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ANTRIM MIN., INC. v. DAVIS

September 10, 1991

ANTRIM MINING, INCORPORATED, PLAINTIFF,
v.
ARTHUR A. DAVIS, SECRETARY, PENNSYLVANIA DEPARTMENT OF ENVIRONMENTAL RESOURCES; ET AL., DEFENDANTS.



The opinion of the court was delivered by: Muir, District Judge.

ORDER

Introduction

On June 14, 1991, Plaintiff Antrim Mining, Inc. (Antrim) filed a complaint against Defendants Arthur A. Davis, Secretary, Pennsylvania Department of Environmental Resources; the Pennsylvania Department of Environmental Resources; and "all other persons known or unknown acting for or on behalf of the named Defendants in their official capacity." On June 26, 1991, Antrim filed an amended complaint. Antrim seeks declaratory and injunctive relief to enjoin Defendants from enforcing two compliance orders issued November 16, 1990, and June 18, 1991 pursuant to the Pennsylvania Clean Streams Law, 35 P.S. §§ 691.1, et seq. The compliance orders require Antrim to treat and abate acid mine discharge flowing from an inactive underground mine complex underlying Antrim's surface mining operations. Antrim alleges that Defendants are barred from enforcing the compliance orders because Antrim previously was sued for the same alleged violations of the Clean Streams Law by the Pennsylvania Environmental Defense Foundation (the Foundation), a private environmental organization, and that that litigation was resolved by consent decree approved January 12, 1990. Pennsylvania Environmental Defense Foundation v. Antrim Mining, Inc., No. 89-0434 (M.D.Pa. Jan. 12, 1990). Antrim argues that Defendants who were not parties to the suit are barred from enforcing the compliance orders by the terms of the consent decree and by the doctrine of res judicata. Antrim also asserts pendent state claims contesting its liability under the Clean Streams Law. On July 8, 1991, Defendants filed a motion to dismiss the complaint. On July 9, 1991, Antrim filed a motion for a preliminary injunction. Both motions are ripe for disposition.

Antrim conducts surface coal mining operations in Duncan Township, Tioga County, Pennsylvania. A large inactive underground mine complex lies beneath a portion of Antrim's surface mining operations. The underground mine complex was operated in the late 1800s and early 1900s by mining companies other than Antrim. This matter concerns polluted water which flows out of the underground mine complex and into the Babb's Creek watershed. On December 2, 1988, the Foundation served notice of a citizens' suit against Antrim pursuant to the citizens' suit provisions of the Federal Clean Water Act, 33 U.S.C. § 1365(b)(1)(A), and the Pennsylvania Clean Streams Law, 35 P.S. § 691.-601(e). Neither the United States nor Defendants initiated legal proceedings and on April 26, 1989, the Foundation filed a complaint against Antrim alleging that Antrim illegally discharged polluted effluent from its surface mining operations into the underground mine complex from whence it flowed into the Babb's Creek watershed.

  Antrim asserts in its amended complaint that the parties
wished "to avoid the expense, delay and uncertainty of a trial
of complex and disputed issues" and therefore settled the
matter by way of a consent decree. Amended Complaint, ¶ 15. A
proposed consent decree was served on the United States
Department of Justice, the Administrator of the Environmental
Protection Agency, and Defendants. Following negotiations with
the Department of Justice, a modified consent decree was
submitted to this Court and approved on January 12, 1990. The
modified consent decree required Antrim to pay a civil penalty
of $10,000.00 to the United States Treasury; provided for the
creation of the Babb's Creek Watershed Pollution Abatement
Fund; and required Antrim to commence reclamation of its
surface mining operations, complete backfilling of areas
overlying the underground mine complex, cease coal extraction
on those areas, and monitor periodically the effluent flowing
from the underground mine complex. Paragraph 4 of the modified
consent decree provided in relevant part that:

   . . this Consent Decree constitutes a full and
  complete adjudication and settlement, including
  attorneys fees and expert fees, of the claims
  which were alleged or the civil claims which could
  have been alleged in this case and binds all
  parties or potential parties who had notice of the
  instant claims and this Consent Decree.

Pennsylvania Environmental Defense Foundation, No. 89-0434, slip. op. at 7 (M.D.Pa. Jan. 12, 1990). This Court retained jurisdiction over the matter to facilitate the implementation and enforcement of the decree. Id., slip op. at 2 (M.D.Pa. Sept. 19, 1990). Antrim claims that enforcement of the compliance orders will threaten its solvency and will prevent full compliance by Antrim with the terms of the modified consent decree.

