YOUNG, D.J.
This case concerns the release of polychlorinated biphenyl ("PCBs") onto the banks and streambed of the Middle and Lower portions of the Mother Brook Stream (the "Mother Brook") located in the Hyde Park neighborhood of Boston, Massachusetts. Following a directive from
On November 12, 2010, Thomas & Betts filed a complaint against New Albertson's alleging that New Albertson's had ceased making interim payments to Thomas & Betts, and asserting claims for breach of contract and breach of the duty of good faith arising out of New Albertson's failure to reimburse Thomas & Betts for its share of remediation costs and for the invoices paid to the environmental cleanup contractors. Compl. 1-2, 6-8. On January 18, 2011, New Albertson's filed breach-of-contract counterclaims against Thomas & Betts related to the Agreement Amount as well as a counterclaim under the Massachusetts Oil and Hazardous Material Release Prevention Act, Mass. Gen. Laws ch. 21E ("Chapter 21E") §§ 4 and 4A, for reimbursement, contribution, or an equitable share of the cleanup costs it had separately incurred. Ans. Countercl. New Albertson's, ECF No. 7. In response, Thomas & Betts filed its own Chapter 21E counterclaims, in addition to counterclaims alleging breach of contract and breach of the duty of good faith related to New Albertson's' failure to cooperate with Thomas & Betts in completing the Mother Brook remediation. Thomas & Betts Corp.'s Ans. Am. Countercl., ECF No. 45. Thomas & Betts also filed a third party complaint asserting Chapter 21E claims against Alfa Laval and the Charter School on December 8, 2011. Third Party Compl. Boston Renaissance Charter School, Inc., Boston Renaissance Charter Public School, Alfa Laval, Inc., ECF No. 83.
By the time trial commenced, the litigation had become primarily a Chapter 21E contribution action involving several other counterparties abutting Mother Brook. The original contract causes of action, though never waived, had become but a minor subplot. At trial, Thomas & Betts, as the primary plaintiff, was the first party to present evidence. After Thomas & Betts concluded presenting its evidence, New Albertson's moved for a partial directed verdict on Thomas & Betts's breach of contract claims and counterclaims insofar as these related to the invoices admittedly paid by New Albertson's. Mot. Directed Verdict Thomas & Betts Corp.'s Contract Claims Non-Payment Certain Shaw Environmental Invoices 1, ECF No. 698. The Court allowed this motion for partial direct verdict. Trial Tr. vol. 2, 88:2-4, Dec. 9, 2015, ECF No. 782.
Toward the end of the trial, Thomas & Betts submitted proposed jury instructions including a proposed charge related to the breach-of-contract and breach-of-duty-of-good-faith claims that both Thomas & Betts and New Albertson's had asserted. Pl.'s Proposed Jury Instr.'s 25-29, ECF No. 691. Neither the Court's December 18, 2015 jury instructions nor the verdict form for the jury addressed the breach of contract claims and counterclaims. Trial Tr., 35:9-91:21, Dec. 18, 2015; Jury Verdict.
On December 22, 2015, at the conclusion of a six-week trial, the jury returned its verdict, which consisted of answers to three questions contained on the jury verdict form. On question 1, the jury found that the plaintiff Thomas & Betts Corporation ("Thomas & Betts") had met its burden of proving that it had incurred $12,703,322.52 in reasonable and necessary environmental response costs. Jury Verdict 1, ECF No. 801. The jury assigned Thomas & Betts responsibility for 85% of these costs.
Following the verdict and the ensuing judgment, all parties in this action filed post-trial motions, including motions for a new trial, motions to alter or amend the judgment, and motions for judgment as matter of law.
In its motion for a new trial pursuant to Fed. R. Civ. P. 59(b), Thomas & Betts raised six grounds, denominated as (A) through (F). Mem. Thomas & Betts 1-2. The Court denied this motion on March 29, 2016. Order. The Court summarily rejected arguments (B), (C), (D) and (F)
When addressing a motion for a new trial, "[a] district court may set aside the jury's verdict and order a new trial only if the verdict is against the law, against the weight of the credible evidence, or tantamount to a miscarriage of justice."
Thomas & Betts has not convinced the Court that the absence of a breach-of-contract verdict question (and the absence of related jury instructions) constitutes a miscarriage of justice requiring a new trial.
