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July 8, 1991


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 action.

Although they admit these general propositions, third-party defendants argue that, 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 12.

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 ...

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