Case 3:07-cv-01955-BAS-WVG Document 133 Filed 02/08/24 PageID.3093 Page 1 of 8
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF CALIFORNIA
`
`SAN DIEGO UNIFIED PORT
`DISTRICT,
`
`Plaintiff,
`
`v.
`GENERAL DYNAMICS
`CORPORATION; LOCKHEED
`MARTIN CORPORATION;
`LOCKHEED MARTIN
`ENGINEERING & SCIENCES
`COMPANY,
`
`Case No. 07-cv-1955-BAS-WVG
`ORDER DENYING WITHOUT
`PREJUDICE PLAINTIFF SAN DIEGO
`UNIFIED PORT DISTRICT’S MOTION
`TO ENFORCE SETTLEMENT
`(ECF No. 118)
`
`
`
`Defendants.
`
`
`
`These consolidated actions arise out of environmental contamination emanating from
`
`two properties located alongside the San Diego Bay. The San Diego Unified Port District
`sued General Dynamics Corporation and Lockheed Martin Corporation for allegedly
`contaminating sediment in the San Diego Bay while conducting industrial activities at the
`properties.
`
`In 2017, the Court approved the parties’ 300-page Settlement Agreement. As part of
`the settlement, Lockheed Martin agreed to take remedial action that satisfies the San Diego
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`Case 3:07-cv-01955-BAS-WVG Document 133 Filed 02/08/24 PageID.3094 Page 2 of 8
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`Regional Water Quality Control Board. Events, however, have not gone as planned.
`Lockheed Martin and the Regional Water Board are embroiled in a dispute over the scope
`of the remediation. Lockheed Martin claims the Regional Water Board drastically moved
`the goalposts for the cleanup, leading to a petition for writ of mandate in the San Diego
`Superior Court. That lawsuit seeks to force the Regional Water Board to restore cleanup
`terms similar to those Lockheed Martin contends the parties contemplated in their
`Settlement Agreement. The petition also argues the settlement in this Court has been
`“vitiated” by the agency’s new cleanup terms. The Regional Water Board is not a party to
`the lawsuit in this Court, however. The dispute in this Court instead concerns how liability
`for the contamination should be allocated among the three potentially responsible parties.
`
`The Port District now moves to enforce the Settlement Agreement, arguing Lockheed
`Martin is in breach of its promises. The Port District asks the Court to compel Lockheed
`Martin to complete the cleanup and withdraw pleadings in the lawsuit against the Regional
`Water Board. The motion also asks the Court to enjoin the state court “from entering any
`rulings on the subject matter of the Settlement.” Lockheed Martin contends the Port
`District’s motion is unripe because if the company succeeds in state court, this Court’s
`ruling would likely be moot. General Dynamics weighs in, too, arguing concessions in
`Lockheed Martin’s response address the gravamen of the Port District’s motion, and the
`parties have not complied with their dispute resolution procedure.
`
`The Court agrees. To leave no doubt, the Settlement Agreement approved in this
`Court remains in full force and effect and binds the Port District, Lockheed Martin, and
`General Dynamics. This Court has exclusive jurisdiction to interpret and enforce the
`Settlement Agreement. That said, the Court is unpersuaded that intervening in Lockheed
`Martin’s dispute with the Regional Water Board is appropriate. The Court is likewise
`unconvinced that the Port District has complied with the Settlement Agreement’s dispute
`resolution procedure. Hence, for the following reasons, the Court DENIES WITHOUT
`PREJUDICE the Port District’s Motion to Enforce Settlement (ECF No. 118).
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`Case 3:07-cv-01955-BAS-WVG Document 133 Filed 02/08/24 PageID.3095 Page 3 of 8
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`I. BACKGROUND
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`The Court summarized the history of this long-running dispute in its Order Granting
`Motion to Confirm Settlement and Bar and Dismiss Claims (“Dismissal Order”). (ECF
`No. 105.) Hence, the Court provides only a snapshot here.
