Case Law TREMONT LLC v. Halliburton Energy Services, Inc.

TREMONT LLC v. Halliburton Energy Services, Inc.

Document Cited Authorities (106) Cited in (56) Related

696 F. Supp.2d 741

TREMONT LLC, Plaintiff, v. HALLIBURTON ENERGY SERVICES, INC., et al., Defendants, v. NL Industries, Inc., Third-Party Defendant.

Civil Action No. H-08-1063.

United States District Court, S.D. Texas, Houston Division.

March 11, 2010.

Derek Hollingsworth, Rusty Hardin Assoc. PC, Houston, TX, Joel L. Herz, Law Office of Joel Herz, Tucson, AZ, for Plaintiff.

Bruce W. Bowman, Jr., Donald Everett Godwin, James E. Johanns, Jenny Lanell Martinez, Godwin Ronquillo PC, Dallas, TX, Robert Alan York, Godwin Ronquillo, PC, Houston, TX, for Defendants.

MEMORANDUM AND OPINION

LEE H. ROSENTHAL, District Judge.

This case involves allocating responsibility for environmental remediation. The following motions are pending:

• Tremont LLC ("Tremont") seeks partial summary judgment that Halliburton Energy Services, Inc. ("HESI") and DII Industries, LLC ("DII") (collectively, "Halliburton") must indemnify Tremont for the costs and expenses it has incurred and will incur to remediate environmental contamination at three Texas locations where Gulf Nuclear, Inc. ("Gulf Nuclear" or "GNI") manufactured, stored, repaired, and disposed of radioactive materials (the "Gulf Nuclear Sites"). (Docket Entry No. 8; 2005 Case, Docket Entry No. 247).1 The motion includes a request for indemnification for claims raised in a related civil case filed in this district by the Environmental Protection Agency (EPA) against Halliburton, NL Industries, Inc. ("NL"), and other entities. (2005 Case, Docket Entry No. 252 at 1-2). That case is referred to as the "EPA lawsuit."
• Halliburton has filed a third-party complaint against NL seeking indemnification or, alternatively, contribution under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). NL moves to dismiss Halliburton's third-party complaint, or in the alternative, for summary judgment. (Docket Entry No. 19).
• NL has filed a motion to stay discovery, (Docket Entry No. 26), and a separate motion for partial summary judgment, (Docket Entry No. 56).
• Halliburton seeks a continuance of both Tremont's motion for partial summary judgment, (Docket Entry No. 11), and of NL's motion for partial summary judgment, (Docket Entry No. 58).
• Halliburton moves for leave to file under seal certain exhibits to its surreply to Tremont's reply to Halliburton's supplemental response to Tremont's motion for partial summary judgment. (Docket Entry No. 63).
• Tremont has filed a motion to supplement the summary judgment record, (Docket Entry No. 70), and a sealed motion for leave to file under seal its response to Halliburton's objection to Tremont's supplemental evidence and its memorandum in further support of the motion to supplement the summary judgment record, (Docket Entry No. 74).
• Halliburton has filed a motion for leave to supplement the summary judgment record. (Docket Entry No. 86).

This court held hearings and heard oral argument from counsel. Based on the motions, the responses, and the replies; the present record; the arguments of counsel; and the applicable law, this court reaches the following conclusions:

• There is no genuine dispute of fact as to whether NL's potential liability for the Gulf Nuclear Sites stems solely from NL's former petroleum services business.
• Issue preclusion applies to the interpretation—made by an arbitration panel in an earlier arbitration—of the relevant contracts. That interpretation places the responsibility for the Gulf Nuclear Sites on Halliburton.
• This court's own interpretation of the relevant contracts places the responsibility for the Gulf Nuclear Sites with Halliburton.
• NL transferred its petroleum services business to its subsidiary, NL Petroleum Services, Inc. ("NLPS"), in a 1988 restructuring, and then to New Baroid in a 1990 restructuring. Under both the arbitrators' and this court's contract interpretation, both restructurings included the transfer of all historical liabilities associated with NL's petroleum services business, including historical liabilities arising from assets undisputedly New Baroid's successor, Halliburton is responsible for historical liabilities associated with NL's former petroleum services business, including historical liabilities associated with assets or operations that NL sold before the 1988 restructuring became effective.

