Petition for Writ of Certiorari — Gurley v. United States

4 ) Supreme Court, U.S.

A) FILED

9420.0 9 JUN 6 - 1995

No. OFFICE OF THE CLERK

IN THE

Supreme Court of the United States

October Term, 1994

WILLIAM M. GURLEY,

Petitioner,

Vv.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

*James W. GENTRY, JR.

SPEARS, MOORE, REBMAN

& WILLIAMS

8th Floor, Blue Cross Building

Chattanooga, TN 37402

(615) 756-

Eton A. RieEves IV

*Counsel of Record William M. Gurley

TREVATHAN PRESS » LITTLE ROCK

“Sl ne

QUESTIONS PRESENTED

MAY THE COURT OF APPEALS FOR THE EIGHTH

CIRCUIT CONSIDER THE MIXED QUESTIONS OF LAW

AND FACT, RAISED FOR THE FIRST TIME AT THE

APPELLATE LEVEL, REGARDING WHETHER THE PE-

TITIONER WAS SUED UNDER 42 U.S.C. §9607(a) IN

AN INDIVIDUAL CAPACITY, RATHER THAN IN HIS

CORPORATE CAPACITY; AND REGARDING THE ExX-

ISTENCE OF PRIVITY BETWEEN THE PETITIONER

AND HIS CO-DEFENDANT, GURLEY REFINING CO.,

INC.?

ONCE HAVING CONSIDERED THE QUESTIONS OF

THE CAPACITY IN WHICH THE PETITIONER WAS

SUED (PERSONALLY OR IN A CORPORATE CAPACI-

TY), AND THE EXISTENCE OF PRIVITY BETWEEN THE

PETITIONER AND HIS CO-DEFENDANT, GURLEY RE-

FINING CO., INC., DOES THE RESOLUTION OF

THOSE QUESTIONS UPON THE MERITS AT THE

APPELLATE LEVEL CONSTITUTE AN UNACCEPTABLE

EXERCISE OF THE COURT OF APPEALS’ JURISDIC-

TION WHEN NO SPECIAL CIRCUMSTANCES ARE

PRESENT TO COMPEL SUCH RESOLUTION AND

WHEN AN INTERESTED PARTY HAS NOT BEEN AF-

FORDED THE OPPORTUNITY TO PRESENT EVI-

DENCE ON THE ISSUES RESOLVED? .

LIST OF PARTIES

The petitioner herein is William M. Gurley, and

the respondent is the United States of America.’

LIST PURSUANT TO RULE 29.1

The petitioner is an individual without any rela-

tionships which come within the purview of Rule 29.1.

Other entities who are not petitioners herein but were defendants in

the U. S. District Court were Gurley Refining Co., Inc. (dismissed on

appeal), Larry Gurley, Gurley Refining Company (a partnership)

(dismissed by the respondent with prejudice), Betty Gurley (dismissed

by the respondent with prejudice) and R. A. Caldwell (dismissed by

way of compromise at the commencement of the trial of this cause).

li

TABLE OF CONTENTS

Page

EERE os ean i

RR go BS SNE ET OU NS Shs Mn nove ee ii

List Pursuant to Rule 29.1 .......ccccccscsscscescscssesccoosesesensers il

BORNE OE CHING sikh caddies tensstcesiccsthondinscseterennnnee iii

Bp RRS Rd tas BORE EO vi

PURINE TRON gist sinesss cake sitacst canker taibnionienscnstnencensece 1

POUT achat te dh castes isaci cbs Dict iestcacabiacsalicivensins 2

SOCMRRIEES TIT ONIINES searnicisstacteinsvneoten-nsctanernceesstvineerecessecenee 3

nn PERN TALE Tee be Me RO OER 4

Phe: SSMMNRGS F ROCP CCIE a crscseveseneaonvesnscsnnsesosiniane 6

B. District Court Jurisdiction, Proceedings,

Ruling and Judgment..............csccecsesscsesesseees 7

C. Court of Appeals Review Reversing

in Part and Affirming in Part..................0. 9

ill

Reasons for Granting the Writ........sssssssseserereseeeees 13

I. A. THE EIGHTH CIRCUIT'S TAKING UP

FOR THE FIRST TIME ON APPEAL

THE QUESTION OF THE EXIST-

ENCE OF PRIVITY, IN THE ABSENCE

OF SPECIAL CIRCUMSTANCES,

CONFLICTS WITH THIS COURT'S

DECISIONS IN HORMEL V. HELVER-

ING AND SINGLETON V. WULFF «1.220000 16

B. THE EIGHTH CIRCUIT'S TAKING UP

FOR THE FIRST TIME ON APPEAL

THE QUESTION OF WHETHER THE

RESPONDENT SUED THE PETI-

TIONER IN HIS CAPACITY AS

PRESIDENT AND PRINCIPAL

SHAREHOLDER OF GURLEY RE-

FINING CO., INC., AND WHETHER

THE DISTRICT COURT IMPOSED

LIABILITY UPON THE PETITIONER

IN HIS CAPACITY AS PRESIDENT

AND PRINCIPAL SHAREHOLDER, IN

THE ABSENCE OF ANY SPECIAL

CIRCUMSTANCES, CONFLICTS

WITH THIS COURT'S DECISIONS IN

HORMEL V. HELVERING AND SIN-

GLETON V. WULFF 16

I. A. WHEN THE EIGHTH CIRCUIT

RULED UPON THE MERITS AS TO

WHETHER THE PETITIONER WAS

SUED IN A PERSONAL CAPACITY,

RATHER THAN A CORPORATE

CAPACITY, IN THE INSTANT CASE,

IT FORECLOSED PETITIONER

FROM PUTTING IN EVIDENCE

THAT WOULD HAVE ESTABLISHED

HIS CLOSE RELATIONSHIP, BOR-

DERING ON NEAR IDENTITY, TO

GRC, AND AS SUCH CONFLICTS

WITH THIS COURT'S DECISIONS IN

HORMEL V. HELVERING, SINGLETON

V. WULFF AND COMMISSIONER V.

B. THE EIGHTH CIRCUIT’S RULING

UPON THE MERITS AS TO THE

QUESTION OF PRIVITY, AFTER

FINDING THAT THE DEFENSE OF

RES JUDICATA WAS AVAILABLE TQ

GURLEY REFINING CO., INC.,

FORECLOSED THE PETITIONER

FROM PUTTING INTO THE RECORD

PROOF OF PRIVITY WHICH CON-

STITUTED AN UNACCEPTABLE

EXERCISE OF APPELLATE JURIS-

DICTION IN CONFLICT WITH THIS

COURT'S DECISIONS IN HORMEL V.