In its motion, Thomas & Betts argues that New Albertson's breached its duty to cooperate under the Agreement "in good faith and with due haste to implement [MassDEP]'s expectations." Mem. Thomas & Betts 4 (quoting Trial Ex. 166 ¶ 1). Specifically, Thomas & Betts states that New Albertson's failed to meet its obligation to provide access to its property so that Thomas & Betts could perform remediation work on the Mother Brook banks and streambed.
Its argument ignores the realities of the actual trial that took place. While the Agreement was introduced in evidence (along with many other documents to which no objection was made), no party made any substantive reference to it throughout this long trial. This is unsurprising, since the Agreement does nothing more than codify the signatories' duties under Chapter 21E and provide for certain interim payments from New Albertson's to Thomas & Betts.
It was only at the charge conference, upon seeing the proposed jury verdict slip, that Thomas & Betts requested a separate jury question addressing New Albertson's duties under the Agreement. The Court demurred on the ground that such a question would add needless complexity to an already complex matter and that resolution of the Chapter 21E issues would necessarily resolve any contract questions.
Finally, there was scant evidence presented regarding the damages Thomas & Betts suffered as a result of this alleged breach of contract.
During the jury charge, the Court instructed the jury with respect to the Agreement Amount as follows:
Trial Tr., 61:24-62:24, Dec. 18, 2015. Thomas & Betts argues that, in light of the above instructions and the jury verdict form that excluded breach-of-contract questions, it is impossible to know whether and by how much the jury expected that New Albertson's's recovery of the Agreement Amount would be impacted by the liability allocation under question 2 in the jury verdict. Mem. Thomas & Betts 14.
There is no cause for confusion. Reading the jury's response to questions 1 & 2 together, the jury found the entire amount expended by Thomas & Betts
Both Thomas & Betts and New Albertson's filed post-trial motions and supporting memoranda requesting the amendment of the December 31, 2015 judgment pursuant to Fed. R. Civ. P. 59(e) and Mass. Gen. L. c. 231, § 6B or § 6H, to reflect the award of prejudgment interest. Thomas & Betts Corp.'s Mot. Amend J., ECF No. 820; Mem. Supp. Thomas & Betts Corp.'s Mot. Amend J. ("Thomas & Betts Mem. Amend"), ECF No. 821; New Albertson's Mot. Alter; Mem. Supp. New Albertson's, Inc.'s Mot. Alter, Amend Correct J. ("New Albertson's Mem. Amend"), ECF No. 809. Given the structure of the jury verdict, Thomas & Betts requests prejudgment interest from Alfa Laval and the Charter School.
These requests raise three issues: whether awarding prejudgment interest is appropriate in a Chapter 21E action; whether Thomas & Betts delayed the proceedings such that, even if authorized by law, the Court should exercise its discretion and reduce any award to it; and what the correct date to begin the accrual of interest. These will be discussed in turn.
In a diversity lawsuit in federal court, the award of prejudgment interest is a question of substantive law governed by state law — in this case, Massachusetts law.
Mass. Gen. Laws ch. 231 § 6B. Section 6C includes a similar provision for contract actions.
In opposing Thomas & Betts's request for prejudgment interest, Alfa Laval and the Charter School (the "opposing parties") argue that prejudgment interest ought not be awarded in Chapter 21E actions. Boston Renaissance Charter School, Inc.'s Mem. Opp'n Thomas & Betts' Mot. Alter Amend J. ("Charter School Opp'n") 3, ECF No. 836; Alfa Laval Inc.'s Opp'n Thomas & Betts Corp.'s Mot. Amend J. ("Alfa Laval Opp'n") 3, ECF No. 848. In other words, they argue that Chapter 231 does not apply to Chapter 21E actions.
While the opposing parties are correct that Chapter 21E does not include language specifically addressing the award of prejudgment interest, and that speaking of "damages" in the Chapter 21E context is arguably inaccurate,
The opposing parties next argue that, even if Chapter 231 were to apply to Chapter 21E actions, the Court ought not award prejudgment interest in this case because Thomas & Betts is in large part to blame for the protracted litigation and awarding prejudgment interest at a 12% interest rate would amount to a "windfall" for Thomas & Betts, Mother Brook's main polluter. Charter School Opp'n 3-4; Alfa Laval Opp'n 1. The opposing parties argue that Thomas & Betts both refused to comply with certain notice-and-procedure requirements, and that, more generally, it used procedural maneuvers during litigation that resulted in delay and unfairness.
