boston gas co. v. century indemnity co. status conference

8/7/2019 BOSTON GAS CO. v. CENTURY INDEMNITY CO. Status Conference

http://slidepdf.com/reader/full/boston-gas-co-v-century-indemnity-co-status-conference 1/41

e4a1c1ba-ba0f-4d2d-a6ab-2739

IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF MASSACHUSETTS

BOSTON GAS COMPANY d/b/a )KEYSPAN ENERGY DELIVERY NEW ENGLAND, )

)

Plaintiff ))

-VS- ) CA No. 02-12062) CA No. 07-10701) Pages 1 - 40

CENTURY INDEMNITY COMPANY, ))

Defendant )

STATUS CONFERENCE

BEFORE THE HONORABLE PATTI B. SARISUNITED STATES DISTRICT JUDGE

United States District Court1 Courthouse Way, Courtroom 19Boston, Massachusetts

July 1, 2010, 2:35 p.m.

LEE A. MARZILLIOFFICIAL COURT REPORTER

United States District Court1 Courthouse Way, Room 7200

Boston, MA 02210(617)345-6787

Case 1:07-cv-10701-PBS Document 24 Filed 07/09/10 Page 1 of 41




1 A P P E A R A N C E S:

2 DAVID L. ELKIND, ESQ. and JOHN A. GIBBONS, ESQ.,

Dickstein, Shapiro & Morin, 2101 L Street, NW, Washington,3 D.C., 20037, for the Plaintiff.

4 DAVID B. CHAFFIN, ESQ., White and Williams, LLP,

100 Summer Street, Suite 2707, Boston, Massachusetts,5 02110-1701, for the Defendant.

6 GUY A. CELUCCI, ESQ. and SHANE R. HESKIN, ESQ.,White and Williams, LLP, 1800 One Liberty Place,

7 Philadelphia, Pennsylvania, 19103-7395, for the Defendant.

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1 P R O C E E D I N G S

2 THE CLERK: The case of Boston Gas Company v. Century

3 Indemnity Company, Civil Action 02-12062 and Case No. 07-10701,

4 will now be heard before this Court. Will counsel please

5 identify themselves for the record.

6 MR. ELKIND: Yes, David Elkind for Boston Gas.

7 MR. GIBBONS: John Gibbons for Boston Gas Company.

8 MR. CELUCCI: Guy Celucci from White and Williams for

9 Century Indemnity.

10 MR. HESKIN: Shane Heskin for Century Indemnity.

11 MR. CHAFFIN: Good afternoon, your Honor. David

12 Chaffin from White and Williams for Century Indemnity.

13 THE COURT: Never go gambling with me because when I

14 rolled the dice and got this case, I started reading about it,

15 and it's a very complicated matter. So it's because of our

16 local rules that it had to be redrawn to another judge. I got

17 it on the random draw. I have been reading up for the last

18 week. I've read your very excellent memos on both sides as

19 well as the First Circuit case, cases, Judge Zobel's case, the

20 Supreme Judicial Court case, and I think what we need to do is

21 set a new trial date. I also need to unravel this discovery

22 dispute about the intentionality documents, and we also

23 probably need supplemental expert discovery on whether or not

24 we have to just do time on the risk or whether there's another

25 allocation method that makes sense.





1 I was thrilled to see that you've abandoned all of the

2 other sites, so we're really talking about two sites, so it

3 isn't quite as massive as I originally thought. So my

4 inclination is to do as Judge Zobel did, which is two separate

5 trials. It's just too much to get my arms around, but we will

6 need, I think, two separate trials. And my first goal today is

7 pick a date that you both think is doable, given the supplemental

8 discovery that's expected.

9 MR. ELKIND: Your Honor, if I may, David Elkind for

10 Boston Gas Company. We were talking about this, and we both

11 have fairly busy trial schedules; and recognizing expert

12 discovery needs and some brief supplemental fact discovery, we

13 were talking sometime in March or April of next year for trial.

14 THE COURT: That's crazy. No. That's crazy. That's

15 so far out. That's a full year almost.

16 MR. ELKIND: If I may, there are two reasons for this.

17 We think it's probably -- well, first of all, let me step two

18 steps back. One of the most important things to be resolved,

19 if we're doing the Everett trial first, which we propose, is --

20 THE COURT: Yes, we're doing Everett first.

21 MR. ELKIND: -- is the scope of that trial where we

22 have disagreements, and when we respond to their motion on the

23 expected intended issue, we'll set forth our view --

24 THE COURT: Can I ask you this? Apart from whether

25 you intentionally withheld these documents or not, they seemed





1 relevant.

2 MR. ELKIND: They're really not relevant, and I prefer

3 to brief it, but I could explain why --

4 THE COURT: Well, you can, but let me just say this:

5 If I have a new trial, I will seriously consider holding it --

6 if in fact the documents are what he says they are, if they

7 weren't produced -- were they produced before? Let me just

8 start with that basic thing.

9 MR. ELKIND: Let me --

10 THE COURT: Can you just say yes or no, have they --

11 MR. ELKIND: We did not produce them before. We

12 believe we can show we had no obligation to produce them

13 before.

14 THE COURT: Put that aside. Isn't it newly discovered

15 evidence?

16 MR. ELKIND: Well, it's newly discovered evidence that

17 we were not required to produce, which we will explain is

18 irrelevant.

19 THE COURT: Excuse me, excuse me. It didn't seem

20 irrelevant if we're talking about a longer period of time. I

21 read A Civil Action. I know some of the lawyers sanctioned for

22 some of those. I would, if I can, avoid the ugliness and

23 nastiness of having to get into why you did or didn't produce

24 them. If I have to get into it, I will. Maybe I'll send it to

25 a magistrate judge if I have to get into sanction issues, but





1 it looked as if it was relevant.

2 MR. ELKIND: That will be our first point, and then we

3 move back into why we didn't have to produce it, but we will

4 explain that.

5 THE COURT: Why isn't it relevant?

6 MR. ELKIND: The issue, your Honor, under

7 Massachusetts law is, did we intend to cause the property

8 damage that's being cleaned up today? Those documents purport

9 to state that, gee, the problem may have been worse from a

10 judicial point of view or from a mandatory point of view, that

11 the government was more angry at Boston Gas, if you will.