HELVERING, SINGLETON V. WULFF,

COMMISSIONER V. McCOY, AND THE

PRINCIPLES OF RES JUDICATA

ENUNCIATED IN HEISER V. WOOD-

RUF P ....cccsrseseccoccccosntcccsacccsscesesqooscessoseosenseces 21

Il. SPECIAL AND IMPORTANT REA-

SONS EXIST FOR GRANTING THIS

PETITION cccccscscccocccscccsesocccesosesenesoccssesoccecs 31

Appendix (Separately Bound)

TABLE OF AUTHORITIES

Page

Cases:

Anderson v. United States, 417 U.S. 211 (1974)........0000 20n

Brown v. Felsen, 442 U.S. 127 (1979) 17

Caldwell v. Gurley Refining Co., et al., 533

F.Supp. 252 (E.D. Ark. 1982) aff’m on

other grounds, Caldwell v. Gurley Refining

Co., 755 F.2d 645 (8th Cir. 1985) 6

Commissioner v. McCoy, 484 U.S. 3 (1987)....... 18n, 30, 32

Crane Boom Life Guard Co. v. Saf-T-Boom Corp.,

362 F.2d 317 (8th Cir. 1966) 14

Estate of Vak v. Commissioner of Internal Reve-

nue, 973 F.2d 1409 (8th Cir. 1992) 19

Federated Dep’t. Stores, Inc. v. Moitie, 452 U.S.

594 CASS) a cciteienied seins a

Fountain v. Filson, 336 U.S. 681 (1949).....ssesssssessseseseees 30

Headley v. Bacon, 828 F.2d 1272 (8th Cir.

1987) 14n, 24, 28n

Heiser v. Woodruff, 327 U.S. 726 (1946) 21, 23

Hormel v. Helvering, 312 U.S. 552 (1941) .........ss0000 passim

In re Teletronics Services, Inc., 762 F.2d 185 (2nd

Cir. 1985) 14n

Kamen v. Kemper Financial Services, 500 U.S. 90,

114 L.Ed.2d 152, 111 S.Ct. 1711 (1991)............. 30n

_ Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,

475 US. 574 (1986) us 83

Montana v. United States, 440 U.S. 147 (1979)... 17, 29, 30

Nevada v. United States, 463 U.S. 110 (1983) 30

Oglala Sioux Tribe v. Homestake Mining Co., 722

F.2d 1407 (8th Cir. 1983) , 25, 28n

Vi

Parklane Hosiery Co. v. Shore, 429 U.S. 322

(1979) 17

St. Louis Developmental Disabilities v. Mallory,

767 F.2d 518 (1985) 19

Singleton v. Wulff, 428 U.S. 106 (1976) passim

Souffront v. Compagnie des Sucreries, 217 U.S.

475 (1910)..... echaupeastntinssssascassoadhgsittglatilbemertipetpeate 29

Stafford v. Ford Motor Company, 790 F. 2d 702

(8th Cir. 1986) imax 39

State of New York v. Shore Realty, 759 F. 2d 1031

(2nd Cir. 1985) 22

Thornburg v. American Coll. of Obst. & Gyn., 476

U.S. 747 (1986) a i

Towle v. Boeing Airplane Co., 364 F.2d 590 (8th

RN incl iiccsinsanadipicaindsbitidieedanGiccemescennic 14

United States v. Caldwell, et al., No. J-C-83-399,

SIMs 1 OOPS siiiiiessincciinenssitehinnnitigeistaticovebiones passim

United States v. Gurley, 43 F.3d 1188 (8th Cir.

a) NES ELS ARNE ee RR ee 2, 10

United States v. Gurley Refining Co. 788 F.Supp.

Pe CAS PUN PIED ectenietcrspicnsiieninssisccresnercenscsetee 2

United States, ex rel. Glass v. Medtronic, Inc., 957

ame CS Stile, FID crickets seeebciensisenenioceczinesciees 13

United States v. Northeastern Pharmaceutical &

Chemical Co., 810 F.2d 726 (8th Cir.

1986) (NEPACCO), cert. denied, 484 U.S.

848 (1987) a icliainailslindbesbueedinnbagebecseiniece 22

United States v. Southern Ute Tribe or Band of

Indians, 402 U.S. 159 (1971) 17

Vii

Statutes:

28 U.S.C. §1254(1) pons: fosoul nabibcesanenbaandensbbulel 2

33 U.S.C. §1321 6,8

42 U.S.C. §9601 5, 23

42 U.S.C. §9601(20)(A) 4, 26

42 U.S.C. §9601(21). .S

42 U.S.C. §9607 7, 8, 12

42 U.S.C. §9607(a) .. ~ we

42 U.S.C. §9607(a)(1)-(4)(A) 22, 25

42 UDI aii ee 8 es y EY

42 USC. SaGIIN2 asin ee passim

Miscellaneous:

1B Moore’s Federal Practice 40.411[6] 25n

1B Moore’s Federal Practice q0.411(9) . 25n

Viii

IN THE

Supreme Court of the United States

October Term, 1994

WILLIAM M. GURLEY,

Petitioner,

V.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR WRIT oF CERTIORARI

TO THE UNITED States Court oF APPEALS

FOR THE EIGHTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

Petitioner prays that a writ of certiorari issue to

review the judgment of the United States Court of Ap-

peals for the Eighth Circuit entered in this case on De-

cember 28, 1994,

OPINIONS BELOW

The pretrial opinion and order of the District

Court that granted partial summary judgment to the re-

spondent and against the petitioner is unreported and is

reproduced in the Appendix at A-30.? The subsequent

opinion of the District Court resulting from the trial of

this cause is reported at 788 F.Supp. 1473 and is repro-

duced at A-52. The opinion of the Court of Appeals is

reported at 43 F.3d 1188 and is reproduced at A-1. The

Order of the Court of Appeals denying rehearing is unre-

ported and is reproduced at A-83.

JURISDICTION

The judgment of the District Court was entered

April 29, 1993. A-82.° The judgment of the Court of Ap-

peals was entered December 28, 1994. A-1. A timely peti-

tion for rehearing was denied on March 9, 1995. A-83.

This Court has jurisdiction pursuant to 28 U.S.C.

§1254(1) to review by writ of certiorari the judgment of

the United States Court of Appeals for the Eighth Circuit

which is the subject of this petition. The District Court

possessed jurisdiction pursuant to 42 U.S.C. §9613(b).

_ *References herein to “A-” are to the separately bound appendix

filed herewith; to “R.” to the record in the Appellees’ Appendix in

the Court of Appeals.

The separate opinion of the district court issued March 27, 1992,

and found at A-52, was not a final judgment; thus entailing the

Amended Judgment of April 29, 1993.

STATUTES INVOLVED

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

Notwithstanding any other provision or rule of

law, and subject only to the defenses set forth in

subsection (b) of this section—

(1) the owner and operator of a vessel or a fa-

cility,

(2) any person who at the time of disposal of

any hazardous substance owned or operat-

ed any facility at which such hazardous sub-

stances were disposed of,

(3) any person who by contract, agreement, or

otherwise arranged for disposal or treat-

ment... of hazardous substances owned or

possessed by such person, by any other par-

’ ty or entity, at any facility ... owned or

operated by another party or entity and

containing such hazardous substances...

shall be liable for—

CERCLA Section 101(21), 42 U.S.C. §9601(21):

The term “person” means an individual, firm, cor-

poration, association, partnership, consortium,

joint venture, commercial entity, United States

Government, State, municipality, commission, po-

litical subdivision of a State, or any interstate body.