The result of these conclusions is that this court:

• grants Tremont's motion for partial summary judgment;
• denies Halliburton's request for a continuance of Tremont's motion for partial summary judgment;
• grants in part and denies in part NL's alternative motion for summary judgment based on issue preclusion, and denies NL's motion to dismiss as moot;
• denies NL's motion for partial summary judgment based on contract interpretation and motion to stay discovery as moot;
• denies Halliburton's request for a continuance to respond to NL's motion for partial summary judgment as moot;
• grants Halliburton's motion for leave to file exhibits under seal; grants Tremont's motion to supplement the summary judgment record; denies Tremont's motion for leave to file one of its responses under seal as moot; and denies Halliburton's motion for leave to supplement the summary judgment record.

The reasons are set out in detail below. A status conference is set for March 30, 2010, at 2:00 p.m., to discuss a schedule for resolving the remaining issues.

Table of Contents 

  I. Procedural Background . . . . . . . . . . . . . . . . . . . . . . . . . . 747
 II. The Legal Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . 749
     A. Summary Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . 749
     B. Motions to Dismiss . . . . . . . . . . . . . . . . . . . . . . . . . . 750
     C. Issue Preclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . 751
III. Tremont's Motion for Partial Summary Judgment . . . . . . . . . . . . . . 751
     A. The Facts Relevant to Tremont's Motion . . . . . . . . . . . . . . . . 751
        1. The 1988 Restructuring . . . . . . . . . . . . . . . . . . . . . .  752
           a. The 1988 Plan . . . . . . . . . . . . . . . . . . . . . . . . .  752
           b. The Formation Agreement . . . . . . . . . . . . . . . . . . . .  753
           c. The Cross-Indemnification Agreement . . . . . . . . . . . . . .  755
           d. The Assumption Agreement . . . . . . . . . . . . . . . . . . . . 756
           e. The Indebtedness Agreement . . . . . . . . . . . . . . . . . . . 756
        2. The 1990 Restructuring . . . . . . . . . . . . . . . . . . . . . .  756
        3. The Evidence in the Arbitration About the Transfer of NL's Former
             Petroleum Services Business to Halliburton . . . . . . . . . . .  758
           a. The Affidavits of J. Landis Martin, Steven L. Watson, William
                Lindquist, and Harold C. Simmons . . . . . . . . . . . . . .   759
           b. The SEC Information Statement . . . . . . . . . . . . . . . . .  762
           c. The New Baroid/Dresser/Halliburton Mergers . . . . . . . . . . . 763
           d. Testimony in the Arbitration Proceeding . . . . . . . . . . . .  763
                i. The Arbitration Testimony of J. Landis Martin . . . . . . . 764
               ii. The Arbitration Testimony of William Lindquist . . . . . .  766
              iii. The Arbitration Testimony of Steve Watson . . . . . . . . . 767
               iv. The Arbitration Testimony of Harold Simmons . . . . . . . . 768
                v. The Arbitration Testimony of Ann Manix . . . . . . . . . .  768
               vi. The Arbitration Testimony of John Karnes . . . . . . . . .  769
              vii. The Arbitration Testimony of John Deering . . . . . . . . . 770
             viii. The Arbitration Testimony of Joseph S. Compofelice . . . .  770
        4. The Sale of the McCullough Division to Western Atlas . . . . . . .  772
        5. Western Atlas v. NL Industries, Inc. . . . . . . . . . . . . . . .  773
        6. The Sale of Oilfield Service Facilities to Exxon . . . . . . . . .  774
        7. Tremont's Request for Indemnification from Halliburton for the Gulf
             Nuclear Site Liabilities . . . . . . . . . . . . . . . . . . . .  775
        8. The Arbitration Panel's Decision . . . . . . . . . . . . . . . . .  777
        9. The Evidence as to Whether Liabilities Associated with the Gulf
             Nuclear Sites Are Part of NL's Former Petroleum Services
             Business . . . . . . . . . . . . . . . . . . . . . . . . . . . .  781
           a. The McCullough Division's Activities at the Gulf Nuclear Sites . 781
           b. Shipping Slips and Receiving Logs Showing Shipments of
                Radioactive Material from NL and Its Subsidiaries . . . . . .  782
           c. Witness Statements and Testimony of Former Gulf Nuclear
                Employees . . . . . . . . . . . . . . . . . . . . . . . . . .  791
           d. NL Annual Reports . . . . . . . . . . . . . . . . . . . . . . .  793
           e. NL Board Minutes . . . . . . . . . . . . . . . . . . . . . . . . 796
           f. The Public Record . . . . . . . . . . . . . . . . . . . . . . .  796
           g. Halliburton's Discovery Responses . . . . . . . . . . . . . . .  797
           h. Use of Nuclear Materials in Petroleum Services Operations . . .  798
           i. NL's Nuclear Division . . . . . . . . . . . . . . . . . . . . .  799
           j. EPA Claims Linking NL to the Gulf Nuclear Sites . . . . . . . .  802
           k. Affidavits and Declarations of Former NL Employees Stating
                that NL's Connection to the Gulf Nuclear Sites Was Through
                Its Petroleum Services Business . . . . . . . . . . . . . . .  807

     B. Halliburton's Request for a Continuance . . . . . . . . . . . . . . .  810
        1. Background and the Parties' Arguments . . . . . . . . . . . . . . . 810
        2. Analysis of the Motion for Continuance . . . . . . . . . . . . . .  814
     C.
...

