Reply Brief — Monsanto Co. v. United States

|. Supreme Court, U.S.

| FyLED

MAY 26 1989

SPANIOL, JR.

vw

CLERK

No. 88-1404 —

—

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1988

MONSANTO COMPANY, ALLIED-SIGNAL, INC.

AND EM INDUSTRIES, INC.,

Petitioners,

Was

UNITED STATES OF AMERICA,

SOUTH CAROLINA DEPARTMENT OF HEALTH

AND ENVIRONMENTAL CONTROL,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

FOURTH CIRCUIT

REPLY BRIEF FOR THE PETITIONERS

George C. Freeman, Jr.

(Counsel of Record)

Alffred R. Light

Thomas E. Knauer

Hunton & Williams

707 E. Main St.

Richmond, Virginia 23212

(804) 788-8363

May 26, 1989

TABLE OF CONTENTS

NOONE CIID acc iscdscccstnsnieacnevnnenssasnncaeinesnanducuse l

ee NE BI sarees sisiisisaendanicdancuababinyicdansnneisianiandens 4

The Implications of the Secret Settlements ...................... 7

EAN IIIE ists Suadaicunseduncschscaassmasisaisoinuannncosancieoasceciated 10

PRIIIEAG ssthatinada csnesinaacetecsceacenarasansssnioiinnowdatitenpeanenaden A-1

TABLE OF AUTHORITIES

Chan v. Korean Air Lines, 109 S.Ct. 1676 (1989)........ccc0ccc000. 7

Kelly v. United States, 23 Env’t Rep. Cas. (BNA)

DN MMIII, BOPBID oo. 6ssccccsnnseshscsesesscasoonvassedcecanscecs 4

Liberty Mutual Insurance Co. v. Wetzel, 424 U.S. 737 (1976) 1

Mola Development Corp. v. United States,

No. CV82-0819-RMT (C.D. Cal. May 5, 1986) .0.....00..... +

United States v. Distler, No. 88-0201-L (J) (W.D.

aang cssciipechivenduanecieenmianseronias 3

United States v. Halper, 109 S.Ct. 1892 (1989) ..cececeeeeeeeee 10

United States v. Monsanto, 858 F. 2d 160 (4th Cir. 1988)........ 2

United States v. Seymour Recycling Corp., 686 F. Supp.

es ssassnnanawannes 3

United States v. South Carolina Recycling & Disposal, Inc.,

oe i ed ad | | ne 8

Statutory Provisions

Comprehensive Environmental Response, Compensation, and

Liability Act of 1980 (“CERCLA”), as amended by

Superfund Amendments and Reauthorization Act (“SARA”)

Pub.L. No. 99-499, 100 Stat. 1613 (1986), 42 U.S.C.

§§ 9601-9675 (1982 & Supp. IV 1986) oo... passim

Section 101(21), 42 U.S.C. § 9601(21)

UU MN EY POD vicscscnnccccneccscncnaceecsoias 7

Section 107(a), 42 U.S.C. § 9607(a)

ee 7

=

Section 107(a)(3), 42 U.S.C. § 9607(a)(3)

CRNA, Tor ND asnchridchesiacanchenaeneniauinitabcrickexsmseniae 5

Section 107 (b)(3), 42 U.S.C. § 9607(b)(3)

I ee II saccade cevcsiehnnhipicicdcniscnteedniceapes 5

Section 113(f), 42 U.S.C. § 9613(f)

(1982 & Supp. IV 1986) .......... Maucananeninciedien 3

Section 113(f)(1), 42 U.S.C. § 9613((1)

Ce Oe Se Fe, CD shtcchicrncncaretiscinncesiness 1,7

Section 113(f)(2), 42 U.S.C. § 9613(f)(2)

CREE Ge I TY TSG) cvscevvccccncnsssncasseniesces a

Section 114(b), 42 U.S.C. § 9614(b) (1982

PI EW CUMIN ciccascsosessacescsnecetchvocaserasesacnce 8

Rules

Perak TGS OE CVEE FCOIIIS sa ccsisniccrcnnsestnstrcascconccosancesonseess 2

PNNI SOI psi hh Cranage cc ilaens cde cabscensens Meee

Miscellaneous

6 J. Moore, Federal Practice (2d ed. 1988)

Be TE cichccinsansatinndclnntadacnuissecsbiaidadsediabieigacanbeabeanscaiiuieen 2