12 Two things: First of all, the actual Metcalf & Eddy

13 report that we produced noted that the Attorney General was

14 involved. They obviously were not happy with Boston Gas.

15 Second of all, what happens at another site doesn't matter, but

16 it doesn't mean that the contamination was intentional or not.

17 It just means it was a greater problem --

18 THE COURT: Apart from whether it's even intentional,

19 it goes to the timing of all of it, how far back it goes. I am

20 simply saying it's likely to be admitted. Now, whether it

21 opens up intentionality I would have to have briefing on. I

22 don't begin to know the case well enough to know whether it's

23 sufficiently cumulative, as you're making the argument, or

24 whether it's not cumulative in terms of intentionality. I can

25 address that later. It's relevant as to timing, at the very





1 least, as to what was happening way back when, and so I think

2 that at the very least will be subject of discovery, one.

3 Two, I am inclined, since the First Circuit opened it

4 up, to allow whatever that supplemental report was. I don't

5 even know if it's still relevant. Three, we have the on-site

6 property issues of allocation, and, four, we have the issue of

7 how many years back does it go? And -- the SJC left it open --

8 you all haven't discussed it so much -- it's possible that the

9 bulk of it happened during the policy periods and only a little

10 bit happened otherwise, or it's possible it's the reverse. I

11 don't know. But I do envision the need for supplemental expert

12 reports, but not otherwise than those few documents that we

13 talked about just now with the, you know, "you can't push the

14 boat through the oil" comment. I don't envision that will even

15 trigger very much discovery because the people are all dead

16 probably, right? I mean, who are you going to depose? I mean,

17 I don't know, aren't they dead?

18 MR. ELKIND: Well, your Honor, people testified at

19 trial, and that obviously can be used to the extent they're not

20 available. But if I may, the issue really is going to involve

21 expert testimony, and a lot depends on an issue which we still

22 think has to be resolved, which is what is going to be the

23 scope of the new trial.

24 THE COURT: I'm telling you. I'm going to retry it

25 for how many years was this pollution going on. At least right





1 now, neither of you seem to be fighting very much in your brief

2 the time on the risk as opposed to some other method of

3 allocation. Maybe I could hear you on that today. No one here

4 is saying that it all happened during the policy period, or

5 that it only happened for ten years before that, so it should

6 all be before the policy period. Am I right, no one is

7 really -- maybe you --

8 MR. ELKIND: Well, actually, at trial they argued it

9 didn't happen during their policy period. We've never wavered

10 from the fact that there was continuous contamination.

11 THE COURT: Right.

12 MR. ELKIND: But the relevant question --

13 THE COURT: You've got some judicial estoppel problems

14 because of that.

15 MR. ELKIND: I'm sorry, your Honor.

16 THE COURT: You've got some judicial estoppel issues.

17 MR. ELKIND: Well, the real issue, though, which is

18 what I think the First Circuit recognized in its remand, which

19 is a verdict question that the jury answered, is what did our

20 liability stem from? When did the property damage for which

21 Boston Gas was liable happen? And that's what we think we can

22 prove happened during their policy period, and if we have to

23 retry it, we'll retry it.

24 THE COURT: You do have some judicial estoppel issues.

25 I am not so familiar with the record that I'm prepared to rule





1 on them today. I know we need a new trial on virtually

2 everything other than the intentionality, and I'm leaving that

3 issue open because I haven't seen your brief yet.

4 MR. ELKIND: Understood.

5 THE COURT: But, at the very least, the documents

6 sound relevant to how many years and what happened when.

7 MR. ELKIND: We will address that. I would point out,

8 though, that the First Circuit's remand focused fairly narrowly

9 on when did the damage happen that caused us to have cost

10 liability, not just a general remand on when property damage

11 happened. The real question is, when did --

12 THE COURT: Judge Zobel's orders, I'm not revisiting

13 anything she did. She knew this case for eight years. I

14 actually think that it's unfortunate we have this local rule,

15 for me, and for all of you, simply because she is just so smart

16 and she was so into this case. I have to learn from scratch,

17 and, as Mr. Chaffin knows, I am really busy. You probably died

18 when you saw I got this because -- right?

19 MR. CHAFFIN: I did, your Honor.

20 THE COURT: I mean, I've just had these -- I don't

21 know, this massive case finds its way to me. I'm swamped, but

22 I got it. So I need a trial date. A year out isn't within the

23 realm. I was sort of thinking along the lines of six months

24 out. I do think there's going to be some additional discovery

25 necessary. I think everyone will have to agree to that. And I





1 think we stay anything going on with the commercial site. I am

2 hoping you will settle it, depending on what happens. And in

3 fact I was going to ask you now about settlement because

4 there's this mathematical issue that you actually can start

5 allocating more easily now.

6 MR. ELKIND: Well, your Honor, and, again, I obviously

7 am going to be put to my burden at trial, but there is a

8 presumption that the damages that we suffered were because of

9 equal property damage. We believe that we can demonstrate

10 that's not true. Indeed, their motion which we're responding

11 to notes that the linchpin of their trial was the 1950 work by

12 this Metcalf & Eddy. Well, Metcalf & Eddy came in and said

13 that they cleaned the site up to the practical degree

14 attainable. The jury then heard specific evidence of tar,

15 which is the main contaminant at NGP plants, being released

16 during these policy periods. And we believe we will be able to

17 demonstrate on retrial, if we have to, and obviously we now

18 have to, that the liability that we have was caused by property

19 damage beginning during their policy periods. We're not

20 wavering from the fact that there was --

21 THE COURT: Didn't you make an argument that it was

22 too hard to figure out exactly when it happened?

23 MR. ELKIND: Well, we said you couldn't figure out

24 when every element happened, but that doesn't mean -- we

25 believe, your Honor, and I'm getting maybe --





1 THE COURT: You know, in a way, I feel sorry for you

2 all, and for Judge Zobel and for the expenses of this, because

3 there were two Appeals Court decisions which I think every

4 court was following; and you all just are almost going like

5 this in what your legal theories are, so there may be some hurt

6 or some estoppel on both sides. So I'm not saying how much

7 you're estopped. I mean, it's one thing to say it's hard to

8 discern when you think it's an "all sums" theory. That doesn't

9 necessarily mean it goes back a hundred years. Maybe it was

10 just a little itsy-bitsy operation back then. I don't know.