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"...other than as a quasi-admission of wrongdoing or liability. See Rule 408(b), Fed.R.Evid.; see also Tremont LLC v. Halliburton Energy Servs., Inc., 696 F.Supp.2d 741, 782 n. 42 (S.D.Tex.2010); Fireman's Fund Ins. Co. v. City of Lodi, Calif., 296 F.Supp.2d 1197, 1208 (E.D.Cal.2003). It is cle..."
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Omni United States, Inc. v. Parker-Hannifin Corp.
"...1128 (5th Cir.1993) ( quoting U.S. v. Jimenez Lopez, 873 F.2d 769, 772 (5th Cir.1989)), cited by Tremont LLC v. Halliburton Energy Services, Inc., 696 F.Supp.2d 741, 753 n. 8 (S.D.Tex.2010). An authenticating affidavitwill often serve this purpose. Here the format of the excerpts suggests t..."
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CERx Pharmacy Partners, LP v. Provider Meds, LP (In re Providerx of Grapevine, LLC)
"...rules permit this Court to exercise its discretion to consider evidence filed as a supplement. See Tremont LLC v. Halliburton Energy Svs., Inc., 696 F.Supp.2d 741, 790 (S.D.Tex.2010) (finding that both Rule 56(e) and the local rules of court for that district permit a court to exercise disc..."
Document | U.S. Bankruptcy Court — Northern District of Texas – 2014
Cerx Pharmacy Partners, LP v. Provider Meds, LP (In re Providerx of Grapevine, LLC)
"...rules permit this Court to exercise its discretion to consider evidence filed as a supplement. See Tremont LLC v. Halliburton Energy Svs., Inc., 696 F.Supp.2d 741, 790 (S.D.Tex.2010) (finding that both Rule 56(e) and the local rules of court for that district permit a court to exercise disc..."

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4 books and journal articles
Document | Antitrust Evidence Handbook – 2016
Collateral Estoppel and Prima Facie Effect
"...on the parties to the extent they were necessary to arbitration panel’s ruling); Tremont LLC v. Halliburton Energy Servs., Inc., 696 F. Supp. 2d 741, 856-60 (S.D. Tex. 2010). But see In re Klein, Maus & Shire, Inc., 301 B.R. 408, 417 (Bankr. S.D.N.Y. 2003) (finding collateral estoppel inapp..."
Document | Antitrust Evidence Handbook. Third Edition – 2023
Table of Cases
"...1995), 193 Trans World Airlines Inc. v. Hughes, 308 F. Supp. 679 (S.D.N.Y. 1969), 69 Tremont LLC v. Halliburton Energy Servs., Inc., 696 F. Supp. 2d 741 (S.D. Tex. 2010), 256 Tri-National, Inc. v. Yelder, 781 F.3d 408 (8th Cir. 2015), 245 Tronitech, Inc. v. NCR Corp., 108 F.R.D. 655 (S.D. I..."
Document | Antitrust Evidence Handbook – 2016
Table of Cases
"...1995), 193 Trans World Airlines Inc. v. Hughes, 308 F. Supp. 679 (S.D.N.Y. 1969), 69 Tremont LLC v. Halliburton Energy Servs., Inc., 696 F. Supp. 2d 741 (S.D. Tex. 2010), 256 Tri-National, Inc. v. Yelder, 781 F.3d 408 (8th Cir. 2015), 245 Tronitech, Inc. v. NCR Corp., 108 F.R.D. 655 (S.D. I..."
Document | Antitrust Evidence Handbook. Third Edition – 2023
Collateral Estoppel and Prima Facie Effect
"...on the parties to the extent they were necessary to arbitration panel’s ruling); Tremont LLC v. Halliburton Energy Servs., Inc. , 696 F. Supp. 2d 741, 856-60 (S.D. Tex. 2010). But see In re Klein, Maus & Shire, Inc. , 301 B.R. 408, 417 (Bankr. S.D.N.Y. 2003) (finding collateral estoppel ina..."