`
`Settlement. Under the Settlement Agreement, the parties deny liability but agree to
`contribute time and resources toward remediating the contamination. (Settlement
`Agreement §§ 2.1–2.3, 5.1, ECF No. 106-1.) Lockheed Martin agreed to implement the
`Remedial Action Plan required under the Regional Water Board’s Cleanup and Abatement
`Order (“CAO”). (Id. § 2.1(a).) Based on the then-proposed Remedial Action Plan, the
`estimated cost to remediate the premises was $3.3 million. (Gigounas Decl. ¶¶ 13–14, ECF
`No. 105-5.) Lockheed Martin also agreed to remove certain installations and
`improvements under a proposed demolition plan. (Settlement Agreement § 2.1(b).) As for
`General Dynamics, it promised to contribute to the cleanup by paying $850,000 to
`Lockheed Martin. (Id. § 2.3.) Meanwhile, the Port District agreed to abate rent for
`Lockheed Martin, contribute staff time for a Coastal Development Permit, and waive
`certain claims for reimbursement and damage to natural resources. (Id. § 2.2(a), (d).)
`Finally, the parties agreed to a dispute resolution process:
`
`
`Each Party agrees to provide the other Parties no fewer than thirty calendar
`days’ notice of any dispute, claim, or difference arising out of or in connection
`with this Agreement, or the breach or invalidity thereof, including disputes
`related to disposal of contaminated dredge spoils in the future, prior to
`commencing any proceedings in any court or tribunal. During the thirty day
`notice period, the Settling Parties agree to attempt in good faith to resolve the
`issue. If the Settling Parties do not reach resolution of the issue, any dispute
`concerning this Agreement or disposal costs must be resolved first by
`participation in a mediation with Timothy Gallagher, or with another mediator
`mutually agreed upon by the parties. Only if such mediation is unsuccessful
`shall the parties seek relief in the United States District Court for the Southern
`District of California. To the maximum extent permitted by law, the Settling
`Parties agree to personal jurisdiction, subject matter jurisdiction, and venue in
`that Court for purposes of resolving disputes under this Agreement.
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`Case 3:07-cv-01955-BAS-WVG Document 133 Filed 02/08/24 PageID.3096 Page 4 of 8
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`(Id. § 7.3 (emphasis added).)
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`After a hearing, the Court approved the parties’ settlement. (ECF Nos. 111, 112.)
`The Court incorporated the Settlement Agreement throughout its Dismissal Order. (E.g.,
`Dismissal Order 7:10–8:13, 20:14–22:2.) Further, upon dismissing the parties’ claims with
`prejudice, the Court expressly retained jurisdiction:
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`The Court shall retain jurisdiction over both the subject matter of this
`Settlement Agreement and the parties for the duration of the performance of
`the terms and provisions of the Settlement Agreement for the purpose of
`enabling the parties, and each of them, to apply to the Court at any time for
`such further order, direction, and relief as may be necessary or appropriate to
`construe, implement, or enforce compliance with the terms of the Settlement
`Agreement, which rights and obligations shall survive the dismissal of these
`actions.
`(Id. 21:15–21.)
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`Petition. Events did not unfold as expected. In 2023, Lockheed Martin filed a
`Verified Petition for Writ of Mandate and Request for Stay against the Regional Water
`Board and the California State Water Resources Control Board. (State Pet., ECF No. 118-
`11.) Lockheed Martin’s lawsuit allegedly follows several years’ worth of negotiations and
`disputes with Regional Water Board on the scope of the cleanup. (Id. ¶¶ 36–68.)
`
`In the Petition, Lockheed Martin claims it “is ready, willing, and able to execute the
`background cleanup that was mutually agreed upon” in the Settlement Agreement. (State
`Pet. ¶ 2.) Lockheed Martin contends, however, that the Regional Water Board violated
`state law by “dramatically moving the goal posts” for the cleanup and issuing “an entirely
`new CAO in August 2022.” (Id. ¶¶ 3, 5.) This new CAO allegedly upends the Settlement
`Agreement “and decades of work by multiple parties and consultants—an administrative
`process that took nearly fifteen months, during which time the Site could have been
`remediated.” (Id. ¶ 5 (emphasis omitted).) Hence, Lockheed Martin advances various
`theories to convince the San Diego Superior Court to require the Regional Water Board to
`rescind the 2022 CAO and return to the 2017 cleanup proposal. (Id. ¶¶ 167–215.)
