San Francisco Baykeeper v. Allied Engineering and Production Corporation

Background

San Francisco Baykeeper alleged that Allied Engineering & Production Corporation, Allied Land Company, Stone Boatyard, LLC, and TC I 2421 Blanding, LLC were jointly and severally liable for contamination of a shoreline parcel in Alameda County. Baykeeper and TC I reached a settlement providing for removal of debris from part of the shoreline owned by TC I.

The settlement required court approval as a good-faith settlement under sections 877 and 877.6 of the California Code of Civil Procedure. It also sought protection for TC I from contribution and equitable-indemnity claims under section 6 of the Uniform Comparative Fault Act. Contribution is a claim seeking payment from another party that shares responsibility for a liability; equitable indemnity is a related claim seeking reimbursement for that liability. The non-settling parties did not oppose the motion, and the court determined that no fairness hearing was needed.

Court’s analysis

The court applied the standards for deciding whether a settlement is made in good faith. It found that the agreement was substantively and procedurally fair, reasonable, in the public interest, and reached in good faith. The court considered reasonable the allocation of responsibility because Baykeeper alleged that the Allied defendants caused the contamination, while TC I agreed to address contamination on the shoreline it owned and pay part of Baykeeper’s attorney and expert fees.

The court also found that the agreement resulted from extensive, arm’s-length negotiations involving experienced counsel. It found no evidence of collusion, fraud, or wrongful conduct intended to harm the non-settling defendants, and nothing about the agreement was so unreasonable as to show a lack of good faith.

Order

The court granted the motion and approved the settlement as a good-faith settlement. It found that the agreement was entered into in good faith under sections 877 and 877.6, the California Supreme Court’s decision in Tech-Bilt, and section 6 of the Uniform Comparative Fault Act as adopted as federal common law for this case.

The order barred all contribution or equitable-indemnity claims against TC I related to the facts alleged in the complaints and notice letters and the matters resolved by the settlement. It dismissed with prejudice all claims made or deemed asserted and denied between Baykeeper and TC I in this action, while retaining continuing jurisdiction to interpret, implement, and enforce the settlement agreement. Unless the settlement provided otherwise, Baykeeper and TC I were each responsible for their own costs and expenses through the date of the order, but Baykeeper retained the right to seek additional costs and expenses from the non-settling parties.