11 But the reality is, we have to retry it, we have to retry

12 almost everything on Everett, and I'm leaving open the issue of

13 the intentionality. And I just need you all to tell me -- I'm

14 inclined, now that I'm doing a new trial and there's a

15 supplemental report, since everyone's going to be

16 supplementing, I'm going to allow in whatever that report --

17 who was the guy?

18 MR. CELUCCI: It was Professor Anderson, who was on

19 the owned property issue, which the First Circuit said we were

20 entitled to retry anyway.

21 THE COURT: Yes, you'll have a supplement on that. Do

22 you just want that supplement, or do you need to do more with

23 it?

24 MR. CELUCCI: Your Honor, we will probably need to

25 supplement his report entirely because one of the other experts





1 that we had in the original trial, going back to 2005, retired

2 to Thailand and is not really available. He was not available

3 in the Commercial Point trial, and Judge Zobel allowed us to

4 replace him in that trial.

5 THE COURT: So how long are you going to need to come

6 up with your new expert reports for Everett only?

7 MR. CELUCCI: Well, your Honor, we think we need some

8 more fact discovery on what you're calling the intentional or

9 the expected or intended issue, but --

10 THE COURT: This has already cost a bloody fortune.

11 I'm not inclined to reopen all discovery. I think expert

12 discovery needs to be reopened. I don't remember, because I

13 didn't sit and read them all, how many documents you're talking

14 about. How many documents are you talking about?

15 MR. CELUCCI: We don't know how many documents we

16 don't have, but it looks like there was an area of Boston Gas,

17 the parent company, that they didn't look to. I guess it's

18 Eastern Gas that is the adjacent property. There were four

19 adjacent neighbors that all investigated and pooled together

20 for the same investigation. We don't know if they've looked

21 through those documents or not. We just need a little time

22 to confirm on that.

23 THE COURT: Have you?

24 MR. ELKIND: Your Honor, for two reasons. We've

25 looked through Boston Gas's documents. Boston Gas is a





1 separate corporation, number one. Number two, there was no

2 discovery request addressed other than to Boston Gas. Number

3 three, Judge Zobel ruled that other Boston Gas sites that were

4 not subject to --

5 THE COURT: Well, if they're immediately adjacent,

6 they may be relevant.

7 MR. ELKIND: But they're not in our possession,

8 custody, or control. There's a corporate separateness here,

9 your Honor. They could have subpoenaed the other party and

10 chose not to.

11 THE COURT: Excuse me, but we're opening -- it was so

12 compelling, some of those documents. I don't know the sites

13 well enough. You're saying they're not even the site, but he's

14 saying it's contiguous. I don't know.

15 MR. CELUCCI: It is contiguous.

16 MR. ELKIND: But they're different sites with

17 different histories and different facts and different insurance

18 policies.

19 THE COURT: Excuse me. We're not talking about the

20 insurance policies at this point. I'm not even getting into

21 whether or not you should have produced them. He claims they

22 requested it from the parent. I don't know. I'm not even at

23 the level in the weeds yet. I am simply at, you can subpoena

24 those documents, anything at the parent, and take the

25 deposition with respect to contiguous properties.





1 MR. CELUCCI: Your Honor, you were talking about

2 having a trial in six months. I'm going to maybe say it needs

3 to be seven months, but six months, seven months, I actually

4 have two trials now myself on the books for September and

5 November that are going to tie me up during that six-month

6 period anyway.

7 THE COURT: How about early January?

8 MR. ELKIND: I have December and January

9 unfortunately, but -- I have trials in October, December, and

10 January.

11 THE COURT: All right, February first.

12 MR. CELUCCI: We could do February, your Honor. We

13 certainly can work within that time frame.

14 THE COURT: That seems fair.

15 MR. CELUCCI: Your Honor, just so I'm not misleading,

16 I mean, we may have one more expert now because Boston Gas is

17 raising a new issue because of the new allocation law, so --

18 THE COURT: That may be. This has opened up a can of

19 worms. It's basically all on the table again with an open

20 question about intentionality, which is, how long did the

21 damage happen? Was it consistent so it's time on the risk, or

22 is there another possible allocation theory? Remember, they

23 left it up to the trial judge to see what was fair. I think

24 they left it up to me to see if there was an alternative to

25 time on the risk. I haven't seen one yet, but you all have





1 focused on something completely different. So I don't know if

2 there is or there isn't, but what I do know is, we have to

3 retry the thing unless you settle it, and you don't sound like

4 in settlement mode, although I'll get to that in a minute. So

5 on intentionality, I don't know until I see what the evidence

6 is.

7 MR. CELUCCI: Your Honor, if I could be clear, we did

8 not reject time on the risk. We actually made a payment to

9 Boston Gas already on account based on the time-on-the-risk

10 theory.

11 THE COURT: Yes, but your theory is, time on the risk

12 is from 1890 to the present, right? So your denominator is

13 huge.

14 MR. CELUCCI: Well, it's based on their expert's

15 testimony.

16 THE COURT: I know, but it's possible that in the

17 beginning, it was just tiny.

18 MR. CELUCCI: Well, their expert says in the beginning

19 is when you have most of the leaks and spills.

20 THE COURT: Maybe. You know this stuff. Then maybe

21 it is as far as there's nothing now. I don't know because I

22 don't know the record as well as anybody in this room does, but

23 what I do know is that I have to retry it. I need to let you

24 supplement expert reports so that I really do understand it.

25 Can you both get in your -- you have people -- you need one new





1 person, right? Can you have in expert reports by August 31 and

2 then depositions in September, October? Is that doable?

3 MR. CELUCCI: I would say, if we just add one month to

4 that, it's doable. If we could just have the expert reports by

5 the end of September and we can do the depositions in the fall,

6 it's doable, especially if we're going to have a February trial

7 or a March trial.