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`Case 3:07-cv-01955-BAS-WVG Document 133 Filed 02/08/24 PageID.3097 Page 5 of 8
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`As part of its arguments, Lockheed Martin also casts doubt on the continued viability
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`of the Settlement Agreement. One of Lockheed Martin’s state court arguments is that the
`Regional Water Board improperly omitted the Port District and General Dynamics from
`the 2022 CAO as responsible parties. (State Pet. ¶¶ 125–139.) Lockheed Martin contends
`that “while the terms of the 2017 Settlement Agreement have not changed, the 2017
`Settlement Agreement itself was vitiated upon issuance of an entirely new and substantially
`different CAO and that Lockheed Martin does not agree to be the sole implementing party
`of the expanded cleanup.” (Id. ¶ 130.) Thus, Lockheed Martin claims the Settlement
`Agreement “does not govern [the parties’] respective allocation of liability at the
`[properties] under the 2022 CAO.” (Id. ¶ 134.)
`
`The Port District now moves to enforce the Settlement Agreement in light of
`Lockheed Martin’s Petition and failure to complete the cleanup. (ECF No. 118.) Lockheed
`Martin opposes. (ECF No. 129.) Both the Port District and General Dynamics reply. (ECF
`Nos. 130, 131.) The Court finds this Motion suitable for determination on the papers
`submitted and without oral argument. See Fed. R. Civ. P. 78(b); Civ. L. R. 7.1(d)(1).
`II. ANALYSIS
`
`The Court begins by confirming its jurisdiction. A court may retain ancillary
`jurisdiction to enforce a settlement agreement if the parties agree and the court embodies
`the agreement in its dismissal order. Kelly v. Wengler, 822 F.3d 1085, 1095 (9th Cir. 2016)
`(citing Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 381 (1994)). As recapped
`above, the Court incorporated the parties’ Settlement Agreement throughout its Dismissal
`Order and expressly retained jurisdiction at the parties’ request. Lockheed Martin
`unequivocally subjected itself to this Court’s jurisdiction and panoply of enforcement
`powers. (Dismissal Order 21:15–21.) The Court thus can consider the Port District’s claim
`that Lockheed Martin is in breach of the Settlement Agreement and has therefore violated
`the Dismissal Order. See id. at 1095–96 (affirming court’s civil contempt finding and
`award of attorneys’ fees based on breach of an incorporated settlement agreement).
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`Case 3:07-cv-01955-BAS-WVG Document 133 Filed 02/08/24 PageID.3098 Page 6 of 8
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`The Port District contends Lockheed Martin breached the parties’ deal by failing to
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`complete the cleanup, by challenging the enforceability of the Settlement Agreement in
`state court, and by neglecting to complete certain demolition in a timely manner. (Mot.
`7:17–20:15.) Lockheed Martin counters that the Motion is premature because the
`resolution of its state court action “will narrow the outcomes of the Port’s Motion” and
`likely moot this Court’s ruling. (Opp’n 11:2–3, 12:10–13:7.) In addition, Lockheed Martin
`admits that “this Court presides over the Settlement” and contends it would be improper to
`presume the state court will rule that Lockheed Martin can escape the Settlement
`Agreement. (Id. 1:16, 14:13–15:13.) General Dynamics weighs in last. It argues the Port
`District’s motion is moot because Lockheed Martin’s Opposition addresses the substance
`of the Port’s demands. (Reply 1:14–16.)
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`At this juncture, the Court is persuaded that wading into the state court dispute is
`unnecessary. The Court has reviewed Lockheed Martin’s Verified Petition for Writ of
`Mandate. The linchpin of Lockheed Martin’s suit is that the Regional Water Board’s
`conduct is unlawful under state law. The Court expresses no opinion on the merits of
`Lockheed Martin’s claims. It is enough to say here, however, that the Court finds
`interfering with Lockheed Martin’s action against a nonparty is unwarranted—without
`reaching the parties’ arguments concerning the Anti-Injunction Act. See Flanagan v.