Even after deciding that Chapter 231 applies, the Court remains empowered to ensure that a "liberal award of prejudgment interest [does not] result in a windfall for plaintiffs amounting, in essence, to an award of punitive damages."
The Charter School also faults Thomas & Betts for delaying the resolution of the dispute by means of procedural maneuvering (filing an action for breach of contract first and only later filing Chapter 21E claims); disclosing for the first time only during closing arguments the amount it contended the Charter School ought contribute — 15%; and making settlement offers to the Charter School that were magnitudes away from the 1% liability the jury eventually assigned the Charter School. Charter School Opp'n 2d 5-8. The delays the Charter School attributes to Thomas & Betts, however, are more akin to litigation wrinkles associated with complex litigation strategy and less like the discrete and measurable delays justifying reductions in prejudgment interest in other cases.
Although it may seem unfair to award significant prejudgment interest to the party most responsible for the pollution, any fairness concerns have already been addressed by the jury's apportionment of the liability. The First Circuit has discussed this very issue, in the context of a federal statute, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S.C. §§ 9601-9675, that serves a similar function to Chapter 231, covering environmental contribution and cost recovery actions:
Lastly, the opposing parties argue that interest should run from the date when the trial commenced on November 16, 2015, and not from the commencement of the action, as required by Sections 6B and 6H, because of the unique features of this action. Charter School Opp'n' at 15-16. The Court does not agree that the circumstances warrant the departure. Previous Massachusetts case law has established that prejudgment interest must be computed from the initial filing of the complaint and not from the date when a third party was added to the action.
As far as New Albertson's's requests for prejudgment interest are concerned, Thomas & Betts opposes only the award of prejudgment interest on the Agreement Amount, arguing that it is impossible to tell what the jury intended to do with the Agreement Amount. Thomas & Betts Corp.'s Opp'n New Albertson's, Inc.'s Mot. Alter, Amend Correct J. ("Thomas & Betts Alter Opp'n") 2, ECF No. 830. As discussed
For the foregoing reasons, the Court denied Thomas & Betts's motion for a new trial and granted Thomas & Betts's and New Albertson's' requests for prejudgment interest. ECF No. 890.
In its memorandum, Thomas & Betts argues that it has introduced such evidence by pointing to the testimony of one of the defendants' experts at trial, Mr. Pierdinock, who testified that New Albertson's delayed access to its property for Thomas & Betts's remediation crew and that this delay resulted in $3,600,000 in additional costs for Thomas & Betts. Mem. Thomas & Betts 1. Later on, in its reply brief, Thomas & Betts attempts to buttress its argument by selectively referencing Mr. Peirdinock's answers during his cross-examination — in particular his confirmation that the $3,600,000 excess costs on top of the reasonable costs were a result of the "delay." Thomas & Betts Corp.'s Reply Br. Supp. Mot. New Trial ("Thomas & Betts Reply Br.") 3-4, ECF No. 877; Trial Tr. vol. 2, 76:5-9, Dec. 9, 2015, ECF No. 782.
This is an attempt to twist Mr. Pierdinock's testimony out of all relationship to realty. Mr. Pierdinock actually testified that, even taking into account access delays, Thomas & Betts's reasonable costs should have been
In its reply brief, Thomas & Betts attempts to offer another example of evidence submitted at trial that could have allowed the jury reasonably to assess damages under the contract. Thomas & Betts Reply Br. 4-5. Thomas & Betts points to the testimony of its own expert, Mr. Mitchell, placing the cost of the water diversion system for Middle Mother Brook at $42,000 per week.
This too fails to create a miscarriage of justice because this theory was never adverted to at trial. Further, this is a completely new theory for the calculation of damages that Thomas & Betts offered for the first time in its reply brief and that is unrelated to any of the arguments made by New Albertson's in opposition to Thomas & Betts's motion for a new trial. Thomas & Betts cannot raise for the first time in the reply brief new arguments of error that could have been made in the memorandum supporting its motion.
There is some small discrepancy between the principal amounts reported by Thomas & Betts and New Albertson's in their briefs requesting prejudgment interest and the amounts reported on the Court's Judgment. J. Civil Case. In this Memorandum, for the sake of simplicity, the Court discusses the numbers as reported by the parties. The correct principal and prejudgment interest values, to the cents, are reported in the Court's March 29, 2016 order. ECF No. 890.
