Opinion
No. 98-CV-2777 D, 98-CV-2968 D, 00-CV-2245 D (Consolidated Cases)
March 18, 2003
Before the court is the December 21, 2001 motion of defendants Mid-Continent Fuel Company ("MCFC") and Deffenbaugh Industries, Inc. ("DII") seeking relief from payment of fees and costs incurred between January 16, 2001 and October 31, 2001 by Special Master William H. Hyatt, Jr. Also before the court are the January 6, 2003 motions of defendants Quality Analytical Services, Inc., f/k/a Industrial Service Corporation, f/k/a Radium Petroleum Company ("QAS"); Mid-Continent Fuel Company; and Deffenbaugh Industries, Inc. seeking relief from payment of fees and costs incurred between September 29, 2001 and July 25, 2002 by Special Master William H. Hyatt, Jr. These motions were referred to the United States Magistrate Judge f or determination on February 26, 2003. For the following reasons, the motions are denied.
The complete January 26, 2003 motions and their accompanying memoranda are docketed as Documents Nos. 400, 401, 402, and 403 in Civil Case No. 98-2777.
This case arises under the Comprehensive Environmental Response Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq. The plaintiffs entered into a judicially approved consent decree that resolved their liability with the United States and the State of Arkansas in connection with oil treatment process waste deposited at sites in West Memphis, Arkansas, and at Edmonton, Arkansas. See United States v. Aircraft Service International, Inc., Civil Actions Nos. J-C-98-362 and 363 (E.D. Ark., Dec. 19, 2000). The present litigation involves claims by the plaintiffs against other potentially responsible parties for recoverable response costs. In a case management order entered January 12, 2001, the Honorable Bernice B. Donald divided the instant consolidated cases into two phases: "Phase I," to last approximately nine months and consist of settlement efforts supervised by a special master; and "Phase II," a standard pretrial phase during which settlement efforts would continue concurrent with standard pretrial discovery and motion practice. See Case Management Order at 2, Signature Combs, Inc. v. United States off America, Civil Case No. 00-2245D (W.D. Tenn., Jan. 12, 2001) (consolidated order including Civil Cases Nos. 98-2777 and 98-2968). The case is now in Phase II. The defendants QAS, MCFC, and DII object to paying their assessed per capita portions of the special master's fees from Phases I and II. For the following reasons, their motions for relief are denied.
The special master's first petition for fees, filed on December 14, 2001, included the special master's services from January 16, 2001 up to and including October 31, 2001. The first petition for fees was provisionally approved by Judge Donald on December 27, 2001, subject to objections to be filed within ten days of the order provisionally approving the fees. Defendants MCFC and DII duly objected to the first petition and their objections to the first petition are the subject of their motion for relief from payment of the special master's fees in connection with the special master's first petition. The special master's second petition for fees encompassed unpaid amounts from the first petition and fees for additional services from September 29, 2001 up to and including July 31, 2002.
See Motion/Petition by William J. Hyatt, Jr. for Compensation of Fees and Reimbursement of Costs of William J. Hyatt, Jr. of Pitney Hardin Kipp Szuch, as Special Master for the Period January 16, 2001 through October 31, 2001, Signature Combs, Inc. v. United States of America, Civil Case No. 98-2777 (W.D. Tenn., Dec. 14, 2001) [Document No. 204 in Civil Case No. 98-2777].
Order Approving Fee Petition of Special Master, Signature Combs, Inc. v. United States of America, Civil Case No. 00-2245D (W.D. Tenn., Dec. 27, 2001) (consolidated order including Civil Cases Nos. 98-2777 and 98-2968) [Document No. 39 in Civil Case No. 00-2245 and Document No. 208 in Civil Case No. 98-2777].
Second Petition for Compensation of Fees and Reimbursement of Costs of William H. Hyatt, Jr. as Special Master, and for Third Assessment at Ex. 3, Signature Combs, Inc. v. United States of America, Civil Case No. 98-2777 (W.D. Tenn., Feb. 12, 2003) (Court File Document No. 421 in Civil Case No. 98-2777].
As a basis for their motions, the defendants QAS, MCFC, and DII claim they should not be responsible for any of the special master's fees because he failed to evaluate the issue of their successor liability. As an additional reason to be relieved from paying their per capita share of the special master's fees, the defendants QAS, MCFC, and DII insist that the special master did not personally work with them to negotiate a settlement and that the special master did not spend sufficient time with them during the mediation sessions on October 24 and 25, 2001.
On February 19, 2003, Judge Donald ruled that the question of successor liability posed a genuine issue of material fact as to all three of the instant defendants. See Documents Nos. 433 and 434 in Civil Case No. 98-2777. Accordingly, to the extent that the defendants' motions are grounded on claims that they are not successors in interest, the motions are denied without prejudice.
Generally, a court's allocation of special master's fees will not be overturned absent an abuse of discretion. Apponi v. Sunshine Biscuits, Inc., 809 F.2d 1210, 1220 (6th Cir. 1987). See also FED. R. Civ. P. 53(a) (authorizing a court to fix a special master's compensation).
In this case, the defendants QAS, MCFC, and DII had opportunity to participate in the settlement process. Defendants QAS, MCFC, and DII advance no law to support their proposition that a special master's fee allocation must be proportional to the personal care and attention a special master gives each party. (Indeed, the defendants advance no law at all in their motion.) If the court were to adopt the defendants' position, then the court would be faced with the task of prorating the special master's fee in accordance with the number of minutes he personally met with each party and addressed issues pertinent to each party's individual claims. Such an approach would be unwieldy. Moreover, to the extent that time spent with other defendants resulted in agreements to pay a portion of the response costs for the sites in question, this activity on the part of the special master may ultimately inure to the benefit of QAS, MCFC, and DII if QAS, MCFC, and DII do not prevail on their successor liability arguments.
Finally, defendants QAS, MCFC, and DII object to paying a portion of the special master's fees incurred between December 20, 2001 and June 25, 2002, on the grounds that the special master was laboring under a December 20, 2001 deadline to complete Phase I settlement efforts and failed to notify them that this phase was complete in compliance with the Case Management Order. Therefore, they argue, they should not be responsible for any of the special master's fees incurred after December 20, 2001.
The defendants relate this deadline to Phase II, which is in error. The Case Management Order, at III.20, provides that December 20, 2001, was the deadline for completion of Phase I. Case Management Order at 10, Signature Combs, Inc. v. United States of America, Civil Case No. 00-2245D (W.D. Tenn., Jan. 12, 2001) (consolidated order including Civil Cases Nos. 98-2777 and 98-2968).
The Case Management Order of January 16, 2001 clearly states that settlement efforts will continue into Phase II of the consolidated cases and run concurrent with pretrial motion practice. Even if defendants QAS, MCFC, and DII believed all settlement efforts were to be concluded by December 20, 2001, they offer no explanation for their failure to contact the special master and seek to advance negotiations before that date. Accordingly, to the extent defendants QAS, MCFC, and DII claim the special master's services could not continue past December 20, 2001, the motions are denied.
In addition to the foregoing reasons for denial, to the extent that the January 26, 2003 motions of QAS, MCFC, and DII object to fees incurred by the special master before October 31, 2001, the motions are untimely. When the district court provisionally approved the special master's first petition for fees, all parties were given ten days to lodge objections. See Order Approving Fee Petition of Special Master at 2-3, Signature Combs, Inc. v. United States of America, Civil Case No. 00-2245D (W.D. Tenn., December 27, 2001) (consolidated order including Civil Cases Nos. 98-2777 and 98-2968). Any objections to fees incurred between January 16, 2001 and October 31, 2001 that appear in the later motions are denied as untimely.
CONCLUSION
For the foregoing reasons, the motions by defendants Quality Analytical Services, Inc., f/k/a Industrial Service Corporation, f/k/a Radium Petroleum Company; Mid-Continent Fuel Company; and Deffenbaugh Industries, Inc. seeking relief from payment of fees and costs submitted by Special Master William H. Hyatt, Jr. in his first and second petitions for fees are denied at this time. The court may reconsider its ruling depending on the ultimate respective liabilities of the parties and their conduct during the litigation.
IT IS SO ORDERED.
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