`Arnaiz, 143 F.3d 540, 545 (9th Cir. 1998) (noting the exceptions to the Anti-Injunction Act
`“allow federal courts to enjoin state courts in cases where ‘some federal injunctive relief
`may be necessary to prevent a state court from so interfering with a federal court’s
`consideration or disposition of a case as to seriously impair the federal court’s flexibility
`and authority to decide that case’” (quoting Atl. Coast Line R. Co. v. Bhd. of Locomotive
`Engineers, 398 U.S. 281, 295 (1970))). There is a dispute between Lockheed Martin and
`the Regional Water Board over the scope of the cleanup required, and any ruling by the
`state court would either moot this Court’s determination or require the parties to overhaul
`their briefing and positions. Indeed, if Lockheed Martin prevails, it will need to complete
`the cleanup contemplated by the 2017 CAO and will lack a justification if it fails to do so.
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`Case 3:07-cv-01955-BAS-WVG Document 133 Filed 02/08/24 PageID.3099 Page 7 of 8
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`If Lockheed Martin does not prevail, it will need a determination from this Court
`interpreting the Settlement Agreement as not applying to the 2022 CAO. Lockheed Martin
`will otherwise be in breach of the Settlement Agreement and in violation of the Court’s
`Dismissal Order.
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`At the same time, the Court appreciates the Port District’s concern over Lockheed
`Martin’s arguments addressing the “vitiation” of the Settlement Agreement. The Court
`underscores that the Dismissal Order remains in full force and effect. The incorporated
`Settlement Agreement binds the Port District, Lockheed Martin, and General Dynamics.
`And this Court’s jurisdiction over the matter is exclusive. Even where a court’s retention
`of jurisdiction does “not include the word ‘exclusive,’” the Ninth Circuit reasons
`“exclusivity is inferred” because “it would make no sense for the district court to retain
`jurisdiction to interpret and apply its own judgment to the future conduct contemplated by
`the judgment, yet have a state court construing what the federal court meant in the
`judgment.” Flanagan, 143 F.3d at 545; accord Republic Bldg. Co., Inc. v. Charter Twp.
`of Clinton, Michigan, 81 F.4th 662, 668 (6th Cir. 2023) (“When a consent judgment
`contains a provision stating that a court retains jurisdiction over its interpretation and
`enforcement, that jurisdiction is presumed exclusive.”). Hence, only this Court may
`enforce compliance with the Dismissal Order or determine that the Settlement Agreement
`has been “vitiated.” Moreover, federal courts like this one presume state courts follow the
`law. E.g., Jeffers v. Lewis, 38 F.3d 411, 415 (9th Cir. 1994). Thus, given these rules and
`Lockheed Martin’s admission that this Court presides over the Settlement Agreement, the
`Court finds granting further relief is not warranted.
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`The Court turns to one final issue. General Dynamics argues the parties’ multi-step
`dispute resolution process has not been followed and “asks the Court to ensure that the
`parties comply with the Settlement Agreement’s dispute resolution provisions to ensure
`that its rights are protected.” (Reply 2:17–18.) This point is well taken. The Port District
`does not demonstrate it complied with the process excerpted above, including for its
`argument that Lockheed Martin has failed to complete certain demolition under the
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`Settlement Agreement. The Court thus will deny without prejudice the Port District’s
`motion. The Court reminds Lockheed Martin, too, that any claim that the Settlement
`Agreement has been invalidated will need to proceed under this process and include
`General Dynamics’s participation. The Court therefore will order the parties to comply
`with the Settlement Agreement’s dispute resolution process and require that any future
`request submitted to this Court include evidence of this compliance.
`III. CONCLUSION
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`In light of the foregoing, the Court DENIES WITHOUT PREJUDICE the Port
`District’s Motion to Enforce the Settlement Agreement (ECF No. 118). The Court
`confirms that the Dismissal Order and the Settlement Agreement incorporated therein
`remain in full force and effect. Further, the Court ORDERS the parties to comply with the
`Settlement Agreement’s “Disputes” provision—§ 7.3. Any dispute submitted to this Court
`concerning the Settlement Agreement, including a renewal of the Port District’s Motion,
`must be accompanied by a declaration attesting that each step of the dispute resolution
`process has been satisfied.
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`IT IS SO ORDERED.
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`DATED: February 8, 2024
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