Sanofi-aventis Wins Dismissal of Lawsuit
November 20, 2007
Cleary Gottlieb won the dismissal of a lawsuit against sanofi-aventis by Rhodia, formerly a subsidiary of a predecessor of sanofi-aventis, for reimbursement of costs Rhodia incurred remediating environmental damages at an elemental phosphorus production site in Montana that Rhodia acquired from sanofi-aventis’s predecessor in 1998.
In moving to dismiss the complaint, sanofi-aventis argued that Rhodia had previously released its claims for contribution under CERCLA and common law, when the parties entered into an indemnity agreement to settle Rhodia’s environmental claims against sanofi-aventis’s predecessor and that, in any event, any dispute about the scope of Rhodia’s release is arbitrable under the agreement’s arbitration clause. In dismissing the complaint, Chief Judge Brown of the U.S. District Court in Trenton rejected Rhodia’s argument that its claims fell outside the scope of the indemnity agreement.
The Court also granted Cleary Gottlieb’s motion on behalf of sanofi-aventis’s co-defendant and indemnitee Bayer CropScience, which was also in the chain of title to the Montana site, on the ground that Rhodia had effectively released its CERCLA and contribution claims when it entered into an asset contribution agreement with Bayer in 1998.
The Court deferred a ruling on Rhodia’s one remaining claim for negligence, but stayed prosecution of that claim pending the outcome of the arbitration between Rhodia and sanofi-aventis.
If Rhodia seeks arbitration against sanofi-aventis, it will reprise a prior arbitration between the parties in which Cleary Gottlieb represented sanofi-aventis, and in which the arbitrators rejected Rhodia’s environmental indemnification claims on the ground that they had been released.