RE ina sa tank ts Gala asullat aden ean ecadadhakiacoeabesendoimienaas ]

OP SIIINEE cUtstakas sist cin dlsbecccciaigasdaahaudastabeasammamidaaanmpneimamec ones 2

Ca, CUI, FAMINE FE CED dissscoccccennanconconscandcccnaccasecconinas 6

Restatement (Second) Of Torts (1985)..................scccsssccssssseees 4,5

II Gr ro doa cael anmaeaneeriemniaioralan 5,6

I EAA CE oacincnccstnossencsssieicantrnesinceecnnens 5

RIE ATR AA Ree OILS MeO PL REISE REDE CEE 5

Ne EF CHIN assis sernensnnsscnnananniasanienavanan 5

ie RN. SIGs: NTI, comsncccanpcenonacabbeancasancubeatoiapahibvaeapitanidnties: 5

-ii-

PETITIONERS’ REPLY BRIEF

Pursuant to Rule 22.5, Petitioners respond to (1) Respondents’

restatement of the questions presented, (2) their allegation that the

district court treated Petitioners “claims” against the plaintiffs as

“abandoned”, (3) their claim for preferential treatment simply be-

cause the Government was a plaintiff and (4) the implications of

both governments’ disclosures of their heretofore secret settlements

with each other and their agencies.

The Government’s rewording of the questions presented

shows that it has no substantial defense on the merits to Petitioners’

arguments.

Mandatory Bifurcation

The Government recasts Petitioners’ first question to imply

that Petitioners argue that, as an abstract matter, courts do not have

the power to mandate bifurcation of CERCLA liability and contri-

bution issues into two separate trials. That is a straw man. Petition-

ers’ primary argument is that where the plaintiff also contributed to

the harm, the defendant may assert the plaintiff’s share in causing

the harm as a defense to the scope of defendant’s liability. This

defense is not a severable contribution claim. The court erred in

treating Petitioners’ partial defenses as separate “claims” which did

not have to be considered prior to entry of final judgment. See

Liberty Mutual Insurance Co. v. Wetzel, 424 U.S. 737, 743-44

(1976); 6 J. Moore, Federal Practice J 54.33[2] (2d ed. 1988).

Bifurcation into separate suits was also inappropriate in this

case for three other reasons. First, CERCLA actions are equitable

proceedings and, as Judge Widener said in his dissent, it is the

“universal and unvarying rule that the court will decide all matters in

dispute and decree complete relief.” Second, CERCLA § 113(f)(1)

also commands that:

. since the matter was brought before the

district court, that court had no discretion but to

decide the question. To repeat, the discretion is

ee

in the party to make the claim, not in the district

court to defer decision.

Widener, J., dissenting, 858 F.2d at 177. Pet. App. B-29. Third,

bifurcation into two separate suits was inappropriate because the

plaintiffs were also “responsible parties” under CERCLA and,

applying traditional principles of common law, since they did not

carry the burden of apportionment, defendants should not have been

held liable for all of the costs.

Petitioners’ additional, “fall back,” argument is that even if

their assertion of plaintiffs’ contribution to the harm must be

regarded as a “claim,” while the court had discretion to require two

Separate trials, its discretion was limited by the Federal Rules of

Civil Procedure. The Government concedes that the court did not

make the required certification under Rule 54(b), e.g., “that there is

no just reason for delay,” prior to entry of final judgment. U.S. Br.

10 n.7. Absent this requisite determination, the judgment of the

court of appeals would remain interlocutory however it might be

styled. 6 J. Moore, Federal Practice 9§ 54.28[2], 54.42 (2d ed.

1988). The “judgment” would not be a final judgment within the

meaning of the Federal Rules and the court of appeals would have

lacked jurisdiction to hear the appeal, as the United States concedes.

U.S. Br. 10 n.7.'

: The Government itself invoked the appellate jurisdiction of the Fourth

Circuit in a cross-appeal not the subject of this petition. See United States v.

Monsanio, 858 F. 2d 160, 175 (4th Cir. 1988) (Pet. App. B-26).. But it never

moved to dismiss the counterclaims for contribution or referred to them in the

order it drafted for the district court to which it refers. U.S. Br. 6 n.3 (referring

to Pet. App. G-3). Below, the Government argued, “To the extent that the

generators can be said to have presented contribution claims to the district

court, they were clearly denied, without prejudice to their assertion in a later

action, in the district court’s order of February 23, 1984... That ruling, of

course, was incorporated in the final judgment.” Joint Answer of the United

States and South Carolina Department of Health and Environmental Control to

Petitions for Rehearing and Suggestion for Rehearing in Banc, United States v.