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4 books and journal articles
Document | Antitrust Evidence Handbook – 2016
Collateral Estoppel and Prima Facie Effect
"...on the parties to the extent they were necessary to arbitration panel’s ruling); Tremont LLC v. Halliburton Energy Servs., Inc., 696 F. Supp. 2d 741, 856-60 (S.D. Tex. 2010). But see In re Klein, Maus & Shire, Inc., 301 B.R. 408, 417 (Bankr. S.D.N.Y. 2003) (finding collateral estoppel inapp..."
Document | Antitrust Evidence Handbook. Third Edition – 2023
Table of Cases
"...1995), 193 Trans World Airlines Inc. v. Hughes, 308 F. Supp. 679 (S.D.N.Y. 1969), 69 Tremont LLC v. Halliburton Energy Servs., Inc., 696 F. Supp. 2d 741 (S.D. Tex. 2010), 256 Tri-National, Inc. v. Yelder, 781 F.3d 408 (8th Cir. 2015), 245 Tronitech, Inc. v. NCR Corp., 108 F.R.D. 655 (S.D. I..."
Document | Antitrust Evidence Handbook – 2016
Table of Cases
"...1995), 193 Trans World Airlines Inc. v. Hughes, 308 F. Supp. 679 (S.D.N.Y. 1969), 69 Tremont LLC v. Halliburton Energy Servs., Inc., 696 F. Supp. 2d 741 (S.D. Tex. 2010), 256 Tri-National, Inc. v. Yelder, 781 F.3d 408 (8th Cir. 2015), 245 Tronitech, Inc. v. NCR Corp., 108 F.R.D. 655 (S.D. I..."
Document | Antitrust Evidence Handbook. Third Edition – 2023
Collateral Estoppel and Prima Facie Effect
"...on the parties to the extent they were necessary to arbitration panel’s ruling); Tremont LLC v. Halliburton Energy Servs., Inc. , 696 F. Supp. 2d 741, 856-60 (S.D. Tex. 2010). But see In re Klein, Maus & Shire, Inc. , 301 B.R. 408, 417 (Bankr. S.D.N.Y. 2003) (finding collateral estoppel ina..."

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5 cases
Document | U.S. District Court — Northern District of Alabama – 2010
SOLUTIA INC. v. McWANE INC.
"...other than as a quasi-admission of wrongdoing or liability. See Rule 408(b), Fed.R.Evid.; see also Tremont LLC v. Halliburton Energy Servs., Inc., 696 F.Supp.2d 741, 782 n. 42 (S.D.Tex.2010); Fireman's Fund Ins. Co. v. City of Lodi, Calif., 296 F.Supp.2d 1197, 1208 (E.D.Cal.2003). It is cle..."
Document | U.S. District Court — Southern District of Texas – 2010
Udoewa v. Union
"...with prior deposition testimony when the affiant does not account for the inconsistency.” Tremont LLC v. Halliburton Energy Servs., Inc., 696 F.Supp.2d 741, 760 n. 17 (S.D.Tex.2010). In this case, the record does not justify disregarding Udoewa's affidavit because it is not so inconsistent ..."
Document | U.S. District Court — Southern District of Texas – 2013
Omni United States, Inc. v. Parker-Hannifin Corp.
"...1128 (5th Cir.1993) ( quoting U.S. v. Jimenez Lopez, 873 F.2d 769, 772 (5th Cir.1989)), cited by Tremont LLC v. Halliburton Energy Services, Inc., 696 F.Supp.2d 741, 753 n. 8 (S.D.Tex.2010). An authenticating affidavitwill often serve this purpose. Here the format of the excerpts suggests t..."
Document | U.S. Bankruptcy Court — Northern District of Texas – 2013
CERx Pharmacy Partners, LP v. Provider Meds, LP (In re Providerx of Grapevine, LLC)
"...rules permit this Court to exercise its discretion to consider evidence filed as a supplement. See Tremont LLC v. Halliburton Energy Svs., Inc., 696 F.Supp.2d 741, 790 (S.D.Tex.2010) (finding that both Rule 56(e) and the local rules of court for that district permit a court to exercise disc..."
Document | U.S. Bankruptcy Court — Northern District of Texas – 2014
Cerx Pharmacy Partners, LP v. Provider Meds, LP (In re Providerx of Grapevine, LLC)
"...rules permit this Court to exercise its discretion to consider evidence filed as a supplement. See Tremont LLC v. Halliburton Energy Svs., Inc., 696 F.Supp.2d 741, 790 (S.D.Tex.2010) (finding that both Rule 56(e) and the local rules of court for that district permit a court to exercise disc..."

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