8 THE COURT: Does that seem acceptable to you?

9 MR. ELKIND: That's acceptable to us. I'm going to

10 have to play around with a trial starting in October, but I'll

11 work with Mr. Celucci --

12 THE COURT: I just am not going to wait another year.

13 This case is just sitting -- you know, you probably don't know

14 this, but it sits on your docket when it's old. This is a 2002

15 case, and I've got two old cases because it's not just this

16 one; it's the 2007 case. And it just sits there, and it's

17 another year; then it suddenly becomes a nine-year-old case and

18 then a ten-year-old case. This may be the oldest case in the

19 Federal Court here right now. That's a pretty pathetic

20 comment. Now, I understand you've been busy. It's been up and

21 down and up and down, but I'm just not waiting another year.

22 That's just not feasible.

23 MR. CELUCCI: We understand, your Honor.

24 THE COURT: So you do the subpoena to both Boston Gas

25 and -- who is it, Eastern Gas?





1 MR. ELKIND: Eastern Gas.

2 THE COURT: -- Eastern Gas for all documents that you

3 think are relevant. Do it within a week or two weeks. You

4 should have a deposition by the end of July on those documents.

5 So by the end of July, by July 30, so Robert can get this down,

6 the deposition, the 30(b)(6) deponent on those documents.

7 That's the only fact discovery I'm opening up again. And so

8 then, if you feel as if it opens up the door on intentionality,

9 you file something by, can we say, would it be doable to do --

10 I'm not here to destroy someone's summer vacation, so stop

11 me -- August 15, August 30, something in that ballpark?

12 MR. CELUCCI: Yes, your Honor.

13 THE COURT: I don't want to destroy your vacation.

14 MR. ELKIND: You're not, your Honor, but I would

15 propose, I think if we respond in July -- I forget the exact

16 date -- to their motion on intentionality, I think we can show

17 that it's a nonissue.

18 THE COURT: You know what? I'm not going to wait on

19 all that because it may be it doesn't open up intentionality,

20 but it would be relevant to timing if you have all these

21 documents about the area. He can pursue it. He didn't know

22 about it. He can pursue it. It's the same location, right?

23 Am I right?

24 MR. CELUCCI: Your Honor, it was a joint

25 investigation, it was a joint cleanup effort, and according to





1 the --

2 THE COURT: The location, right, is Everett, right?

3 Contiguous properties, is that what you're telling me?

4 MR. CELUCCI: Yes, your Honor.

5 THE COURT: Is that true?

6 MR. ELKIND: They knew it, yes, and they knew about it

7 years ago. This issue was raised before Mr. Celucci was

8 involved.

9 THE COURT: Did they ever see the document that says

10 the oil was so thick that the boats couldn't go through them?

11 MR. ELKIND: No, they didn't, your Honor, but that did

12 not involve the Everett site. That involved the site next to

13 it, which is not at issue in this litigation.

14 THE COURT: Is it contiguous?

15 MR. ELKIND: They are next to each other, but they're

16 separate sites, separate histories.

17 THE COURT: Is it the same body of water?

18 MR. CELUCCI: It's the same body of water.

19 MR. ELKIND: It's the same body of water, but if --

20 let me give you a hypothetical.

21 THE COURT: We're all children of BP. It moves.

22 MR. ELKIND: Yeah, but BP is BP, okay? If Eastern

23 Enterprises intentionally caused contamination --

24 THE COURT: Excuse me. I just ruled. I'm going to

25 allow you to subpoena all documents about that site, the





1 contiguous sites in Everett, and then you will have a 30(b)(6)

2 deposition by the end of July. If there's still a

3 disagreement, which there's likely to be -- I'm getting the

4 tone here -- about whether or not to reopen intentionality,

5 then you should file something by the end of August.

6 MR. ELKIND: Yes, your Honor.

7 THE COURT: And then you come back fourteen days

8 later. We'll have a hearing on whether that opens up or not.

9 That's a fact -- does that involve expert testimony?

10 MR. ELKIND: It does to a certain degree, your Honor,

11 because if there's a -- first of all, there's two different

12 levels. One is, of course, how did the contamination happen?

13 If it happened by unintentional events, it should be a

14 nonissue. But in the second trial, the Commercial Point trial,

15 there was unquestioned testimony that we intentionally disposed

16 of tar in 1914 on the site, and the jury found we did not

17 intend --

18 THE COURT: That's the other site, right?

19 MR. ELKIND: Yes, but let me explain why it's

20 important. The jury found that that was not intentional

21 contamination because that's what people did in 1914, even

22 1969. And so that's a second-level analysis, and that would be

23 a matter for expert testimony.

24 THE COURT: That what?

25 MR. ELKIND: The standards of practice of the time.





1 Waste disposal in 1908 --

2 THE COURT: Yes, but you probably already did that.

3 MR. ELKIND: I'm sorry?

4 MR. CELUCCI: We did do that discovery, your Honor.

5 THE COURT: Didn't you have that discovery already?

6 MR. CELUCCI: Those subjects, yes.

7 MR. ELKIND: Okay.

8 THE COURT: That was an issue last time. That might

9 be relevant. I'm just --

10 MR. ELKIND: Okay, you're correct, there was expert

11 testimony on that.

12 THE COURT: So the real need for expert testimony, in

13 my view, and this is why I'm asking you, is, you need expert

14 testimony on how long a period of time was there pollution with

15 property damage, and was it the whole period of time? People

16 really just weren't that focused on the out years, if I can

17 call them that. How far out did the out years go? It's clear

18 it didn't just start in 1950, but I'm not sure it started back

19 in 1890.

20 MR. CELUCCI: Well, your Honor, it's not just that, if

21 I may, and I don't mean to interrupt your Honor. It's whether

22 it's indivisible in the first place or not because the Supreme

23 Court said, if it's not divisible, it gets spread over the

24 entire period of time. So if it really is indivisible injury,

25 the Supreme said clearly you go to the --





1 THE COURT: But they left it up to me. I mean, here's

2 my issue: I don't know. If you all want to just agree right

3 now it's evenly divisible, that's fine. Do you agree with

4 that?

5 MR. ELKIND: Well, I would read from the SJC

6 decision --

7 THE COURT: I just read it.

8 MR. ELKIND: Okay. It's a problem of proof.

9 THE COURT: Excuse me, what?

10 MR. ELKIND: If we can prove that contamination that

11 we're liable for happened during a certain period, then that

12 trumps --

13 THE COURT: You've got a serious problem of judicial

14 estoppel, a serious problem, because you said it predated it.