3. CERCLA Section 101(20)(A), 42 U.S.C.

§9601(20)(A):

The term “owner or operator” means... (ii) in

the case of an onshore facility or an off-shore facil-

ity, any person owning or operating such facili-

Cis

STATEMENT

The petitioner herein, from 1960 through the

present time, was and is the president, director, chief ex-

ecutive officer, and majority stockholder of a closely held

corporation known as Gurley Refining Co., Inc. (herein-

after “GRC’”’). GRC, during the sixties and seventies,

engaged in the rerefining of used oil. That operation pro-

duced as a by-product a residue of oily waste, which was

disposed of at a facility near Edmondson, Arkansas, be-

tween 1970 and 1975, under a permit from the State of

Arkansas.‘ The disposal operation was terminated by

GRC in 1975. Subsequent to the termination of the dis-

posal operation and during the period of time between

1978 and 1979, rains and floods caused the waste in the

facility to overflow into the surrounding area and the

_ waters of the United States. The respondent reacted to

“The facility had originally been a clay borrow pit owned by R. A.

Caldwell. The petitioner negotiated a lease with Mr. Caldwell on be-

half of GRC in 1970. A-30 and A-56.

these discharges by way of two cleanup efforts; the second

of which was completed in 1979. A-55-59.

Thereafter, on December 12, 1980, the Compre-

hensive Environmental Response, Compensation and

Liability Act of 1980 became law. That Act, as amended,

is found at 42 U.S.C. §§9601 et seg. (“CERCLA”). The

facility described above was designated a National Priori-

ties List site in August of 1983, pursuant to that statute.

A-58. Despite the 1978 and 1979 efforts by respondent to

remedy the problems at the facility, the respondent con-

tinued to consider the facility a problem, notwithstanding

the fact that there were no discharges therefrom as late as

the trial held by the District Court in 1990. The respond-

ent, in December of 1983, authorized a Remedial Investi-

gation of the site under the auspices of CERCLA. This

investigation took place during 1984 and 1985, and re-

sulted in a Feasibility Study being released in April of

1986. Contemporaneously with the Remedial Investiga-

tion, the respondent initiated an action in Federal District

Court under the Clean Water Act against R. A. Caldwell

(“Caldwell”) and GRC for response costs incurred by it

as a result of the remediation actions of 1978 and 1979. A

final judgment was entered in that action against Caldwell

and GRC in 1985. The respondent, in 1987, brought the

instant action against Larry Gurley, William M. Gurley,

Betty Gurley, GRC, Gurley Refining Company (a part-

nership), and R. A. Caldwell to recover costs associated

with that Remedial Investigation and Feasibility Study. A-

59-60.

A. Earlier Proceedings

The Edmondson facility and the 1978 and 1979

releases therefrom spawned two legal actions prior to the

instant case.. The first was Caldwell v. Gurley Refining Co.,

et al., 533 F.Supp. 252 (E.D. Ark. 1982), aff’m on other

grounds, Caldwell v. Gurley Refining Co., 755 F.2d 645 (8th

Cir. 1985). The second was the United States of America v.

R. A. Caldwell and Gurley Refining Co., No. J-C-83-399,

United States District Court, Eastern District of Arkan-

sas, Jonesboro Division. The earlier case brought by

Caldwell (owner of the property whereon the site was

located) named as defendants in that action not only

GRC, but also Larry Gurley, William M. Gurley and the

United States. The United States was disinissed through

motion practice prior to the trial and Larry Gurley and

William Gurley had a verdict directed in their favor at the

close of the plaintiff's proof.

The second case was filed by the respondent

against R. A. Caldwell and GRC, pursuant to 33 U.S.C.

§§1321 et seq., in 1983. The trial of the second case re-

sulted in a judgment being entered on October 30, 1985,

finding Caldwell and GRC jointly and severally liable to

the respondent for costs incurred by it in responding to

the 1978 and 1979 releases at the Edmondson facility. It

was this judgment that was relied upon by the Eighth Cir-

_ cuit in its finding that GRC was entitled to the defense of

res judicata in the instant appeal. A-14-20.5

B. District Court Jurisdiction,

Proceeding, Ruling and Judgment

The respondent filed, on November 18, 1987, a 42

U.S.C. $9607 action against various defendants, including

the petitioner, seeking reimbursement of response costs

incurred by way of its Remedial Investigation and Feasi-

bility Study of the GRC disposal pit and declaratory relief

concerning liability for future costs. A-84. The District

Court exercised exclusive original jurisdiction of this ac-

tion pursuant to the provisions of 42 U.S.C. §9613(b). The

respondent relied exclusively upon the 1978 and 1979 re-

leases to justify its complaint. The complaint described

petitioner as president and principal shareholder of GRC

and, as such, responsible for the conduct and manage-

ment of the company’s disposal facility. Petitioner filed a

timely answer and two amended and supplemented an-

swers (A-94) alleging, among other things, that he was a

privy of GRC and was thus entitled to join in the defense

of res judicata along with that company. On June 29, 1989,

respondent filed a motion for partial summary judgment

against GRC and the petitioner. A-114. The respondent

additionally sought to have the District Court dismiss the

defense of res judicata that had been raised by both GRC

and the petitioner. It essentially argued that the previous

>The Circuit Court in its decision noted that the District Court had

read the transcript of the 1985 trial. This is indeed a puzzling state-

ment in light of the fact that only fifteen pages of Larry Gurley’s tes-

timony in that trial were made available to the District Court. (R. 72-

87).

action relied upon as creating res judicata (United States v.

Caldwell, et al.), was brought pursuant to 33 U.S.C. $1321

(A-62-63) and that the respondent’s second suit to recov-

er costs pursuant to 42 U.S.C. §9607(a) constituted a dif-

ferent “cause of action.” The respondent further argued

that 42 U.S.C. §9613(g)(2), which allows successive ac-

tions to recover further response costs under §9607(a),

forecloses any defense of res judicata, as it relates to a

failure on the part of the respondent to couple an action

under 33 U.S.C. §1321 with an action under 42 U.S.C.

§9607. Nowhere in respondent’s complaint or in its mo-

tion for partial summary judgment, or in the District

Court’s June 14, 1990, decision on such motion, was any

question raised as to whether petitioner was a privy of

GRC or in what capacity he was sued. Indeed, it is clear

from the respondent’s pleadings and the District Court’s

order for partial pretrial summary judgment that both the

respondent and the District Court were of the opinion

that the petitioner was sued in his corporate capacity. The

impact of the June 14, 1990, decision foreclosed both

questions from ever arising.

After the District Court denied the availability of

the defense of res judicata it turned its attention to the

question of liability of both defendants under §9607. In

particular, it reviewed the pleadings, affidavits of re-

spondent’s experts and petitioner’s discovery deposition.

