Union Oil Co. v. Terrible Herbst, Inc.

Dissenting:

I must respectfully dissent. I would not presume to secondguess the district court judge on a matter of state law that has not been decided by the state’s Supreme Court. I prefer to certify to the Nevada Supreme Court the question of whether Nevada law recognizes forbearance of a stale claim as adequate consideration. As we noted in Kremen v. Cohen, 325 F.3d 1035, 1038 (9th Cir.2003), “we have an obligation to consider whether novel state-law questions should be certified—and we have been admonished in the past for failing to do so.” (citation omitted). Having so considered, I would certify.

Opinion by Judge RICHARD S. ARNOLD; dissent by Judge RAWLINSON.

OPINION

This appeal involves a contract dispute over who is responsible for cleaning up pollution beneath a gas station. Union Oil Company of California (Unocal) bought the service station from Terrible Herbst, Inc., in 1986 on the condition that Herbst would clean up the site. In 1990, the Nevada Department of Environmental Protection (NDEP) relieved Herbst of the duty to monitor the site but did not relieve it of liability for any damage it had already done there. The site remained polluted, but it was not clear whether Unocal or Herbst was at fault. Seven years later, as a precursor to settlement talks over who was responsible for cleaning up the land, Unocal and Herbst signed a series of agreements in which Herbst agreed that the statute of limitations would not run and that it would waive its statute-of-limitations defense as to any claims that Unocal “may assert” against Herbst. A year later, Unocal brought this breach-of-eon-tract suit against Herbst and received a jury verdict of approximately a million dollars. The District Court, however, entered judgment as a matter of law for Herbst on the grounds that…