15 So I don't know how many years it predated it. Judge Zobel

16 herself said that. I mean, I'm not estopping you to a

17 particular year. I don't think people were focused on what --

18 but it is clear that it didn't just start in 1950. What I

19 don't know -- you conceded it, Judge Zobel found it, the First

20 Circuit found it, everyone found it: It didn't just start the

21 year of their policy. Now, did it start in 1945? Did it start

22 in 1930? I don't know. I'm not as mired in the facts. So I'm

23 going to allow discovery.

24 MR. ELKIND: I understand that. If I may make two

25 points, the documents that they recently uncovered all relate





1 to the 1950 time frame. Be that as it may, I don't think it

2 will shed light on earlier contamination, but if I may, the

3 relevant question --

4 THE COURT: Well, it may not.

5 MR. ELKIND: The relevant question isn't when

6 contamination happened. It's when did the contamination happen

7 that we had to clean up that we're liable for? That's the

8 relevant issue.

9 THE COURT: Maybe. I mean, it may be that there were

10 different kinds of contamination, and, as you said, some got

11 into groundwater and some didn't. Fair enough, maybe. That's

12 why you need more expert discovery. It's a difficult job for

13 you because of certain things that you said, but there we are.

14 So do we need anything more on the owned property

15 discovery, or is that all done?

16 MR. ELKIND: Well, we're going to generally furnish

17 them with updated invoices and any updated site information.

18 MR. CELUCCI: Right. They've done a lot of work at

19 the site in the last three years, and we don't have those

20 invoices. So our expert may have to opine after they get those

21 invoices that this stuff relates to owned property; this

22 doesn't relate to owned property. So the expert is going to

23 need probably 60 days to review those invoices to give a

24 report.

25 THE COURT: So should we say that all expert reports





1 should be October 1? Does that make sense, all updated expert

2 reports? And at that point you can do -- so October 1, all

3 expert reports or supplemented expert reports. So then by the

4 end of -- do you want to say December 15? Does that make some

5 sense?

6 MR. ELKIND: It's good for me, your Honor, because

7 I'll be in trial.

8 THE COURT: For depositions?

9 MR. ELKIND: December 15 is fine.

10 MR. CELUCCI: Your Honor, that's fine. If I could

11 just add, we don't have a date for Boston Gas to give us the

12 invoices that the expert needs to review.

13 THE COURT: Thirty days?

14 MR. ELKIND: Sure.

15 THE COURT: And I'm hoping Robert is getting this, but

16 maybe what you all can do is also draft up what we've just been

17 talking about so there's one bucket which is the intentionality

18 evidence, there's one bucket which is the supplemental reports,

19 and there's one bucket which is the new invoices. We're

20 staying everything having to do with the commercial site,

21 although I wanted to ask you one question about that later on

22 having to do with that what seemed to be a mistake of the jury,

23 although it turns out the case law is not so crystal clear on

24 whether or not I have to actually retry it or whether I can fix

25 it. It's not just like a switch of a number or something.





1 It's actually in a gray area. We have been doing some research

2 on it, on what to do about that. I'm not sure I can just call

3 it a mathematical mistake, but it seems as if it was a mistake.

4 MR. ELKIND: Well, our position, as stated in our

5 briefs, that both the First Circuit decisions and the Federal

6 Rules of Evidence don't allow an alteration of the jury's

7 verdict under these circumstances.

8 THE COURT: It may not, and I may have to do it sort

9 like under a clearly, like, interest-of-justice kind of thing,

10 I may have to retry it, and I just would hate to do that

11 because it seems pretty clear what happened. But you may be

12 right as a legal matter. We're not sure. I'm hoping reasoned

13 minds can move beyond that. It's not that much money on the

14 scheme of these things, and it looks like he's right, that's

15 what happened.

16 MR. ELKIND: Well, we also, I should point out, have a

17 separate motion for JNOV on the owned property exclusion for

18 the reasons stated, which I won't --

19 THE COURT: I'll be so unlikely to do those. I don't

20 have a feel for the record that way. I'm not going to go

21 through hundreds and hundreds of documents and transcripts.

22 It's just too hard to do in retrospect. It's quicker for me to

23 try it. They're two weeks apiece, right? Is that right?

24 MR. CELUCCI: Your Honor, the first one was three

25 weeks, and the second one was a little less than two weeks, but





1 the second time around it should be two weeks apiece.

2 THE COURT: Mr. Chaffin, you know how I try cases 9:00

3 to 1:00 pretty tightly. Will it --

4 MR. CHAFFIN: Yes, your Honor, we talked about that

5 this morning, right, and the estimates stand that Mr. Celucci

6 gave.

7 THE COURT: Okay, okay.

8 MR. CELUCCI: Two weeks, your Honor.

9 MR. ELKIND: And we can revisit the Commercial Point

10 site later, but I just want to make sure I --

11 THE COURT: So Everett was two weeks?

12 MR. CELUCCI: Everett originally was three weeks,

13 three and a half weeks, but we should be able to do it in two

14 weeks this time.

15 THE COURT: What do you all think? I mean, if I open

16 up intentionality, it's right back to where we are. If I

17 don't, maybe it's a little shorter.

18 MR. CELUCCI: Your Honor, there was also a lot about

19 the lost policy issues and things like that.

20 THE COURT: Oh, I see, speaking of which, do I have to

21 do that lost policy, that SI -- what do you call it?

22 MR. ELKIND: SIR.

23 THE COURT: Do I have to do that?

24 MR. ELKIND: I think we'll be able to resolve that.

25 It's not a large amount of money, no matter whether we prevail





1 or they prevail, so I think we can probably resolve that. And

2 we've conceded that the missing policy had an owned property

3 exclusion, which were two to three issues remanded by the First

4 Circuit. But I want to make sure. So our time to respond to

5 their intentionality motion now has been delayed until they

6 make another submission, and then we respond to that?

7 THE COURT: Well, I thought, when did we set that you

8 were going to -- by August 15 or August 30, right?

9 MR. CELUCCI: August 30.

10 THE COURT: By August 30.

11 MR. CELUCCI: Yes. They're referring to the one we

12 had already filed for a new trial, and their response was due,

13 I think, in two weeks from now. But instead we're going to do

14 a more clearly focused motion based on the actual evidence that

15 we get, so then they'll respond to that instead.