_ The District Court came to the conclusion that both GRC

and petitioner were liable under §9607 and in particular

found that the petitioner was personally liable because

he, as president and principal stockholder, participated in

the management of GRC (facility). A-42-44.

\

Thereafter, the trial commenced. After a truncated

history of the trial, it was concluded in October of 1990.°

The first portion of the trial focused upon the question of

whether or not Larry Gurley was properly a defendant

because of his employee status and his lack of control

over the corporation.

Thereafter, the question of whether or not the

respondent’s costs were consistent with the NCP domi-

nated. As previously observed, the District Court’s pretri-

al granting of a partial summary judgment and the denial

of the application of res judicata, precluded the possibility

of petitioner presenting to the Court evidence that would

establish his close relationship with GRC (bordering on

near identity) at the time of the 1985 trial between the

respondent, Caldwell, and GRC. The District Court ulti-

mately entered a Memorandum Opinion and Order on

March 27, 1992, which was subsequently amended by way

of an Amended Judgment dated April 29, 1993. It was

from the latter judgment that Larry Gurley, GRC, and the

petitioner appealed to the United States Court of Ap-

peals for the Eighth Circuit.

C. Court of Appeals Review

Reversing in Part and Affirming in Part

The Court of Appeals reviewed the decision of the

District Court below and delivered an opinion on De-

©Prior to the commencement of the trial, the respondent dismissed

Betty Gurley and Gurley Refining Company, a partnership, with

prejudice. Also at the commencement of the trial, the government

entered into a compromise with R. A. Caldwell. .

cember 28, 1994, affirming in part and reversing in part.

The portion of the Court of Appeals opinion to which this

petition is directed occupies less than three pages (see

U.S. v. Gurley, 43 F.3d 1188, 1197-1199 (8th Cir. 1994)).

A-19-21. On appeal petitioner and GRC argued vigorous-

ly that the case of United States v. Caldwell, et al, J-C-83-

399, Slip Op. (E.D. Ark. October 30, 1985), (A-31-32, 37-

38), was a vehicle sufficient to allow both to assert the

doctrine of res judicata in the District Court. The Court of

Appeals agreed that the respondent should have included

the CERCLA count in its cause of action in United States

v. Caldwell and thus held that GRC should be dismissed

under the doctrine of res judicata because it was a party in

that prior action. The Court observed that the respond-

ent’s second lawsuit asserted the same cause of action as

was asserted in United States v. Caldwell, stating in its

opinion that the 1983 action and the 1987 action “focused

on the same underlying facts.” A-16. The Eighth Circuit

went on to examine the District Court’s holding that the

defense of res judicata could also be denied because of

the express terms of 42 U.S.C. §9613(g)(2). It aptly re-

jected the reasoning that “EPA may pursue both a CWA

action and a CERCLA action to right the same wrong”

under the auspices of 42 U.S.C. §9613(g)(2). A-17.

After the Court held that the defense of res judica-

ta was available to GRC, it then addressed two questions

_ raised for the first time by the respondent in its appellate

brief. The first question was whether petitioner was a

privy of GRC. The second question was whether the re-

spondent had sued the petitioner individually or in his

corporate capacity as president and dominant stockholder

of GRC. (An adjunct to this latter question was whether

10

i aasiaeeemmaiepaiaiemiaiaiaiiiaaaiaiie |

the District Court, in its June 14, 1990 Order, had found

petitioner liable in his individual capacity or, alternative-

ly, in his corporate capacity.)’

Assuming, for the sake of argument, that, in ad-

dressing the two legal questions described above, the Cir-

cuit Court was not violating the teachings of Singleton v.

Wulff, 428 U.S. 106 (1976), and Hormel v. Helvering, 312

U.S. 552 (1941), could it with impunity resolve these

questions on the merits without allowing petitioner his

day in court and without allowing petitioner to supple-

ment the inadequate record applicable to these ques-

tions? The answer to the foregoing questions would seem

to be a resounding “‘no”’ if Hormel and Singleton really

mean what they say.

That paragraph in respondent’s brief which raises these first-time

questions reads as follows:

Even if the res judicata challenge were well-founded, it would

only preclude the United States’ claim against GRC. William

Gurley asserts that he was ‘in privity’ with GRC when U.S. v.

Caldwell was decided and is therefore entitled to the same pro-

tection as the Corporation. But William Gurley was sued under

CERCLA in his personal rather than his corporate capacity. ‘This

personal liability is distinct from the derivative liability that re-

sults from “piercing the corporate veil” where [courts] hold the

owners of a less than bona fide corporation responsible for cor-

porate acts.’ ... The extent of his control over GRC’s defense in

U.S. v. Caldwell has no bearing on his liability under CERCLA

Section 107(a)(2) for his individual conduct as operator of the

Gurley Pit.

(Citations omitted).

11

The Circuit Court, feeling no jurisdictional

qualms, reached the merits of the questions of privity and

capacity by merging the two questions. It astonishingly

based its finding of lack of privity upon the fact that the

respondent had not sued petitioner in his corporate ca-

pacity but solely in his individual capacity and further

held that the District Court had found him liable in his

individual capacity, as opposed to his corporate capacity.

The Circuit Court, in effect, proceeded beyond the need

to remand to determine the question of privity and in

what capacity petitioner was sued. It, therefore, improper-

ly resolved mixed questions of law and fact based upon an

inadequate, if not non-existent, record.

The Circuit Court reasoned that since petitioner

was sued in the 1987 action as an individual and not as a

corporate officer under §9607, he was not in privity with

GRC for the purposes of the 1983 action and could not

therefore invoke the application of res judicata.®

8-The Court seems to overlook the fact that the threshold question

_ regarding privity is whether the petitioner was a privy of GRC in the

1983 (1985 trial) case. The petitioner, at the very least should have

been entitled to have the question remanded so that he could demon-

strate, inter alia, his participation and control of the first litigation,

domination of GRC by way of his presidency, dominant position as

stockholder and CEO, and to further demonstrate the fact that he

constituted the alter ego of GRC.

12

REASONS FOR GRANTING THE WRIT

The petitioner’s appeal to the Eighth Circuit Court

of Appeals contained, inter alia, the questions of whether

the action brought by the respondent against petitioner

and GRC was barred by the doctrine of res judicata and

whether the District Court erred in granting the respond-

ent’s motion for partial summary judgment as to liability.

When a circuit court is faced with those questions, it

looks to the standard of review by which it is to adjudge

the district court’s rulings. Essentially, a determination of

res judicata should revolve around the structure of the

pleadings as they relate to the previous case purportedly

creating res judicata and generally becomes a question of

law, as opposed to a question of fact. When circuit courts

review the granting of motions for summary judgment,

they do so de novo. United States ex rel., Glass v. Medtron-

ic, Inc., 957 F.2d 605, 607 (8th Cir. 1992). As this Court

has held, where the record taken as a whole could not

lead a rational trier of fact to find for the non-moving

party, there is no genuine issue for trial. Matsushita Elec.

Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).

The error that has been generated by the Court of

Appeals is that subsequent to its determination that the

doctrine of res judicata was available as a defense to

GRC, it treated the question of petitioner’s status as a

privy of GRC as one that could be decided de novo when,

in fact, that question, because it was a question of fact, at

the very least, should have been remanded to the District

13

Court for briefing and a hearing on the merits.? As the

Circuit Court has previously noted, ““Who are privies or-

dinarily presents a question of fact requiring examination

of the circumstances of each case as it arises.” Crane

Boom Life Guard Co. v. Saf-T-Boom Corp., 362 F.2d 317,

322 (8th Cir. 1966), cited with approval in Towle v. Boeing

Airplane Co., 364 F.2d 590, 593 (8th Cir. 1966).

The Eighth Circuit below has adopted a seemingly

variable standard of review which enables it to reverse de

novo the District Court’s finding that res judicata was not

available to GRC and then to uphold the District Court’s

finding of liability against the petitioner, based upon a

determination on the merits that the petitioner was not a

privy of GRC.’° This procedural sleight of hand violates

the Court’s admonition concerning the sanctity of the sal-

utary principle of res judicata. Federated Dep’t Stores, Inc.

v. Moitie, 452 U.S. 394, 401 (1981).

*-This assumes, arguendo, that the Circuit Court properly allowed the

question of privity to be raised at the appellate level.

10-This determination, of course, was made notwithstanding the fact

that the question had never been raised by the respondent below and

had never been briefed and argued. Thus, the petitioner was not al-

lowed to demonstrate his “ ‘close relationship, bordering on near

identity’ ” to GRC. Headley v. Bacon, 828 F.2d 1272, 1276 (8th Cir.

1987). Nor was he allowed to establish that as a participating nonpar-

ty in the 1983 lawsuit, he had sufficient interest in the litigation be-

tween respondent and GRC to be bound by, and to take advantage

of, the 1985 judgment in U. S. v. Caldwell. In re Teletronics Services,

Inc., 762 F.2d 185 (2d Cir. 1985).

The petitioner suggests in summary, that the

Eighth Circuit generally adhered to the standard of re-

view normally applicable to circuit courts when it re-

viewed the District Court’s granting of a partial summary

judgment on behalf of the respondent. However, once it

determined that GRC should be dismissed from the ac-

tion below based upon the doctrine of res judicata, it

created a new playing field relative to the standard of re-

view. On that playing field, the Circuit Court, having al-

ready determined that the first (1983) suit and the second

(1987) suit contained the same cause of action, then took

it upon itself to determine if the petitioner was a privy of

GRC and thus entitled to invoke the protections afforded

by the doctrine of res judicata. The issue of privity had

never been addressed by the District Court; it had rea-

soned that even GRC, the party with which petitioner

claimed to be in privity, was not entitled to invoke the

doctrine of res judicata because (1) the two actions were

not the same since each sought damages for costs in-

curred during different time frames and under different

Statutes, and (2) 42 U.S.C. §9613(g)(2) permitted succes-

sive actions to be brought to recover response costs or

damages. See 788 F.Supp. at 1479. A-17. By deciding the

question of privity upon the merits, the Circuit Court

engaged in what this Court has characterized as an unac-

ceptable exercise of its appellate jurisdiction. Singleton,

supra, at 120.

Petitioner does not request this Court to resolve

earthshaking matters of constitutional law but does urge

that this Court resolve a question of fundamental fairness

under law, i.e., may a circuit court, through the abuse of

15

procedure and standard of review, circumvent this Court’s

mandates as to the doctrine of res judicata.

A. THE EIGHTH CIRCUIT’S TAKING UP FOR

THE FIRST TIME ON APPEAL THE QUES-

TION OF THE EXISTENCE OF PRIVITY, IN

THE ABSENCE OF ANY SPECIAL CIR-

CUMSTANCES, CONFLICTS WITH THIS

COURT'S DECISIONS IN HORMEL V.

HELVERING AND SINGLETON V. WULFF.

THE EIGHTH CIRCUIT’S TAKING UP FOR

THE FIRST TIME ON APPEAL THE QUES-

TION OF WHETHER THE RESPONDENT

SUED THE PETITIONER IN HIS CAPACITY

AS PRESIDENT AND PRINCIPAL SHARE-

HOLDER OF GURLEY REFINING CO., INC.

AND WHETHER THE DISTRICT COURT

IMPOSED LIABILITY UPON THE PETITION-

ER IN HIS CAPACITY AS PRESIDENT AND

PRINCIPAL SHAREHOLDER, IN THE AB-

SENCE OF SPECIAL CIRCUMSTANCES,

CONFLICTS WITH THIS COURT’S DECI-

SIONS IN HORMEL V. HELVERING AND

SINGLETON V. WULFF.

The petitioner addresses both parts A and B of I

above in a single argument. The Eighth Circuit, in reach-

ing its decision relative to the petitioner, accepted the

respondent’s argument (which was, as previously noted,

advanced for the first time in one page of respondent’s

appellate brief) that if GRC was afforded the defense of

res judicata, the petitioner was not a privy of GRC be-

16

cause he was sued in his individual, not corporate,

capacity and therefore was not entitled to invoke the pro-

tections afforded by the doctrine of res judicata.

Because the District Court had no reason to look

to the question of privity nor did the respondent have any

reason to argue that privity did not exist while urging its

motion for partial summary judgment to the District

Court, these matters were not confronted in petitioner’s

appellate brief. It was only at the time that the respond-

ent focused on the overwhelming law enunciated by this

Court (Brown v. Felsen, 442 U.S. 127, 138. n 10 (1979);

Montana v. United States, 440 U.S. 147, 154 (1979); Park-

lane Hosiery Co. v. Shore, 429 U.S. 322, 327n 5 (1979);

United States v. Southern Ute Tribe or Band of Indians, 402

U.S. 159, 162, 174 (1971)), relative to the parameters of

res judicata, that it commenced to search for other legal

arguments so as to foreclose the petitioner from success-

fully asserting that defense. This Court has observed that:

Ordinarily an appellate court does not give con-

Sideration to issues not raised below. For our

procedural scheme contemplates that parties shall

come to issue in the trial forum vested with au-

thority to determine questions of fact. This is es-

sentially in order that parties may have the oppor-

tunity to offer all the evidence they believe rele-

vant to the issues which the trial tribunal is alone

competent to decide; it is equally essential in order

that litigants may not be surprised on appeal by

final decision of issues upon which they have had

no opportunity to introduce evidence.

Hormel v. Helvering, supra at 556.