Monsanto, Nos. 86-1261(L), 86-1263, 86-1265 (4th Cir., filed Oct. 8, 1988), at

11 n.4. Having deferred consideration of contribution claims to a separate

action in the 1984 order it drafted for the district court, the Government

apparently saw no need to refer to them in the later order, which it also drafted.

. +

Respondents struggle in separate ways to solve the Rule 54(b)

dilemma that they themselves have created by their mischaracteriza-

tion of Petitioners’ defense as a separate claim. South Carolina

asserts that the Rule 54(b) issue should not be considered because it

was not raised by Petitioners when the plaintiffs moved for sum-

mary judgment on costs issues in the district court.2 The Govern-

ment asserts for the first time that the district court treated Petition-

ers’ claims as effectively abandoned. U.S. Br. at 6 n.3, 10 n.7; see

S.C. Br. 10. But these assertions are without support in the record.

The Government itself drafted the language in the district

court’s orders which the Government refers to in its foomote 3. In

the Fourth Circuit, Respondents argued that the district court had

deferred Petitioners’ “counterclaims” to a subsequent separate con-

tribution action. The district court’s refusal to decide the contribu-

tion questions was a major subject of the briefs in the Fourth Circuit,

including Petitioners’ contention that such deferral was improper

under Rule 54(b).? The Government’s imaginative “abandonment”

argument is simply a thinly veiled attempt to reconstruct the district

. S.C. Br.9. South Carolina also argues that defendants are not prejudiced

because they did not sue third parties for contribution. S.C. Br. 10. But the

plainuffs had settled with most of the private defendants against whom the

defendants might have made claims in contribution and who had made sub-

Stantial contribution of wastes to the Bluff Road site. Assertion of claims

against these parties would have been futile. See 42 U.S.C. § 9613(f)(2). Their

equitable obligations are properly assigned to the plaintiffs under CERCLA §

113(f), but that is a result the plaintiffs seek to avoid by the “two trial”

procedure ordered below and the settlements they reveal for the first time in

their Briefs in Opposition in this Court.

’ The Government litigates cases under CERCLA in federal district

courts throughout the nation. As plaintiff, the Government frequently moves

for severance and/or stay of claims for contribution and indemnity. In some

cases, the Government argues (as it did here below) that the district court must

under the statute dismiss contribution claims for trial in subsequent actions.

United States v. Distler, No. 88-0201-L(J) (W.D. Ky. Feb. 2, 1989) (App. A-

1). In other cases, the Government argues, inconsistently, that a district court

cannot under the statute dismiss contribution claims as unripe. United States

v. Seymour Recycling Corp., 686 F. Supp. 696 (S.D. Ind. 1988). The United

States, as a CERCLA defendant, argues for impleader and against separate

tnals of the CERCLA plaintiffs’ claims against it. See U.S. Br. 12 n9

mo

court opinions it previously drafted in order to avoid issues, which

on reflection it now finds inconvenient to address. Moreover this

“abandonment” argument is inconsistent with other arguments in

the Government's brief. Later the Government attempts to distin-

guish cases cited by Petitioners on the grounds that they do not

discuss “deferral,” the issue involved here, but instead involve

various courts’ refusal “to dismiss some counierclaims against the

governmental plaintiffs based on alleged governmental involvement

at the waste site.” U.S. Br. 12 n.9.

The Burden of Proof

The Government would have the Court collapse Petitioners

second and third questions into a single, second question in order to

avoid (1) the Congressional guideline for determining wien joint

and several liability is appropriate under CERCLA, “principles of

traditional and evolving common law,” and (2) the application of

the Restatement (Second) of Torts. All parties agree that the statute

itself is silent as to when joint and several liability is appropriate and

who has the burden of proof under what circumstances. Turing to

the legislative history, both Petitioners and Respondents have cited

the floor statement of Senator Randolph, one of the principal spon-

sors of the Senate compromise in 1980. Here is what Senator

Randolph actually said:

[w]e have deleted any reference to joint and

several liability, relying on common law prin-

ciples to determine when parties should be sever-

ally liable.

It is intended that issues of liability not resolved

by this act, if any, shall be governed by the

traditional and evolving principles of common

(discussing Mola Development Corp. v. United States, No. CV82-0819-RMT

(C.D. Cal. May 5, 1986)); Kelly v. United States, 23 Env’t Rep. Cas. (BNA)

1500, 1503 (W.D. Mich. 1985).