16 THE COURT: Yes, because that evidence is newly

17 discovered. I'm trying it again. It's at least relevant on

18 what happened. It's relevant evidence that probably should

19 have been produced. Is it true that it was a -- it said parent

20 company? He says that they represented they requested it from

21 the parent company.

22 MR. ELKIND: No. Most of the documents came from a

23 third party, not from the parent company. Only a couple of

24 documents came from the parent. None of them came from Boston

25 Gas. Most of them came from Metcalf & Eddy or its successor.





1 Mr. Gibbons can speak to that.

2 MR. GIBBONS: Yes, your Honor, this really is an issue

3 that we can address pretty quickly. All but two of the

4 documents that are attached to the motion were produced by a

5 third party, Metcalf & Eddy, not related; and they were

6 produced in a separate litigation not involving Boston Gas out

7 in Illinois.

8 THE COURT: Did you know about them?

9 MR. GIBBONS: No, we did not, your Honor.

10 THE COURT: Did Mr. Elkind know about them?

11 MR. GIBBONS: No, your Honor, he did not, and in

12 fact --

13 THE COURT: Were you the lawyer in that litigation?

14 MR. GIBBONS: No, your Honor.

15 THE COURT: All right, so there was --

16 MR. CELUCCI: It was local counsel, it was a local

17 counsel that was the lawyer in both cases.

18 MR. GIBBONS: No, our local counsel is not in that

19 case, your Honor. Our local counsel is in a case in Boston

20 sometime after a subpoena was issued in Illinois -- and I've

21 had to track this down, so that's why we've been -- after a

22 subpoena was issued in Illinois for Metcalf & Eddy. Because

23 the site that was at issue in the subpoena for Eastern is also

24 a subject that the local counsel is dealing with in a separate

25 insurance coverage action, he was conferring with that counsel.





1 And sometime later after they were produced, after 2005, he

2 obtained copies because he believed that they might be helpful

3 for his case and decided to produce them. But this was --

4 THE COURT: So the first time that the two of you

5 actually saw these documents is when he --

6 MR. GIBBONS: When we received them.

7 MR. ELKIND: When we got their motion.

8 MR. GIBBONS: When we got their motion was the first

9 time we saw these Metcalf & Eddy documents.

10 THE COURT: Did you go search through the parent?

11 They did request documents from the parent.

12 MR. GIBBONS: All right, now, I can address that very

13 quickly, your Honor.

14 THE COURT: They quoted me something that said --

15 MR. GIBBONS: I understand, your Honor, but there are

16 some things that were missing. And what Century has cited you

17 to isn't a document request for the case, which we've responded

18 to, and that was much earlier. What they've cited you to is a

19 30(b)(6) notice that was issued months after we had started and

20 completed our production of documents. That 30(b)(6) notice

21 and the request for documents we objected to because we said it

22 was unanswerable, and we weren't going to be responding to that

23 document request because we had already been responding to

24 their request for documents. That was an issue that was at

25 that point put to bed. If there was a problem with us not





1 responding to the document requests in the 30(b)(6) notice,

2 that was a motion to compel that needed to be filed back in

3 2004, your Honor.

4 And, by the way, I can tell your Honor that for

5 Metcalf & Eddy, they are one consultant. There were, I think,

6 twenty consultants that Century subpoenaed during this case.

7 Metcalf & Eddy --

8 THE COURT: So you're saying Metcalf & Eddy is at

9 fault?

10 MR. GIBBONS: And Metcalf & Eddy was not subpoenaed by

11 Century, although they knew about them. So this is not

12 something that was being hidden at all. And in fact the

13 Eastern property and the other contiguous properties, there was

14 discovery that Century conducted of Koppers and Beazer and

15 other environmental consultants for those other properties; but

16 it was never an issue because we have testimony and we have

17 questions during depositions where counsel for Century

18 recognized that these were two unrelated sites.

19 THE COURT: But aren't they contiguous?

20 MR. GIBBONS: The property is -- when you say

21 contiguous, it's an environmental area, okay? I mean, it's an

22 industrial area. And in one part there was SL, and in another

23 part there was Boston Gas, and over here is an Eastern site.

24 So it's an industrial area, okay.

25 Now, we are dealing with just the Boston Gas property.





1 THE COURT: Maybe I should go do a view because, I

2 mean, if --

3 MR. GIBBONS: I'm sorry?

4 THE COURT: If it's immediately contiguous, and if

5 it's the same body of water, and the oil was as thick that you

6 couldn't push a boat through it, and that the Attorney General

7 was threatening both companies with an indictment, that is

8 relevant.

9 MR. GIBBONS: Well, your Honor, and I'll tell you,

10 we're getting -- these are all interesting issues that I was

11 going to hit. In fact, if we look at the documents, and I

12 don't have them here, but even a reading of the document

13 doesn't support what Century said because the indictment that

14 is seen in the papers so many times isn't an indictment -- what

15 the document says is, there is talk of potential indictments of

16 two other companies, not Boston Gas or Eastern. Century has

17 read this and makes the representation that -- they dropped the

18 "there was talk of" or "rumor of," and they dropped the "of the

19 other companies," and they insert this to indictments of Boston

20 Gas. The document, which we don't even know about --

21 THE COURT: Hold on. You do say that it's the

22 potential indictment of Boston Gas, or at least -- either that

23 or I read it too quickly.

24 MR. HESKIN: They were preparing indictments against

25 all four companies. The document that he's speaking of was





1 talking in the third person. It was saying the Attorney

2 General was preparing bills and equities against the companies,

3 being Boston Gas and Eastern Company. They were also preparing

4 indictments against the two other companies.

5 THE COURT: Do you agree with that?

6 MR. GIBBONS: No, your Honor. The document I've

7 seen --

8 THE COURT: Well, let me see it. Let me see. Where's

9 the piece of paper? Do you have it?

10 MR. CHAFFIN: Yes.

11 MR. GIBBONS: I mean, the document that they've cited

12 to says that it's two other companies.

13 THE COURT: Do you have it there? Make sure you're

14 both talking about the same document. Show him what you're

15 referring to. Have you seen this one?

16 MR. GIBBONS: I want to cross-reference what they cite

17 in their brief to the document.

18 THE COURT: Well, just first read the document he's

19 got.

20 MR. HESKIN: It states right here: "Information in

21 the nature of bills in equity to restrain the continuation of

22 such conditions at the plants of Eastern and Boston Gas Company

23 had been prepared. Fortunately, we learned about them before

24 they were filed with the court. There was talk of indictments

25 being sought against the other two companies."





1 MR. GIBBONS: Natures of bills in equity to restrain

2 is not an indictment, your Honor, one. And what has been cited

3 is here criminal indictments. They've tried to portray Boston

4 Gas as a criminal where someone is going to be shackled and

5 walked down to the courthouse. What it says is, there was talk

6 of indictments being sought against two other companies.

7 THE COURT: That's what it seems to say, not Boston

8 Gas.

9 MR. GIBBONS: And, your Honor, may I approach?

10 THE COURT: No. Hold on one second.

11 Is that right?

12 MR. HESKIN: The restraints in equity are indictments.

13 There was a law on the books that made it a crime to pollute in

14 the river so much as to cause pollution, and it authorized

15 people to make arrests.

16 THE COURT: A restraint in equity typically sounds in

17 equity, not criminal.

18 MR. CHAFFIN: But it's by the AG, your Honor.

19 THE COURT: No, I understand, but that's different

20 from an indictment. It may be relevant. It's relevant. I'm

21 just simply saying, it's certainly relevant; it's just not an

22 indictment. Right?

23 MR. CHAFFIN: I think what that says is that "We've

24 already done it with respect to Boston Gas and Eastern, and

25 we're thinking about doing it with respect to the others."





1 THE COURT: It says what it says. But it's relevant.

2 It may not be as damming as a preparation of an indictment

3 against Boston Gas, but it certainly was a government action,

4 right?

5 MR. GIBBONS: It was a government action, although

6 that government action has been --

7 THE COURT: It certainly was relevant, right?

8 MR. GIBBONS: -- long known about.

9 THE COURT: Excuse me.

10 MR. GIBBONS: Actually, your Honor, and I'm sorry to

11 do this, but I don't --

12 THE COURT: Don't forget, you're an officer of the

13 court. It's relevant.

14 MR. GIBBONS: No, I don't necessarily agree with that

15 because we've got to see how it's being used, of course,

16 because you talk about timing, and this does nothing for the

17 timing. And I'll tell you, it certainly doesn't open up the

18 intentional --

19 THE COURT: Excuse me. You take the position it's not

20 relevant on a trial?

21 MR. GIBBONS: This is in 1950, your Honor. We already

22 know that there was property damage --

23 THE COURT: Excuse me. Is that document dated in

24 1950?

25 MR. HESKIN: 1953 or 1954.





1 THE COURT: It's relevant as to timing because it may

2 even support your position. It's relevant as to timing.

3 MR. CHAFFIN: "The charges against all four companies

4 were substantially the same," the next paragraph. And

5 Mr. Heskin knows these documents better than I, but --

6 THE COURT: In any event, it's relevant. Now, whether

7 or not it opens up intentionality depends on what was known at

8 the time of the trial, whether or not there was other evidence,

9 et cetera, that could have been known or was known, whether

10 this is cumulative. I don't know that piece of it. It's

11 relevant. It's probably -- whose document is it, Eastern

12 Gas's?

13 MR. HESKIN: Yes.

14 THE COURT: It's probably admissible.

15 MR. GIBBONS: Actually, it appears to be a statement

16 of Harrison Eddy, which is a consultant.

17 THE COURT: To whom?

18 MR. GIBBONS: I'm sorry. It appears -- I'm sorry, I'd

19 have to go back and look at the document.

20 MR. HESKIN: It's a statement by the management

21 counsel for Eastern Gas & Fuel Associates from their legal

22 department.

23 THE COURT: It's likely to be relevant. It may be

24 admissible. I am allowing discovery into it.

25 MR. GIBBONS: And I'm not arguing that point at all,





1 your Honor, but you asked some questions about --

2 THE COURT: You made a good point --

3 MR. GIBBONS: -- that I wanted to really just address.

4 THE COURT: You raised a good point that it was

5 probably not an indictment at that point, but it was

6 governmental action.

7 MR. ELKIND: And, I'm sorry, I want to make a brief

8 point about --

9 THE COURT: Yes, yes.

10 MR. ELKIND: For discovery purposes, I understand it

11 may be relevant, but what Eastern did and knew about is totally

12 irrelevant to what Boston Gas did and knew under Massachusetts

13 law, under the policies, and --

14 THE COURT: Was it the parent back then?

15 MR. ELKIND: Sorry?

16 THE COURT: Was it the parent back then?

17 MR. ELKIND: It was the parent, but there was

18 corporate separateness. Unless they're going to pierce the

19 corporate veil, which there's no basis for, these are two

20 separate operations on two separate sites by two separate

21 companies.

22 THE COURT: Maybe, maybe, maybe. I don't know. I

23 mean, unless they shared joint counsel or joint cleanup crews

24 and had a joint --

25 MR. CELUCCI: Your Honor, we can lay all this out in





1 the brief when we get the evidence. And there are other issues

2 of -- I mean, their expert testified nobody knew about these

3 kinds of things and concerns, and it would have been relevant

4 on a lot of different issues. We'll clarify that in the

5 written papers.

6 MR. GIBBONS: And not to argue this more, your Honor,

7 and I really won't, but just to put this in perspective, the

8 oil that was addressed as part of that investigation was deemed

9 to come from Esso.

10 THE COURT: Maybe.

11 MR. GIBBONS: And it was merely flowing through the

12 underground.

13 THE COURT: Maybe. I'm not ruling on whether I'm

14 reopening it. I'm simply saying it's of concern enough to

15 reopen fact discovery narrowly on that point, and it would be

16 very useful to see this all in a better factual record. I'm

17 not deciding intentionality. I am simply saying I'm opening up

18 discovery on intentionality. And, as I said earlier, I don't

19 want to get into A Civil Action situation where I'm worrying

20 about sanctions and who did what and why they did it. Just it

21 may be relevant newly discovered evidence. I don't think that

22 I can rule on anything more today.

23 I'm staying the commercial site, and what I'm hoping

24 is that whatever is decided, I can then send you back to Eric

25 Green and have you resolve the next site, if that's possible.





1 MR. CELUCCI: Your Honor, the only other thing, if I

2 may, you may say you're staying it as well, but just to

3 clarify, there's a bad-faith action. There is an outstanding

4 motion to dismiss our bad-faith action. It's a separate

5 action. That's the 2007 action. I don't know what your

6 intention is with regard to that.

