(1) Hatco's cost recovery claim under CERCLA, (2) Hatco's contribution claim under the Spill Act, and (3) Grace's counterclaim under CERCLA.
Following the three and one-half week trial in July, an additional one week trial in October 1993 and the publication of two bench opinions of considerable length, replete with extensive findings of fact and conclusions of law, the Court entered judgment in favor of Hatco and against Grace on April 29, 1994, in an amount in excess of $ 12 million. Hatco had successfully established Grace's liability under CERCLA and the Spill Act. While achieving some degree of success with its divisibility defense to Hatco's CERCLA claim, Grace failed to establish Hatco's liability on the CERCLA contribution claim.
On May 12, 1994, Grace filed a Notice of Appeal of the final judgment with the Third Circuit. On May 31, 1994, Grace filed a civil appeal case statement, in which it identified the following as a proposed issue to be raised on appeal: "a party seeking contribution under § 113 of CERCLA and the New Jersey Spill Act is entitled to a jury trial."
On the pending motion, Grace seeks to complete the record and asserts that the Court failed to record in a formal order its decision to deny the demands for a jury trial. In opposition, Hatco asserts that Federal Rule of Appellate Procedure 10 does not authorize the type of relief requested by Grace and that the consequences of the failure to preserve the record on the jury trial issue must fall upon Grace.
A. Applicability of Federal Rule of Appellate Procedure 10(e)
As a threshold matter, the Court must reject Hatco's argument that Rule 10(e) is not applicable in the instant case. The district court may supplement the record on appeal in two instances under Rule 10(e): (1) when "any difference arises as to whether the record truly discloses what occurred in the district court," and (2) when "anything material to either party is omitted from the record by error or accident or is misstated therein." Rule 10(e) provides a mechanism for ensuring that the record reflects accurately what transpired in the district court. It does not authorize a district court "to add to the record on appeal matters that did not occur there in the course of proceedings leading to the judgment under review." Fassett v. Delta Kappa Epsilon, 807 F.2d 1150, 1165 (3d Cir. 1986), cert. denied, 481 U.S. 1070, 107 S. Ct. 2463, 95 L. Ed. 2d 872 (1987).
Hatco contends that Grace cannot invoke either prong of Rule 10(e) here. As to any difference between the record and what truly occurred, Hatco argues there is no such difference. At the January 19 conference, the Court never expressly denied the demands for a jury trial, but only indicated that it would deny the requests. Therefore, the record accurately reflects what transpired -- the Court never expressly denied the jury demands and the record contains no order denying the demands.
As to the omission of a material matter, Hatco simply states that there was no "error or accident" here -- there is no order in the record because Grace failed to press the Court for an order or ruling on the jury trial issue. Hatco's arguments deserve little consideration. This motion is not an attempt ex post by Grace to include on appeal issues that were not before this Court. The parties were asked by the Court to brief the jury trial question. The parties complied, and then some, by filing two briefs apiece.
At the January 19 conference, the Court stated that it would -- or intended to -- convene a non-jury trial in July 1993. It is irrelevant whether it was or was not an express order, off the record, denying the demands. Hatco's submission on March 10, 1993, regarding new case law, indicates that the Court most likely was expressing its intention, rather than its final decision, at the January 19 conference.
Nonetheless, other events subsequent to the January 19 conference clearly indicate that the parties perceived that the Court had denied the jury demands. By April 15, 1993, counsel for both parties consented to CMO No. 3, which provides for the filing of proposed findings of fact and conclusions of law after trial -- submissions reserved specifically for non-jury trials. See Hill & Range Songs v. Fred Rose Music, Inc., 570 F.2d 554, 558 (6th Cir. 1978) (stating that "it is not unusual for the court in a non-jury case to request counsel for both parties to submit proposed findings of fact and conclusions of law"). Prior to the execution and entry of CMO No. 3, neither Hatco nor Grace made any attempt to withdraw their jury demands. See Fed. R. Civ. P. 38(d) (providing that "[a] demand for trial by jury . . . may not be withdrawn without the consent of the parties").
Consequently, this Court finds that Grace has properly invoked Rule 10(e) to complete the record in this litigation. The absence of a recorded order denying the parties' jury demands clearly reflects a difference of what actually transpired, and is most likely the result of "accident or error" by the parties and the Court.
If Hatco wishes to maintain its position that Grace waived its jury demand, it may do so before the Third Circuit.
