B. Motion to Strike Jury Demand
In support of its motion to strike defendant Gould's demand for a jury trial the United States cites to three recent district court decisions holding that because CERCLA affords essentially equitable relief in the nature of restitution the Seventh Amendment right to a trial by jury does not attach. United States v. Argent Corp., 21 ERC (BNA) 1353, No. 83-523-HB (D.N.M. Dec. 20, 1983); United States v. Northeastern Pharmaceutical, 19 ERC (BNA) 2186, (W.D. Mo. 1983); United States v. Reilly Tar & Chemical, 20 ERC (BNA) 1052, 13 ELR 20897, No. 4-80 Civil 469 (D. Minn. June 24, 1983). I find these opinions to be well-reasoned and the generator defendants' efforts at distinguishing or discrediting them to be unpersuasive.
The sole issue raised by the generator defendants that gives me pause in this regard is whether the Commonwealth's claim for damages for injury to natural resources under § 107(a)(3)(C) is legal or equitable in nature. Certainly the label used by Congress is not dispositive of the issue. Instead I must look to the nature of the remedy. United States v. Long, 537 F.2d 1151 (4th Cir. 1975), cert. denied, 429 U.S. 871, 50 L. Ed. 2d 151, 97 S. Ct. 185 (1976). The Commonwealth has stated it seeks to recover under § 107(a)(3)(C) only to the extent that it has spent funds in assessing any injury to natural resources or rehabilitating or restoring injured resources. Such relief would properly be characterized as equitable for the same reasons that recovery of § 107(2)(3)(A) response costs is considered equitable relief.
The generator defendants rely on Beacon Theatres v. Westover, 359 U.S. 500, 3 L. Ed. 2d 988, 79 S. Ct. 948 (1959), for the proposition that a right to a jury trial exists in a declaratory judgment action brought under 28 U.S.C. §§ 2201 and 2202. Their reliance is misplaced. Beacon Theatres holds that the Declaratory Judgment Act "preserves" the right to a jury trial for both parties. Thus, if the issue on which a party seeks a declaratory judgment is one on which a party would otherwise be entitled to a jury trial, that right is not abrogated by the fact that the issue is first raised in a declaratory judgment proceeding. It follows that the Declaratory Judgment Act does not create a right to a jury trial when the underlying action is equitable in nature. See Robinson v. Brown, 320 F.2d 503 (6th Cir. 1963), cert. denied, 376 U.S. 908, 11 L. Ed. 2d 607, 84 S. Ct. 662 (1964).
Here the Commonwealth seeks a declaratory judgment that the defendants are liable under CERCLA for response costs incurred by the Commonwealth in the future. Because I have concluded that the remedies afforded by CERCLA are equitable in nature, it follows that no right to a jury trial attaches when a party seeks a declaration of rights and liabilities under that statute.
Finally, the generator defendants argue that the Commonwealth's nuisance claim, which is asserted only against the non-generator defendants, necessitates a jury trial. I must reject this contention as well.
As with the CERCLA counts the critical question is whether the relief sought is legal or equitable. Clearly the Commonwealth's request for an injunction directed towards abatement of the alleged nuisance constitutes equitable relief and consequently does not require a jury trial. Farmers' Chemical Association v. Union Camp Corp., 312 F. Supp. 214 (E.D. N.C. 1970).
More difficult is its request for monetary relief. Assuming the Commonwealth establishes its nuisance case, it clearly could recover damages for injury to its interests; however, the Commonwealth has elected to seek recovery only of its costs incurred in abating the nuisance presented by the Wade site. This relief, like that sought under CERCLA, is in the nature of equitable restitution. The non-generator defendants therefore have no right to a trial by jury of the issues presented in the nuisance count.
C. Motion to Bifurcate
The final issue to be resolved is that of bifurcation. Initially the generator defendants argued that a bifurcated trial, before two separate juries as proposed by the United States, would present serious constitutional as well as practical problems. Were the case to be tried to a jury I agree that bifurcation in this manner would not be appropriate; however, my granting of the motion to strike the jury demand removes this obstacle to bifurcation.
I stated at the conference held on February 6 that if I concluded that the defendants had no right to a jury trial I would be inclined to bifurcate the trial into liability and cost phases. My proposal was for a liability trial in early May and a cost hearing sometime in the Fall, at which time clean-up will presumably be completed. Since that conference the generator defendants have advanced a new argument in opposition to bifurcation.
The generator defendants argue that bifurcation will necessitate duplicative testimony and unfairly prejudice them by compelling them, in essence, to try a portion of the government's case. As I stated at the conference, I am confident that no significant degree of duplication will be necessary. To the extent any testimony is relevant to both phases of the trial, it can be presented at the liability phase and merely referred to at the cost hearing if one is necessary. While I may find it necessary or helpful during the course of the cost hearing to review transcripts of prior testimony, certainly no prior testimony will need to be repeated.
The generator defendants' next objection is more difficult to articulate but, I believe, also presents no real obstacle to bifurcation. Plaintiffs have taken the position that, similar to most tort and contract litigation, liability under CERCLA can be imposed without reference to their costs incurred in cleaning up the site. Thus, at the liability phase of a bifurcated trial plaintiffs would not place into evidence any of their costs incurred. The generator defendants argue that because the statute imposes liability only for "costs incurred" a liability determination cannot be made for any given defendant without determining which costs have been incurred with respect to that particular defendant's wastes. If plaintiffs proceed as suggested above the generator defendants argue that in order to establish their affirmative defenses at the liability phase they will be compelled to present plaintiffs' damages case. Were the trial not bifurcated this would not occur.
Although the generator defendants do not say so directly they are apparently attempting to relitigate the issue of joint and several liability and to raise by way of a § 9607(b)(3) defense arguments previously rejected. That section provides in part as follows:
There shall be no liability under subsection (a) of this section for a person otherwise liable who can establish by a preponderance of the evidence that the release or threat of release of a hazardous substance and the damages resulting therefrom were caused solely by -- . . .
(3) an act or omission of a third party other than an employee or agent of the defendant, or than one whose act or omission occurs in connection with a contractual relationship, existing directly or indirectly, with the defendant . . . if the defendant establishes by a preponderance of the evidence that (a) he exercised due care with respect to the hazardous substance concerned, taking into consideration the characteristics of such hazardous substance, in light of all relevant facts and circumstances, and (b) he took precautions against foreseeable acts or omissions of any such third party and the consequences that could foreseeably result from such acts or omissions.