, 2001). “[T]he
parties are no closer to administrative closure than they
were in September 1997,” he lamented. Id. at *4. To get
things moving, he recommended, inter alia, that JMS be
authorized to clean up its own property at Bulk’s expense.
Id. at *5. He also recommended an award of $20,725.30 to
JMS for the costs and attorney’s fees it had incurred to
enforce the consent decree. (The consent decree entitles
a prevailing party in an action to enforce the terms of
the decree to all of its costs, including attorney’s fees.)
4 No. 02-1674
The deadline for objections to the report and recommen-
dation was extended repeatedly while the parties engaged
in settlement discussions. Those discussions ultimately
proved unsuccessful, however.
Their efforts at resolution having failed, the parties filed
cross-objections to the Magistrate Judge’s report and
recommendation. Bulk and Dhaliwal objected both to the
proposed award of attorney’s fees and to the recommenda-
tion that the authority to clean up the JMS property be
transferred from Bulk to JMS. R. 121. JMS, on the other
hand, contended that it should be given authority to
address the Zaltzman property as well as its own. JMS
argued that the IEPA would not close its file on the JMS
property until both that property and the source of the
contamination (the Zaltzman property) had been sanitized.
R. 120 at 2-3 ¶ 5, 5 ¶ 13. Bulk and Dhaliwal opposed this
request, contending that it was not necessary to clean up
the Zaltzman property in order to decontaminate and obtain
environmental clearance for JMS’s property; rather, a wall
could be installed between the two properties that would
prevent pollutants from migrating onto the JMS property in
the future. R. 125 at 7 ¶ 19. In addition to the license to
clean up both properties, JMS also asked that Judge Aspen
order Bulk and Dhaliwal to deposit a minimum of
$150,000 into escrow to cover the cost of cleaning up both
of the properties. R. 120 at 6 ¶ 17. JMS contended that it
lacked the resources to pay for the job on its own; it was
also concerned that Bulk and Dhaliwal otherwise might
escape the obligation to reimburse JMS for the clean-up
by declaring bankruptcy.
Judge Aspen overruled the objections of Bulk and
Dhaliwal to the Magistrate Judge’s report and recommen-
dation, and sustained JMS’s objection. 2002 WL 252457(N.D. Ill. Feb. 20, 2002). He sustained the proposed award
of attorney’s fees and costs to JMS, finding the request to be
adequately supported. Id. at *1. The judge rejected the
No. 02-1674 5
defendants’ request for more time to secure administrative
closure of the JMS property:
Defendants . . . are out of time. The record amply shows
that they have not used their best efforts to achieve
administrative closure of the JMS property. By repeat-
edly terminating their attorneys and their environmen-
tal consultants, it appears that Defendants are simply
seeking to delay enforcement of the consent decree.
Indeed, their request today for more time is just one
more example of this unacceptable pattern of delay.
Id. The judge further determined that the goal of the
consent decree—the clean-up and administrative closure of
JMS’s property—would best be served at this point by
authorizing JMS to clean up the Zaltzman property in
addition to its own. Id. at *2. Judge Aspen also found it
“prudent,” “[g]iven Defendants’ track record in this matter,”
to require the defendants to front the anticipated cost of the
clean-up. Id. He remanded the matter to Magistrate Judge
Keys to ascertain how much money should be placed in
escrow and on what timetable and additionally to monitor
the parties’ compliance with his directives.1
Bulk and Dhaliwal appealed Judge Aspen’s order. After
they filed their notice of appeal, Magistrate Judge Keys
entered an order directing the parties to establish an
escrow account with an opening balance of $150,000 and
outlining the procedures by which expense claims were to
be submitted, approved, and reimbursed. 2002 WL 1303129(N.D. Ill. June 13, 2002). At this juncture, the cost of
1
JMS had also asked for an award of damages to compensate it
for its purported inability to sell the property while it continued
to await administrative closure of the property. Judge Aspen
rejected this request, finding JMS’s proposed damages “simply too
speculative to award.” 2002 WL 252457, at *2.
6 No. 02-1674
cleaning up the two properties can only be estimated; the
final figure will not be known until the decontamination
process has been completed.
II.
As always, our first obligation is to ascertain our own
jurisdiction to entertain this appeal. United States v. Smith,
992 F.2d 98, 99 (7th Cir. 1993). 28 U.S.C. § 1291 grants us
jurisdiction to review “all final decisions” entered by the
district courts. In this case, of course, the consent decree
finally resolved the merits of the suit; and the order
directing JMS to clean up the Zaltzman property was
entered in postjudgment proceedings. In this context, “we
try to treat the postjudgment proceeding as if it were a free-
standing lawsuit and to identify the final decision in the
postjudgment proceeding and confine any further appeal
under section 1291 to that decision.” Bogard v. Wright, 159
F.3d 1060, 1062 (7th Cir. 1998) (citations omitted). A
postfinal order will be treated as “final” for purposes of
section 1291 if it “dispose[s] of all issues raised in the post-
judgment motion.” Transportation Cybernetics, Inc. v. Forest
Transit Com’n, 950 F.2d 350, 352 (7th Cir. 1991). We
therefore must consider whether the order that Bulk and
Dhaliwal have appealed from is final in the sense that it
leaves nothing more to be decided with respect to the clean-
up of the JMS and Zaltzman properties. See, e.g., Ross Bros.
Constr. Co. v. International Steel Servs., Inc., 283 F.3d 867,
871 (7th Cir. 2002); ITOFCA, Inc. v. MegaTrans Logistics,
Inc., 235 F.3d 360, 363 (7th Cir. 2000). Looking to the
pertinent Supreme Court decision on this subject, Liberty
Mut. Ins. Co. v. Wetzel, 424 U.S. 737, 96 S. Ct. 1202 (1976),
we conclude that the order is not final.
