Rogers Cartage Company v. Monsanto Company, 794 F.3d 854

Background

Dead Creek (Sauget Area 1) is a heavily contaminated storm-water channel; EPA sued PRPs under CERCLA in 1999 to recover cleanup costs.
Monsanto (later Pharmacia; Solutia indemnified Monsanto) and others sued Rogers Cartage alleging truck-wash runoff from Rogers’ Sauget and Cahokia depots contributed PCBs and other contaminants to Dead Creek.
After a 2003 bench trial, the district court found the government had not proven Rogers’ discharges reached Dead Creek and entered judgment for Rogers; contribution claims against Rogers were dismissed with prejudice.
In 2011 several defendants settled claims with Rogers for $7.5 million (Rogers to pay $50,000), with a broad release of claims “pertaining to the Sauget Area 1 and 2 Sites” and a definition of Sauget Area 1 Sites to include drainage pathways contaminated to/from Dead Creek; insurance proceeds could fund Cahokia cleanup.
Rogers later filed a third-party complaint in a separate action (Phillips 66) asserting claims related to Cahokia; MS&P sought dismissal/enforcement of the EPA settlement and transfer of the pleading to the EPA case.
The district court dismissed Rogers’ transferred third-party complaint as barred by the settlement and sanctioned Rogers $200,000; Rogers appealed (one notice dismissed as premature; the appeal of dismissal and sanctions was resolved on the merits).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the district court erred by deciding dismissal based on the settlement without converting to summary judgment	MS&P: dismissal was proper because the release barred the claims and the agreement was part of the record	Rogers: affirmative defense (release) requires Rule 12(c)/summary judgment and opportunity to present evidence	No reversible error; agreement and complaint language undisputed and unambiguous, so dismissal was proper without conversion
Whether the settlement release covered claims related to Rogers’ Cahokia depot	MS&P: release explicitly covered Sauget Area 1 Sites, defined to include drainage pathways contaminated to/from Dead Creek, thus encompassing Cahokia	Rogers: Cahokia was not a drainage pathway; release did not explicitly mention Cahokia and should be construed narrowly	Release unambiguous; Cahokia falls within the defined Sauget Area 1 Sites and the insurance/trust provisions confirm parties intended to cover Cahokia; dismissal affirmed
Whether sanctions were permissible and on what legal basis	MS&P: sanctions appropriate because Rogers filed claims contrary to an unambiguous release; invoked §1927, Rule 11, and inherent power	Rogers: procedural defects under Rule 11 safe-harbor and statutory/inherent authorities improperly applied; §1927 cannot be imposed on a party	District court erred to the extent it relied on §1927 and inherent power, but did not abuse discretion applying Rule 11; substantial compliance with Rule 11 safe-harbor found, so sanctions under Rule 11 were affirmed
Whether the first notice of appeal was timely	Rogers contended appealable; argued earlier step concluded matter	MS&P: pending further action (sanctions) meant no final order yet	First notice was premature and dismissed for lack of jurisdiction; only the later notice presented a final decision

Key Cases Cited

United States v. Atlantic Research Corp., 551 U.S. 128 (2007) (clarified that PRPs who incur voluntary cleanup costs may seek contribution under CERCLA § 107)
Thompson v. Gordon, 948 N.E.2d 39 (Ill. 2011) (contract must be construed as a whole; clear terms given plain meaning)
Chambers v. NASCO, Inc., 501 U.S. 32 (1991) (scope and limits of a court's inherent sanctioning power)
Yassan v. J.P. Morgan Chase & Co., 708 F.3d 963 (7th Cir. 2013) (affirmative defenses like releases are external to complaints; discuss appropriate procedural treatment)
Lightspeed Media Corp. v. Smith, 761 F.3d 699 (7th Cir. 2014) (standard for sanctions under 28 U.S.C. § 1927)