On July 2, 2008, this сourt issued a partial final judgment in favor of the Tremont Parties, 1 and against Halliburton Energy Services, Inc. (“HESI”) and DII Industries, Inc. (“DII”) (together, “Halliburton”), with respect to claims resolved in arbitration about the past and future costs of investigating and remediating environmental contamination at a site near Magnet Cove, Arkansas and Malvern, Arkansas (the “Site”). This court stayed the monetary portion of the judgment at Halliburton’s request, and required Halliburton to post a supersedeas bond. The partial final judgment was subsequently affirmed by the Fifth Circuit. No further appeals have been taken and thе judgment is final. Halliburton has filed a motion to release the supersedeas bond. (Docket Entry No. 365). Based on the motion and briefs, the arguments of counsel, and the applicable law, this court grants Halliburton’s request to release the bond.
I. Background
On January 27, 2009, Halliburton paid the Tremont Parties the full аmount due at that time — $11,797,149.75. (Docket Entry No. 365 at 2). Halliburton has agreed to release the Tremont Parties from the obligations the Tremont Parties previously agreed to assume at the Site. (Id. at 2 — 3). According to Halliburton, it has undertaken the Tremont Parties’ obligation at the Site and has provided а revised financial assurance letter to the Arkansas Department of Environmental Quality (the “ADEQ”), and the form of guarantee offered by Halliburton has been approved by the ADEQ. (Id. at 3). Halliburton argues that because the monetary portion of the judgment and the obligation for future financial assurance have been satisfied, the bond should be released. (Id.).
The Tremont Parties oppose releasing the bond and request that additional or substitute security of $25 million be provided by Halliburton to secure future costs at the Site. (Docket Entry No. 367 at 1, 4-5). The Tremont Parties argue that Halliburton has not provided any defense for the Tremont Parties from all government and third-party claims, including those of Georgia-Pacific Corporation and Milwhite Inc. (Id. at 2). The Tremont Parties focus on the fact that Halliburton Company, Halliburton’s parent corporation, has mоved its headquarters to Dubai, which the Tremont Parties assert could make future collection from Halliburton difficult, on the fact that Halliburton Company has taken on liabilities as a result of one of its subsidiaries in Nigeria making improper payments, and on the fact that Halliburton Company hаs filed for bankruptcy protection for Dresser Industries, Inc., an entity that was involved at the Site. (Id. at 6-7). The Tremont Parties also submitted a supplement in which they state that HESI contributed shares of stock to a subsidiary and argue that this raises questions as to whether Halliburton is diverting assets. (Docket Entry No. 370 at 1-2). The Tremont Parties also point to a letter from the ADEQ, which they assert raises questions as to whether the ADEQ will accept a parent guarantee from Halliburton Company. (Id. at 2). However, that letter asks that Halliburton comply with certain requests, and concludes by stating that “[i]f Halliburton addresses these comments then its financial assurance submittal should be approved.” (Id., Ex. B at 2). At the hearing on Halliburton’s motion, this court denied Tremont’s request for an increase in the bond or other security without prejudice. 2
Georgia-Pacific — which was not a party to the arbitration — filed a resрonse to Halliburton’s status report, arguing that Halliburton should sign a stipulation agreeing to undertake the liabilities of National Lead under the leases between Georgia-Pacific and National Lead at issue in this case. (Docket Entry No. 373). Halliburton responded to Georgia-Pacifiс’s statement by noting that it had not yet determined whether it would sign Georgia-Pacific’s proposed stipulation, but that because this court noted the possibility that the leases at issue might not cover liability under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), Halliburton was assessing the propriety of entering the stipulation. (Docket Entry No. 376 at 2).
The Tremont Parties responded to Halliburton’s status report by arguing that Halliburton still had not replaced the Tremont Parties’ bond with the ADEQ and that Halliburton still needed to pay more than $15,000 in unpaid invoices. (Docket Entry No. 374 at 1-3). The Tremont Parties also argued that the bond should not be reduced because Halliburton cannot satisfy all future costs at the Site. (Id. at 3).
As required by this court, Halliburton filed another status report on March 19, 2010. (Docket Entry No. 403). Halliburton reports that Halliburton Company, on behalf of HESI, has issued a сorporate guarantee as financial assurance for the operation and maintenance of the water treatment system at the Site, and that the ADEQ has released TRE Management’s letter of credit.
(Id.
at 1). Halliburton also reports that the ADEQ has agreed to release TRE Management
from
a 2000 Administrative Settlement Agreement, and that the parties are currently discussing the proposed release documentation.
(Id.).
Halliburton states that when it submitted a feasibility study for the Site to the ADEQ, which identified a range of possible remedial alternatives, it specifiсally acknowledged that TRE Management withdrew from the project on April 10, 2008.
(Id.
at 2). Halliburton emphasizes that “[a]s between the TRE Management-related parties (including Tremont and NL Industries) and HESI, HESI is taking full financial responsibility of the Site remediation.”
(Id.).
Halliburton also states that all fees and costs it owes have been paid, and that it is currently reviewing an additional $40,000 in legal fees that the Tremont Parties recently submitted.