7 THE COURT: I don't know if I can dismiss it. It's an

8 uphill battle now that the whole case has been reversed on

9 appeal. It's hard to argue bad faith. Are you pressing it

10 forward? I don't know if I can dismiss it.

11 MR. ELKIND: Your Honor, our decision on whether or

12 not to press the bad faith will largely depend on what happens

13 at Everett. If we go to trial and we are successful or are

14 largely successful in recovering what we've already recovered,

15 or more because of prejudgment interest and increased costs,

16 then, yes, we think we'll have a valid bad-faith claim.

17 THE COURT: Let me just say, I understand why you

18 filed it. They're almost always filed in insurance cases.

19 That's my experience. I am simply saying, not your fault, you

20 had two Appeals Court cases in your quiver, but the bottom line

21 is, you were reversed on appeal, so it's hard to argue that

22 Century Indemnity didn't have a good-faith basis for its

23 position.

24 MR. ELKIND: Well, your Honor, I'm not going to argue

25 the merits today. I will tell you, in twenty-two years of





1 practice, I filed three bad-faith claims. And we felt this one

2 was well taken, and if we end up having to try Everett again

3 and recovering as much, if not more, than before, I think that

4 will speak for itself.

5 THE COURT: Well, I'm going to get to settlement in

6 one second. Let me say this again: I don't know if I can

7 dismiss it. I know Iqbal and Twombly are the "motions

8 de jure." But I do know one thing, which is, even if I were to

9 let it go forward, it's a very tough battle for you now because

10 you got reversed. You had a good-faith position, they had a

11 good-faith position on the law. I mean, what can I say? You

12 had two Appeals Court cases -- you must have died when you saw

13 that SJC opinion -- you had two Appeals Court cases in your

14 side, but both the First Circuit and the SJC disagreed with

15 you.

16 MR. ELKIND: Actually, we were heartened when we saw

17 the judgment of the First Circuit.

18 THE COURT: I'm glad you were because you must be a

19 glass-half-full kind of guy. So I'm glad you were, but I am

20 simply saying it's a tough -- it's a 93A kind of action, isn't

21 it? I haven't even read it yet. It's a hard thing to win when

22 you get reversed on appeal, and so I don't want to waste more

23 resources. And this seems, like, so contentious. I have so

24 many of these cases that are so contentious. But I'll have to

25 say, the Neurontin case, right, pretty heavy, lots of money, I





1 think people got along. Am I misreading that? Maybe I am.

2 Maybe I just didn't see the --

3 MR. CHAFFIN: I wouldn't know anymore, your Honor,

4 but, no, we got along.

5 THE COURT: Just I don't want the pugilist approach

6 here. Maybe we can start with a new day. You know, we've got

7 the law, the facts. Maybe we can just get rid of the bad-faith

8 allegations and just get to what the right answer is here. If

9 not, I don't want to do anything. I'm not doing anything with

10 the bad-faith claims. Maybe I'll look at the motion to dismiss

11 and see what I need to do with that, but I'm not going to be

12 trying it, for sure. I'm trying Everett first. It's a two- to

13 three-week trial, right?

14 MR. ELKIND: Yes.

15 THE COURT: It may be three weeks if intentionality is

16 in there. It may be two weeks if we're just doing the owned

17 property and the years on the risk issue.

18 MR. CELUCCI: Right.

19 THE COURT: And as we get closer, Mr. Alba will send

20 out a pretrial order and that sort of thing, but let me go off

21 the record for one second here.

22 (Discussion off the record.)

23 THE COURT: Good. So nice to get to know you all.

24 MR. ELKIND: Thank you, your Honor.

25 MR. CHAFFIN: Thank you, your Honor.





1 THE COURT: I don't think you need to respond to that

2 motion.

3 MR. GIBBONS: Thank you, Judge. We'll wait.

4 THE COURT: Enjoy your July 4th weekend.

5 MR. GIBBONS: I very much appreciate that, your Honor.

6 Thank you.

7 MR. ELKIND: I was chomping at the bit, but --

8 THE COURT: I know you were desperate to do it, but

9 save your powder, all right?

10 MR. CELUCCI: Your Honor, one last thing. Do we have

11 a date in February or just February?

12 MR. ELKIND: February 1, your Honor?

13 THE CLERK: Hold on. No. We only impanel on Monday,

14 so it would have to be February 7, the first Monday, and we'll

15 have a final pretrial conference on February 2 at 2:00 p.m.

16 THE COURT: And, Robert, write down two to three

17 weeks, and as we get closer, we'll figure out exactly what it

18 is. What I like to do is, at some point I go through the

19 witnesses and literally how much in direct, how much in cross,

20 get a realistic read. So whatever I tell the jury I actually

21 do stick with and I pretty much keep to, short of a major

22 crisis.

23 (Discussion off the record.)

24 (Adjourned, 3:30 p.m.)

25




1 C E R T I F I C A T E

2

3

UNITED STATES DISTRICT COURT )4 DISTRICT OF MASSACHUSETTS ) ss.

CITY OF BOSTON )5

6

7 I, Lee A. Marzilli, Official Federal Court Reporter,

8 do hereby certify that the foregoing transcript, Pages 1

9 through 40 inclusive, was recorded by me stenographically at

10 the time and place aforesaid in Civil Action Nos. 02-12062 and

11 07-10701, Boston Gas Company d/b/a KeySpan Energy Delivery New

12 England v. Century Indemnity Company, and thereafter by me

13 reduced to typewriting and is a true and accurate record of the

14 proceedings.

15 In witness whereof I have hereunto set my hand this 8th

16 day of July, 2010.

17

18

19

20

21 /s/ Lee A. Marzilli

__________________________________22 LEE A. MARZILLI, CRR

OFFICIAL COURT REPORTER23

24


boston gas co. v. century indemnity co. status conference

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