Liberty Mutual was a class action challenging the defen-
dant’s employee insurance benefits and maternity leave
No. 02-1674 7
regulations under Title VII of the Civil Rights Act of 1964,
42 U.S.C. § 2000e, et seq. In addition to damages, the class
sought injunctive relief compelling the defendant to estab-
lish non-discriminatory employment policies and enjoining
it from engaging in additional illegal acts and practices, an
award of attorney’s fees and costs, and other relief. The
district court granted partial summary judgment in favor of
the class on liability, finding that the employer’s pregnancy-
related, hiring, and promotion policies ran afoul of Title VII.
Subsequently, the court purported to enter final judgment
as to liability pursuant to Federal Rule of Civil Procedure
54(b) while leaving the question of relief undecided. The
defendant took an appeal, the Third Circuit concluded that
it had jurisdiction in view of the Rule 54(b) judgment, and
it affirmed the liability finding.
On certiorari, the Supreme Court held that the court of
appeals lacked appellate jurisdiction for want of the final
decision required by 28 U.S.C. § 1291. This was not a
multiple-claims case in which the district court was autho-
rized under Rule 54(b) to enter final judgment as to some
but not all of the claims, the Court explained. The plaintiffs
had but a single claim of employment discrimination under
Title VII; consequently, the district court’s Rule 54(b)
findings could not render the liability determination
appealable as a final decision. 424 U.S. at 742-44, 96 S. Ct.
at 1206. The grant of partial summary judgment as to
liability was itself interlocutory, so the only possible basis
for an appeal lay in 28 U.S.C. § 1292. The district court had
neither granted nor denied injunctive relief, but simply
postponed its decision on the matter, foreclosing an appeal
under section 1292(a)(1). 424 U.S. at 744-45, 96 S. Ct. at
1207. And even if the district court’s Rule 54(b) findings
were treated as a certification under section 1292(b) that
the liability determination involved a controlling question
of law as to which reasonable minds might diverge and that
an immediate appeal would facilitate final resolution of the
8 No. 02-1674
litigation, the defendant had not made the requisite
application to the court of appeals within ten days as
section 1292(b) requires. Id. at 745, 96 S. Ct. at 1207. As
the company’s appeal satisfied the criteria of neither section
1291 nor section 1292, there was no appellate jurisdiction:
Were we to sustain the procedure followed here, we
would condone a practice whereby a district court in
virtually any case before it might render an interlocu-
tory decision on the question of liability of the defen-
dant and the defendant would thereupon be permitted
to appeal to the court of appeals without satisfying any
of the requirements that Congress carefully set forth.
We believe that Congress, in enacting present §§ 1291
and 1292 of Title 28, has been well aware of the dan-
gers of an overly rigid insistence upon a “final decision”
for appeal in every case, and has in those sections made
ample provision for appeal of orders which are not
“final” so as to alleviate any hardship. We would twist
the fabric of the statute more than it will bear if we
were to agree that the District Court’s order . . . was
appealable to the Court of Appeals.
Id. at 745-46, 96 S. Ct. at 1207.
Liberty Mutual’s analysis makes plain that we lack
jurisdiction over this appeal, for the defendants’ liability
for the clean-up of the JMS and Zaltzman properties has
not been reduced to a final, appealable judgment. That
the defendants are responsible for the clean-up was, of
course, settled in 1997 with the entry of the consent decree.
But with the district court’s finding that Bulk and
Dhaliwal had dragged their feet for too long in effectuating
the clean-up came a shift in the burdens and rights as-
signed to the parties. The right and responsibility to
decontaminate the two properties has been taken from the
defendants and given to JMS. At this juncture, the sole
burden that remains with the defendants is to pay for the
clean-up.
No. 02-1674 9
The extent of the defendants’ monetary liability, however,
remains indeterminate. True, an escrow fund has been
established, and Bulk and Dhaliwal have been ordered to
deposit money into that fund in order to cover the costs of
the clean-up. But with the clean-up incomplete, the costs
can only be estimated. Just how severely the defendants’
pocketbook will be pinched thus cannot be known. Bulk and
Dhaliwal ultimately may be required to pay JMS more than
they have been directed to pay into escrow, or at the end of
the clean-up they may be entitled to a refund. No final
dollar amount has been placed upon their financial liability
to JMS. Until their liability has been so quantified, the
order requiring defendants to pay for the clean-up is not
final in the sense that section 1291 requires.
We are mindful that, in the interim, the clean-up of the
two properties presumably proceeds apace and that by the
time the precise extent of the defendants’ monetary liability
becomes clear, the remediation will be complete or nearly
so. There will be little that this court could do at that point
to alter the course or consequences of the clean-up. In
authorizing JMS to clean up not only its own property but
the Zaltzman’s, the district court has taken an unusual
step, and not surprisingly, it is that step that is the focus of
the defendants’ appeal. The record certainly makes clear
that the court did not act precipitously or without reason.
In any case, the relief that the court has ordered poses no
irreparable harm to either Bulk or Dhaliwal, whose sole
obligation is monetary. (Bulk and Dhaliwal no longer lease
the Zaltzman property, and neither the Zaltzmans nor the
land trust are parties to this appeal, although they were
parties to the litigation below.) Any missteps in the method
or extent of the clean-up that affect its cost can be ac-
counted for in the final amount that Bulk and Dhaliwal are
ordered to pay, and that amount will, of course, be subject
to appellate review.
10 No. 02-1674
III.
Because the district court has not yet entered a final
judgment, we DISMISS this appeal for lack of jurisdiction.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—7-24-03