(Id.).
At a hearing in the related case, Case No. 08-1063, Halliburton’s counsel indicated that Halliburton had agreed to pay these outstanding fees, subject to not waiving argumеnts on any future dispute, and indicated that the bills would be paid within
The Tremont Parties argue that Halliburton still has not hired independent counsel to defend the claims of Georgia-Pacific and Milwhite, and has failed or refused to agree to do so in writing. (Docket Entry No. 404 at 1). The Tremont Parties assert that as a result, they have needed to remain involved in this litigation and to incur legal expenses. (Id.). The Tremont Partiеs note that Halliburton has not paid the legal bills and expenses that the Tremont Parties have submitted for reimbursement since December 1, 2009, and that Halliburton now owes over $36,898.01. (Id. at 1-2). The Tremont Parties also assert that Halliburton has not yet had TRE Management removed from the 2000 Administrative Settlemеnt with the ADEQ, and that as a result, the Tremont Parties have needed to engage counsel in Arkansas to attempt to have TRE Management removed from the agreement. (Id. at 2). The Tremont Parties note that Halliburton has changed its estimates as to the amount of future costs, (see id.), but the new estimate ($17 million) is significantly less than a prior estimate ($390 million). The Tremont Parties request that the supersedeas bond remain in place so that they have protection for future cleanup costs. (Id.).
II. Analysis
Under Rule 62(d), “[i]f an appeal is taken, the appellant may obtain a stay by supersedeas bond ____” Fed. R. Civ. P. 62(d). “The purpose of a supersedeas bond is to preserve the status quo while protecting the non-appealing party’s rights
pending appeal.” Poplar Grove Planting & Refining Co. v. Bache Halsey Stuart, Inc.,
Halliburton’s supersedeas bond has served its purpose of maintaining the status quo during the appeal and there is no longer а reason for it to remain in place. Although it may sometimes be appropriate to maintain a supersedeas bond after appeal when there are some outstanding amounts due,
see Wilmer v. Bd. of County Comm’rs of Leavenworth County, Kan.,
Halliburton has paid the monetary portion of the judgment and has indicated that it will pay the outstanding amounts submitted by the Tremont Parties within the next two weeks.
Halliburton has also taken steps to ensure that the Tremont Parties will not be held responsible for future cleanup costs at the Site. When this court entered the order requiring the supersedeas bond, it noted that the risk that the Tremont Parties would have to pay future cleanup costs at the Site was relatively low because Halliburton had provided assurances, in open court, that it hаd assumed responsibility for future remediation work and costs at the Site and would not seek payment for or involvement in the remediation work at the Site from the Tremont Parties. The risk that the Tremont Parties will have to pay future cleanup costs at the Site is even lower now that the judgmеnt confirming the awards has been affirmed by the Fifth Circuit. Halliburton has replaced the Tremont Parties’ letter of credit with the ADEQ, and the ADEQ has agreed to re-' move TRE Management from the 2000 Administrative Settlement. The small possibility that the Tremont Parties could be held responsible for future cleanup costs at the Site does not warrant maintaining the supersedeas bond, which was meant to maintain the status quo pending appeal, not pending final cleanup of the Site.
The claims of third parties also do not require maintaining the supersedeas bond. When this court entered the order requiring the bond, it did not include the claims of third parties in the bond. This court noted at that time that the claims involving Georgia-Pacific and Milwhite were being mediated in the near future, and concluded that given the possibility that those claims might be resolved soon, no additional bond amount was needed. Although the mediation mentioned in this court’s order requiring the supersedeas bond did not result in settlement, since that time certain motions for partial summary judgment on some of the claims involving Georgia-Pacific and Milwhite have been resolved and the parties have partiсipated in mediation. The parties are set to continue mediation next month. Although the Tremont Parties contend that Halliburton has not obtained independent counsel for the claims of Georgia-Pacific and Milwhite and that the Tremont Parties have been required to remain involved in this litigation as a result, it appears that the Tremont Parties have been submitting legal fees incurred in this case to Halliburton for reimbursement. Given the fact that the claims involving Georgia-Pacific and Milwhite may be resolved in the near future, those claims do not provide a basis for mаintaining the supersedeas bond. 3
The Tremont Parties have also asserted that they have needed to retain Arkansas counsel to have TRE Management removed from the 2000 Administrative Settlement, but, in addition to the fact that
III. Conclusion and Order
The supersedeas bond has fulfilled its purpose and the appeal has been resolved. Halliburton’s request to release the supersedeas bond, (Docket Entry No. 365), is granted.
Notes
. The "Tremont Parties” include TRE Holding Company, TRE Management Company (“TRE Management”), NL Industries, Inc., and Tremont LLC.
. The parties initially also disagreed regard
. Because of the ongoing attempts to mediate, Georgia-Pacific's request that Halliburton "either sign the proposed stipulation, or explаin to the Court on the record precisely how they have complied with the portion of the arbitration award and judgment concerning the Georgia-Pacific leases, or concede that they have not,” need not be resolved at this time. The fact that Halliburton has not agreed to Georgia-Pacific’s stipulation is not a reason to maintain the supersedeas bond.