Discussion

In construing a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6), the complaint must be liberally construed and viewed in the light most favorable to the Plaintiff. Gomez v. Toledo, 446 U.S. 635, 636 n. 3, 100 S.Ct. 1920, 1921 n. 3, 64 L.Ed.2d 572 (1980). The factual allegations contained in the complaint and every inference deducible therefrom must be accepted as true for the purposes of the motion. United States v. Mississippi, 380 U.S. 128, 85 S.Ct. 808, 13 L.Ed.2d 717 (1965). The Court must determine whether "under any reasonable reading of the pleadings, the plaintiff may be entitled to relief." Colburn v. Upper Darby Township, 838 F.2d 663, 665-66 (3d Cir. 1988), cert. denied, 489 U.S. 1065, 109 S.Ct. 1338, 103 L.Ed.2d 808 (1989). We should not dismiss Antrim's complaint at the pleading stage unless it appears beyond doubt that Antrim can prove no set of facts in support of its claim which would entitle it to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957). In light of these principles we will now address Defendants' motion to dismiss the complaint.

Antrim first asserts that Defendants are precluded from enforcing the compliance orders because the provision at ¶ 4 of the modified consent decree forecloses all future claims which could have been alleged and binds all persons who had notice of the claims and of the consent decree. Antrim argues that Defendants should have intervened and participated in the suit and should be bound by the modified consent decree. In Martin v. Wilks, 490 U.S. 755, 109 S.Ct. 2180, 104 L.Ed.2d 835 (1989), a case determining the scope of a consent decree, the Supreme Court reaffirmed the general rule that persons are not bound by a judgment unless they are parties to the litigation. The Court emphasized the principle that "everyone should have his own day in court." Wilks, 109 S.Ct. at 2184 (citing 18 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure, § 4449, p. 417 (1981) (18 Wright)). The Court held that in order for a person to be bound by a judgment he must be joined under Fed.R.Civ.P. 19, or intervene under Fed.R.Civ.P. 24. The fact that a person had an opportunity to intervene but chose not to do so is irrelevant. Id. at 2186. The burden lies on existing parties to bring into the litigation additional non-intervening parties. Id.

Antrim argues that Wilks is inapplicable here because the Court did not address the case where a consent decree contains a provision explicitly purporting to bind all potential parties. In our view, the law is clear that consent decrees can bind only parties, Id. at 2188, and, moreover, can bind only those parties who have agreed to the consent decree. See Firefighters v. Cleveland, 478 U.S. 501, 529, 106 S.Ct. 3063, 3079, 92 L.Ed.2d 405 (1986). The holding in Wilks was based on the requirements of the Federal Rules of Civil Procedure. Wilks, 109 S.Ct. at 2185. Because the Court held that parties may not bind non-parties by entering consent decrees, it follows that parties may not restrict the legal rights of non-parties by including in a consent decree provisions purporting to bind them. Antrim possessed no power to alter the rule set forth in Wilks merely by including language in the consent decree purporting to bind non-parties and Defendants are not bound by ¶ 4 of the modified consent decree.

Claim Preclusion

The Court in Wilks recognized that in some "limited circumstances," a non-party may be bound by a judgment if his interests are "adequately represented by someone with the same interests who is a party." Id. at 2184, n. 2 (citations omitted). Defendants do not appear to dispute Antrim's claim that the alleged violations of the Clean Streams Law cited in the compliance orders are based on the same facts and law which formed the basis for the prior suit brought by the Foundation. Antrim argues that even if Defendants are not bound by ¶ 4 of the consent decree, Defendants are precluded from enforcing the compliance orders because the Foundation adequately represented Defendants in the first suit and possessed the same interests as Defendants.

The Wilks exception relating to "adequate representation" appears to mirror the res judicata doctrine of "virtual representation." See Mann v. City of Albany, 883 F.2d 999, 1003 (11th Cir. 1989) (comparing Wilks exception to doctrine of virtual representation). The principle of virtual representation expands res judicata by broadening the concept of privity between parties to successive actions. In United States v. ITT Rayonier, Inc., 627 F.2d 996 (9th Cir. 1980), the court explained that a non-party may be barred by res judicata if a party in the first suit "is so closely aligned with its interests as to be its `virtual representative.'" Id. at 1003 (citations omitted). The doctrine of virtual representation, in turn, "closely resembles the common law theory of concurrent privity." Clark v. Amoco Prod. Co., 794 F.2d 967, 972-74 (5th Cir. 1986). "[Privity] designates . . . a person so identified in interest with a party to former litigation that he represents precisely the same legal right in respect to the subject matter involved. . . . Or . . . the term is sufficiently inclusive `under the federal law of res ...


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