-4-

law. An example is joint and several liability.

Any reference to these terms have been deleted,

and liability of joint tort feasors will be deter-

mined under common or previous statutory law.

126 Cong. Rec. 30932 (1980); 126 Cong. Rec. $14964, (daily ed.

November 24, 1980). Following this guidance, numerous courts

have turned to Restatement (Second) of Torts for the governing tra-

ditional common law principles. The court of appeals below looked

to Section 433A for when joint and several liability is or is not

appropriate. But as Petitioners have pointed out, it failed to heed

comment g to Section 433A to look to Section 433B for “the burden

of proof, and the effect of failure to produce evidence justifying the

apportionment.” Pet. 24-26.

In trying to cope with Secu’on 433B, the Government does not

dispute the proposition that under the traditional common law the

burden of proof of apportionment is upon the plaintiff, not the

defendant, when both have contributed to the harm. Instead, it seeks

to evade the traditional common law by several manuevers. First, it

excises the words “traditional and” from Senator Randolph’s state-

ment. U.S. Br. 13.* Second, it argues for selective use of only some

of the traditional principles:

Congress’ instruction to the courts to apply

“evolving principles of. common law" was not

tantamount to requiring courts to apply to CER-

CLA every statement and every explanation con-

tained in the Restatement.

4

The Government also argues that the term “the proved tort feasor,” in

comment (d) to Section 443B has no relevance to CERCLA because “the gov-

ernment is not required to make a traditional showing of fault or causation.”

U.S. Br. 15n.11. But “tort feasors” are the very words Senator Randolph used

in the quote above when referring to the common law that was to determine

when joint and several liability was appropriate under CERCLA. Further-

more, the Government’s argument ignores its burden of proving the elements

of statutory liability and the kind of evidence relevant to the availability of

defenses which relate directly to notions of causation and fault. See CERCLA

§ 107(a)(3),(0)(3), 42 U.S.C. § 9607(a)(3), (b)(3).

A

U.S. Br. 14-15 n.11. But the American Law Institute in its restate-

ments Crafts the “black letter” and the comments as a seemless web.

Moreover, the Goverment does not say what is to guide courts in

this case-by-case picking and choosing among traditional common

law pnnciples. The Government’s novel selective acceptance

theory is quintessential “‘standardless delegation.”

The Govermnment’s third reason why it should not bear the

burden of proving apportionment where it is also a “responsible

party” is that a special exception from the common law rules

applicable to other CERCLA plaintiffs should be made where it is

the plainuff. This argument is “Orwellian”. George Orwell in

Animal Farm refers to the rule in that mythical land that

All animals are equal,

But some animals are more equal than others.

Here the Government concedes that CERCLA intends “each depart-

ment, agency, and instrumentality of the United States” can be liable

“persons” under the Act. But then it argues that its agencies become

liable “persons” within the context of the Act’s liability and contri-

bution provisions “only after all questions of liability and remedy

have been resolved.” U.S. Br. 8. As support for this curious

proposition, the Government refers to a statement in the House

Judiciary Committee Report:

The night of the United States to proceed under

§ 106 or 107 is unaffected by its status as an

owner or operator of a facility or a generator of

waste at the site.

U.S. Br. 8. But all this statement does is clarify that the

Government's nght to commence a suit is not inhibited by its own

liability, e.g., the Government’s liability is not a complete defense

analogous to contributory negligence. Moreover, as pointed out in

the Petition, the Senate clearly and decisively rejected the

Government’s pleas for universal bifurcation of liability and contri-

bution issues either in separate suits or separate trials in the same

suit. Pet. 16-17. In any event, in the face of the clear statutory

Sas

language in CERCLA Section 113(f)(1),(2) giving “any person” a

right to seek contribution from any other person who is liable or

potentially liable under section 107(a), during or following any civil

action under. .. section 107(a),” the courts have no power to consult

the legislative history to insert an amendment into the text. (Empha-

sis added.) Cf. Chan v. Korean Air Lines, 109 S.Ct. 1676 (1989)

(Although a treaty’s drafting history might be consulted to elucidate

a text that is ambiguous, courts have no power to insert an amend-

ment into the treaty where the text is clear).

Finally, any notion that the Government can separate itself

into two separate, independent entities (EPA as plaintiff “protector

of the public” and EPA, the Army, and its other agencies as defen-

dant “‘polluters”’) in a single legal proceeding has been disavowed by

the Government elsewhere and rejected by this Court in other

contexts. Pet. 14-15. Indeed, the “potentially liable person”

referred to in the statute is the United States Government. 42 U.S.C.

§ 9601(21).

The Implications of the Secret Settlements

Petitioners have argued that the judgment below should be set

aside because it has not been reduced to reflect setlements among

the plaintiffs and other settling parties. In partial response, South

Carolina reveals that it has made payment to the Goverment for

reimbursement of response costs at Bluff Road. But it concedes

“that the amount paid should result in a reduction of the judgment.”

S.C. Br. 8. Similarly, the Government reveals that EPA has also

accepted payments from certain other federal agencies. U.S. Br. 3

n.1.

The intergovernmental settlements between the Government

and South Carolina and among the govemmmental agencies are in

addition to two settlements of which Petitioners were previously

aware in which the Govemmenit accepted payment for the same

costs covered by the judgment here. Pet. 19-20. The Government

also concedes that these settlements “would reduce the total

amounts due the governments.” U.S. Br. 11.8. This statement is,

however, misleading for two reasons. First, the amount of the

judgment entered by the district court did not reflect all settlements

a

approved by the district court prior to entry of final judgment.*

Second, the Government now reveals that it has accepted payment

trom its own federal agencies. Thus, it will attempt to block Peti-

tioners from recovering payments from these agencies in the contn-

bution action which the Government below maintained was avail-

able. U.S. Br. 3n.1.° The attempt to obtain double recoveries and to

avoid court determination of the fair shares of the Government

departments and agencies as waste generators through self-dealing

is flatly contrary to the statute, see 42 U.S.C. § 9614(b), and equi-

table principles.

Part I, C of the Petition discusses the likely consequences to

Petitioners of the “two actions” procedure forced on them by the

district court. The bottom line is that they probably will end up

saddled with far more than their fairly apportioned share of liability.

The Respondents off-the-record intergovernmental settlements

make this result virtually inevitable.’

; The district court entered a settlement between the Government and

Columbian Organic Chemical Company specifically stating that claims

against the other defendants would be reduced by the amount of the settlement.

United States v. South Carolina Recycling & Disposal, Inc., 653 F. Supp. 984,

1010 (D. S.C. 1985). Although the United States represents that such a

reduction occurred, U.S. Br. 11 n.6, an exainination of the accounting of costs

on which the final judgment was calculated and the amount of that judgment

clearly demonstrates that no such reduction occurred. The settlement with

AquAir Corporation entered by the Fourth Circuit without any hearing, though

one had been requested by Petitioners, dismissed the judgment against AquAir

for $1,561,134.55 in exchange for a payment of $5,000, without reduction of

the judgment against Petitioners. Pet. 19; S.C. Br. 8.

. Joint Answer of the United States and South Carolina Department of

Health and Environmental Control to Petitions for Rehearing and Suggestion

for Rehearing in Banc, United States v. Monsanto, Nos. 86-1261(L), 86-1263,

86-1265 (4th Cir., brief filed Oct. 7, 1988), at 8 n.1 (“Where governmental

agencies resolve their responsibility to reimburse the Superfund they would be

enutled to contribution protection, 42 U.S.C. 9613(f)(2) ....”).

? The Government argues that, “Contrary to the fears expressed by Peti-

uioners . . . district courts can exercise this discretion in a manner that . . . avoids

unfairness where unfairness would otherwise result, a district court could

simply bifurcate the Government’s case-in-chief and contribution claims,

=

Respondents take the position that they can enter into “admin-

istrative” settlements between their “potentially responsible” agen-

cies and thereby extinguish contribution claims against them.’

While respondents asserted this position in the Fourth Circuit, they

did not advise the court or Petitioners of all such settlements. Yet

the lynchpin of the majority opinion’s reason for denying or not

addressing the constitutional arguments raised below was the

court’s assumption that “the Respondents still have the right to sue

responsible parties for contribution and in that action may assert

both legal and equitable theories of cost allocation.”” Pet. App.

B-22. Elsewhere in the opinion, unaware of the off-the-record set-

tlements, the court also stated:

We also observe that the EPA has contributed

upwards of $50,000 to the Bluff Road cleanup,

and that any further claims against EPA and

other responsible government instrumentalities

may be resolved in contribution action pursuant

to CERCLA section 113(f).