17

The Court revisited the general rule expressed in Hormel

in the case of Singleton v. Wulff, supra, noting that:

The matter of what questions may be taken up and

resolved for the first time on appeal is one left

primarily to the discretion of the courts of appeals,

to be exercised on the facts of individual cases. We

announce no general rule. Certainly there are cir-

cumstances in which a federal appellate court is

justified in resolving an issue not passed on below,

as where the proper resolution is beyond any

doubt, .. . or where ‘injustice might otherwise re-

sult.’ ... Suffice it to say that this is not sucha

case. The issue resolved by the Court of Appeals

has never been passed upon in any decision of this

Court. This being so, injustice was more likely to

be caused than avoided by deciding the issue with-

out petitioner’s having had an opportunity to be

heard.

428 U.S. at 121, citations omitted.

The Court appears to be saying that if the Court of Ap-

peals addresses and resolves a question for the first time

on appeal, it must properly find special circumstances to

allow it to bypass the general rule enunciated in Hormel."

Prior to its decision below, the Eighth Circuit had

faithfully followed the mandates of Hormel and Singleton.

" 11.S¢e, also, the case of Commissioner v. McCoy, 484 U.S. 3, 6 (1987),

wherein this Court disposed of a petition through a summary per cu-

riam opinion, the facts of which are very similar to the instant case.

Additionally, it should be a matter of great interest to this Court that

based upon a careful reading of the record, no special circumstances

could possibly have existed.

18

In the case of Stafford v. Ford Motor Company, 790 F.2d

702 (8th Cir. 1986), the Circuit acknowledged that the

general rule is that a federal appellate court will not con-

sider issues not passed upon below, citing as authority

Singleton v. Wulff. The Court observed that the rationale

of the rule is twofold:

First, the record on appeal generally would not

contain the findings necessary to an evaluation of

the validity of an appellant’s arguments. /St. Louis

Developmental Disabilities v. Mallory, 767 F.2d 518

(1985)] Mallory, 767 F.2d at 521. Second, there is

an inherent injustice in allowing an appellant to

raise an issue for the first time on appeal. A liti-

gant should not be surprised on appeal by a final

decision there of issues upon which they have had

no opportunity to introduce evidence. Hormel v.

Helvering, 312 U.S. 552, 556, 61 S.Ct. 719, 721, 85

L.Ed. 1037 (1941). A contrary rule could encour-

age a party to ‘sandbag’ at the district court level,

only then to play his ‘ace in the hole’ before the

appellate court.

790 F.2d 706.

The Stafford Court, quoting Singleton, observed

that courts of appeals have discretion with regard to ques-

tions taken up and resolved for the first time. It noted

that an appellate court is “justified” in considering an is-

sue whose “proper resolution is beyond any doubt” or

“ ‘where injustice might otherwise result,’ ” quoting Hor-

mel, supra, at 557. A subsequent Eighth Circuit case en-

larged upon reasons to consider an issue for the first time

at the appellate level by observing an issue may be con-

sidered if it was a legal question that had been fully

briefed and argued by the parties. Estate of Vak v. Com-

19

missioner of Internal Revenue, 973 F.2d 1409, 1412 (8th

Cir. 1992).

The Eighth Circuit in its decision enunciated no

special circumstances in the instant case to enable it, for

the first time, to address the questions of privity and ca-

pacity. As indicated in footnote 11 above, none existed.

There was no constitutional question present whose an-

swer was obvious. There was no miscarriage of justice

which would otherwise result from the appellate court not

acting as a district court regarding findings of fact, nor

were the legal questions addressed by the Circuit Court

ones that had been fully briefed and argued by the parties.

To be sure, the greatest apparent injustice present in this

case was created by the Eighth Circuit through its funda-

mentally unfair denial of the petitioner’s day in court,

which resulted in his becoming responsible for a money

judgment in excess of $1.7 million plus interest, as well as

a declaratory judgment against him for future response

costs estimated to be in excess of $6 million. A-59, A-77.

12-This Court also appears to have created an exception for criminal

cases when it noted that “The Court of Appeals recognized that it

need not ordinarily consider grounds of objection not presented to

the trial court.” (Citing Hormel.) The Court went on to say that the

above described rule has exceptions, particularly in criminal cases

wherein appellate courts can take judicial notice of errors that

impinge upon the fairness of the judicial proceedings. Anderson v.

United States, 417 U.S. 211, 217, n 5 (1974).

20

il. A. WHEN THE EIGHTH CIRCUIT RULED

UPON THE MERITS AS TO WHETHER THE

PETITIONER WAS SUED IN A PERSONAL

CAPACITY, RATHER THAN A CORPORATE

CAPACITY, IN THE INSTANT CASE, IT

FORECLOSED PETITIONER FROM PUT-

TING IN EVIDENCE THAT WOULD HAVE

ESTABLISHED HIS CLOSE RELATIONSHIP,

BORDERING ON NEAR IDENTITY, TO GRC,

AND AS SUCH CONFLICTS WITH THIS

COURT’S DECISIONS IN HORMEL V.

HELVERING AND SINGLETON V. WULFF.

B. THE EIGHTH CIRCUIT'S RULING UPON

THE MERITS AS TO THE QUESTION OF

PRIVITY, AFTER FINDING THAT THE DE-

FENSE OF RES JUDICATA WAS AVAILABLE

TO GURLEY REFINING CO., INC., FORE-

CLOSED THE PETITIONER FROM PUT-

TING INTO THE RECORD PROOF OF

PRIVITY WHICH CONSTITUTED AN UNAC-

CEPTABLE EXERCISE OF APPELLATE

JURISDICTION IN CONFLICT WITH THIS

COURT’S DECISIONS IN HORMEL V.

HELVERING AND SINGLETON V. WULFF

AND THE PRINCIPLES OF RES JUDICATA

ENUNCIATED IN HEISER V. WOODRUFF.

This petitioner reiterates that the Eighth Circuit

found the respondent had asserted the same claim in this

action that it had asserted in the 1983 action. A-19. As

was discussed above, the cause of action in the 1983 case

and the cause of action in the 1987 case (the instant case)

21

arose out of the same “nucleus of operative facts.” A-

15.

The petitioner has previously noted in this petition

that the District Court found petitioner’s liability (as well

as GRC’s) to be governed by §9607(a)(2). The Court re-

lied, inter alia, on the cases of United States v. Northeast-

ern Pharmaceutical & Chemical Co., 810 F.2d 726, 746

(8th Cir. 1986) (NEPACCO), cert. denied, 484 U.S. 848

(1987), and State of New York v. Shore Realty, 759 F.2d

1032, 1052 (2nd Cir. 1985). A-42. The fact is that notwith-

standing the District Court’s reliance upon NEPACCO

and State of New York, NEPACCO found individual liabil-

ity emanating not from §9607(a)(2) but from §9607(a)(3)

and State of New York noted that the individual in ques-

tion acquired personal liability as an owner and operator

because he was an owning stockholder who managed the

corporation. Jd. at 1052. Neither the two cases above nor

the opinion of the District Court below addressed the ex-

istence of privity. Thus, none of the three cases stand for

the proposition that capacity in which the privy is sued

must always be examined in the second case. Certainly

the fact that the petitioner was sued under 42 U.S.C.

13-One should not lose sight of the fact that the District Court, in in-

terpreting the respondent’s action against GRC and petitioner, stated

in its June 14, 1990, opinion that:

The main dispute concerns whether any of the defendants

are liable under section 107(a) which provides the categories

of parties who are liable. The United States contends that

GRC, Inc. and William Gurley are liable as owners and oper-

ators under Sections 107(a)({1) and (a)(2).

A-41.

$§9601, et seq., (whether in a corporate or individual ca-

pacity) would have no impact on petitioner’s right to the

defense of res judicata if the privity between petitioner

and GRC arose because there was near identity between

the two or because as a nonparty he had directed and

dominated the first litigation.

The appzrent flaw in the Eighth Circuit’s attempt

to use its appellate jurisdiction to factually foreclose the

question of privity for the petitioner was that it ignored

the question of privity vis-a-vis GRC and the petitioner in

the first action. One must remember it found the causes

of action in both the first and second cases to be the

same. It also then assumed that whether or not William

M. Gurley enjoyed a relationship bordering on near iden-

tity with GRC and whether or not William M. Gurley, as

a stockholder, alter ego and nonparty, had participated in

and dominated the litigation in the first proceeding, it

could reinterpret respondent’s pleadings and the District

Court’s findings in the second proceeding so as to fore-

close petitioner’s right to the defense of res judicata. All

of this is in violation of that mandate set out by this Court

in Heiser v. Woodruff, 327 U.S. 726 (1946), ie., “no princi-

ple of law or equity . . . sanctions the rejection . . . of the

salutary principle of res judicata.” Id. at 733.

This petitioner has previously pointed out that the

Circuit Court further rejected the argument that 42

US.C. §9613(g)(2) by its operation allowed the respond-

ent to bypass the application of res judicata (A-17) and

that the Circuit found that GRC was a party to the prior

action but that petitioner was not. A-19. The Circuit

Court, having made that assessment, did not determine

23

whether there was a sufficient record before it to reach a

mixed question of fact and law as to whether privity exist-

ed between GRC and the petitioner in the prior action.

The Circuit Court bypassed that obligation in an adroit

manner.

The Eighth Circuit addressed petitioner’s relation-

ship with GRC and discussed the newly raised issues of

privity and in what capacity petitioner was sued (A-19-

21), notwithstanding the fact that no true record existed

from the District Court below as to those two proposi-

tions. The Court noted that “[a] person is in privity with

another person if he has ‘ “a close relationship bordering

on near identity.” ’ Headley v. Bacon, 828 F.2d 1272, 1276-

79 (8th Cir. 1987).” A-20. Despite that observation and

faced with limited findings of fact by the District Court

that could very easily be interpreted in favor of the peti-

tioner being an alter ego of GRC, the Eighth Circuit, in-

voking a de novo standard, found as a matter of law that

Gurley had no close relationship with GRC. A-20.

Finally, the Court of Appeals examined the capaci-

ty in which petitioner had been sued, ostensibly for the

purpose of determining whether privity existed in the sec-

ond suit. This was procedurally improper. As stated

above, privity is determined by the relationship of GRC

and the petitioner in the first (1983) case. Any examina-

tion of the second (1987) case has to be for the purpose

of determining whether the causes of action are the same

in both cases. The Circuit Court, having found that with

regard to the respondent and GRC the causes of action

were the same, proceeded to reinterpret the respondent’s

complaint and the District Court’s findings as follows:

24

Here, William Gurley is the principal shareholder,

the president, and one of two directors of GRC.

The only other director and only other sharehold-

er is his wife, Betty Gurley. It is undisputed that

the district court imposed liability on him not in

his capacity as principal shareholder, president,

and director, but as an individual who meets

§9607(a)(2)’s definition of ‘operator.’ Thus, Wil-

liam Gurley is not in privity with GRC and may

not assert the defense of res judicata.

A-20-21.

In making the foregoing legal conclusion, the

Eighth Circuit ignored contrary legal and factual conclu-

sions made by the District Court. It thereupon relied

upon a footnote in the case of Oglala Sioux Tribe v.

Homestake Mining Co., 722 F.2d 1407 (8th Cir. 1983), (to

the effect that directors, officers and shareholders not

solely named as such in the second suit cannot claim

privity with the corporation) (Id. at 410, n 3, A-20-21) to

buttress its improper exercise of appellate jurisdiction."

14-The Court’s reliance on that footnote was clearly misplaced. Foot-

note 3 to Oglala Sioux Tribe stands for the proposition that directors

of a corporation, when sued in that capacity, may be in privity with

that corporation for the purposes of res judicata. It does not stand for

the proposition that only such directors sued in such Capacity may be

in privity. Indeed, there are a number of ways in which a person may

be in privity with a corporation, such as a shareholder with sufficient

interest in the litigation by the corporation, participating and control-

ling that litigation, (1B Moore’s Federal Practice 40.411[6] (2nd Ed.

1974), pp. III-253-254), or by other special relationships between the

stockholder and the corporation, as well as the application of “sub-

stantial identity of parties.” Id. at |0.411[9], pp. I1I-267-274.

25

This apparent legal conclusion (which is in truth a

finding of fact) by the Court of Appeals is quite remarka-

ble. One has but to examine the respondent’s complaint,

its requests for admissions, and the District Court’s deci-

sion of June 14, 1990, to determine how really remarka-

ble it is.

The complaint filed by the respondent described

the petitioner as follows:

On information and belief, William Martin Gurley,

is president of and principal shareholder in Gurley

Refining Co., Inc., and partner in Gurley Refining

Company. William Gurley, at all times relevant

herein, was responsible for the conduct and man-

agement of the Gurley site. William Gurley con-

trolled the affairs and activities of Gurley Refining

Company, Inc., and Gurley Refining Company.

A-86

This was the only description of the petitioner in the

complaint filed by respondent in the second case.

Through requests for admissions in the second suit

(A-105), the respondent sought to have William M. Gur-

ley admit that in his “capacity” as president of GRC:

= He sought a site for disposal;

= He leased the site from R. A. Caldwell;

= He was the “operator” of the site as defined at

42 U.S.C. §9601(20)(A);

26

= He accompanied the driver who “dumped the

first truckload of waste” at the site;

= He directed the activities of the employees of

GRC;

and so on. A-107-113.

Finally, the District Court, in granting the re-

spondent’s motion for partial summary judgment, held

“,.. that Gurley is personally liable because as a corpo-

rate official and major stockholder he was responsible for

the daily management of the Pit and the disposal of haz-

ardous wastes in the Pit.” A-44.

Although the District Court did have the benefit of

petitioner’s discovery deposition, that deposition was not

directed toward the question of the capacity in which he

was being sued and, because the question of res judicata

ceased to be a viable defense by the District Court’s

granting of the motion for partial summary judgment, the

petitioner was foreclosed from testifying in the trial of the

cause with regard to any legal point other than to ques-

tion whether the respondent’s costs of remediation were

consistent with the national contingency plan. Thus, there

was no legal way for petitioner to interject the question of

privity or in what capacity he was being sued nor had the

District Court or the respondent even broached those

questions prior to the granting of the partial summary

judgment.

The Eighth Circuit, in addressing the question of

the capacity in which the petitioner was sued, seems to be

taking a position that is contrary to law. As previously

stated, the threshold question is whether petitioner was a

27

privy of GRC when the case of United States v. Caldwell

was brought and subsequently tried. If that is answered in

the affirmative, then it may be proper for the Circuit

Court to determine if the petitioner was sued in any ca-

pacity other than that which created his privity in the first

suit.!> Certainly the Eighth Circuit below proceeded to

manufacture a different capacity in which the petitioner

was sued in the District Court as a means of justifying its

denial of the petitioner his day in court. This would be in

regard to both the question of privity and the question of

capacity. As pointed out by this Court:

We have no idea what evidence, if any, petitioner

would, or could, offer in defense... , but this is

only because petitioner has had no opportunity to

proffer evidence. ...

=s* &

The issue resolved by the Court of Appeals has

never been passed upon in any decision of this

Court. This being so, injustice was more likely to

be caused than avoided by deciding the issue with-

out petitioner’s having had an opportunity to be

15-This statement assumes that the matter of privity as between, in

this case, GRC and the petitioner arose because of petitioner’s activi-

ty as a stockholder, president, director, etc. The cases, such as Oglala

Sioux and Headley, which stand for this examination of capacity, are

not necessarily important to cases where privity has been created by a

nonparty dominating the litigation in the first instance and by an indi-

vidual who becomes an alter ego (under the facts of the case) of the

corporation that is entitled to the defense of res judicata. The citation

of Headley and Oglala Sioux by the Eighth Circuit in support of its

finding that no privity exists assumes facts that are neither in the rec-

ord nor available to that Court in any other fashion.

28

heard.

Assuming, therefore, that the Court of Appeals

had jurisdiction to proceed to the merits in this

case, we hold that it should not have done so. To

that extent, its judgment is reversed and the case is

remanded with directions that it be returned to the

District Court so that petitioner may file an answer

to the complaint and the litigation proceed accord-

ingly.

Singleton v. Wulff, supra, at 120-121.

The manner in which the Eighth Circuit decided

the questions of privity and capacity on the merits also

foreclosed (as previously indicated in footnote 8) peti-

tioner’s ability to demonstrate his overall nonparty con-

trol of the United States v. Caldwell litigation. This is par-

ticularly important with regard to petitioner being able to

establish an additional reason why he is in privity with

GRC. This Court has observed in Montana v. United

States, supra:

These interests are similarly implicated when non-

parties assume control over litigation in which they

have a direct financial or proprietary interest and

then seek to redetermine issues previously re-

solved. As this Court observed in Souffront v.

Compagnie des Sucreries, 217 U.S. 475, 486-487, 54

L.Ed. 846, 30 S.Ct. 608 (1910), the persons for

whose benefit and at whose direction a cause of

action is litigated cannot be said to be ‘strangers to

the cause... . [O]ne who prosecutes or defends a

suit in the name of another to establish and pro-

tect his own right, or who assists in the prosecution

or defense of an action in aid of some interest of

his own ... is as much bound . . ..as he would be if

29

he had been a party to the record.’

440 US. at 154.

When one couples the teachings of this Court in

Hormel, Singleton and Montana with the analogous au-

thority of Commissioner v. McCoy, Nevada v. United

States, 463 U.S. 110, 129-132 (1983), and Fountain v. Fil-

son, 336 U.S. 681, 683 (1949), it becomes apparent that

the Eighth Circuit has ignored this Court’s admonition

that:

... Quite apart from these considerations, the

Court of Appeals’ resolution of the merits seems

to us to be an unacceptable exercise of its appel-

late jurisdiction.

As noted, with respect to the complaint’s count

that is before us, petitioner filed in the District

Court only a pre-answer motion to dismiss for lack

of standing. . . . In short, petitioner has never been

heard in any way on the merits of this case.

Singleton at 119-120."°

16.Cf Thomburg v. American Coll. of Obst. & Gyn., 476 U.S. 747, 757,

821 (1986), wherein a majority of this Court recognized the applica-

tion of Singleton but carved out an additional exception that allows a

court of appeals to address a matter not addressed below if, inter alia,

the facts are established or not relevant to the question reviewed. Jd.

at 757. It should be noted that the dissent in that case quoted with

authority Hormel and Singleton and found Fountain to be analogous

authority. Jd. at 821. Also, cf. Kamen v. Kemper Financial Services, 500

U.S. 90, 100, (1991), wherein this Court, in remanding a matter for

consideration by the Court of Appeals, took the trouble to note that

despite its position in the instant case, it did not “mean to suggest

that a court of appeals should not treat an unasserted claim as waived

or that the court has no discretion to deny a party the benefit of fa-

30

lll. | SPECIAL AND IMPORTANT REASONS EXIST

FOR GRANTING THIS PETITION.

In summary, the petitioner respectfully submits to

this Honorable Court that special and important reasons

exist for the granting of his petition for a writ of certio-

rari. It is clear from the foregoing that the Eighth Circuit

Court of Appeals has departed so far from the accepted

and usual course of judicial proceedings that an exercise

of this Court’s power of supervision is called for. Notwith-

standing the mandate of this Court as contained in Single-

ton and Hormel, the Circuit Court has taken upon itself

the determination of the issues of privity and capacity

upon the merits although no special circumstances existed

for such determination and although an insufficient rec-

ord was before the Court. In so doing, it has deprived the

petitioner of his fundamental right to present evidence

showing that his relationship to GRC at the time of the

1983 action was such that he, like his alter ego GRC, is

entitled to the protections afforded by the doctrine of res

judicata. By depriving him of the defense of res judicata,

the Circuit Court has unfairly subjected him to monetary

liability approaching $10 million. The petitioner respect-

fully petitions this Court to issue a writ of certiorari and,

because the Eighth Circuit’s opinion constitutes a direct

rejection of this Court’s mandates in Hormel, Singleton

and McCoy, petitioner respectfully urges the Court to dis-

vorable legal authorities when the party fails to comply with reasona-

ble local rules on the timely presentation of arguments. See generally

Singleton v. Wulff, 428 U.S. 106, 121, 49 L.Ed.2d 826, 96 S.Ct. 2868

(1976)....” 114 L.Ed.2d at 166.

31

pose of this matter through a summary per curiam opin-

ion.

——

Respectfully submitted,

James W. GENTRY, JR.

Counsel of Record

SPEARS, Moore, REBMAN

& WILLIAMS

8th Floor Blue Cross Building

Chattanooga, Tennessee 37402

(615) 756-7000

Exton A. Rieves IV .

Rieves & MayTon

304 East Broadway

West Memphis, Arkansas 72303

Counsel for Petitioner

William M. Gurley

32

a