B. The Demand and Denial of a Trial by Jury
Having concluded that Grace's application under Rule 10(e) is appropriate, the next step is to determine the substance of the order to be entered. Grace has submitted to the Court a proposed order which simply states that "Grace's motion for a jury trial, which was filed in November of 1992, is deemed denied as of July 12, 1993, the date when this action commenced." Hatco argues, and the Court agrees, that such a conclusory order, without explanation, oversimplifies a difficult decision made all the more complex because it must come in hindsight after certain events and the trial have taken place. Consequently, the Court will not summarily sign Grace's proposed order.
Timing is a factor in the Court's analysis. Between the time the parties submitted their briefs in late 1992, and the non-jury trial began in July 1993, the complexion of the case changed markedly. Four of the parties' claims ultimately were not tried: Hatco's common law contract and strict liability claims and Grace's common law indemnification and Spill Act contribution counterclaims. However, the arguments briefed by the parties in late 1992 reflect the inclusion of these claims in the case.
The Court will not retroactively resolve the jury trial question with any of these untried claims in mind. Grace identifies as a proposed issue on appeal its right to a jury trial on its Spill Act contribution claim. The Court dismissed this counterclaim on summary judgment. Whether this counterclaim could have or would have been tried to a jury has no relevance to the issue at hand. The Court tried only the following claims: Hatco's CERCLA and Spill Act claims and Grace's CERCLA contribution counterclaim. Because these were the only issues tried to the Court on the merits, the Rule 10(e) order will reflect a denial of the jury trial demands with respect to these claims only.
1. The Seventh Amendment -- Law Versus Equity
The Seventh Amendment to the United States Constitution provides that "in suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved . . . ." U.S. Const. amend VII. The phrase "suits at common law" refers to actions in which legal rights are adjudicated as opposed to actions where equitable rights alone are at issue and equitable remedies are administered. Chauffeurs, Teamsters & Helpers, Local No. 391 v. Terry, 494 U.S. 558, 564, 110 S. Ct. 1339, 1344, 108 L. Ed. 2d 519 (1990).
The Seventh Amendment right to a jury trial also extends to causes of action created by Congress. Id.; see also Curtis v. Loether, 415 U.S. 189, 194, 94 S. Ct. 1005, 1008, 39 L. Ed. 2d 260 (1974) (concluding that Seventh Amendment requires jury trial on demand "if the statute creates legal rights and remedies, enforceable in an action for damages in the ordinary courts of law"). To determine whether the right to a jury trial exists under particular CERCLA provisions, a court must assess (1) the nature of the issues to be raised and remedies sought at trial, and more importantly, (2) whether the remedies sought are legal or equitable. Wooddell v. International Brotherhood of Elec. Workers, Local 71, 502 U.S. 93, 112 S. Ct. 494, 497-98, 116 L. Ed. 2d 419 (1991).
2. Hatco's CERCLA and Spill Act Claims
The Court need not address the jury trial demand with respect to Hatco's Spill Act contribution claim. Hatco did not demand a trial by jury on its Spill Act claim, with the exception of the treble damages issue which was not tried. Therefore, as to Hatco's claims, the Court need only consider the right to a jury trial in relation to the CERCLA cost recovery claim.
The case law is generally uniform in holding that CERCLA cost recovery actions, like Hatco's under 42 U.S.C. § 9607(a)(4), are to be tried to the court because they seek restitution, and restitution is an equitable remedy. United States v. Northern Pharmaceutical & Chem. Co., 810 F.2d 726, 749 (8th Cir.), cert. denied, 484 U.S. 848, 108 S. Ct. 146, 98 L. Ed. 2d 102 (1986); Greene v. Product Manufacturing Corp., 842 F. Supp. 1321, 1322 n.1 (D. Kan. 1993); American Cyanamid Co. v. King Indus., Inc., 814 F. Supp. 209, 213-14 (D.R.I. 1993). Hatco was not entitled to a jury trial on its CERCLA claim; Grace was not entitled to rely on Hatco's demand.
3. Grace's CERCLA Counterclaim
The right to a jury trial is a much closer question on Grace's CERCLA contribution claim under 42 U.S.C. § 9613(f) than on Hatco's cost recovery claim under 42 U.S.C. § 9607 (a). The existing law is not so clear with respect to CERCLA contribution claims. CERCLA provides:
any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) . . . . Such claims shall be brought in accordance with this section and the Federal Rules of Civil Procedure and shall be governed by Federal law. In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate . . . .