Petition for Writ of Certiorari — Jones-Blair Co. v. Hardage Steeling Committee

Supreme Court brief1995

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In The

Supreme Court of the United States

October Term, 1995 ,

THE JONES-BLAIR CO. and THE O’BRIEN CORPORATION,

Petitioners,

vs.

THE HARDAGE STEERING COMMITTEE,

Respondent.

Petition for Writ of Certiorari to the United States Court of

Appeals for the Tenth Circuit

PETITION FOR WRIT OF CERTIORARI

TIMOTHY L. HARKER

Counsel of Record

THE HARKER FIRM

Attorneys for Petitioners

5301 Wisconsin Avenue, N.W.

Suite 740

Washington, D.C. 20015

(202) 966-7900

Arges (800) 3 APPEAL + (800) 5 APPEAL + (800) BRIEF 21

ervices, inc.

QUESTIONS PRESENTED

I. When counsel for two de minimis parties states on-the-

record that his clients do not authorize settlement and the district

court orders a settlement nonetheless although no party asked him

todo so, does the judge’s statement that “[t]he Court is not about to

undertake a trial of this magnitude and size on behalf of two de

minimis parties” indicate the appearance of bias or adverse

predisposition requiring recusal under 28 U.S.C. § 455 when the

case is remanded by the Court of Appeals to determine if a

settlement arose?

II. Has a district court in a federal environmental case

impermissibly created a new federal law of settlement that negates

state law when: (a) liaison counsel, the one person the district

court said was authorized to settle on Petitioners’ behalf, testified

he did not do so; (b) Petitioners’ counsel stated in court on-the-

record that his clients wanted their day in court and did not want to

settle; (c) state statutory law requires that “consent of the parties to

a [settlement] be free, mutual and communicated by each to the

other,” and the record shows none of these criteria are present; and

(d) nonetheless, the court finds a settlement was reached while

ignoring the state statutory right to rescind or revoke any

settlement allegedly reached over counsel’s objection?

IIf. Has the district court impermissibly established a new

federal law of settlement that negates state law and constitutional

due process when, over Petitioners’ counsel’s in-court objections

that his clients do not authorize a settlement and wish their day in

court, the district court relies on a letter written to liaison counsel

six days earlier for authority to order a settlement?

LIST OF PARTIES

The Jones-Blair Co. and The O’Brien Corporation,

Petitioners named in the caption were third party defendants and

appellants below.

Neither the Jones-Blair Co. nor The O’Brien Corporation

have parent companies nor subsidiaries.

Respondent, Hardage Steering Committee (“HSC”), the

defendants in United States v. Hardage et al., 750 F. Supp. 1460

(W.D. Okl. 1990) including the following companies: Advance

Chemical Company, Allied-Signal, Inc.; AT&T Technologies,

Inc.; Ashland Oil, Inc.; Atlantic Richfield Company; Borg Warner

Corporation; Cato Oil & Grease Company; Dal-Worth Industries,

Inc.; Double-Eagle Refining Company; Exxon Corporation; The

Firestone Tire & Rubber Company; Foster Feed & Seed Co.;

Gencorp, Inc.; Bull HN Information Systems, Inc.; J.0.C. Oil

Exploration Company, Inc.; Kerr-McGee Refining Corporation;

L&S Bearing Company; Magnet Peripherals, Inc.; Maremont

Corporation; McDonnell-Douglas Corporation; Mobil Chemical

Corporation; Nalco Chemical Company; Oklahoma Gas and

Electric Company; Oklahoma National Stockyards Company;

The Oklahoma Publishing Company; Rockwell International

Corporation; Texaco, Inc.; Texas Instruments, Inc.; Uniroyal,

Inc.; UOP, Inc.; Westinghouse Electric Corporation;

Weyerhaeuser Company; Powell Sanitation Service, Inc.; Samuel

L. Bishkin, individually, and doing business as Eltex Chemical &

Supply Company; United States Pollution Control, Inc.

TABLE OF CONTENTS

Page

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Statement of Jurisdiction ....................... 2

ati EETTET EPR 2

wmmomentoftheCnes ........ 2... 3

Reasons for Grantingthe Writ ..................0 6

I. The court of appeals has not followed this Court’s

guidance that “justice must Satisfy the appearance

. .. 2 eee 8

II. The circuit court’s decision improperly validates

the district court’s establishment of a new federal

settlement rule contrary to existing Oklahoma law

and this Court’s precedent. ............... 14

A. For A Binding Settlement To Arise Under

Oklahoma Law JB/O’Brien Had To

Communicate Acceptance Of HSCs

Settlement Offer To An Agent Of The HSC

Authorized To Receive JB/O’ Brien’s

DI S58 0h bod coe ekecc cnc... 15

Contents

B. The Evidence Shows No Authorized Party

Accepted HSC’s Settlement Offer On Behalf

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C. The Courts Below Ignored JB/O’Brien’s

Right To Revoke Or Rescind Under Oklahoma

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Ill. The district court’s finding that “once Cook Paint

settled with HSC, settlements between HSC and

Jones-Blair and O’ Brien were effected” is contrary

to Oklahoma law and represents a serious breach of

federalism since it establishes a new federal

settlement rule without justification. ..........

CORNERS. oa kis caged s cnsabeas wakes avesvancees

TABLE OF CITATIONS

Cases Cited:

Armstrong v. Guy H. James Const. Co., 402 P.2d 275

COIIe i ve pd idwanccasewiesnsieds a veuwenekesel

City of Milwaukee v. Illinois and Michigan, 451 U.S. 304,

oe Re yk. Pe rong er ey re

Coates v. First Nat’l Bank and Trust Co. v. Okla. City, 176

Olin. SEo, Sa ines LAO: 6c cnn ssccevaccnaweees

Day and Zimmermann Inc. v. Challoner, 423 U.S. 3 (1975)

oeeeeeeeeveeeeeeeeeeeeeeeeveeeeeeeee eee eee eee ee

Page

16, 17

Contents

Page

Erie Railroad Co. y. Thompkins, 304 U.S. 64 i | 7,8

1414 Partnership y. Taveau, 815 P.2d 1228 (Okla. App.

MOE 8A bis osevnnicieneetcavint, Cems 17

Harmon vy. Diversified Mutual Ins. Co., 524 F.2d 361 (10th

actin AEE CCE eT Ee 19

In re La Mare, 494 F.2d 753 a ef, | an 14

In re Murchison, 349 U.S. 133 | RP ptt as 9,13

Litkey v. United States, 1145 Ct. 1147(1994) ......... 9,12

Maddox v. Northern Natural Gas Co., 259 F. Supp. 781

ON TUNE 55 595 6oeted diveiec cc, 15, 16

Marshall v. Jerrico, Inc., 446 U S.238(1980) ......... 8

Matter of Estate of Dillon, 575 P.2d 127 (Okla. App. 1977)

itd state E LT TT TT Ty Pe rear Tees 21

Mistretta v. United States, 488 U.S. 361 (1988) ......... 11

Offutt v. United States, 348U.S.11 .................. 13

Salve Regina College v. Russeil, 499 U.S. 225(1991)...., 8,15

Swift v. Tyson, 16 Pet. 1 SEE éakving seh eede nie 8

Telex Corp. v. AiResearch Aviation Co., 460 F.2d 215 (10th

MO POTEE 0h 08. s8ab eh cans es 19

Contents

Page

United States v. Antar, 53 F.3d 568 (3rd Cir. 1995) ...... 12,13

United States v. Cannons Engnr. Corp., 899 F.2d 79 (ist

CU SOO ccncanneceeasuchiegucéueeedsadeanuas 1]

United States v. Colorado and Eastern Ry. Co., 50 F.3d

SISO RSG SOD. v éswccccsoncncencessonuine’ 10

United States et al. v. Buckner & Moore, 505 F. Supp. 409

COSA GER: BUFED o cccccccd ead dddaubeteeweess 16, 17

United States v. Hardage, 750 F. Supp. 1460 (W.D. Okla.

IDOE) cccncccdcvecucesuwewssesececuesuneenen 10

United States v. Olano, __ U.S. __, 113 S. Ct. 1770 (1993)

cavcdecseeseceunseeuanceacheeeeskaneenen 12

Watkins v. Grady County Soil and Waste Con. Dist., 38 P.2d

Gt GIRGR. SUED 0c cuccccdécavesescnnusséeauace 19

Statutes Cited:

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ites & } Perrrrrrrrer yy poy 2,4, 22

ISOB. 8232 woviccseccssdeuessesabbeseeeeee 16

BOCAS. OS. cctcvauas otéeekeeseneaneeeiereeane 2,4, 16,21

ISOB. GSD cccccccesecsccesecsccstcceuesdesaue 4,16

vii

Contents

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DEININUE SwiNwnwsinssewavakcuwouecdeceecei. il 2,4,21

sic nts as dine CREEL OS CPET EEE CE 2,4,7,22

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2 onc cee EE AO Ie ae EE 9

Contents

Page

Bs BONED | A vk deen eed cctcuecedcoctaded 3,10, 11

Other Authorities Cited:

Restatement (2d) Agency:

COU chkhadedupiscccecasehadesiosseaseuseanien 18

DOE sin cccncsvchadedidalivdisedseereee 18

LUD: ack.0'0s usp davdcusdedacennsenkenanaiee 18

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W. Blackstone Commentaries, Book III,*361 ......... 13

APPENDIX

Appendix A— Order of the United States District Court for

the Western District of Oklahoma Denying Motion for

DOU occ ccscrccsncesscedckeaseeisbennvewnno* la

Appendix B — Order of the United States District Court for

the Western District of Oklahoma Finding a Settlement

ADOABGR TEINS, BIE ccc cocnccssessnsvcervess 3a

a ee

ee es _

Contents

Appendix C — Order of the United States Court of Appeals

for the Tenth Circuit Denying Appeal Filed May 5,

WT WAV EN Nwakakey seuoves Cel Paseo kis esac...

Appendix D — Order of the United States Court of Appeals

for the Tenth Circuit Denying Rehearing Dated July 5,

de D ETE COE Se ts oe ce re een eae

Appendix E — Appropriate Provision of Oklahoma

Statutes Title 15—Contracts ....................

Appendix F — Excerpts of Transcript Enforcing

Settlement Dated March 27,1991 .................

Appendix G — Letter Dated March 22, 1991 from Mr.

PN cbse aden cecwnvanctes.

Appendix H — Order of the United States District Court

for the Western District of Oklahoma Denying

Summary Judgment Motion .....................

Appendix I — Excerpts of Transcript Dated December 21 ,

ong BEE OP CS erp hr ppp Cae

Appendix J — Deposition of Robert Roark, Esq., Counsel

for HSC (Admitted to Record in Lieu of Direct

I ho eas hu oihes oka beck

Appendix K — Deposition of Robert Tomlinson, Esq.,

Counsel for HSC (Admitted to Record in Lieu of Direct

| REE CSTE eet nA Ae ee

Page

12a

19a

25a

29a

38a

40a

Contents

Page

Appendix L — Captioned Brief/Motion Relative to Partial

SUMMMATY FUGRMION occ cde ccccccsccceseccceseces 79a

Appendix M — Application of O’Brien, Jones-Blair and

Akzo to File Oversized Brief Filed October 15,1990... 8la

Appendix N — Deposition of Patricia Houle for O’Brien

Corp. (Admitted in Lieu of Direct Examination) ..... 83a

No.

In The

Supreme Court of the United States

~>-

October Term, 1995

THE JONES-BLAIR CO., AND THE O’BRIEN

CORPORATION,

Petitioners,

vs.

THE HARDAGE STEERING COMMITTEE,

Respondent.

Petition for Writ of Certiorari to the United States Court of

Appeals for the Tenth Circuit

PETITION FOR WRIT OF CERTIORARI

Petitioners, the Jones-Blair Co. and the O’Brien

Corporation, respectfully pray that a writ of certiorari issue to

review the judgment of the court of appeals entered in this case on

May 5, 1995.

OPINIONS BELOW

Following appeal of an April 2, 1991 settlement order by the

Western District of Oklahoma, the United States Court of

Appeals for the Tenth Circuit remanded the case for an

evidentiary hearing. 982 F.2d 1491 (10th Cir. 1993). The district

court for the Western District of Oklahoma entered its judgment

denying Petitioners’ Motion for Recusal on March 25, 1993.

(Appendix A). On January 10, 1994, the district court issued its

final order in this case finding Petitioners, the Jones-Blair Co.

and the O’Brien Corp. (“JB/O’ Brien”) entered into a settlement

with the Hardage Steering Committee (“HSC”) on March 27,

1991. (Appendix B). On May 5, 1995, the Tenth Circuit denied

Petitioners’ subsequent appeal (Appendix C), and on June 28,

1995, denied Petitioners’ Request for Rehearing. (Appendix D).

The decisions following remand are unreported but are contained

in the Appendix.

STATEMENT OF JURISDICTION

The United States Court of Appeals for the Tenth Circuit

denied Petitioners’ appeal of the decisions of the district court on

May 5, 1995. Petitioners filed a timely request for rehearing,

which was denied by the Tenth Circuit on June 28, 1995. The

jurisdiction of this Court is invoked under 28 U.S.C. § 1254(1).

STATUTES INVOLVED

The textual portions of Oklahoma Statutes, Title 15

(Contracts), §§ 1, 2, 51, 53, 63, 66, 67, 71-73, 233 and 235

relevant to the determination of this appeal are set forth in

Appendix E. The appropriate textual portions of 28 U.S.C. § 455

relevant to this Court’s review are set forth below:

§ 455. Disqualification of justice, judge, or

magistrate

(a) Any justice, judge, or magistrate of

the United States shall disqualify himself in

any proceeding in which his impartiality

might reasonably be questioned.

STATEMENT OF THE CASE

JB/O’ Brien were in the district court defending against the

HSC’s cost recovery claim under § 107 of the Comprehensive

Environmental Response, Compensation and Liability Act

(“CERCLA”), 42 U.S.C. § 9607. Thus, the district court had

jurisdiction under 42 U.S.C. § 9613. Although JB/O’ Brien had

each already paid hundreds of thousands of dollars to the United

States in a de minimis settlement of their alleged CERCLA

liability, in September 1989 the district court ruled that the

contribution protection of 42 U.S.C. § 9622(g)(5) did not

extinguish HSC’s claim against JB/O’ Brien under CERCLA. By

March 27, 1991, only JB/O’ Brien and one other defendant, Cook

Paint, all represented by the same counsel, Mr. Schulcz of The

Harker Firm, remained in the case.

The transcript of the March 27, 1991, hearing in the district

court judge’s chambers at Appendix F paints the picture of

judicial bias, one of the two overriding issues in the case. Mr.

Conger, liaison counsel, cited a letter at Appendix G written to

him six days before by Mr. Harker, JB/O’Brien’s counsel, and

said a settlement on their behalf should go forward. (App. F, 32a-

34a). JB/O’Brien’s own counsel of record, Mr. Schulcz, then

denied the current validity of the letter and represented to the

district court that his clients had not authorized and did not

authorize settlement and that liaison counsel had previously been

informed that the letter’s terms had been revoked. (App. F, 34a-

35a). Judge Lee West then said:

The Court will enforce the settlement. . . .

The Court is not about to undertake a trial of

this magnitude and size on behalf of two de

minimis parties. Costs would very quickly

exceed any amount in controversy as hetween

them and certainly exceed any differences in

their position now from the time that that was

stated. For those reasons the Court will

enforce the settlement.

(App. F, 35a) (emphasis added).

To JB/O’Brien and any reasonable person, the judge’s

declaration was clear: “not about to undertake a trial of this

magnitude and size on behalf of two de minimis parties” means

“T’m not about to let you de minimis parties have your day in court

under any circumstances.”

JB/O’ Brien appealed the district court’s order. The Tenth

Circuit vacated the order and remanded the case to the district

court for an evidentiary hearing concerning whether a settlement

was reached. JB/O’Brien then moved for Judge Lee West’s

recusal under 28 U.S.C. § 455, based on his on-the-record

statement that he was not about to give JB/O’Brien (the two de

minimis parties) their day in court and his previous refusal to rule

on several dispositive motions that had been filed months before

the March 1991 trial date. The judge denied JB/O’ Brien’s recusal

motion.

After deposing the witnesses, JB/O’Brien moved for

summary judgment. Judge West denied the motion without

explaining what material facts were still in dispute. (App. H). A

hearing was held in December 1993.

The second overriding issue arose because of the district

court’s failure to apply Oklahoma’s law of contracts. Under the

provisions of Title 15 of Oklahoma Statutes (“15 O.S.”) HSC was

required to show that the adverse parties intended and agreed to

settle, i.e., there was a meeting of the minds (15 O.S. §§ 2, 51, 66),

and that JB/O’ Brien communicated acceptance to someone in the

HSC authorized to act on its behalf. (15 O.S. §§ 51.3, 67). Yet the

record shows that this was not the case. Rather, the following

evidence was before the district court.

Liaison counsel, Mr. Conger, admitted that he neither settled

on behalf of JB/O’Brien nor communicated to HSC any

acceptance of its offer. (App. I, 52a-53a). HSC admitted to the

district court that Mr. Conger did not settle (App. I, 46a), but

argued, without evidence, that Mr. Condren, a lawyer who did not

represent JB/O’Brien, settled on JB/O’Brien’s behalf. (App. I,

46a).

Mr. Conger’s failure to communicate acceptance was not a

mere oversight. Under the laws of agency and Rules of

Professional Responsibility, Mr. Conger could not openly act

against his de minimis clients’ interests. Mr. Conger already

knew that the settlement instructions for JB/O’Brien he had

received in a letter six days earlier were outdated and had been

changed when (1) he heard Mr. Schulcz, JB/O’Brien’s counsel,

argue with Mr. Condren, a co-counsel for Cook Paint (App. I,

60a), and Mr. Condren informed Mr. Conger that Mr. Schulcz had

said JB/O’ Brien would not settle even if Cook Paint settled (App.

I, 60a); and (2) in an off-the-record conference in Judge West’s

chambers, he again heard Mr. Schulcz say JB/O’ Brien had not

authorized settlement. (App. B, 9a - Finding No. 21). This all

transpired before the HSC ever knew about Mr. Harker’s letter

written to Mr. Conger six days earlier or its terms addressing a

possible settlement scenario that Mr. Schulcz now repudiated.

(App. J, 68a-70a, App. K, 75a-77a).

Given the requirement under Oklahoma contract law, that

acceptance of a settlement offer be communicated to the offeror

by the offeree, HSC’s admission (App. I, 46a) that it had received

no settlement acceptance from anyone who had authority to act

for JB/O’ Brien should have resolved the issue. It dovetailed with

Mr. Conger’s admission that he did not settle on JB/O’Brien’s

behalf. Nonetheless, the district court found JB/O’Brien had

settled with HSC without ever mentioning Oklahoma law. How

then, over the in-court representations of trial counsel on the day

of trial that his clients did not agree to settle, did a settlement arise

if no one ever communicated acceptance of an offer? Either a

biased district court was once again improperly depriving two de

minimis parties of their day in court or the district court had

unlawfully created a new federal settlement rule overriding state

contract law.

Additionally, JB/O’Brien argued to the district court that

under Oklahoma law they had repudiated or rescinded any

agreement that might arguably have arisen. (App. I, 49a-50a).

They made the same argument to the court of appeals since the

district court ignored this fundamental right under state law.

Without discussion, both as the refusal to recuse and the

validity of the settlement, the Tenth Circuit affirmed the district

court’s decisions. (App. C, App. D).

REASONS FOR GRANTING THE WRIT

This case addresses fundamental rights of federal litigants

and the proper role of judges in the exercise of those rights. It is

not the typical settlement dispute arising when one party decides

to change its mind after both parties reach an agreement

following a period of negotiations. In this case HSC, the opposing

party, admitted that there were no negotiations (App. J, 68a) and

it found out that there was a settlement only when it went into the

Judge’s chambers to hear the judge make a record of the

settlement HSC didn’t know had been reached. (App. J, 68a-70a,

App. K, 75a-77a). Moreover, none of the parties here asked

Judge West to enforce a settlement. He did so on his own

initiative so he would not have to have a trial. Becoming JB/

O’Brien’s adversary, Judge West made his purpose very clear on

the record: “The Court is not about to undertake a trial of this

magnitude and size on behalf of two de minimis parties. ...” For

justification, Judge West improperly overrode JB/O’ Brien’s own

counsel’s unmistakable representations that (1) JB/O’Brien did

not want to settle and (2) prior settlement instructions to liaison

counsel had been revoked in accord with 15 O.S. § 72 (a

settlement offer may be revoked any time before it is

communicated to the other side).

No case has come before this Court where the presiding

judge said he would force a settlement (1) without being asked to

do so by one of the parties involved, (2) over the objections of

counsel who made it crystal clear that his clients did not want to

settle and (3) for the purpose of denying one side its day in court.

This is an issue of fundamental fairness, due process and judicial

integrity.

This case involves two other issues fundamental to the

orderly and constitutional administration of justice, the right to

have state law properly applied by federal courts to determine

contract issues and the responsibility of reviewing courts to

insure that this is done. In Erie Railroad Co. v. Thompkins, 304

U.S. 64 (1938), this Court reversed a dangerous precedent that

had allowed federal courts to fashion their own version of what

they thought state law should be. Under the Erie Doctrine, federal

courts must apply state law as it is applied in the state courts;

federal judges are “not free to engraft on those state rules

exceptions or modifications” incompatible with state law. Day

and Zimmermann Inc. v. Challoner, 423 U.S.3, 4 (1975). Yet that

is precisely what happened here.

The district court’s opinion finding JB/O’ Brien entered into

a settlement (without the HSC knowing it) makes not a single

mention of state law. State law requires affirmative acceptance of

an offer by the offeree, for a contract to arise. But the counsel

authorized to enter into the agreement admitted that he did not do

so and HSC, the opposing party agreed. Nonetheless, the court

found a contract to settle had arisen. Although state law allows an

offer to be withdrawn, and liaison counsel was notified that his

previous instructions had been changed before HSC ever found

out about the offer, the court said the original offer was

irrevocable. This is not the application of state law under Erie but

a return to the anything goes days of Swift v. Tyson, 16 Pet.1

(1842).

The court of appeals compounded this error by forgetting

this Court’s guidance in Salve Regina College v. Russell, 499 U.S.

225, 231 (1991) that, since courts of appeals were better situated

to evaluate the nuances of state law and ensure its uniform

application and interpretation, they were not to defer to district

courts on the application of state law. Although the district

court’s failure to apply state law was clearly before the court of

appeals, its affirmance says not a single word about state law.

Given Judge West’s statement about not having a trial, one would

have thought the court of appeals might have been interested in

the appearance of justice enough to list the elements of contract

and how they were met. Consequently, the court of appeals

breached it obligation to insure state law was applied properly.

THE COURT OF APPEALS HAS NOT FOLLOWED

THIS COURT’S GUIDANCE THAT “JUSTICE MUST

SATISFY THE APPEARANCE OF JUSTICE.”

“The Due Process Clause entitles a person to an impartial

and disinterested tribunal in both civil and criminal cases.”

Marshall v. Jerrico, Inc., 446 U.S. 238, 242 (1980). An impartial

judge is a necessary factor in insuring “an impartial and

disinterested tribunal,” since “[flairness of course requires an

actual absence of bias in the trial of cases.” Jn re Murchison, 349

U.S. 133, 136 (1954).

As acorollary to this fundamental right, 28 U.S.C. § 455(a)

requires that a judge “disqualify himself in any proceeding in

which his impartiality might reasonably be questioned.” The

standard is an objective one, “so that what matters is not the

reality of bias or prejudice but its appearance. Quite simply and

quite universally, recusal [is] required whenever impartiality

might reasonably be questioned.” Litkey v. United States, 114S.

Ct. 1147, 1154 (1994).

The threshold question is what appearance did Judge West

cause when he refused to accept JB/O’Brien counsel’s (Mr.

Schulcz) representations on the day of trial that his clients did not

authorize settlement and stated, instead, that the court was “not

about to undertake a trial . . .on behalf of two de minimis parties.”

On its face the statement suggests that due process is dependent

on the dollar amount at stake, that if the dollar amount of the

claims were more substantial JB/O’Brien would be entitled to

their day in court. Clearly, the statement indicates a judicial

viewpoint that a party’s opportunity for a trial is a privilege not a

right, dependent on the judge’s evaluation of the trial’s value.

When the Tenth Circuit remanded to Judge West the question of

whether JB/O’Brien agreed to a settlement, is it reasonable to

expect the very judge who had allowed their dispositive motions

to languish, enforced a settlement which neither party requested

and who said he was not about to hold a trial for JB/O’ Brien’s

claims under any circumstances, to suddenly become a paragon

of impartiality? A review of all the circumstances in the case

would indicate otherwise.

Third party defendants JB/O’Brien, had already paid the

United States hundreds of thousands of dollars to settle their

alleged liability undera CERCLA § 122(g),42 U.S.C. § 9622(g),

de minimis settlement. Yet, despite the contribution protection

provisions of CERCLA §§ 122(g)(5) and 113(f)(2), the HSC was

allowed in an erroneous ruling of the district court to continue its

litigation against JB/O’Brien.' See Hardage, 982 F.2d at 1493.

The question of what response costs HSC was entitled to

recover was decided in the remedy phase of the trial in which

HSC counter-claimed for response costs against the United

States. See United States v. Hardage, 750 F. Supp. 1460 (W.D.

Okla. 1990). At that phase of the trial, HSC claimed that it was

entitled to recover various categories of alleged response costs

totalling $9.5 million. The district court rejected the HSC’s

position, found that response cost categories totalling only

$3.716 million were authorized by CERCLA, and that the

remaining HSC costs were not recoverable. Jd. at 1512-1520.

Immediately thereafter, JB/O’ Brien facing an HSC claim of $34-

55 million,’ filed a motion for summary judgment asking the

court (Judge West) to apply the doctrine of collateral estoppel to

HSC’s response cost claims against them (App. L, 79a). Judge

West ignored that motion. It was never ruled on, although it was

fully briefed months before the March 1991 trial. Hardage, 982

F.2d at 1493 n.4.

1. On September 22, 1989 the district court held that parties already

liable under CERCLA § 107(a) such as HSC could maintain a separate

response cost claim against other potentially responsible parties under § 107

and thereby defeat the contribution protection given JB/O’Brien under

provisions of § 122(g)(5),42 U.S.C. § 9622(g)5). This conclusion of law was

later rejected by the Tenth Circuit in United States v. Colorado and Eastern Ry.

Co., 50 F.3d 1530 (10th Cir. 1994). Because of Judge West's bias and failure to

apply state law, JB/O’ Brien never had their day in court to challenge this initial

error of the district court.

2. “At the hearing HSC represented to the district court that its claim for

response costs amounted to approximately $10 million. Later, HSC claimed it

had incurred response costs of $34-55 million.” Hardage, 982 F.2d at 1492

n.3.

JB/O’ Brien also moved the district court (Judge West) to

reconsider its September 1989 decision that liable parties could

maintain response cost claims despite the contribution protection

provisions of 42 U.S.C. § 9622(g)(5). (App. M, 81a). Several

courts, including the First Circuit in United States v. Cannons

Engnr. Corp., 899 F.2d 79 (1st Cir. 1990), had in the meantime,

ruled that such a decision eviscerated Congress’ objectives of

promoting settlement and finality. In the same motion, JB/

O’Brien also requested dismissal of HSC’s claim based on HSC’s

misrepresentation to the district court that HSC’s § 107 response

cost claims were only $9.5 million, and then, increasing HSC’s

claims to $34-55 million immediately after the court decided that

this § 107 claim defeated the statutory contribution protection

accorded JB/O’Brien. This motion also languished in Judge

West’s black hole.

Is it reasonable for JB/O’ Brien to conclude that Judge West

was impartial when he (a) refused to rule on their long-pending

dispositive motions that could have eliminated the need for trial;

(b) decided to force a settlement without the request of any party

to that alleged settlement; (c) disregarded JB/O’ Brien’s in-court

representations that they did not agree to settle and wanted to go

to trial; (d) stated, before ruling, that he was not about to let two

de minimis parties have their day in court? The answer should be

obvious.

Without explanation the Tenth Circuit approved Judge

West’s denial of JB/O’Brien’s recusal motion as well as his

finding that a settlement arose. The Tenth Circuit forgot that

“(t]he legitimacy of the Judicial Branch ultimately depends on its

reputation for impartiality and non-partisanship.” Mistretta v.

United States, 488 U.S. 361, 407 (1988). The bold statement by

the judge that he was not about to let two parties have their day in

court should have been a clear indicator that the judge’s reasoning

may well not be in accord with the law and connote, instead, an

unfavorable disposition that is somehow “wrongful or

inappropriate.” Litkey, 114 U.S. at 1155. It should have

prompted a close examination of the judge’s decision to see that

his application of law to the facts was in strict accord with state

law. Unfortunately the court of appeals failed in this function.

Like the district court, the appeals court’s decision is devoid of

any mention, discussion or application of even the elements of a

contract under Oklahoma law.

A recent review of a judge’s on-the-record comments that

indicated the possibility of bias is United States v. Antar, 53 F.3d

568 (3rd Cir. 1995). In the midst of along colloquy at sentencing,

the judge said, “My object in this case has always been to get back

to the public that which was taken from it as a result of the

fraudulent activities of this defendant and others.” Jd. at 573. In

characterizing this statement the Third Circuit said, “this is a case

where the district judge, in stark, plain and unambiguous

language, told the parties that his goal in the criminal case, from

the beginning, was something other than what it should have been

and indeed, was improper.” Jd. 576.

When recusal is the issue, “our focus must be on the reaction

of the reasonable observer. If there is an appearance of partiality,

that ends the matter.” Jd. at 576 (citation omitted). Taking the

“clearest and most obvious reading of the language”, id. at 577,

the court traced the impact of the judge’s comments through his

various rulings and concluded that it was “constrained to say that

a reasonable person could think the judge’s goal during the

criminal proceeding — and the reason behind some of his rulings

— was to enforce orders issued in a parallel civil case.” Jd. at 579.

Consequently, recusal was necessary because the judge’s

comment gave the appearance of affecting the fairness and

integrity of the trial, “seriously affect[ing] the . . . public

reputation of the judicial proceeding.” Jd. (quoting United States

v. Olano, __ U.S. __, 113 S. Ct. 1770, 1779 (1993)).

This case is similar to Antar in that the judge’s “stark, plain

and unambiguous language told the parties that his goal” was to

preclude JB/O’Brien from having their day in court, a right

guaranteed by our Constitution. Furthermore, had the Tenth

Circuit analyzed the judge’s rulings in light of Oklahoma law it

would have seen that the judge’s goal was reflected in his initial

decision to force a settlement without request by the parties

involved, and his legally incorrect subsequent rulings, e.g., a

contract arose although no one communicated acceptance.

Although Judge West admitted that “Schulcz advised the Court

(with Mr. Conger present) that [JB/O’ Brien] did not intend to

settle with HSC,” in the off-the-record hearing (App. B, 9a -

Finding No. 21), and this occurred before HSC even knew of the

Harker letter, he nonetheless concluded that Mr. Conger was

never told JB/O’Brien did not want to settle (App. B, 10a -

Conclusion No. 3). Whatever standard the Tenth Circuit used to

evaluate the “clearest and most obvious reading of the language”

used by Judge West, it did not evaluate what this means to a

reasonable man.

While it is natural for appellate Judges to defend those who

bear the daily brunt of making judicial decisions, it is not

appropriate for them to fail to give proper and serious attention to

claims of bias or prejudice. In an era when many question the

ability of the judicial system to provide justice, this case provides

the Court an opportunity to reinforce the responsibility of United

States courts of appeal to ensure that those who find themselves

in court, as many innocent parties do in CERCLA litigation, are

accorded their basic rights, maintaining the public trust and

confidence in the impartiality of the federal judiciary; “to

perform its high function in the best way, ‘justice must satisfy the

appearance of justice.’” In re Murchison, 349 U.S. at 136

(quoting Offutt v. United States, 348 U.S. 11, 14).3

3. See also W. Blackstone Commentaries, Book III, *361 (“And should

(Cont'd)

Il.

THE CiRCUIT COURT’S DECISION IMPROPERLY

VALIDATES THE DISTRICT COURT’S ESTABLISH-

MENT OF A NEW FEDERAL SETTLEMENT RULE

CONTRARY TO EXISTING OKLAHOMA LAW AND

THIS COURT’S PRECEDENT.

The fundamental concept of the freedom to contract is

deeply embedded in our nation’s framework. “[I]t is clear on due

process grounds, no judge can compel a settlement prior to trial

- on terms which one or both parties finds unacceptable.” In re

LaMare, 494 F.2d 753, 756 (6th Cir. 1974). Yet, the court of

appeal’s affirmance of the district court’s decision herein

establishes some new, undefined federal common law settlement

criteria for CERCLA cases, see 42 U.S.C. § 9601 et seq., that is at

odds with basic settlement principles and negates rather than

applies Oklahoma contract law, the state in which the case arose.

In Day and Zimmermann Inc. v. Challoner, 423 U.S. 3, 4,

(1975), this Court said that a federal court is “not free to engraft

on those state rules exceptions or modifications which may

commend themselves to the federal court, but which have not

commended themselves to the State in which the federal court

sets.” See also City of Milwaukee v. Illinois and Michigan, 451

U.S. 304, 313, 101 S.Ct. 1784, 1790 (1981) (federal common law

is appropriate in only “a few and restricted instances”). The law

of contracts governing settlements of private party litigation is an

area where state law should govern. If the alleged settlement at

issue here is governed by Oklahoma law, rather than judge-made

federal law, the statutory elements of a contract under Oklahoma

(Cont'd)

the fact at anytime [show a biased judge], there is no doubt that such

misbehavior would draw down a heavy censure from those to whom the judge

is accountable for his conduct.”).

law would be evident in the record and in the written opinion of

the lower courts. As shown below they are not.

Moreover, the court of appeals forgot the Court’s guidance in

Salve Regina College v. Russell, 499 U.S. 225, 231 (1991), that

courts of appeals were better suited than district courts to provide

the searching analysis of state law required under our concepts of

federalism and to ensure consistent interpretation and application

of controlling state law. That mission was not performed in this

case. The court of appeals mirrored the district court in failing to

consider the essential elements of a contract under Oklahoma law

and show how they had been met. Neither court below gave even

a cursory discussion of Oklahoma contract law. The failure of the

court of appeals to follow this Court’s direction of energetic

review has led to the imposition of federal rule the sole purpose of

which is expediency or docket control, resulting in a denial of due

process and justice.

Under Oklahoma law, as shown below, settlements are to be

entered and determined with precision and settlement

instructions to counsel may be changed before an offer of

settlement is accepted; under the district court’s decision,

settlements merely happen despite the expressed opposition of

one of the parties.

A. ForA Binding Settlement To Arise Under Oklahoma Law

JB/O’Brien Had To Communicate Acceptance Of HSC’s

Settlement Offer To An Agent Of The HSC Authorized To

Receive JB/O’Brien’s Acceptance.

In Oklahoma, a valid settlement must conform to contract

law. Coates v. First Nat’l Bank and Trust Co. of Okla. City, 176

Okla. 322, 55 P.2d 441, 445 (1936); Maddox v. Northern Natural

Gas Co., 259 F. Supp. 781 (W.D. Okla. 1966) (applying

Oklahoma law to dispute whether settlement arose). The party

alleging the existence of an agreement, in this case HSC, must

prove the existence of the essential statutory elements of a

contract. United States et al. v. Buckner & Moore, 505 F. Supp.

409, 412 (W.D. Okl. 1979). This includes mutual consent (15

O.S. § 2.2), and that the alleged “consent of the parties to a

contract [was]: 1. Free; 2. Mutual; and 3. Communicated by each

to the other.” (15 O.S. § 51) (emphasis added). The district court

failed to find as a matter of law or fact that on March 27, 1991, JB/

O’Brien had consented to the HSC’s offer and had communicated

consent to the HSC. As a matter of law, he could not make such

findings because there was no evidence to support it.

“To constitute a contract there must be an offer by one party

and acceptance by the other.” Maddox, 259 F.Supp. at 783. Fora

valid settlement to occur, consent to a settlement must be

“communicated by each to the other.” 15 O.S. § 51.3. As the

Oklahoma Supreme Court explained in Armstrong v. Guy H.

James Constr, Co., 402 P.2d 275, 277 (1965) (emphasis in

original):

An offer becomes a binding promise and

results in a [settlement] only when it is

accepted, 17 Am. Jur. 2d. Contracts, sec. 41;

Strohm v. Board of Trustees, 203 Okl. 635,

225 P.2d 159. Ordinarily, to constitute

acceptance of an offer, there must be an

expression of the intention by word, sign,

writing or act, communicated or delivered to

the person making the offer or his agent. 17

Am. Jur. 2d. Contracts § 414. One of the

essentials of the existence of a contract is the

consent of the parties capable of contracting,

15 O.S. 1961, § 2, and the consent must be

4. The cited statutes are reproduced at Appendix E.

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communicated by each to the other, 15 O.S.

1961, § 51.

In Armstrong, the central issue was where was the

employment contract consummated since that determined which

state’s laws applied. The Oklahoma Supreme Court looked to

where the parties “communicated the fact of their acceptance” of

an employment offer, id. at 278-79 (emphasis added), to

determine where “assent was given.” Id. at 277. See also 1414

Partnership v. Taveau, 815 P.2d 1228, 1229 (Okla. App. 1991)

(“To constitute acceptance of an offer, there must be an

expression of the intention . . .communicated or delivered to the

person making the offer or his agent”). Consequently, there can

be no agreement where, as shown below, there is no

communication of acceptance to the offeror by an authorized

representative of the party accepting the offer.

Additionally, 15 O.S. § 67 specifies that “consent can be

communicated with effect, only by some act ... of the party

contracting, by which he intends to communicate it... .”

(emphasis added). The requirements of §§ 51 and 67 thus define

acceptance of an offer as an affirmative act of communication by

the accepting party. A settlement cannot occur without the

acceptor’s active participation in the acceptance process. The

HSC had the burden to establish that any acceptance was

communicated by an authorized agent of JB/O’ Brien to the HSC,

see Buckner & Moore, 505 F. Supp. at 412, a burden it failed to

meet.

B. The Evidence Shows No Authorized Party Accepted

HSC’s Settlement Offer On Behalf Of JB/O’Brien.

The district court’s finding that Mr. Conger was authorized

to act on JB/O’Brien’s behalf during the “Phase III litigation,”

(App. B, 9a - Conclusion No. 1) is similar to its original decision,

“that Mr. Conger is authorized to settle the case... .” (App. F,

35a). Yet Mr. Conger’s clear testimony at the December 21, 1993

hearing was that he did not settle or act on behalf of O’Brien on

March 27, 1991. (App. I, 52a-53a). The HSC agreed with Mr.

Conger. In its opening statement at the December 21, 1991

hearing, the HSC said, “Mr. Conger did not enter into any

agreement on behalf of Jones-Blair and O’Brien. This is not

about an agreement that Mr. Conger did or did not enter into.

Therefore, whatever Mr. Schulcz may have said to Mr. Conger on

that day is irrelevant.” (App. I, 46a) (emphasis added).

Having agreed that Mr. Conger did not communicate any

alleged acceptance, the HSC had to prove that on March 27, 1991

JB/O’ Brien accepted HSC’s offer and intended to act through

some other agent who affirmatively communicated the alleged

acceptance to the HSC. Although HSC tried to make Mr.

Condren, co-counsel for Cook Paint, JB/O’ Brien’s agent (App. I,

46a) the district court found only Mr. Conger was authorized.

(App. B, 4a - Conclusion No. 1). Thus, JB/O’Brien’s only

authorized agents were Mr. Conger’ and The Harker Firm,

neither of whom even arguably communicated any acceptance to

the HSC. Consequently, no settlement could have arisen.

Although the district court found Mr. Conger had authority

to settle for JB/O’ Brien, the district court failed to find that, in

fact, he exercised that authority and, if so, specify when. HSC

agreed he did not. (App. I, 46a). Who then communicated

acceptance? Since acceptance of settlement does not occur by

accident or inference in Oklahoma, the district court’s finding

that a settlement arose on March 27, 1991 is contrary to

Oklahoma law. Either the district court is plain wrong under

5. Under the rules of agency, Mr. Conger was precluded from acting

against JB/O’Brien’s interests once he learned Mr. Schulcz was stating JB/

O’Brien did not intend to settle. See Restatement (2d) Agency §§ 14, 34,

108(1), 112, 124, 134, 383.

Oklahoma law and the Tenth Circuit failed to apply the

appropriate standard, or the district court and Tenth Circuit were

both applying a new federal law.

C. The Courts Below Ignored JB/O’Brien’s Right To Revoke

Or Rescind Under Oklahoma Law.

Additionally, without explanation, the court of appeals’

decision denies JB/O’Brien a statutory and equitable right

provided by Oklahoma law and recognized by prior Tenth Circuit

decisions, the right to revoke or rescind an agreement. Telex

Corp. v. AiResearch Aviation Co., 460 F.2d 215, 218 (10th Cir.

1972) (“Oklahoma law allows for rescission of the contract by

one of the parties to the contract.”); Harmon v. Diversified

Mutual Ins. Co., 524 F.2d 361, 365 (10th Cir. 1975) (Oklahoma

law “provides that a party to a contract may rescind when his

consent was given by mistake.”). JB/O’ Brien had argued to the

courts below that, even if a settlement had been inadvertently

reached between JB/O’Brien and the Hardage Steering

Committee (“HSC”), JB/O’Brien had promptly rescinded or

revoked that agreement, a right firmly established in Oklahoma

law by statute, 15 O.S. § 233, and in equity. See Watkins v. Grady

County Soil and Waste Con. Dist., 438 P.2d 491, 495 (Okla.

1968). Neither of the courts below addressed that issue, which is

wholly separate and apart from the question of whether a

settlement had been reached. A fundamental contract right

should not be abrogated or denied without some explanation.

Ill.

THE DISTRICT COURT’S FINDING THAT “ONCE

COOK PAINT SETTLED WITH HSC, SETTLEMENTS

BETWEEN HSC AND JONES-BLAIR AND O’BRIEN

WERE EFFECTED” IS CONTRARY TO OKLAHOMA

LAW AND REPRESENTS A SERIOUS BREACH OF

FEDERALISM SINCE IT ESTABLISHES A NEW

FEDERAL SETTLEMENT RULE WITHOUT

JUSTIFICATION.

The district court’s Conclusion of Law No. 3 (App. B, 10a)

that “the letter of March 22, 1991, authorized the settlements that

the court enforced” could be correct only if: (1) Mr. Schulcz had

not been in the district court to represent JB/O’ Brien; (2) the

district court had not been on notice from Mr. Schulcz that his

clients did not want to settle;* and (3) liaison counsel, Mr. Conger,

as authorized agent for JB/O’Brien, had communicated

acceptance of HSC’s settlement offer to HSC. However, that is

not the evidence and the courts below made no such findings.

Had the court of appeals applied Oklahoma law it would have

seen the district court’s conclusion was wrong.

Given liaison counsel Mr. Conger’s testimony that he did not

settle, the district court’s finding, that “once Cook Paint settled

with HSC, settlement with Jones-Blair and O’Brien were

affected,” (App. B, 10a - Conclusion No. 3) could be correct

under Oklahoma law, only if counsel’s letter of instruction calling

for action by Mr. Conger was a self-executing, irrevocable

contract. However, under Oklahoma law, the only way the

instructions in the Friday letter could be self-executing was if JB/

O’Brien had already entered into an agreement with the HSC with

6. When “Mr. Schulcz told the Court [his clients) did not intend to

settle,” (App. B, 9a - Finding No. 21), the HSC had no knowledge of the letter

Judge West later relied on to force a settlement. See note 7, infra.

" ir, eee 4

Pa Te ee ee

a condition precedent. “A condition precedent of a contract is one

calling for the performance of some act or happening of some

event after the contract is entered into, upon which its obligations _

are made to depend.” Matter of Estate of Dillon, 575 P.2d 127,

130 (Okla. App. 1977) (citation omitted) (emphasis added). In

other words, under state law JB/O’Brien would be ouligated to

settle with the HSC when Cook Paint settled only if HSC and JB/

O’Brien had previously entered into an agreement to settle that

specifically spelled out that exact scenario so that when Cook

Paint settled, i.e., the condition precedent occurred, the

agreement would ripen into a binding settlement with the HSC.

Yet there is absolutely no evidence of any such agreement

between JB/O’ Brien and the HSC, who knew nothing of the letter

Or its terms.’

In effect, the district court equated “are prepared to settle”

with “will settle regardless of what happens.” JB/O’ Brien had a

right under 15 O.S. $71 to instruct Mr. Conger not to

communicate acceptance of the HSC’s offer any time before he

actually communicated their acceptance, a right the records

shows they exercised through Mr. Schulcz.

The district court’s decision also directly conflicts with other

provisions of Oklahoma law. Under Oklahoma law, settlements

are entered willingly or not at all. See 15 O.S. § 51. The testimony

of both Jones-Blair and O’Brien at the hearing is that they did not

wish to enter into a settlement agreement with HSC. (App. I, 63a

(Paul Dague - Jones-Blair); App. N, 83a (Patricia Houle -

7. HSC’s agents for settlement with de minimis parties such as JB/

O’Brien, Mr. Roark and Mr. Tomlinson (App. B, 5a - Fact No. 9; App. J, 66a;

App. K, 75a) testified that HSC knew nothing of Mr. Harker’s letter of

instruction to Mr. Conger until just before the on-the-record hearing

announcing the enforcement of the settlement, (App. J, 68a-71a; App. K, 74a-

77a). Mr. Roark also testified that prior to the 3/27/91 hearing, Mr. Conger told

HSC “that [JB/O’ Brien] had not. . - accepted [HSC’s] offer. . .” (App. J, 68a).

Pron ne ne eee eT

;

epee ot eee ae ee

O’Brien)). The record is also clear that Mr. Conger knew that JB/

O’Brien did not want to settle and that the terms of the letter had

changed. He knew this before the district court was aware of the

letter, before any alleged acceptance of the HSC’s settlement

terms on behalf of JB/O’ Brien, (App. I, 59a-60a), and before the

existence of the letter had been communicated to HSC. See note

7, supra. Consequently, had Oklahoma law been considered, the

court would have found that the terms in the letter were revoked

and it no longer had any authority since “[a}] proposal may be

revoked at any time before its acceptance is communicated to the

proposer but not afterwards.” 15 0.S. § 72.

Oe ee ee Dee yee

The district court also knew JB/O’Brien did not want to

settle. (App. B, 9a - Facts No. 20, 21). But because Mr. Conger

could not, contrary to his clients’ wishes, communicate

acceptance without committing malpractice, the district court

decision could only be based on a new federal common law rule

that in effect says, once a party has indicated it may settle, it may

not change its mind but will be forced to settle without the request 1

of the opposing party so that the district court does not have to

bother with a trial. :

Further, had Oklahoma law been considered, the district

court would not have found that the 3/22/91 letter (App. G, 38a)

constituted an “offer of settlement” to the HSC (App. B, 10a -

Conclusion No. 3). First it was not addressed to HSC but to Mr.

Conger. Second, all testimony by those persons who authorized

the letter and that of its author is that it was intended only to cover

a weekend contingency, in the unlikely event that Cook might

settle with its insurance carrier over the weekend before trial on

Monday morning, by instructing Mr. Conger that if that

contingency occurred, i.e., if Cook settled with its insurance

carrier over the weekend before trial, Mr. Conger was to then

fulfill 15 O.S. §§ 2 and 51 by communicating acceptance of an

offer to the offeror. This never occurred and the courts below

made none of these requisite findings under state law.

Finally, the district court’s failure to apply state law,

applying instead an extemporaneously crafted federal rule, is an

impermissible attack on the status and role of counsel before the

court. The letter did not limit or abrogate Mr. Schulcz’s authority

to speak for JB/O’ Brien or his right to direct Mr. Conger’s efforts

on their behalf. Although Mr. Schulcz correctly expressed the

desires of his client, the district court dismissed them and,

without checking further, relied on a letter then six days old,

whose authority and substance were both clearly challenged and

revoked by Mr. Schulcz.

The right of a person to be represented by counsel of one’s

own choosing is a fundamental part of American jurisprudence.

It is an empty right if a judge can disregard counsel’s

representation as to his client’s desire to exercise their

constitutional right to trial.

CONCLUSION

After forcing a settlement over the objections in court by

counsel for two de minimis parties that they had not authorized a

settlement, a statement by a district court judge that he “was not

about to undertake atrial . . . on behalf of two de minimis parties”

should be a prima facie indicator to a court of appeals of an

inappropriate judicial predisposition such that recusal was

required under 28 U.S.C. § 455(a).

Oklahoma contract law requires a meeting of the minds anda

specific communication of acceptance by the offeree of

settlement terms to an authorized agent of the offeror. It also

allows revocation of settlement instructions prior to the

communication of acceptance of a settlement offer. Nonetheless,

without any discussion or consideration of state law, the district

court, and the Tenth Circuit found a settlement arose despite the

objections of JB/O’Brien’s counsel and the lack of any proof of

communication of acceptance of HSC’s settlement offer by JB/

O’Brien. This is not Oklahoma law but a new impermissible

federal rule. Nothing in the district court’s decision or the panel’s

affirmance addresses why, contrary to this Court’s guidance, a

new federal common law needs to be derived in a simple contract

dispute, even under CERCLA.

For the above reasons, the Court should review this

unprecedented denial of a federal litigant’s rights to a fair and

impartial trial. The petition for a writ of certiorari should be

granted.

Respectfully submitted,

TIMOTHY L. HARKER

Counsel of Record

THE HARKER FIRM

Attorneys for Petitioners

5301 Wisconsin Avenue, N.W.

Suite 740

Washington, D.C. 20015

(202) 966-7900

, ee ee oe ee ee ee ee eee ae

APPENDIX A—ORDER OF THE UNITED STATES

DISTRICT COURT FOR THE WESTERN DISTRICT OF

OKLAHOMA DENYING MOTION FOR RECUSAL

IN THE UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF OKLAHOMA

No. CIV-86-1401-W

Oklahoma City, Oklahoma

Dated: March 25, 1993

UNITED STATES OF AMERICA,

Plaintiff,

vs.

ROYALN. HARDAGE, ETAL..

Defendants.

TO: ROBERT D. DENNIS, CLERK

Please enter the following minute order in the above-entitled

Case.

This matter comes before the Court on the Motion for

Recusal filed pursuant to title 28, section 455(a) of the United

States Code by The O’Brien Corporation and Jones-Blair

Company. The movants have contended that this Court’s actions

and inactions cast doubt on its impartiality towards them. The

Hardage Steering committee has responded in opposition to the

motion.

The parties have agreed that the test under section 455(a) “is

Appendix A

whether a reasonable person, knowing all the relevant facts,

would harbor doubts about the judge’s impartiality.” Hinman v.

Rogers, 831 F.2d 937, 939 (10th Cir. 1987) (citations omitted).

Upon applying that test to the facts and circumstances in this case

and after reviewing the case law cited by the parties, the court, in

its discretion, finds that the movants have failed to show that

recusal is warranted. Accordingly, the Motion for Recusal filed

on February 25, 1993, should be and is hereby DENIED.

The parties are DIRECTED to confer within fifteen (15)

days in a good faith effort to agree upon the method to be

employed by the Court in resolving the remaining issues and to

submit their suggestions to the Court within five (5) days

thereafter.

Counsel Notified s/ Lee R. West

LEE R. WEST

Clerk to Notify X UNITED STATES

DISTRICT JUDGE

a a nr a> .

APPENDIX B — ORDER OF THE UNITED STATES

DISTRICT COURT FOR THE WESTERN DISTRICT OF

OKLAHOMA FINDING A SETTLEMENT AROSE ON

MARCH 27, 1991

IN THE UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OFOKLAHOMA

FILED JANUARY 10, 1994

No. CIV-86-1401-W

UNITED STATES OF AMERICA,

Plaintiff,

Vs.

ROYALN. HARDAGE et al.,

Defendants.

ORDER

On March 27, 1991 (and thereafter, in writing on April 2,

1991), this court enforced settlements between third-party

defendants Jones-Blair Company (Jones-Blair) and The O’ Brien

Corporation (O’Brien) and the Hardage Steering Committee

(HSC). Jones-Biair and O’Brien appealed the court’s Order to the

United States Court of Appeals for the Tenth Circuit. The

appellate court, after deciding that a material issue of fact existed

as to whether settlements with the two third-party defendants had

indeed been reached, remanded the matter for hearing.

An evidentiary hearing was) held on December 31, 1993,

during which all parties and participants had an Opportunity to be

heard and cross-examine witnesses. Based upon that hearing, the

court opines that the settlements between Jones-Blair and

O’Brien and HSC should be enforced.

Appendix B

Findings of Fact

1. In 1986, the United States of America filed this action

under the Comprehensive Environmental Response,

Compensation, and Liability Act (CERCLA), 42 U.S.C.

<91-9675, against certain generators and transporters of 7

naza2. as substances that were treated, stored and/ordisposedof

at the Royal N. Hardage waste disposal site near Criner,

Oklahoma. The government sought both injunctive relief under

Section 106(a) of CERCLA, 42 U.S.C. § 9606(a), requiring the

defendants to clean up the Hardage site, and recovery under

Section 107(a) of CERCLA, id. § 9607(a), of certain costs

incurred by the government.

2. Most of these generators and transporters formed HSC

and stipulated to liability for the presence of hazardous

substances at the Hardage site.

3. Jones-Blair and O’Brien are paint manufacturers and

generated 43,022 gallons and 26,400 gallons of hazardous

substances, respectively, that were received at the Hardage site.

Although identified by the Environmental Protection Agency as

potentially responsible parties, Jones-Blair and O’Brien were |

not sued by the government. They were instead named by HSC as

third-party defendants along with various others, including Cook

Paint and Varnish Company (Cook Paint).

a ee Rn ee ee ee Se Q see cus —

ab ae Te See FE ROE. Oe Fe OE ee te ae Pee ene a ee eee ee

4. Jones-Blair and O’Brien qualified as de minimis parties

under Section 122(g) of CERCLA, id. § 9622(g), and together

with 177 other de minimis parties, entered into a consent decree

with the government.

5. On April 7, 1989, the government submitted the consent

Appendix B

decree to the then-assigned district judge for approval. In

approving the settlement, the district judge on September 22,

1989, distinguished contribution claims from response cost

claims under CERCLA and ruled that the consent decree did not

release the de minimis parties from potential liability for HSC’s

response costs.

6. Atall times relevant to this matter, Timothy L. Harker and

Arthur A. Schulcz, Sr., with the law firm, The Harker firm, in

Washington, D.C., were attorneys for Jones-Blair, O’Brien and

Cook Paint.

7. Chris Condren with the law firm, Pierce Couch

Hendrickson Johnston & Baysinger, in Oklahoma City, was also

counsel for Cook Paint.

8. J. William Conger, with the law firm, Hartzog Conger

Cason & Hargis, in Oklahoma City, had been appointed by the

court to act as liaison counsel for the third-party defendants

during Phase III of the litigation and as such, was also counsel for

Jones-Blair, O’ Brien and Cook Paint.

9. Robert D. Tomlinson and Robert L. Roark with the law

firm, McKinney, Stringer & Webster, P.C., in Oklahoma City,

Oklahoma, among others, were counsel for HSC during this

phase of the lawsuit.

10. On November 28,1990, the court found Jones-Blair and

O’Brien, as generators of hazardous substances received at the

Hardage site, liable under Section 107(a) of CERCLA for their

allocated shares of response costs incurred and to be incurred by

HSC.

Appendix B

11. The trial on HSC’s response cost claims against all

third-party defendants was scheduled to commence on Monday,

March 25, 1991.

12. On the preceding Friday, March 22, 1991, Harker sent a

letter by facsimile transmission to Conger. The letter read:

“Just to confirm my conversation with

you earlier this afternoon, Reliance Universal

(now Akzo Coatings, Inc.) is prepared to

settle the HSC claim for the $1.00 per gallon

offer. The O’Brien Corporation and Jones-

Blair are prepared to settle the HSC claims on

the same basis of $1.00 per gallon if Cook

Paint does not litigate the ‘HSC response

cost’ phase. Cook Paint will settle or not

based on the willingness of its insurance

carrier to assume a portion of the settlement

cost acceptable to Cook Paint or on the basis

of some alternative arrangement acceptable

to Cook Paint and its insurance carrier.

Cook’s corporate counsel, the firm of

Blackwell, Sanders, is in Oklahoma City,

today, to advise them on that decision.

“You indicated you would apprise the

HSC of the Akzo acceptance and also of the

positions of the other companies (Cook,

Jones-Blair and O’Brien) in time for

settlement to occur and to avoid trial for Akzo

and, as appropriate, for the other three

companies.”"

1. Copies of this letter were sent to Paul Degue for Jones-Blair, Paul Brooks

for Akzo Coatings, Inc., Patti Houle for O’ Brien and Pat Curran for Cook Paint.

Appendix B

13. On Monday, after being advised of the continuance,

Harker drafted letters for use by Jones-Blair and O’ Brien. These

letters dated March 25, 1991, were sent to these third-party

defendants’ liability insurance carriers and each letter read in

part:

“This letter serves as further notification to

your company of a recent suit and settlement

offer involving . . . [Jones-Blair or O’Brien]

and the Hardage Criner Superfund Site . . .

The HSC has offered Jones-Blair [or

O’Brien) a chance to settle for $1.00 per

gallon of material allegedly sent to the

site. . . .Jones-Blair [or O’Brien] must either

settle or litigate the case, with the trial date

now set for Wednesday, March 27... . Your

failure to tender our defense means that we

cannot go forward to defend ourselves at trial

because we cannot, acting essentially alone,

afford the cost of Third party defendants’

Liaison Counsel ... You must tender a

defense by 1:00 p.m., March 25, 1991, in

which case we will immediately notify Third

Party Liaison Counsel to try the case on our

behalf. If you wish not to settle you must also

notify us by that time. Your continued failure

to tender a defense or to assume liability

means we will be forced to settle by

tomorrow afternoon. .. .”

14, Also, that same day, Harker, in Washington, D.C.,

conversed by telephone with Schulcz in Oklahoma City. Harker

testified that during one afternoon conversation, he instructed

Appendix B

Schulcz to inform Conger that Jones-Blair and O’Brien had

decided to proceed to trial regardless of whether Cook Paint

settled with HSC.

15. Schulcz testified that he advised Conger of this change

in position and then advised Harker of his conversation with

Conger.? There is no written confirmation of any of these

conversations, despite the fact that this course of action was in

direct conflict with Jones-Blair’s and O’Brien’s respective

decisions to settle as outlined in Harker’s letter of March 22,

1991.

16. Conger testified that although he and Schulcz discussed

to various matters on March 25, 1991, no conversation occurred

regarding Jones-Blair’s and O’Brien’s decisions to proceed to

trial and both Harker and Conger testified that although Harker

and Conger talked by telephone on March 26, 1991, Harker never

discussed the change in Jones-Blair’s and O’Brien’s positions or

even commented on the same.

17. Neither Harker nor Schulcz discussed with Condren the

letter of March 22, 1991. Condren first became aware of the letter

on March 25 or March 26, 1991, and on March 27, 1991, Conger

showed him the letter.

18. On March 27, 1991, during pretrial proceedings in

chambers, Condren requested that the trial again be delayed for a

brief time so that Cook Paint and HSC could continue settlement

2. At the hearing on March 27,1991, Schulcz stated that Harker “talked to

[him] specifically on Monday morning, indicating that he [Harker] would convey

the contents of the change to Mr. Conger” and that “[o}n his [Harker’s] instruction,

he [Schulcz] made sure that we had reserved the right to decide.”

Appendix B

negotiations. By that time, HSC had reached settlement

agreements or fact stipulations regarding HSC’s cost claims with

all third-party defendants in the case save Cook Paint, Jones-

Blair and O’Brien.

19. The court granted a recess, during which HSC counsel,

Condren and Katherine S. Bunn, of the law firm, Blackwell,

Sanders, Matheny, Weary & Lombardi, in Kansas City, Missouri,

who represented Cook Paint in settlement negotiations with its

insurer, attempted to negotiate a settlement.

20. A settlement was reached but it was conditioned upon

settlements between HSC and Jones-Blair and O’Brien. Condren

and/or Bunn informed Schulcz that Cook Paint had settled with

HSC and of the condition placed upon the HSC-Cook Paint

settlement. Schulcz objected to any settlement by Jones-Blair or

by O’Brien and the Court was informed of the dispute.

21. A hearing was held off-the-record during which (1)

Schulcz advised the Court that Jones-Blair and O’Brien did not

intend to settle with HSC and (2) Conger informed the Court

about the March 22, 1991, letter. The Court announced its

intention to enforce the letter and a hearing on-the-record was

then held.

Conclusions of Law

1. Conger as court-appointed liaison counsel and more

specifically as empowered by Harker’s letter of March 22, 1991 ‘

had the authority to act on behalf of Jones-Blair and O’Brien

during Phase III of the litigation.

2. At the hearing, Jones-Blair and O’Brien failed to prove

10a

Appendix B

that prior to Cook Paint’s settlement with HSC not only that they

revoked this authority to act on their behalf but also that they

communicated to Conger their respective decisions to proceed to

trial.

3. Indeed, the evidence presented at the hearing confirms

and strengthens the Court’s opinion that the letter of March 22,

1991, authorized the settlements that the court enforced. Neither

the authority given to Conger nor Jones-Blair’s or O’ Brien’s offer

of settlement as outlined in the letter was withdrawn,

countermanded or modified by anyone prior to the time the

condition in the letter — Cook Paint’s settlement with HSC —

had occurred. And, once Cook Paint settled with HSC,

settlements between HSC and Jones-Blair and O’Brien were

effected. |

4. Under the terms of these settlements, Jones-Blair, after

application of certain credits, owes HSC the principal sum of

$24,825.00 and O’Brien owes HSC the principal sum of

$43,022.00.

5. Because the court has determined that HSC’s settlement

offers were accepted by Jones-Blair and O’Brien (once Cook

Paint settled) on March 27, 1991, and that Jones-Blair and

O’Brien breached these settlement agreements by failure to pay

the liquidated settlement amounts, the Court further determines

that HSC is entitled to recover prejudgment interest at the rate of

six percent (6%) per annum from March 27,1991, to this date. 23

O.S. § 6; 15 O.S. § 266.

6. Finally, because the issues decided herein are dispositive

of this matter as to these parties, the Court concludes that there is

no just reason to delay entry of judgment. Accordingly, judgment

pursuant to Rule 54(b), F.R.Civ.P., shall issue forthwith.

Pee Ten ae eee

lla

Appendix B

ENTERED this day of January, 1994.

s/ Lee R. West

LEE R. WEST

UNITED STATES DISTRICT JUDGE

12a

APPENDIX C — ORDER OF THE UNITED STATES

COURT OF APPEALS FOR THE TENTH CIRCUIT

DENYING APPEAL FILED MAY 5, 1995

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

No. 94-6036

(D.C. No. CIV-86 1461-P)

(W.D. Okla.)

UNITED STATES OF AMERICA,

Plaintiff,

VS.

ROYAL N. HARDAGE; ADVANCE CHEMICAL COMPANY;

ALLIED-SIGNAL, INC.; AT&T TECHNOLOGIES, INC.;

ASHLAND OIL, INC.; ATLANTIC RICHFIELD COMPANY;

BORG-WARNER CORPORATION; CATO OIL & GREASE

COMPANY; DAL-WORTH INDUSTRIES, INC.; DOUBLE-

EAGLE REFINING COMPANY; EXXON CORPORATION;

THE FiRESTONE TIRE & RUBBER COMPANY; FOSTER

FEED & SEED CO.; GENCORP, INC.; BULL HN

INFORMATION SYSTEMS, INC.; J.0.C. OIL

EXPLORATION COMPANY, INC.; KERR-McGEE,

REFINING CORPORATION; L&S BEARING COMPANY;

MAGNETIC PERIPHERALS, INC.; MAREMONT

CORPORATION; McDONNELL-DOUGLAS CORPORATION;

MOBIL CHEMICAL CORPORATION; NALCO CHEMICAL

COMPANY; OKLAHOMAGAS AND ELECTRIC COMPANY;

OKLAHOMA NATIONAL STOCKYARDS COMPANY; THE

OKLAHOMA PUBLISHING COMPANY; ROCKWELL

INTERNATIONAL CORPORATION; TEXACO, INC.; TEXAS

13a

Appendix C

INSTRUMENTS, INC.; UNIROYAL INC.; UOP, INC.;

WESTINGHOUSE ELECTRIC CORPORATION;

WEYERHAEUSER COMPANY; POWELL SANITATION

SERVICE, INC.; SAMUEL L. BISHKIN, individually, and

doing business as Eltex Chemical & Supply Company; UNITED

STATES POLLUTION CONTROL, INC.,

Defendants,

HARDAGE STEERING COMMITTEE,

Defendants-Third-Party Plaintiffs-

Appellees,

VS.

ABCO, INC.; ACME FENCE & IRON CO.; ADVANCE

PACKAGING, INC.; AGNEW AUTO PARTS CO.; AMEDCO

STEEL, INC.; AMERICAN TRAILERS, INC.; ANTHES, INC.,

doing business as Anthes Hi-Reach; ARROW TANK TRUCKS,

INC.; ARTHUR G. McKEE & COMPANY; B&J TANK TRUCK

SERVICE, INC.; B.W. SOLUTIONS, INC.; BACON

TRANSPORT COMPANY, INC.; BEAUTY CRAFT

VANITIES; BLACKWELL INDUSTRIAL AUTHORITY:

PAUL BOONE, individually, and formerly doing business as

Lawton Plating Co.; BROADWAY MACHINE & MOTOR

SUPPLY, INC.; THE BUCKET SHOP; C & HSERVICES, INC.:

CMI CORPORATION; CENTRAL OKLAHOMA

EQUIPMENT CORPORATION: CIMARRON AIRCRAFT

CORPORATION; CIMARRON MANUFACTURING

COMPANY; CLIFTCO INC.; COOK PAINT & VARNISH

COMPANY; CONSOLIDATED CLEANING SERVICE Co:

COUNTRY HOME MEAT COMPANY; DAY

l4a

Appendix C

INTERNATIONAL CORPORATION; DEL _ PAINT

CORPORATION, doing business as Del Paint Manufacturing;

DIFFEE MOTOR COMPANY; D-MAC LEASING, INC.;

DRILLERS ENGINE & SUPPLY, INC.; DURA-CHROME

INDUSTRIES, INC.; EUREKA TOOL COMPANY; FERRIS

RESOURCES, INC.; FRUEHAUF CORPORATION, Fruehauf

Division; FRUEHAUF CORPORATION, doing business as

Hobbs Trailer; HOBBS TRAILER; VERNON GARNEY,

individually, and doing business as Auto Saver; GLIDDEN

COATING & RESINS, Division of SCM Corporation;

GROENDYKE TRANSPORT, INC.; HAMM & PHILLIPS

SERVICE COMPANY; INDUSTRIAL FABRICATING CO.;

JACKIE COOPER OLDS-GMC, INC.; JAMES BUTE

COMPANY; MRS. WILLIAM JENKINS, individually, and

doing business as Foster Septic Tank Cleaning; J. F. SMITH &

SONS, INC.; KELSEY-HAYES CORPORATION, also known

as Kelsey Axle & Brakes Co.; LAIDLAW WASTE SYSTEMS,

INC.; BILL LANCE, an individual; LARRY GOAD &

COMPANY; LASSITER ENTERPRISES, INC.; MASTER

MOTOR REBUILDERS, INC.; MATERIALS RECOVERY

ENTERPRISES, INC.; McALESTER PUBLIC SCHOOLS;

BOB McBROOM, individually, and doing business as American

Furniture Stripping; RAY McGEE, individually, and doing

business as Quality Drum Service; GEORGE McKIDDIE,

individually, and doing business as Capitol Grease Company;

GREASE COMPANY; MEDLEY MATERIAL HANDLING,

INC.; METROPLEX SANITATION, INC.; MISTLETOE

EXPRESS SERVICE; MORRIS FIXTURE COMPANY;

NAPKO CORPORATION; NEWMAN BROS. TRUCKING

COMPANY; NOBLE CHEMICAL CORPORATION; THE

CITY OF NORMAN, OKLAHOMA; NORTHROP

WORLDWIDE AIRCRAFT SERVICE, INC.; OKLAHOMA

TANK SERVICE; OKLAHOMA TRANSPORTATION

15a

Appendix C

COMPANY; PAGE INDUSTRIES, INC; POWELL

ELECTRICAL MANUFACTURING COMPANY; GEORGE

POWELL, individually, and doing business as Powell Service

Company; PREMIER INDUSTRIAL CORP., doing business as

Kent Industries; RWR STEEL COMPANY; RABAR

ENTERPRISES, INC.; RAM TRANSPORTS, __INC.:

RELIANCE UNIVERSAL, INC.; S&S PLATING COMPANY :

SERMATECH INTERNATIONAL INC.; SOLVENT

MANUFACTURING COMPANY, INC.; SOONER OIL PATCH

SERVICES, INC.; SPECTOR RED BALL, _INC.;

STEELCRAFT, INC.; SUBLETT & ASSOCIATES, INC.;

SUNWEST INDUSTRIES OF OKLAHOMA, _INC.:

RAYMOND SWITZER, individually, and doing business as

Switzer & Gypsum Lime Company; T.I.P., INC.; THERMO

KING SALES & SERVICE OF OKLAHOMA, INC.:;

TRIANGLE ENGINEERING COMPANY ; TRIGG DRILLING

COMPANY, INC.; UNITED PLATING WORKS, INC.:

VICTOR EQUIPMENT CO.i WASTE SERVICE, INC;

WELCH ENTERPRISES, INC.: JIM WESLEY, individually,

and doing business as Jim’s Septic Tank; WESTERN

COMMERCIAL TRANSPORT, INC.; WESTERN UNIFORM

& TOWEL SERVICE, INC.; WESTRAN CORPORATION;

WITCO, INC.; XAL CORPORATION; THOMAS ENGEL; A-

BETTER SANITATION SERVICE, INC. UNIT PARTS:

REAGENT CHEMICAL & RESEARCH, INC.; SUN

EXPLORATION & PROD. CO.: CAMERON IRON WORKS; J

C. PENNEY CO., INC.; ROHM & HAAS SEEDS, INC.:;

PHILLIPS PETROLEUM CO.; SOUTH PRAIRIE

CONSTRUCTION CO.; THE ATCHISON , TOPEKA & SANTA

FE RAILWAY CO.; NORDAM CORP.; NATIONAL CAN

CORP.; LAND & MARINE RENTAL CO., formerly known as

Tesoro Land & Marine Rental Co.; THE GOODYEAR TIRE &

RUBBER CO.; CROWL MACHINE & HEAT TREATING CO.;

Fe a ee

16a

Appendix C

CRANE CARRIER CO.; CORNING GLASS WORKS; DELTA

FAUCET CO.; OCCIDENTAL CHEMICAL CORP.; JOHN

ZINK CO.; GENERAL MOTORS CORP.; DURA-CHROME

INDUSTRIES, INC.; THE DOW CHEMICAL CO., also known

as Dow Industrial Service of the Dow Chemical Co., Dowell

Division of the Dow Chemical Company & Brazos Oil & Gas

Division of Dow Chemical Co.; IUTS LIQUIDATING CORP.,

formerly known as Industrial Uniform & Towell Supply, Inc.;

CLYDE’S CARBURETOR SERVICE, INC.; AMOCO

PRODUCTION CO., formerly known as Pan American

Petroleum; DOVER RESOURCES, INC.; HUDIBURG

CHEVROLET, INC.; AMF TUBOSCOPE; CONTAINER

CORP. OF AMERICA; EASON OIL CO.; FOX-SMYTHE

TRANSPORTATION CO.; INTERNATIONAL CRYSTAL

MFG. CO.; KOBE, INC ; NELSON ELECTRIC POWER

SERVICES, INC.; NEWSPAPER PRINTING CORP.; RYDER

TRUCK RENTAL, INC., formerly known as Wilco Truck Rental,

Inc.; SOUTHWEST ELECTRIC CO.; STAR MFG. CO. OF

OKLAHOMA; CORKEN INTERNATIONAL CORP., formerly

known as Corken Pump Co.; GLOW-LITE CORP. (ARTRA);

GENERAL ELECTRIC CO.; FORD MOTOR CO.; CONOCO,

INC.; E.I. DUPONT DE NEMOURS & CO.; CONTINENTAL

OIL CO.; BLACKWELL ZINC CO., INC. (AMAX); DAY

INTERNATIONAL CORP. (Electric Hose & Rubber);

CENTRAL SALES PROMOTION, INC.; THE CHARLES

MACHINE WORKS, INC.; SOONER FORD TRUCK SALES,

INC.; W&W STEEL CO.; CHROMALLOY AMERICAN

CORP.; BRITTAIN BROTHERS, INC.; WASTE

MANAGEMENT OF OKLAHOMA, INC.; SERMATECH

INTERNATIONAL, INC., formerly known as Sermatel, Inc.;

ICO, INC., formerly known as Fodco, Inc., Sucker Rod Service

&/or Rodcore, Inc.; HOMCO INTERNATIONAL, INC., doing

EY A hi ae ins

17a

Appendix C

business as A-1 Bit & Tool; TOM BROWN’S OPTICAL

SERVICE, INC.,

Third-Party-Defendants,

and

JONES-BLAIR COMPANY; THE O’BRIEN CORPORATION,

Third-Party-Defendants-Appellants.

ORDER AND JUDGMENT*

Before MOORE, BRIGHT, ** and BALDOCK, Circuit Judges.

Defendants Jones-Blair Company and the O’Brien

Corporation appeal the district court’s order enforcing a

settlement agreement following our remand in United States v.

Hardage, 982 F.2d 1491 (10th Cir. 1993). Additionally,

Defendants appeal the district court’s denial of its motion for

recusal. We exercise jurisdiction pursuant to 28 U.S.C. § 1291.

The parties are familiar with the facts. We review the district

court’s conclusions of law de novo, Eastern Investment Corp. v.

* This order and judgment is not binding precedent, except under the

doctrines of law of the case, res judicata, and collateral estoppel. The court generally

disfavors the citation of orders and judgments; nevertheless, an order and judgment

may be cited under the terms and conditions of the court’s General Order filed

November 29, 1993. 151 F.R.D. 470.

** The Honorable Myron H. Bright, Senior United States Circuit Judge for

the Eighth Circuit, sitting by designation.

18a

Appendix C

United States, 49 F.3d 651, 653 (10th Cir. 1995), and findings of

fact for clear error. Ayala v. United States, 49 F.3d 607, 613 (10th

Cir. 1995). Additionally, we review the district court’s denial of a

motion to recuse for an abuse of discretion. Hinman v. Rogers,

831 F.2d 937, 938 (10th Cir. 1987).

We have reviewed the briefs of the parties and the record on

appeal. Based upon our review of the record and the applicable

legal principles, we conclude the district court did not commit

reversible error by: (1) concluding the parties entered into a

settlement agreement, and (2) enforcing that settlement

agreement. Additionally, we conclude the district court did not

abuse its discretion in denying Defendant’s motion to recuse.

AFFIRMED.!

Entered for the Court

Bobby R. Baldock

Circuit Judge

1. Defendant’s motion to strike Plaintiff's Fed. R. App. P.28(j) submission is

granted.

DENYING REHEARING DATED JULY 5, 1995

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

No. 94-6036

UNITED STATES OF AMERICA,

Plaintiff,

ROYALN. HARDAGE; ADVANCE CHEMICAL COMPANY,

ALLIED-SIGNAL, INC.; AT&T TECHNOLOGIES, INC.;

ASHLAND OIL, INC.; ATLANTIC RICHFIELD COMPANY;

INFORMATION SYSTEMS, INC; Joc. OIL

EXPLORATION COMPANY, _INC.: KERR-McGEE,

REFINING CORPORATION; L&S BEARING COMPANY:

MAGNETIC PERIPHERALS, _INC:; MAREMONT

INSTRUMENTS, INC.; UNIROYAL INC.; UOP, INC.:

20a

Appendix D

WEYERHAEUSER COMPANY; POWELL SANITATION

SERVICE, INC.; SAMUEL L. BISHKIN, individually, and

doing business as Eltex Chemical & Supply Company; UNITED

STATES POLLUTION CONTROL, INC.,

Defendants,

HARDAGE STEERING COMMITTEE,

Defendants-Third-Party Plaintiffs-

Appellees,

Vv.

ABCO, INC.; ACME FENCE & IRON CO.; ADVANCE

PACKAGING, INC.; AGNEW AUTO PARTS CO.; AMEDCO

STEEL, INC.; AMERICAN TRAILERS, INC.; ANTHES, INC.,

doing business as Anthes Hi-Reach; ARROW TANK TRUCKS,

INC.; ARTHUR G. McKEE & COMPANY; B&J TANK TRUCK

SERVICE, INC.; B.W. SOLUTIONS, INC.; BACON

TRANSPORT COMPANY, INC.; BEAUTY CRAFT

VANITIES; BLACKWELL INDUSTRIAL AUTHORITY;

PAUL BOONE, individually, and formerly doing business as

Lawton Plating Co; BROADWAY MACHINE & MOTOR

SUPPLY, INC.; THE BUCKET SHOP; C & H SERVICES, INC.;

CMI CORPORATION; CENTRAL OKLAHOMA

EQUIPMENT CORPORATION; CIMARRON AIRCRAFT

CORPORATION; CIMARRON MANUFACTURING

COMPANY; CLIFTCO INC.; COOK PAINT & VARNISH

COMPANY; CONSOLIDATED CLEANING SERVICE CO;

COUNTRY HOME MEAT COMPANY; DAY

INTERNATIONAL CORPORATION; DEL _ PAINT

CORPORATION, doing business as Del Paint Manufacturing;

2la

Appendix D

COMPANY; MRS. WILLIAM JENKINS, individually, and

doing business as Foster Septic Tank Cleaning; J. F. SMITH &

ENTERPRISES, INC.; McALESTER PUBLIC SCHOOLS;

BOB McBROOM, individually, and doing business as American

22a

Appendix D

POWELL, individually, and doing business as Powell Service

Company; PREMIER INDUSTRIAL CORP., doing business as

Kent Industries; RWR STEEL COMPANY; RABAR

ENTERPRISES, INC.; RAM TRANSPORTS, _INC.;

RELIANCE UNIVERSAL, INC.; S&S PLATING COMPANY;

SERMATECH INTERNATIONAL INC.; SOLVENT

MANUFACTURING COMPANY, INC.; SOONER OIL PATCH

SERVICES, INC.; SPECTOR RED BALL, _INC.;

STEELCRAFT, INC.; SUBLETT & ASSOCIATES, INC.;

SUNWEST INDUSTRIES OF OKLAHOMA, _INC.;

RAYMOND SWITZER, individually, and doing business as

Switzer & Gypsum Lime Company; T.I.P., INC.; THERMO

KING SALES & SERVICE OF OKLAHOMA, INC.;

TRIANGLE ENGINEERING COMPANY; TRIGG DRILLING

COMPANY, INC.; UNITED PLATING WORKS, INC.;

VICTOR EQUIPMENT CO.; WASTE SERVICE, INC.;

WELCH ENTERPRISES, INC.; JIM WESLEY, individually,

and doing business as Jim’s Septic Tank; WESTERN

COMMERCIAL TRANSPORT, INC.; WESTERN UNIFORM

& TOWEL SERVICE, INC.; WESTRAN CORPORATION;

WITCO, INC.; XAL CORPORATION; THOMAS ENGEL; A-

BETTER SANITATION SERVICE, INC. UNIT PARTS;

REAGENT CHEMICAL & RESEARCH, INC.; SUN

EXPLORATION & PROD. CO.; CAMERON IRON WORKS; J

C. PENNEY CO., INC.; ROHM & HAAS SEEDS, INC.;

PHILLIPS PETROLEUM CO.; SOUTH PRAIRIE

CONSTRUCTION CO.; THE ATCHISON, TOPEKA & SANTA

FE RAILWAY CO.; NORDAM CORP.; NATIONAL CAN

CORP.; LAND & MARINE RENTAL CO., formerly known as

Tesoro Land & Marine Rental Co.; THE GOODYEAR TIRE &

RUBBER CO.; CROWL MACHINE & HEAT TREATING CO.;

CRANE CARRIER CO.; CORNING GLASS WORKS; DELTA

FAUCET CO.; OCCIDENTAL CHEMICAL CORP.; JOHN

23a

Appendix D

ZINK CO.; GENERAL MOTORS CORP.; DURA-CHROME

INDUSTRIES, INC.; THE DOW CHEMICAL CO., also known

as Dow Industrial Service of the Dow Chemical Co., Dowell

Division of the Dow Chemical Company & Brazos Oil & Gas

Division of Dow Chemical Co.; IUTS LIQUIDATING CORP.,

formerly known as Industrial Uniform & Towell Supply, Inc.;

CLYDE’S CARBURETOR SERVICE, INC.; AMOCO

PRODUCTION CO., formerly known as Pan American

Petroleum; DOVER RESOURCES, _INC.; HUDIBURG

OKLAHOMA; CORKEN INTERN ATIONAL CORP., formerly

known as Corken Pump Co.; GLOW-LITE CORP. (ARTRA);

GENERAL ELECTRIC CO.; FORD MOTOR CO.; CONOCO,

INC.; E.I. DUPONT DE NEMOURS & CO.; CONTINENTAL

OIL CO.; BLACKWELL ZINC CO., INC. (AMAX); DAY

INTERNATIONAL CORP. (Electric Hose & Rubber);

CENTRAL SALES PROMOTION, INC.; THE CHARLES

INC.; W&W STEEL CO.; CHROMALLOY AMERICAN

CORP.; BRITTAIN BROTHERS, INC.; WASTE

MANAGEMENT OF OKLAHOMA, INC.; SERMATECH

INTERNATIONAL, INC., formerly known as Sermatel, Inc.;

ICO, INC., formerly known as Fodco, Inc., Sucker Rod Service

&/or Rodcore, Inc.; HOMCO INTERNATIONAL, INC., doing

business as A-1 Bit & Tool; TOM BROWN’S OPTICAL

SERVICE, INC.,

Third-Party-Defendants,

24a

Appendix D

and

JONES-BLAIR COMPANY; THE O’ BRIEN CORPORATION,

Third-Party-Defendants-Appellants.

ORDER

Entered June 28, 1995

Before MOORE, BRIGHT*, and BALLOCK, Circuit Judges.

* The Honorable Myron Bright of the United States Court of

Appeals for the Eighth Circuit, sitting by designation.

This matter comes on for consideration of appellants’

petition for rehearing and suggestion for rehearing in banc.

Upon consideration whereof, the petition for rehearing is

denied by the panel that rendered the decision.

In accordance with Rule 35(b), Federal Rules of Appellate

Procedure, the suggestion for rehearing in banc was transmitted

to all of the judges of the court who are in regular active service.

No member of the panel and no judge in regular active service on

the court having requested that the court be polled on rehearing in

banc, Rule 35, Federal Rules of Appellate Procedure, the

suggestion for rehearing in banc is denied.

Entered for the Court

PATRICK FISHER, Clerk

s/ Opal A. Carter

By Opal A. Carter

Deputy Clerk

25a

APPENDIX E — APPROPRIATE PROVISION OF

OKLAHOMA STATUTES TITLE 15 — CONTRACTS

OKLAHOMA STATUTES

TITLE 15— CONTRACTS

$1. Contract defined

A contract is an agreement to do or not to do a certain thing.

§2. Requisites of a contract

It is essential to the existence of a contract that there should

be:

1. Parties capable of contracting.

2. Their consent.

3. A lawful object; and,

4. Sufficient cause or consideration.

§51. Essentials of consent

The consent of the Parties to a contract must be:

1. Free.

2. Mutual; and,

3. Communicated by each to the other.

26a

Appendix E

§ 53. When consent not real

An apparent consent is not real or free when obtained

through:

1. Duress

2. Menace

3. Fraud

4. Undue influence, or

5. Mistake.

§ 63. Mistake of fact defined

Mistake of fact is a mistake not caused by the neglect of a

legal duty on the part of the person making the mistake, and

consisting in:

1. An unconscious ignorance or forgetfulness of a fact past

or present, material to the contract; or,

2. Belief in the present existence of a thing material to the

contract, which does not exist, or in the past existence of such a

thing, which has not existed.

§ 66. Mutual consent defined

Consent is not mutual unless the parties all agree upon the

same thing in the same sense.

rays

Le nee FRM Oe eee ONE Ok NT eee a eT ee eT a eee sh ae ee EE

Dt en ee ee Le ee” Me ee ee. a ee en eee

27a

Appendix E

§67. Consent — How communicated

Consent can be communicated with effect, only by some act

Or Omission of the party contracting, by which he intends to

communicate it, or which necessarily tends to such

communication.

71. Acceptance must be absolute

An acceptance must be absolute and unqualified, or must

include in itself an acceptance of that character, which the

Proposer can separate from the rest, and which will include the

Person accepting. A qualified acceptance is a new proposal.

$72. Revocation of proposal

A proposal may be revoked at any time before its acceptance

is Communicated to the proposer, but not afterwards.

§73. How proposal revoked

A proposal is revoked:

1. By the communication of notice of revocation by the

Proposer to the other party, before his acceptance has been

communicated to the former.

* * *

3. By the failure of the acceptor to fulfill a condition

Precedent to a acceptance; or,.. .

28a

Appendix E

§ 233. Rescission — Cases when party may rescind

A party to a contract may rescind the same in the following

cases only:

1. If the consent of the party rescinding, or of any party

jointly contracting with him, was given by mistake, or obtained

through duress, menace, fraud, or undue influence, exercised by

or with the connivance of the party as to whom he rescinds, or of

any other party to the contract jointly interested with such party.

§ 235. Duty of party attempting rescission

Rescission, when not effected by consent, can be

accomplished only by the use, on the part of the party rescinding,

or reasonable diligence to comply with the following rules:

1. He must rescind promptly, upon discovering the facts

which entitle him to rescind, if he is free from duress, menace,

undue influence, or disability, and is aware of his right to rescind;

and

2. He must restore to the other party everything of value

which he has received from him under the contract; or must offer

to restore the same, upon condition that such party shall do

likewise, unless the latter is unable, or positively refuses to do so.

29a

APPENDIX F— EXCERPTS OF TRANSCRIPT

ENFORCING SETTLEMENT DATED MARCH 27, 1991

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF OKLAHOMA

Docket No. C-86-1401-W

Oklahoma City, Oklahoma

March 27, 1991

UNITED STATES OF AMERICA,

Plaintiff,

ROYALN. HARDAGE, et al.,

Defendants,

ADVANCE CHEMICAL COMPANY. et al.

Hardage Steering Committee

Defendants and Third-Party

Plaintiffs,

ABCO, INC., etal.,

Third-Party Defendants.

TRANSCRIPT OF HEARING

BEFORE THE HONORABLE LEE R. WEST

UNITED STATES DISTRICT JUDGE

Appendix F

APPEARANCES:

Raymond Reott, Esq.

United States Pollution Control, Inc.

Washington, D.C.

Robert L. Roark, Esq.

Robert D. Tomlinson, Esq.

101 North Broadway

Oklahoma City, OK

J. William Conger, Esq.

Ross A. Plourde, Esq.

1600 Bank of Oklahoma Plaza

210 Robert S. Kerr

Oklahoma City, OK 73102

Chris J. Condren, Esq.

1109 North Francis

Oklahoma City, OK

Kirk W. Koester, Esq.

2728 N.W. 39th

Oklahoma City, OK

Art Schulcz, Esq.

2021 “K” Street, N.W.

Suite 310

Washington, D.C. 20006

David Thomas, Esq.

20 North Broadway

Oklahoma City, OK

3la

Appendix F

Also appearing:

Katherine Bunn, Esq.

John White, Esq.

Court Reporter Lynn L. Hilton

3013 U.S. Courthouse

Oklahoma City, OK 73102

Proceedings recorded by mechanical stenography, transcript

produced by computer-aided transcription.

*- *+ *

[18] allocation against him. He has been found liable and he

would not be a participant in this phase of the trial, in any event.

THE COURT: Based upon Mr. Roark’s assurance that you

had reached an agreement and assuming that this sets out the

terms and conditions, I free you from any further responsibility in

connection with Phase III or until further order of the Court.

Court will be in recess until further notice.

(Recess was had, following which:)

THE COURT: Let the record reflect that the attorneys for

various parties are meeting in chambers. I assume no one has any

objection to that, as Opposed to the courtroom. Who wishes to

make a statement first?

MS. BUNN: I guess] will. Kathy Bunn for Cook Paint and

Varnish Company.

32a

Appendix F

My understanding is we have reached a settlement

agreement with the Steering Committee, the terms of which are

that Cook will pay $515,000, which fully settles its obligations,

subject to the other terms of the settlement agreement. Namely,

my understanding is the orphan problem and the reopener.

THE COURT: Mr. Tomlinson, Mr. Roark.

MR. ROARK: That’s correct, Your Honor. I think counsel

has seen the agreement, and without going through all the details,

my understanding is you agree with the terms of [19] the global

agreement.

MS.BUNN: Yes.

THE COURT: Now, we may need to make a record with

regard to Mr. Schulcz’ clients and clients of Mr. Conger as third-

party. Who wishes to make a statement in that regard?

MR. CONGER: I think as liaison counsel, I would suggest

that it would be more appropriate for Mr. Schulcz to make a

statement on behalf of — do you have a statement to make?

MR. SCHULCZ: Your Honor, I understood that you were

going to enforce a settlement, based upon a letter that Mr. Harker

THE COURT: I think the proper procedure may be to let me

have acopy of that. Here it is.

Let the record reflect that I have a copy of a letter from the

Harker firm dated March the 22nd, 1991, addressed to Mr.

William Conger, Esquire. It’s signed by Timothy L. Harker.

33a

Appendix F

Would you, if you will, Mr. Conger, recite the gist and

substance of that, or that Portion of it that you think is — well, I

can do that for you.

“Dear Bill, just to confirm my Conversation with you earlier

this afternoon, Reliance Universal, now Akzo Coatings, Inc., is

Prepared to settle the HSC claim for one dollar per gallon offer.

The O’Brien Corporation and Jones-Blair are [20] prepared to

settle the HSC claims on the same basis of one dollar per gallon if

Cook Paint does not litigate the HSC response cost phase.

“Cook Paint will settle or not based on the willingness of its

insurance carrier to assume a portion of the settlement cost

acceptable to Cook Paint or on the basis of some alternative

arrangement acceptable to Cook Pain and its insurance carrier.

Cook’s corporate counsel, the firm of Blackwell-Sanders, is in

Oklahoma City today to advise them of that decision.

“You indicated that you would apprise the HSC of the Akzo

acceptance and also the positions of other companies, Cook,

Jones-Blair and O’Brien, in time for settlement to occur and to

avoid trial for Akzo and, as appropriate, for the other three

companies. Sincerely, Timothy L. Harker.”

And copies of that to Paul Dague, Paul Brooks, Jr.. Patti

Houle and Pat Curran. I'll have that marked and made a part of the

record.

Now, I think for the record, before we hear from Mr. Schulcz,

you should state to the Court your understanding of the terms and

conditions having been complied with.

MR. CONGER: Your Honor, in light of the statement by

34a

Appendix F

Ms. Bunn on behalf of Cook Paint, it seems to me that all of the

protocols and requirements set forth in Mr. Harker’s letter are

performed and therefore, that the settlement should [21] go

through on behalf of O’Brien and Jones-Blair, pursuant to the

instructions of this letter.

MR. CONDREN: !’ll just voice, for the record, on behalf of

Cook Paint, we think that we have settled and that we’ re avoiding

the response cost trial. It’s a matter of record.

THE COURT: The Court agrees with that and has advised

Mr. Schulcz that it intends to enforce the settlement with regard to

Jones-Blair and other clients in accordance with that. But I also

want to allow him an opportunity to make a statement into the

record.

MR.SCHULCZ: Your Honor, I conveyed to Mr. Conger on

Monday that the terms of that letter had changed and that O’Brien

and Jones-Blair wish to reserve that right. And at this time, we are

without authority from those people to enter the settlement.

I think that’s all Ineed to say.

MR. CONGER: I would like to respond for the record that I

don’t think that Mr. Schulcz even knew that this letter existed on

Monday before he talked to me. I have spoken to Mr. Harker as

late as yesterday and advised him of the status of these

proceedings. As it existed yesterday, Mr. Harker never at any time

indicated to me about changing his previous instructions to me.

THE COURT: Okay. Go ahead, Mr. Schulcz.

[22] MR. SCHULCZ: I feel I need to respond for the record

specifically on Monday

the contents of the change to Mr.

made sure that we had reserved the right to decide.

THE COURT: All right. As the Court has previously

announced, it’s my opinion that the terms and protocols and

conditions have been complied with; that Mr. Conger is

authorized to settle the case on that basis.

The Court will enforce the settlement in that regard.

would very quickly exceed any amount in controversy as

exceed any differences in their

Positions now from the time that that was stated.

For those reasons, the Court will enforce the settlement.

I do need to ask counsel, there are three matters that need to

discuss with you about where that leaves us. Let me just start on

the claims that are possibly remaining on [23] liability. Arrow

Tank.

MR. TOMLINSON: I think we hav

€ a couple of issues

remaining on response costs.

THE COURT: First, I want to take up Arrow Tank on

liability costs, on the liability question. What do we have left and

when do we want to take that up?

36a

Appendix F

MR. ROARK: We have an agreement with Arrow Tank to

stipulate on response costs, part of their liability at $15 million.

HSC is entitled to recover that amount.

We do need to try the other aspects of their liability case. We

anticipate that will take somewhere between two and three hours.

Both of our witnesses have been released. I have one coming

from out of town. We could try that perhaps tomorrow afternoon

or if the Court’s schedule would be better next week.

THE COURT: Tomorrow afternoon is fine, if that’s

agreeable with the parties. I just wanted to kind of find out now, if

we could.

MR. WITZE: As far as the timing is fine. To make sure that

we’ re clear on the stipulation, Arrow is obviously contesting it’s

liable for any of the response costs.

However, if the Court should determine that Arrow is liable

for response costs, we stipulate that $15 million is — whatever

our share of that would be proper. We’re reserving the liability

issue obviously to response costs.

». * *&

[28)CERTIFICATION

I, Lynn Hilton, Official Court Reporter, do hereby certify

that the foregoing 27 pages constitutes a true and complete

transcription of my shorthand notes as taken by me on the date set

forth herein.

37a

Appendix F

Dated this the 5th day of April, 1991.

s/ Lynn Hilton

Lynn Hilton, CSR, CP

38a

APPENDIX G — LETTER DATED MARCH 22, 1991

FROM MR. HARKER TO MR. CONGER

THE HARKER FIRM

Attorneys

Timothy Harker and Associates 2021 K Street, N.W., Suite 310

(202) 223-9880 WASHINGTON, D.C. 20006

March 22, 1991

BY TELEFAX

William Conger, Esq

Hartzog, Conger, Carson

& Hargis

1600 Bank of Oklahoma Plaza

201 Robert S. Kerr

Oklahoma City, OK 73102

Dear Bill:

Just to confirm my conversation with you earlier this

afternoon, Reliance Universal (now Akzo Coatings, Inc.) is

prepared to settle the HSC claim for the $1.00 per gallon offer.

The O’Brien Corporation and Jones-Blair are prepared to settle

the HSC claims on the same basis of $1.00 per gallon if Cook

Paint does not litigate the “HSC response cost” phase. Cook Paint

will settle or not based on the willingness of its insurance carrier

to assume a portion of the settlement cost acceptable to Cook

Paint or on the basis of some alternative arrangement acceptable

to Cook Paint and its insurance carrier. Cook’s corporate counsel,

the firm of Blackwell, Sanders, is in Oklahoma City, today, to

advise them on that decision.

39a

Appendix G

You indicated you would apprise the HSC of the Akzo

acceptance and also of the positions of the other companies

(Cook, Jones-Blair and O’Brien) in time for settlement to occur

and to avoid trial for Akzo and, as appropriate, for the other three

companies.

Sincerely,

s/ Timothy L. Harker

Timothy L. Harker

TLH: daj/B5

cc: Paul Dague

Paul Brooks, Jr.

Patti Houle

Pat Curran

40a

APPENDIX H—ORDER OF THE UNITEDSTATES DISTRICT

COURT FOR THE WESTERN DISTRICT OF OKLAHOMA

DENYING SUMMARY JUDGMENT MOTION

IN THE UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF OKLAHOMA

No. CIV-86-1401-W

Oklahoma City, Oklahoma

Dated: November 29, 1993

UNITED STATES OF AMERICA,

Plaintiff,

vs.

ROYALN. HARDAGE, etal.,

Defendants.

TO: ROBERT D. DENNIS, CLERK

Please enter the following minute order in the above-entitled

case.

This matter comes before the Court on the Motion for

Summary Judgment filed by third-party defendants The O’Brien

Corporation and Jones Blair Company pursuant to Rule 56,

F.R.Civ.P. The third-party plaintiff, the Hardage Steering

Committee, has responded in opposition and the third-party

defendants have replied. Based upon the parties’ submissions,

the Court finds there are genuine issues of disputed fact that

render summary judgment inappropriate. Accordingly, the

4la

Appendix H

Motion for Summary Judgment should be and is hereby

DENIED.

Counsel Notified

Clerk to Notify__X

s/ Lee R. West

LEE R. WEST

UNITED STATES DISTRICT JUDGE

42a

APPENDIX I — EXCERPTS OF TRANSCRIPT

DATED DECEMBER 21, 1993

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF OKLAHOMA

Docket No. C-86-1401-W

Oklahoma City, Oklahoma

December 21, 1993

UNITED STATES OF AMERICA,

Plaintiff,

ROYALN. HARDAGE, ETAL,

Defendants,

ADVANCE CHEMICAL COMPANY, ETAL.,

Hardage Steering Defendants

and Third-Party Plaintiffs,

ABCO, INC.., etal.,

Third-Party Defendants.

43a

Appendix |

TRANSCRIPT OF HEARING

DECEMBER 21, 1993

BEFORE THE HONORABLE LEE R. WEST

UNITED STATES DISTRICT JUDGE

[2] A-P-P-E-A-R-A-N-C-E-S

Appearing for the Jones-Blair

Company and The O’Brien

Corporation: Mitchell D. Blackburn

Attorney at Law

Oklahoma City, OK

Appearing for the Hardage

Steering Committee: Robert L. Roark

Attorney at Law

Oklahoma City, OK

Court Reporter Lynn L. Hilton

3001 U.S. Courthouse

Oklahoma City, OK 73102

Proceedings recorded by mechanical stenography, transcript

produced by computer-aided transcription.

44a

Appendix I

[3] TABLE OF CONTENTS

OPENING STATEMENT: By Mr. Roark, Page 4

By Mr. Blackburn, Page 7

EVIDENCE ON BEHALF OF THE PLAINTIFFS

WITNESSES:

Bill Conger,

LAL AAS AOE TN 11

CI an scnrssseissoubinninsendiintneeienainnbh 28

IID os cnccecccecesesvisscniecnsetesosonserseuniines 55

Chris Condren,

III... ncsnsanssestosnnninesensambicnnsaveenennnnts 58

CI ioc cccicnennessssinsesnccsenssnsvesncnmanensient 75

ReGieet TIBOR ooxceccecceessceenscesevessissiccercertesserees 110

PR III oncsecccsscsccnscsnsiccessececctenieereetorines 111

Plaintiffs Rest: Page 113

EVIDENCE ON BEHALF OF THE DEFENDANTS

WITNESSES:

Timothy Harker,

I oo cecessrtstrnnmneniesstnnanmanenertantabeins 114

CII orcrcccccrcenincsttcccerercsariennnrnnnnnions 135

Repti et TRING R .cccccccccccccscccscessscscccsssccrcescnscsceee 152

BRO TID ccccncenececenccsessncesenenctereesescennenestie 156

Arthur A. Schulcz,

Dlr TRIO occecccccccceccccccscesnccerecsntsevesesccronseess 161

CI ecccnsecscecccsessctssccnsrnneecnvenensnateemnnnn 176

Redivect Hrmenimatioe ....<cccccccccccsscsccoscesccesscscoseversecces 185

[4] THE COURT: Are the Parties ready to proceed in the

case of U.S.A. versus Royal Hardage?

MR. ROARK: Plaintiffs are, Robert Roark on behalf of the

Hardage Steering Committee.

MR. BLACKBURN: The Defendants are, Your Honor,

Mitch Blackburn on behalf of Jones-Blair and O’Brien.

THE COURT: Do you wish to make an opening statement?

MR. ROARK: Briefly, if I may.

THE COURT: Sure.

OPENING STATEMENT

BY MR. ROARK:

In this Proceeding, what strikes me as the most interesting

thing about this case is that the parties are contending very

diverse theories and they focus on very different sets of facts to

get to the result which both parties wish the Court to reach.

Jones-Blair and O’Brien contend that this case is about Bill

Conger. They say that Mr. Conger exceeded his authority when he

made an agreement on behalf of Jones-Blair and O’Brien with the

HSC. They say that he knew or should have known when he

reached this agreement on their behalf that the letter on which he

was relying, which is the now-famous March 22, 1991 letter that

Mr. Harker wrote to Mr. Conger, they say that he knew or should

have known that (5) that letter was no longer valid.

46a

Appendix I

They say that, and they will present evidence, I believe, that

Mr. Schulcz allegedly told Mr. Conger on Monday, March 25th

that there had been a change of position. They say that even on

March 27th, even if Mr. Schulcz didn’t communicate that, that he

knew or should have known that he had no authority because of

comments that Mr. Schulcz made that morning.

The evidence that we will present from both Mr. Conger and

Mr. Chris Condren, on behalf of Cook Paint, will be, first of all,

that there was no such communication whatsoever on March 25th

to Mr. Conger about the March 22nd letter no longer being valid.

_ That conversation did not occur. It did not occur effectively

enough to communicate it to Mr. Conger.

Secondly, on March 27th, when the negotiations occurred,

Mr. Conger did not enter into any agreement on behalf of Jones-

Blair and O’Brien; this is not about an agreement that Mr. Conger

did or did not enter into. Therefore, whatever Mr. Schulcz may

have said to Mr. Conger on that day is irrelevant.

The HSC believes, and our evidence will show that what this

case is about is that the March 22, 1991 letter that Mr. Harker

wrote to Mr. Conger had been communicated also to Cook Paint

and its counsel and its negotiator on the scene, on [6] March 27th,

Mr. Chris Condren. Mr. Condren knew about the letter; nobody

ever told him anything about the letter not being valid.

When the parties began to negotiate on Wednesday March

22nd, Cook Paint and the Hardage Steering Committee reached

an agreement. As a result of their having reached that agreement,

the terms of the letter became immediately effective. That meant

that Jones-Blair and O’Brien were also bound to accept the

Hardage Steering Committee’s dollar-per-gallon offer.

47a

Appendix I

The evidenc: ill show that at that point in time any

comments that were allegedly made by Jones-Blair and O’Brien

or Mr. Schulcz, who was on the scene, came too late. They are

ineffective after a contract is already made to do anything to

effect the rights of the parties, particularly where the rights of

third parties — in this case, Cook Paint and the HSC — are

involved. When both of those parties reached an agreement and

changed their position, based upon the fact that that letter had not

been revoked and there had been no communication of that,

Jones-Blair and O’Brien were ineffective on that day to do

anything about that agreement.

There is a stipulation in the Pretrial Order that if the Court

enforces the settlement agreement, which we believe the

evidence will justify, that there is no dispute about the amount of

money involved here; that is, that Jones-Blair would [7] be

indebted to the HSC as a result of that settlement agreement and

for $24,825, and that O’Brien would be indebted to the HSC as a

result of the settlement agreement for $43,022.

We have also asked the Court to award prejudgment interest

at the legal rate in Oklahoma, it is six percent, since those are

unliquidated, undisputed amounts effective as of March 27,

1991.

OPENING STATEMENT

BY MR. BLACKBURN:

What I believe Mr. Roark just went through, I believe, is a far

cry from what you were hearing on Wednesday the 27th, 1991.

When the parties came before you on Wednesday 27th of ‘91, the

issue as reflected in the transcript was whether or not Mr. Conger

48a

Appendix I

had the authority to settle this matter on behalf of Jones-Blair and

O’Brien.

The review of the transcript reflect that that’s the way you

perceived the issue. Mr. Conger has the authority based upon the

letter. And when they went to the Tenth Circuit Court of Appeals,

that’s what they argued, Mr. Conger had the authority.

Now, when all is said and done, they come back down and

there are problems with that theory, the problem being Mr.

Conger knew about a dispute before he ever communicated it to

the HSC. Consequently, if you accept the notion that in order to

have a binding contract, you not only have to have an [8] offer and

acceptance, but acommunication of that acceptance.

Mr. Conger couldn’t effectively communicate that

acceptance. He knew about the dispute; he knew that there was

some question surrounding the validity of the letter at the time.

He was duty-bound to go and check that out. He couldn’t simply

disregard the dispute and proceed with blinders on.

Now, obviously there is a dispute regarding whether or not

Mr. Conger and Mr. Schulcz had the conversation on March 25,

1991. Ithas been in dispute ever since. Mr. Conger now says, No,

no such conversation ever occurred. I believe that you may recall

on March 27, 1991 when he was confronted with that allegation

by Mr. Schulcz, he didn’t say, no, Your Honor, no such

conversation occurred. No. He said only, I don’t believe Mr.

Schulcz knew about the letter before he talked to me on Monday.

Now, that is a far cry from, No, no such conversation occurred.

That is where we get around to the idea now after the fact that

Mr. Condren, on behalf of Cook Paint, somehow had the

49a

Appendix |

authority to consummate the settlement on behalf of Jones-Blair

and O’Brien and the HSC. The novelty of this theory is that under

the HSC position right now, they are Saying they settled with

Jones-Blair and O’Brien and they didn’t even know it. They

settled when they settled with Cook Paint and only learned about

it after the fact.

Now, Your Honor, that won’t — that just won't fly.

[9] The letter was sent from Mr. Harker to Mr. Conger. It

didn’t say, If anybody else happens to see this letter, they are

granted with some authority to settle on behalf of Jones-Blair and

O’Brien. A relatively simple letter, You have the authority to do

this, if this occurs. It didn’t occur.

Let’s talk about reliance on the letter. As Mr. Roark said, they

are going to say that Cook Paint relied on that letter. The evidence

is going to show they didn’t rely on the letter when they began

negotiations, they didn’t rely on the letter when they agreed on

the substantive terms of the negotiations. It was only after the

fact, the final condition, Cook Paint will settle with you if Jones-

Blair and O’Brien will settle, also. That is the first time the issue

arose.

Now what reliance is that? The only thing they relied on that

letter for is they would be able to satisfy that condition. There was

no detrimental reliance on that letter and consequently, Jones-

Blair and O’Brien shouldn’t have to stand along the sidelines

mute.

Then we get to the issue of repudiation or recision, was it

effective? Mr. Schulcz was right there at the moment, within a

heartbeat after this agreement between Cook Paint and Jones-

50a

Appendix I

Blair — and the HSC. Mr. Schulcz protested, brought this matter

to Your Honor. What reliance, what detrimental reliance occurred

during that period of time?

The concessions made by Cook Paint and the HSC, one [10]

to another in order to effect a settlement, if in fact the letter was no

good and Jones-Blair and O’Brien didn’t want to settle, those

concessions, neither were bound, because the condition was still

out there. The HSC wasn’t bound to accept Cook Paint and Cook

Paint wasn’t bound to accept the HSC. We would assume you

would have simply proceeded to trial.

I think that although the theory of this case has shifted on

behalf of the HSC, there is three different ways to skin the cat.

One, Mr. Conger knew about the revocation of the letter. Two,

even if he didn’t, he found out on the 27th and there was no

effective communication of the acceptance of the outstanding

offer. Three, even if by some miraculous way there was an

effective communication, the repudiation was instantaneous and

there was no detrimental reliance suffered.

I believe that’s what the evidence will show.

THE COURT: Who is going forward first with the proof?

MR. ROARK: The Hardage Steering Committee will go

forward.

TERE COURT: Will all witnesses who expect to testify in

this case stand, raise your right hand and be sworn.

(Whereupon, Witnesses are sworn.)

Sla

Appendix I

MR. ROARK: Bill Conger.

THE COURT: For the record, would you state your full

name and spell your last name.

+. * &*

[22] that correct?

A. True.

Q. The record is pretty clear that after some preliminary

discussion before Judge West, Cook Paint, or perhaps the HSC,

requested a continuance to do some further negotiations because

they believed that Cook Paint and the HSC might be able to reach

an agreement; is that your recollection?

A. That’s my recollection.

Q. Can you tell us, Mr. Conger, who was conducting the

negotiations that morning on behalf of Cook Paint?

A. Chris Condren. And let me correct that, Chris Condren and a

lawyer from Kansas City, I believe her name was Kathy Bunn.

Q. Were you involved at all in the detailed negotiations between

the Hardage Steering Committee and Cook Paint that morning?

A. No, I was not.

Q. Did you do any negotiating that morning, March 27th, on

behalf of Jones-Blair or O’ Brien?

Pee a

52a

Appendix I

A. No.

Q. Did you make any agreements that morning on behalf of

Jones-Blair and O’ Brien with the Hardage Steering Committee?

A. No, I did not.

Q. At some point that morning, there was an off-the-record

conference in front of Judge West; is that correct?

A. True.

[31] respect to Jones-Blair and O’Brien, did you not?

A. Itconfirmed my authority, yes.

Q. Your authority, your authority to do what?

A. Well, it confirmed Mr. Harker’s instructions to me to settle on

behalf of Reliance and what I was to do with respect to Jones-

Blair and O’Brien, vis-a-vis Cook Paint.

Q. Again, you felt that this letter constituted your authority with

respect to Jones-Blair and O’Brien?

A. That’s right.

Q. I believe you previously testified that you made no

agreements on behalf of Jones-Blair and O’Brien on March 27,

1991, did you not?

53a

Appendix I

A. That’s right.

Q. But you are also of the opinion that Jones-Blair and O’Brien

settled with the HSC on March 27, 1991, correct?

A. Yes, that’s true.

Q. This letter constituted your authority to settle on behalf of

Jones-Blair and O’Brien. That is your position, correct?

A. Yeah.

Q. Asettlement occurred, that is your position, correct?

A. Asettlement occurred.

Q. But you never exercised the authority in that letter on March

27, 1991, correct?

A. Well, I advised the Court of the letter, the protocols contained

in the letter and my opinion that those protocols had

s * *

[40] Q. This transcript is of proceedings that occurred after the

off-the-record conference which you had with the J udge, correct?

A. That’s right.

Q. This transcript is of proceedings which occurred after you

became aware that there was a dispute regarding whether Jones-

Blair and O’Brien wanted to settle, correct?

54a

Appendix I

A. That’s right.

Q. So, actually, I guess I mischaracterized it awhile ago when I

said that you were thinking on your feet and reacting, you knew

about this ahead of time, before you went in there, correct?

A. Iknew what Mr. Schulcz’s position was, yes.

Q. You knew that Mr. Schulcz was saying that he had revoked the

letter, correct?

A. Yes.

Q. You had had time to give that some thought, correct?

A. Yes, I suppose so.

Q. He didn’t just catch you flat footed with it, just hit you cold

right there in front of the Judge and say, “I revoked the letter on

Monday,” did he?

A. No, he didn’t.

Q. You viewed exhibit, Plaintiffs Exhibit 1, as your authority to

settle on behalf of Jones-Blair and O’Brien if the terms of the

letter were met, correct?

[41] A. Yes.

Q. You didn’t ever delegate that authority to anybody, did you?

A. No.

55a

Appendix |

Q. You didn’t say, “Mr. Condren, I’m busy, I will be talking to

the Judge, making notes, getting ready for trial. You carry the ball

on this one; I got the letter, you close the deal for me,” did you?

A. Ididn’t say that.

Q. Let’s talk about the timing of things, how things occurred on

March 27, 1991.

A. Okay..

Q. Obviously, at some point on March 27, ’91, you became

aware that a dispute existed, that Jones-Blair and O’Brien was at

least saying they didn’t want to settle, correct?

A. That’s what I have been telling you.

Q. You became aware of that before the off-the-record

conference, you previously testified to that, correct?

A. Just moments ago.

Q. You subsequently had a conversation with either Mr. Roark or

Mr. Tomlinson, did you not?

A. Subsequently a conversation with them?

Q. Correct.

A. Yes, I did.

Q. You knew about the dispute regarding the letter before you

[42] had that conversation with Mr. Roark and Mr. Tomlinson,

did you not?

56a

Appendix I

A. I believe I did. I’m not sure what conversation you are talking

about, but I assume I did.

Q. Do you recall Mr. Tomlinson coming up and asking you, you

know, “Jones-Blair and O’ Brien going to settle with us?”

A. No, I really don’t. I had passed the — I had passed their

position on to the HSC earlier, to someone at the HSC, just as a

point of information to tell them where these parties were. Who

that was, I don’t recall.

Q. You know, the monolithic HSC, you don’t recall who that

was?

A. That’s what I just said, I don’t recall exactly who it was. They

had divided up their settlement among various members of their

team. So I was passing it on to whoever it was.

Q. You are aware that Mr. Roark previously testified that he

wasn’t aware of the letter or the position prior to March 27, 1991,

correct?

A. I’mnot aware of what he has testified to.

~ Q. Have you not had any conversations with Mr. Roark

regarding this matter prior to today?

A. Yes, Ihave had conversations with him.

Q. That subject just never came up?

A. He has never told me what he has testified to, no.

57a

Appendix |

[43] Q. Did he ever tell you when he first became aware of the

letter?

A. He may have, I just don’t recall.

Q. But at some point, on March 27, 1991, you went to either Mr.

Roark or Mr. Tomlinson and you said, “Yeah, there is this letter,”

correct?

A. You know, I don’t recall doing that; maybe I did. Chris

Condren had the letter and there was no secret about the letter. I

can’t remember if they were around me at the time or not.

Q. Well, if Mr. Tomlinson was to testify that that’s the way things

happened, that you came to him and you said, “Yeah, there is this

letter,” would you have any reason to say, “No, that’s wrong?”

A. No, I wouldn’t have any reason to say that.

Q. Let’s talk about what you just said there a second ago. This

was no secret that if Cook Paint settled, Jones-Blair and O’Brien

would go along, correct?

A. Okay.

Q. Did you have any discussion with Ms. Bunn prior to March

27, 1991 regarding settlement?

A. Yes.

Q. Ms. Bunn has testified that she didn’t learn about this until she

heard it from the HSC?

58a

Appendix I

A. Didn’t learn about what?

*» *

[52] what Mr. Schulcz was saying, did you?

A. No, I did not.

Q. Mr. Roark previously talked about your duty, your duty to the

Court when this issue came up and how you had a duty to advise

the Court of the existence of the letter. You agreed with that,

right?

A. Yes.

Q. Let’s talk about another duty. There you are, you are before

the Judge. You have got Mr. Schulcz, who you know represents

Jones-Blair and O’ Brien, saying they don’t want to settle. Didn't

you think you had a duty at that point in time to go and check and

make sure?

A. No, I did not.

Q. You felt comfortable in just assuming that Mr. Schulcz was

wrong in going forward?

MR. ROARK: I object. This has been asked and answered

about six times. He is arguing with the witness.

THE COURT: Sustained.

Q. One last point, Mr. Conger. You are standing there on March

59a

Appendix I

27, 1991, Chris Condren comes up to you and says, “There is a

dispute, Schulcz is saying Jones-Blair and O’Brien don’t want to

settle,” correct?

A. Yes.

Q. You pull the letter out of your pocket and you show it to him,

correct?

[53] A. Idon’tremember the order in which I gave him that letter.

Q. Did you participate in any of the negotiations between Cook

Paint and the HSC?

A. That day?

Q. Yeah.

A. No.

Q. When they all left after the morning recess to go and

negotiate, did you go with them?

A. No.

Q. At that point, there was no dispute. I mean, the issue hadn’t

arisen, correct?

A. No.

Q. The issue surrounding the letter?

60a

Appendix I

A. Right.

Q. The first time you saw Mr. Condren after that point was when

the dispute had arisen, correct?

A. I don’t know when the dispute arose. When I saw Mr.

Condren and Ms. Bunn and Mr. Schulcz, there was agitated

conversation amongst them. I simply walked up and learned what

it was about.

Q. That’s when Mr. Condren advised you that Mr. Schulcz was

saying Jones-Blair and O’ Brien didn’t want to settle?

A. It was sometime about that time.

Q. That would have been the first time when you would have

x* * *

[71] Q. Did he ever say anything to you in that conversation that

you just described, that initial statement, about the letter in front

of you, one way or the other; whether it existed or whether it was

any good?

A. The letter was never mentioned to Mr. Schulcz until I told him

we were going to settle.

Q. After you had already reached an agreement?

A. After we reached agreement with the HSC and we went down

from the elevators toward Judge Phillips, had a heated

discussion. I said, “We have this letter; we are going to settle.” He

said, “The letter is no good.” I said, “You just watch.”

6la

Appendix I

We went back to Judge West. Judge West was involved, and

had a discussion, Mr. Conger was there, and I agreed with Mr.

Conger’s version of events. Judge West advised us that he was

inclined to enforce the settlement, but he would want to do it on

the record and give everyone a chance to have their say. Everyone

had their say on the record and settlement was enforced.

Q. When he made the statement to you that the letter was no

good, was that the first notice that you ever received from Mr.

Schulcz where he even mentioned the letter or some change in

position?

A. That’s the first time that Mr. Schulcz and I had ever discussed

anything with respect to the letter and the first

*“ * *

[193] THE WITNESS: Paul David Dague, D-A-G-U-E.

DIRECT EXAMINATION

BY MR. BLACKBURN:

Q. What do you do for a living?

A. President of Jones-Blair Paint Company.

Q. How long have you been president?

A. January 1, 1979.

Q. Paint company, had much involvement with environmental

law and environmental litigation?

62a

Appendix I

A. Well, for about the last ten years, yes.

Q. I believe you are familiar with Timothy Harker and The

Harker Firm?

A. Yes.

Q. We know, based upon everything we have heard today, that

The Harker Firm represented Jones-Blair. How long has The

Harker Firm represented Jones-Blair?

A. Since approximately in 1982.

Q. Their representation, did it start from the very beginning, the

representation of Jones-Blair in connection with this matter?

A. Yes. We had had a previous environmental Superfund site. I

knew Tim previous to that and employed him for a bioecology

site down in Texas. When this one came up, I immediately

contacted him. I already had been working with him for some

time.

[200] very, very clear on it and that we could win the case.

Q. Do you recall anything else about why he had apparently

changed his mind and decided that you ought to stick it out?

A. Idon’treally remember. I’m sure Tim went through a number

of reasons like he always does, but what I can really remember is

that on Friday, he was recommending that we settle if Cook did.

And on Monday, he was recommending that we have really have

63a

Appendix I

a better case than I thought, after thinking it over. We ought to

stand and fight. We ought to fight them tooth and nail.

I agreed with him. That really fit my temperament better than

giving in to these guys.

Q. Has there ever been an instance prior where you refused to

follow Mr. Harker’s recommendation?

A. No, sir, I can’t recall. You know, in my opinion, Tim is

probably the best Superfund lawyer in the U.S. He has got good

common sense. We are able to work with him real well. I just

haven’t had any — I haven’t had an issue from a business

standpoint to say, “Hey, that doesn’t make any sense from a

business point of view.” He is the legal expert.

You know, I don’t know a dadgum thing about the law except

what you guys teach me in these things, but he is a good

businessman. I have had no cause to say, “Hey, Tim, that is not

smart.” You know, that doesn’t mean I haven’t asked him

questions, I have asked him questions. You know, “What is

* ® *

64a

APPENDIX J — DEPOSITION OF ROBERT ROARK, ESQ.,

COUNSEL FOR HSC (ADMITTED TO RECORD IN LIEU

OF DIRECT TESTIMONY)

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF OKLAHOMA

C-86-1401-W

UNITED STATES OF AMERICA,

Plaintiff,

VS.

ROYALN. HARDAGE, et. al.,

Defendants,

ADVANCE CHEMICAL COMPANY, et. al.,

Hardage Steering Committee

Defendants and Third-Party

Plaintiffs,

ABCO, INC., et. al.,

Third-Party Defendants.

DEPOSITION OF ROBERT ROARK

TAKEN ON BEHALF OF

JONES BLAIR COMPANY AND O’BRIEN CORPORATION

ON SEPTEMBER 23, 1993

IN OKLAHOMA CITY, OKLAHOMA

APPEARANCES

For the Hardage Steering Mr. Robert D. Tomlinson

McKinney, Stringer & Webster

City Center Building

Main and Broadway

Oklahoma City, Oklahoma 73102

65a

Appendix J

For Jones Blair Company Mr. Mitch Blackburn

and O’Brien Corporation: Hastie and Kirschner

3000 First Oklahoma Tower

210 W. Park Avenue

Oklahoma City, Oklahoma 73 102

Reported By: Vicki Maltsberger, CSR, CP, CM

MERIT REPORTERS, INC.

Suite 807, Two Leadership Sq.

Oklahoma City, Oklahoma 73102

(405) 232-2804

[2] STIPULATIONS

It is stipulated that the deposition of ROBERT L. ROARK

may be taken on September 23, 1993 at 4:45 p.m. before Vicki

Maltsberger, CSR, CP, CM, pursuant to agreement and the

Federal Rules of Civil Procedure.

It is stipulated that all objections, except objections as to the

form of the question, may be made at the time of trial when said

deposition is offered in evidence, as if said objections were made

at the time of taking said deposition.

* «- & & HH &

ROBERT L. ROARK,

being duly sworn, was examined and testified as follows:

DIRECT EXAMINATION

BY MR. BLACKBURN:

Q State your name for the record, please.

66a

Appendix J

A Robert L. Roark.

Q Mr. Roark, would you briefly describe for me your

involvement in the second trial of the Hardage litigation?

A I was in charge of the third-party litigation which

involved liability issues of the third-party defendants, and that

included settlement negotiations with various third-party

defendants.

Q Was there anyone else who could enter into a binding

settlement agreement on behalf of the HSC besides

* * *

[4] connection or reason why it made sense for them to be

involved versus our firm to be involved.

Q And your firm, of course, was the line of communication -

between Cook Paint, Jones-Blair and O’ Brien?

A Most of the time, yes. And we were the line of

communication with respect to de minimis parties, which

included Jones-Blair and O’Brien. And it did not include Cook

Paint. But we dealt with some of the Cook Paint issues in this law

firm, yes.

Q So settlement discussions between the Hardage Steering

Committee and Cook Paint, Jones-Blair and/or O’Brien would

have been between whoever their representatives were and

yourself; is that correct?

A For the most part, yes.

I cannot categorically tell you that some other attorney on

67a

Appendix J

behalf of the HSC may not have talked with those parties’ counsel

at some point in time.

I know that our firm almost always generated the offer to the

de minimis parties because it was a uniform offer. As we

proceeded through the year-and-a-half of litigation, that offer

changed from time to time.

We would make an offer, communicate to it Bill Conger

because he was representing the third-party de minimis parties as

a group.

He would, in turn, communicate it to the third

* * *

[6] MR. BLACKBURN: Excuse me?

MR. TOMLINSON: Time frame to the question.

MR. BLACKBURN: The week preceding. Within that

week.

THE WITNESS: No. I have no recollection of any other

party on behalf of the HSC during that week.

Q (By Mr. Blackburn) Were you having discussions with

Mr. Conger during that period of time?

A Yes.

Q Can you recall for me the substance of those discussions?

68a

Appendix J

A With respect to —

Q Either of the three parties; Cook Paint, Jones-Blair or

O’Brien?

A Not specifically, other than his generally informing us

during the three days of that week, the 25th, 26th and 27th, that

Jones-Blair and O’Brien had as of that time not accepted our offer

on the table to de minimis parties. And that Cook Paint was not

agreeable to the — what we called the global settlement offer to

the defendants and major third parties in the case.

Other than him just telling us that they hadn’t reached any

agreement and weren’t willing to settle on our terms, no. No, I

have no other specific recollection.

Q On March 25th following the continuance that was

* * *

[14] said, “And the Court was going to enforce this letter”; is that

correct?

A I’msorry? Say that again.

Q The first time that Mr. Condren specifically mentioned

the letter to you —

A (Witness nods head yes.)

Q —inresponse to you reminding him of the condition —

A Yes.

69a

Appendix}

Q — in that same conversation, Mr. Condren also said that

the Court was going to enforce the letter. Is that your

recollection?

A He made some reference to that effect. That there was a

letter agreement, and there was no problem doing this. And that

we were going to go in and announce to the Judge that we had an

agreement.

And at some point, as Mr. Tomlinson has told you, it became

evident that for some reason or another, Jones-Blair and O’Brien

or Mr. Schulcz had raised some questions, and he just commented

that there was going to be — it was a done deal, and there was a

letter and that we were all going to make a record on it.

Q Do you know whether the dispute — Mr. Schulcz raising

this contention, do you know whether that occurred prior to Mr.

Condren’s referring to the letter or

*_ * *

[16] whatsoever with respect to what Cook Paint was doin g or not

doing.

Q (By Mr. Blackburn) But did you previously state that Mr.

Condren alluded to some dispute in his discussion with you?

A Only at the very final moment when he said — when he

said, “We have got a deal, and Jones-Blair and O’Brien are going

to be a part of the deal.” And he alluded to some issue that

apparently had arisen and indicated also that the Court was going

to enforce it, and we needed to go back in chambers and make a

record.

70a

Appendix J

Prior to him saying that, I had absolutely no knowledge, have

no recollection of any dispute or any question about anybody's

authority or anything else with respect to the position that Jones-

Blair and O’ Brien are now taking.

Q Did you have any knowledge of the letter prior to the

conversation in which he said that?

A No, I donot think so.

Q Was Ms. Bunn there during your discussions with Mr.

Condren?

A I’m sure she was from time to time. She was there

representing Cook Paint, and I don’t have a specific recollection

of what particular conversation she was there or not there. But she

was a representative of Cook Paint [17] at Court that morning.

Q Do you recall any specific instance where she

participated in the negotiations, or did Mr. Condren handle that?

A Ihave a general recollection that she was involved, and I

probably talked to her. I have a more specific recollection of my

conversation with Mr. Condren that I just related to you.

Q After you have had the discussion with Mr. Condren that

we just discussed, what happened next?

A We talked back into Judge West’s chambers and made a

record which is reflected by the transcript.

Q Did you speak with Mr. Conger during this period of

time?

7la

Appendix J

A What period of time?

Q In between your conversations with Mr. Condren

regarding the letter and going back into the chambers and going

on the record.

A I think briefly. He confirmed what Chris had said. There

was a letter, and that basically he confirmed what Chris had said.

But I don’t have a specific recollection of a particular

conversation. He was around and in and out, and I suspect we did

visit with him briefly on that.

Q Do you recall discussing it with anyone else?

* * *

72a

APPENDIX K — DEPOSITION OF ROBERT TOMLINSON,

ESQ., COUNSEL FOR HSC (ADMITTED TO RECORD IN

LIEU OF DIRECT TESTIMONY)

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF OKLAHOMA

C-86-1401-W

UNITED STATES OF AMERICA,

Plaintiff,

vs.

ROYALN. HARDAGE, et. al.,

Defendants,

ADVANCE CHEMICAL COMPANY, et. al.,

Hardage Steering Committee

Defendants and Third-Party

Plainiiffs,

ABCO, INC., et. al.,

Third-Party Defendants.

DEPOSITION OF ROBERT TOMLINSON

TAKEN ON BEHALF OF

JONES BLAIR COMPANY AND O’BRIEN CORPORATION

ON SEPTEMBER 23, 1993

IN OKLAHOMA CITY, OKLAHOMA

APPEARANCES

For the Hardage Steering Mr. Robert L. Roark

McKinney, Stringer & Webster

City Center Building

MainandBroadway -

Oklahoma City, Oklahoma 73102

73a

Appendix K

For Jones Blair Company Mr. Mitch Blackburn

and O’Brien Corporation: Hastie and Kirschner

3000 First Oklahoma Tower

210 W. Park Avenue

Oklahoma City, Oklahoma 73102

Reported By: Vicki Maltsberger, CSR, CP,CM

MERIT REPORTERS, INC.

Suite 807, Two Leadership Sq.

Oklahoma City, Oklahoma 73102

(405) 232-2804

*_ * **

[4] Q Well, maybe if I ask you where I’m headed, you'll

understand.

A Just tell me what you want to know, and I will either agree

with you or disagree with you.

Q Let’s say I’m a PRP. You have named me in your third-

party complaint. And I have decided that I want to get out. I want

to settle.

Who do I go to? Who speaks for the Hardage Steering

Committee if I want to settle your claim against me?

A Myself and Robert Roark, either/or.

Q Either/or. Was there —

A With regard to settlement, Robert handled much more of

that than I did.

74a

Appendix K

Q Was that the only division of responsibilities that you

had?

A When it came to trying the lawsuit, we were going to

divide up certain issues and witnesses, but right now, I can’t

remember what they were.

I do recall that I was going to handle our cost recovery. And

that I was going to put on the evidence regarding how much

money we had spent and what the costs of the remedy would be.

And I think he was going to handle liability issues and the

third-party defendants and allocation

* * *&

[17] either remove that condition or didn’t have it.

Q I believe you testified just second ago that when the

discussion with Mr. Condren turned to the issue of —

A Whose name did you just use?

Q Condren. When it turned to the issue of settling with

everybody, Mr. Condren stated that that was possible because of

some authority that Mr. Conger had; is that correct?

A Yeah. I was standing there. He was not speaking to me,

because I was not the negotiator. I was an observer at that point.

And at that point, it was down to those last three. And that

what is I recall him saying; that there was a letter that gave Bill

Conger authority to settle.

75a

Appendix K

I think what he said was, “There is a letter that if Cook Paint

settles, the other two also settle.” I think that is probably the

words he used. And I didn’t know what he was talking about.

Q So did you guys break up, then, and go and confirm

whatever needed to be confirmed, or what happened after that?

A I don’t think it was much longer until we went back ir

there. But somewhere between the hallway and the judge’s

chambers, I sensed or knew that there was some form [18] of

dispute. I didn’t know exactly what it was. AndI don’t know how

I came to know that.

I mean I may have heard Mr. Schulcz say something, or I

may have been able to tell from his demeanor that he didn’t agree

with it, or I don’t know. But it was after that; shortly after.

I don’t think there was a long delay. Shortly after that

comment was made —

Q Were you privy to that, or did you participate in the initial

meeting in Judge West’s chambers that wasn’t transcribed?

A Idon’t know ifI did or not. I don’t remember.

MR. ROARK: I’m sorry. What meeting are you referring to

counsel?

MR. BLACKBURN: It was my understanding, and

certainly Mr. Tomlinson can correct me if I’m wrong, but it was

my understanding that prior to the in-the-chambers hearing, we’ ll

call it, that was transcribed, that there was an initial meeting

before the judge off the record.

76a

Appendix K

MR. ROARK: The transcript of the 27th, I think, refers to

two sessions. Are you referring to some other session off the

record?

MR. BLACKBURN: Yes.

THE WITNESS: WhatI’m referring to, and I’m the one that

told you that, is that during the recess before [19] the final portion

of the transcript, it’s obvious to me that Judge West knew of a

dispute before the record began.

And I don’t know how he knew of that. I don’t know if

Conger and Schulcz and Condren walked in and said, “Judge, we

think we have got a settlement, but we need to put something on

the record because there is a problem.”

I don’t know if that is what happened or not. I am just

presuming that somehow Judge West didn’t divine all of that. And

it’s not clear on the record.

It may have been something as simple as as the group walked

back in, someone may have heard, and I may not have —I mean

someone may have said to Judge West, “There is something you

need to put on the record about this settlement” or whatever.

I don’t recall the specifics of that. I just can tell from reading

it that he had some knowledge before he started back up, because

he said, “There is something we need to put on the record here.

Mr. Schulcz needs to say something.” He said something like

that.

Q Did you have any discussions with Mr. Conger between

the time that Mr. Condren made the statement regarding Mr.

Tla

Appendix K

Conger’s authority and when you went before the Judge on the

record?

A Yes. I think it was him walking past me in the hallway as

we walked back into the chambers. And I asked [20] him if what

Condren had said was true, and he said, “Yes.”

Q lIassume you relayed first what Condren had told you?

A Yeah. I don’t remember how I said it.

Q But Mr. Conger wasn’t privy to those discussions, was

he?

A Idon’tremember. I mean it was a big hallway, and I don’t

remember whether he heard what Chris Condren said. I don’t

think he was standing there.

Q You said that when Mr. Conger was walking back. Was it

to the chambers or from the chambers?

A To. I remember him passing me in the hallway, and there

was a matter of a few seconds of a communication. I remember

the fact that he wasn’t standing still. That’s all I remember is

walking.

Q Do you recall whether that was immediately prior to all of

you going in and going on the record?

A That is what I recall it being.

Q Did you happen to speak with anybody else between that

period of time after the discussion with Mr. Condren?

78a

Appendix K

A I don’t know. It was a long time out in the hallway, and we

talked to a lot of people about a lot of different things.

I think the NCAA basketball tournament was foremost on

most of our minds.

79a

APPENDIX L — CAPTIONED BRIEF/MOTION

RELATIVE TO PARTIAL SUMMARY JUDGMENT

IN THE UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF OKLAHOMA

FILED OCTOBER 12, 1990

CIV-86-1401-W

UNITED STATES OF AMERICA,

Plaintiff,

ROYALN. HARDAGE, et al.,

Defendants.

ADVANCE CHEMICAL COMPANY, et al,

Hardage Steering Committee

Defendants and Third-Party

Plaintiffs,

Vv.

ABCO, INC., ETAL.,

Third-Party Defendants

and Fourth-Party

Plaintiffs,

A.C. POWELL D/B/A POWELL

SANITATION, etal.,

Fourth-Party Defendants.

80a

Appendix L

OPENING BRIEF IN SUPPORT OF THE DE MINIMIS

SETTLORS’ MOTION FOR PARTIAL SUMMARY

JUDGMENT AGAINST THIRD-PARTY PLAINTIFFS, THE

HARDAGE STEERING COMMITTEE

J. William Conger

Ross A. Plourde

HARTZOG CONGER CASON & HARGIS

1600 Bank of Oklahoma Plaza

201 Robert S. Kerr

Oklahoma City, Oklahoma 73102

(405) 235-7000

ATTORNEYS FOR THIRD PARTY

DEFENDANTS’ LIAISON GROUP

October 12, 1990

8la

APPENDIX M — APPLICATION OF O’BRIEN, JONES-

BLAIR AND AKZO TO FILE OVERSIZED BRIEF FILED

OCTOBER 15, 1990

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF OKLAHOMA

Case No. CIV-86-1401-P

UNITED STATES OF AMERICA,

Plaintiff,

Vv.

ROYALN. HARDAGE, et. al.,

Defendants.

ADVANCE CHEMICAL COMPANY, et. al.,

Hardage Steering Committee

Defendants and Third-Party

Plaintiffs,

Vv.

ABCO, INC., et. al.,

Third-Party Defendants.

APPLICATION OF O’BRIEN, JONES-BLAIR, AND AKZO

TO FILE OVERSIZED BRIEF

De Minimis Settlors and Third-Party Defendants, The

O’Brien Corporation, (“O’Brien”), The Jones-Blair Co. (“Jones-

Blair”), and Akzo Coatings, Inc. (“Akzo”) respectfully request

leave of Court to file a brief in excess of 25 pages in support of

82a

Appendix M

their Motion for Partial Summary Judgment pursuant to Local

District Court Rules No. 13(C) and 14(A). In support of this

request, O’Brien, Jones-Blair and Akzo would state that their

brief in support of their Motion for Reconsideration of the Court’s

ruling on September 22, 1989 and Dismissal of the HSC’s cost

recovery Claim. ...

83a

APPENDIX N — DEPOSITION OF PATRICIA HOULE

FOR O’BRIEN CORP. (ADMITTED IN LIEU OF DIRECT

EXAMINATION)

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF OKLAHOMA

C-86-1401-W

UNITED STATES OF AMERICA,

Plaintiff,

Vs.

ROYALN. HARDAGE, et. al.,

Defendants,

ADVANCE CHEMICAL COMPANY, et. al.,

Hardage Steering Committee

Defendants and Third-Party

Plaintiffs,

ABCO, INC., et. al.,

Third-Party Defendants.

seek Ke *

DEPOSITION OF PATRICIA HOULE

TAKEN ON BEHALF OF

THE HARDAGE STEERING COMMITTEE

ON SEPTEMBER 24, 1993

IN OKLAHOMA CITY, OKLAHOMA

* xe kee ke

84a

Appendix N

APPEARANCES

For the Hardage Steering Mr. Robert L. Roark

McKinney, Stringer & Webster

City Center Building

Main and Broadway

Oklahoma City, Oklahoma 73102

ForJones BlairCompany Mr. Mitch Blackburn

and O’Brien Corporation: Hastie and Kirschner

3000 First Oklahoma Tower

210 W. Park Avenue

Oklahoma City, Oklahoma 73102

and

Mr. Arthur A. Schulcz, Sr.

The Harker Firm

5301 Wisconsin Ave., N.W.

Washington, D.C. 20015

Reported By: Vicki Maltsberger, CSR, CP,CM

* s =

[45] going to do?

A I don’t recall. I don’t recall. My recollection is that I told

him to proceed.

Q Proceed how?

A That we were not going to settle. And that if Cook Paint —

even if Cook Paint dropped out, we were prepared to not settle.

85a

Appendix N

Q When did you gave him those instructions?

A That morning.

Q In that same telephone call?

A I believe it was the same telephone call. I don’t have a

memory of talking to anybody else about it.

Q So you did not confer with Mr. Allen or Mr. Crowley

again?

A To my knowledge, no.

Q So you agreed to follow his recommendation on Friday

the 22nd; correct?

A Correct.

Q And when he calls back on Monday and urges you to do

something different, you agreed to follow his new

recommendation?

A Yes

Q Did you have any other conversations with him that day?

A Yes.

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