Ninth Circuit Upholds $18M Default Judgment for Energy Client

November 8, 2022 | Client Results

Members of the Jackson Walker appellate team—Jennifer Caughey and Peter Hansen, along with Chris Thompson and Dan Vineyard—obtained a unanimous appellate victory in the Ninth Circuit Court of Appeals. That victory preserves an $18 million default judgment.

This dispute arises out of environmental clean-up work. In 2019, Jackson Walker’s client sued a property owner under CERCLA and the California Health & Safety Code to recover clean-up costs, caused by that owner/operator, for a toxic landfill. The property owner was a suspended corporation that did not defend itself, and the district court entered an $18M default judgment.

Under California law, Jackson Walker’s client could recover this judgment directly from the corporation’s insurers. The client—advised by Chris Thompson and Dan Vineyard at the trial level—notified the insurers of the lawsuit. Despite this—and asserting that they nonetheless lacked the requisite notice—the insurers did not seek to intervene until after the judgment had been entered, and after the time to appeal had lapsed. The district court denied intervention as untimely. An insurer appealed.

On appeal, Jackson Walker obtained a unanimous Ninth Circuit judgment affirming the district court’s denial of the motion to intervene. The Ninth Circuit agreed with the Jackson Walker appellate team that the insurer received adequate notice that its interests were in jeopardy long before it sought to intervene, and the insurer offered no non-conclusory reason for its delay.

The opinion serves as an important reminder of what potential intervenors must do to protect their interests. It confirms the standard for when one must intervene: when that party should have known that its interests might not be adequately protected by existing parties to the lawsuit.

“It was a fantastic victory all around,” said Jennifer Caughey, the lead appellate attorney in the case and the chair of the Jackson Walker’s Appellate practice. “It’s rare to get a large default judgment—and it’s also rare to uphold one in the Ninth Circuit.” And yet, this was one of the fastest victories our team has ever secured: the favorable opinion was released just one day after oral argument was scheduled. “We were correct on the law, and we presented a strong case to the Court of Appeals,” she commented. Peter Hansen, who handled the appeal with Jennifer, echoed these sentiments; he followed up that “The Ninth Circuit decision is an important affirmation of intervention principles.”

“It’s rare to get a large default judgment—and it’s also rare to uphold one in the Ninth Circuit.”

Christopher Thompson and Daniel Vineyard represented the client at trial, and Jennifer Caughey, Peter Hansen, Danica Milios, and Christopher Thompson handled the appeal.

Meet JW

Since 1887, Jackson Walker has grown to become a full-service national firm serving clients from seven Texas offices. With about 30% of the firm’s more than 450 attorneys practicing litigation, JW has one of the largest trial practices in the Southwest and has been identified among the top law firms “Most Feared in Litigation” by BTI Consulting Group in 2022 and 2023 for demonstrating a “fearless nature, urgency, relentlessness, and an aggressive strategy.” For more information about Jackson Walker’s experience assisting clients with the legal challenges of a Superfund site, visit our Environmental Litigation & Toxic Tort and Superfund practice pages. For more information about appellate lawyers Jennifer Caughey and Peter Hansen, please view their website biographies.