Pet. App. B-22 n. 28.

The net effect of the opinion below and the off-the-record

intergovernmental settlements is likely foreclosure of any “‘opportu-

nities for contribution . . . as well as joinder or interpleader of

responsible parties” cited by the majority below as a means of

preventing transformation of an “otherwise constitutional obligation

into one that exacts punishment.” Pet. Br. App. B-25, 26 n.33.

instead of deferring contribution to a subsequent action.” U.S. Br. 10. What

the Government fails to note is that avoidance of unfairness is the precise

reason why Rule 54(b) requires a court to find that “there is no just reason for

delay” before it can require bifurcation into two separate actions. Here it could

not have made such a finding because it needed to maintain control of the

award of the amount of damages so that it could adjust that amount in light of

its apportionment of responsibility for the harm later in the same proceeding.

. See note 6, supra.

Conclusion

The decision below and the newly revealed intergovernmental

settlements portend the ultimate incidence of grossly dispropor-

tional liability in this case and in future CERCLA cases. These

discriminatory results are contrary to the equitable allocation of

CERCLA liability Congress intended. In extreme circumstances, if

the ultimate incidence bears no rational relationship to a defendant’s

fairly allocated contribution to the harm, it may be unconstitutional.

Pet. 21-23. Cf. United States v. Halper, 109 S.Ct. 1892 (1989)

(discussing the constitutional line between permissible civil remedy

and prohibited punishment).

Respectfully Submitted,

George C. Freeman, Jr.

(Counsel of Record)

Alfred R. Light

Thomas E. Knauer

-10-

APPENDIX

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF KENTUCKY

LOUISVILLE DIVISION

UNITED STATES,

PLAINTIFF,

CIVIL ACTION

No. 88-0201 L(J)

V.

DONALD E. DISTLER, et al.,

DEFENDANTS.

MEMORANDUM OPiNION AND ORDER

This matter is before the court on the motion of Kurfees

Coatings, Inc. (“Kurfees”) to file a third-party complaint. The

United States brought this action under the Comprehensive Envi-

ronmental Response, Compensation, and Liability Act (“CER-

CLA”), 42 U.S.C. § 9607 (1988), to recover costs expended in

remedying improper disposal of hazardous wastes in Hardin

County, Kentucky. Jurisdiction is proper pursuant to 28 U.S.C.

§ 1345 (1988).

Kurfees contends that in 1984 it bought the assets of Louisville

Coatings, Inc. As part of the sale agreement, Louisville Coatings

warranted there was no litigation or governmental investigation

pending nor any known basis for any litigation or investigation.

Kurfees contends that Louisville Coatings is liable for contribution

or indemnity of any claim against them, either because of the

contract or because any wrongful acts were committed by Louisville

Coatings. It seeks to add a third-party claim against them.

A-1

The United States objects for two reasons. First, it claims that

because of the strict liability provisions of CERCLA, a third-party

claim would be unwarranted until a judgment has been entered

against Kurfees. Second, the United States contends that allowing

the defendants to lengthen and complicate the proceeding would

defeat the intent of CERCLA, which is to provide a speedy and

efficient mechanism to reimburse the United States for its clean-up

expenses. Neither ground is persuasive.

Fed. R. Civ. P. 14(a) states that “at any time after commence-

ment of the action a defending party, as a third-party plaintiff, may

cause a summons and complaint to be served upon a person not a

party to the action who is or may be liable to the third-party plaintiff

for all or part of the plaintiff's claim against the third-party plain-

uff.” The defendant need not wait until the claim against him is

reduced to a judgment; he may bring a third-party action for contri-

bution or indemnity when it appears the facts give rise to that claim.

6 C. Wright and A. Miller, Federal Practice and Procedure § 1446

(1971). It may be that Kurfees has no claim against Louisville

Coatings, but it is much too early for this court to tell. The third-

party claim is not too speculative or frivolous to file.

Further, the court has other means at its disposal to prevent

third-party claims from delaying or complicating the case. The

court may bifurcate the trial or order discovery undertaken in

different phases. The court is confident that the third-party claim

will not impede a just and expeditious resolution of this action.

Therefore,

IT IS ORDERED that defendant Kurfees Coatings, Inc.’s

motion to file a third-party complaint is GRANTED.

DATED 1-31-89

Edward H. Johnstone, Chief

Judge ~

United States District Court

Entered Feb. 2, 1989

cc: Counsel