The opinion of the court was delivered by: Gerry, Chief Judge.
The parties are presently before the court upon third-party defendants'
motion to sever and stay the third-party claims filed against them, and
upon the United States' motion for amendment of a case management order.
Plaintiffs, the United States and the State of New Jersey, brought this
case pursuant to section 107(a) of the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA"),*fn2
42 U.S.C. § 9607 (a), to recover response costs expended at the Helen
Kramer Landfill in Mantua, New Jersey. The United States has sued
twenty-nine defendants, and New Jersey has sued over fifty defendants
(some of whom are also named as defendants by the United States).
On November 20, 1990, the primary defendants in the United States'
action filed third-party claims against 289 third-party defendants, and
the primary defendants in New Jersey's action filed third-party claims
against 275 third-party defendants. These third-party complaints seek
contribution pursuant to section 113(f) of CERCLA, 42 U.S.C. § 9613
(f). The third-party defendants now move to sever and stay these
third-party complaints from the claims asserted by plaintiffs against the
defendants/third-party plaintiffs ("primary claims").
The United States filed a cross-motion for amendment of case management
order. Essentially, it seeks to trifurcate this action — with the
first phase limited to all issues of liability in the primary claims, the
second phase limited to issues of recovery of plaintiffs' past and future
response costs, and the third phase consisting of all remaining issues
including the third-party claims. In the alternative, the United States
asks that we at least grant third-party
defendants' motion to sever and stay the third-party claims.
1. Motion to Sever and Stay Third-Party Claims
Third-party defendants move to sever and stay the third-party claims,
pursuant to Federal Rules of Civil Procedure 14(a) and 42(b), until
after the adjudication or settlement of the plaintiffs' claims against
the primary defendants. They argue that the severance and stay would
prevent the derailing of the progress made to date in the primary
litigation, preclude the unnecessary litigation of potentially moot
claims, prevent undue complication of the primary suit and promote the
likelihood of an early settlement. Therefore, the severance and stay
would promote "the fundamental policies underlying CERCLA —
expeditious recovery of money to the Fund." Third-Party Defendants'
Memorandum in Support of Motion to Sever and Stay, at 1.
Defendants/third-party plaintiffs counter that, in fact, the policies
underlying CERCLA will be promoted if the third-party claims are not
severed or stayed. They argue that severance would encourage delay and
undermine judicial economy by requiring separate, largely duplicative
proceedings. Defendant/third-party plaintiff Atochem argues that a
severance and stay also would scuttle the case management scheme crafted
by Magistrate Judge Jerome B. Simandle in this case, and would decrease
the chance of settlement-because third-party defendants will have no real
incentive to participate in meaningful settlement negotiations.
a. Power of the Court to Sever and Stay
Third-party defendants' motion is based upon Rules 42(b) and 14(a).
Rule 42(b) provides that "[t]he court, in furtherance of convenience or
to avoid prejudice, or when separate trials will be conducive to
expedition and economy, may order a separate trial of any claim,
cross-claim, counterclaim, or third-party claim." Rule 14(a) provides
that "[a]ny party may move to strike the third-Party claim, or for its
severance or separate trial."
A district court has inherent power to "control the disposition of
cases on its docket with economy of time and effort for itself, for
counsel and for litigants." Landis v. North Am. Co., 299 U.S. 248, 254,
57 S.Ct. 163, 165-66, 81 L.Ed. 153 (1936). See also Manual for Complex
Litigation 2d ("MCL 2d") § 20.1, at 6 (1985). Rules 14(a) and 42(b)
supplement this power and entrust the decision of whether issues should
be separated for trial to the discretion of the trial court. See, e.g.,
Bandai American Inc. v. Bally Midway Mfg. Co., 775 F.2d 70, 74 (3rd Cir.
1985), cert. denied, 475 U.S. 1047, 106 S.Ct. 1265, 89 L.Ed.2d 574
(1986). See also Gold v. Johns-Manville Sales Corp., 723 F.2d 1068, 1077
(3rd Cir. 1983) ("The power to stay proceedings is incidental to the
power inherent in every court to schedule disposition of the cases on its
docket so as to promote fair and efficient adjudication. How this can
best be done is a decision properly vested in the trial courts.")
In addition, the specific statutory provision governing the third-party
claims in this case also leaves the decision whether to sever to the
discretion of the trial judge. CERCLA Section 113(f)(1),
42 U.S.C. § 9613(f)(1), provides that
[a]ny person may seek contribution from any other
person who is liable or potentially liable under
section 9607(a) of this title, during or following
any civil action under section 9606 of this title or
under section 9607(a) of this title. Such claims
shall be brought in accordance with this section and
the Federal Rules of Civil Procedure, and shall be
governed by Federal Law.
On its face, the statute expresses no preference either way with regard
to whether the contribution claims should be severed; rather, it provides
only that those claims may be brought "during or following" the primary
Although they admit these general propositions, third-party defendants
in passing SARA,*fn3 Congress expressed a preference that third-party
contribution claims under CERCLA be severed from the primary claims. As
support, they cite two proposals considered by Congress: (1) an original
Senate Bill under which claims for contribution could be brought only
after the completion of all proceedings in the primary action, and a
report accompanying that Bill filed by the Committee on Environment and
Public Works, the Senate Committee with primary jurisdiction over
environmental legislation; and (2) an EPA and Justice Department proposal
which provided that although the contribution claims could be filed
during the primary action, the hearing of those claims would be stayed
until resolution of the primary suit.*fn4 While third-party defendants
recognize that neither of these proposals was ultimately adopted by
Congress, they argue that certain statements made by the sponsors of the
amendment ultimately adopted, Senators Stafford and Thurmond, make clear
that the statute embodied the views of the Committee on Environment and
Public Works and the administration (EPA/Justice Department) that "joint
trial of massive third-party litigation is inappropriate where the
governmental entity is the plaintiff in the main action." Original
Brief, at 11-12. From this, they argue that "the legislative history
clearly shows that Congress preferred that the discretion vested in the
district courts generally be exercised" in favor of severance. Id. at
Ultimately, however, we find that the legislative history is
inconclusive. As third-party plaintiffs point out, if Congress had wished
to express such a preference, it easily could have drafted a provision
which reflected that intention. See Barnes v. Cohen, 749 F.2d 1009, 1013
(3rd Cir. 1984) ("in interpreting a statute, the starting point is, of
course, the language of the statute itself"); Albert v. Abramson's
Enterprises, Inc., 790 F.2d 380, 381 (3rd Cir. 1986) ("It is presumed
that the legislative purpose is expressed by the ordinary meaning of the
words used"). Moreover, the legislative history includes the expression
of views contrary to the ones cited by third-party defendants. See report
by House Committee on Energy and Commerce, H.R. 2817 Report 99-253, Part
I, at 80; statements by Senator Simpson and witnesses before the Senate
Judiciary Committee, Hearings Before the Committee on the Judiciary, 99th
Cong. 1st Sess. at 77-78, 147-151, 452-453, 512-514. While the parties
dispute the weight to ...