City of West Sacramento v. R & L Business Management ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 CITY OF WEST SACRAMENTO, No. 2:18-cv-00900 WBS EFB CALIFORNIA; and PEOPLE OF THE 13 STATE OF CALIFORNIA, 14 Plaintiffs, AMENDED MEMORANDUM AND ORDER RE: PLAINTIFFS’ MOTION FOR 15 v. SUMMARY JUDGMENT ON THEIR CLAIMS UNDER THE GATTO ACT 16 R AND L BUSINESS MANAGEMENT, a AND THE HSAA California corporation, f/k/a 17 STOCKTON PLATING, INC., d/b/a CAPITOL PLATING INC., a/k/a 18 CAPITOL PLATING, a/k/a CAPITAL PLATING; CAPITOL PLATING, INC., 19 a dissolved California corporation; et al., 20 Defendants. 21 22 ----oo0oo---- 23 Plaintiffs City of West Sacramento, California and the 24 People of the State of California (collectively, “plaintiffs”) 25 brought this action to address toxic levels of soil and 26 groundwater contamination resulting from the release of hazardous 27 substances from a metal plating facility formerly located at 319 28 1 3rd Street, West Sacramento, California (the “Site”). 2 The court has previously granted summary judgment for 3 plaintiffs on the issue of liability on their claim under the 4 Comprehensive Environmental Response, Compensation, and Liability 5 Act (“CERCLA”), 42 U.S.C. § 9607(a), against defendants R and L 6 Business Management (“R&L”), John Clark, and the Estate of Nick 7 E. Smith (collectively, “defendants”). (Order at 10 (Docket No. 8 125).) The court has also found that triable issues of material 9 fact remain as to plaintiffs’ claims under the Resource 10 Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 7002(a), 11 California public nuisance law, and the Porter-Cologne Water 12 Quality Control Act, Cal. Water Code § 13304(c). (See id. at 14- 13 16; Docket No. 211.) Additionally, after an evidentiary hearing 14 the court has determined that defendants’ contribution to the 15 pollution at the Site is not divisible from the total 16 contamination present at the Site under CERCLA. (See Mem. and 17 Order re: Defendants’ Divisibility Defense (“Divisibility Order”) 18 (Docket No. 203).) The facts and procedural background of the 19 case have been discussed fully in these prior Orders, and will 20 not be repeated here. (See Docket Nos. 125, 203, 211.) 21 The remaining motion before the court is plaintiffs’ 22 motion for partial summary judgment on their Carpenter-Presley- 23 Tanner Hazardous Substance Account Act (“HSAA”) claim, Cal. 24 Health & Safety Code §§ 25363(d), and on their claim under the 25 Gatto Act, Cal. Health & Safety Code §§ 25403.1, 25403.5 and. 26 (See Pls.’ Mot. Partial Summ. J. (“Pls.’ Mot.”) (Docket No. 27 204).) On their Gatto Act claim, the City requests a permanent 28 injunction requiring defendants to investigate and clean up 1 releases of hazardous materials at the Site. (See id. at 32-35.) 2 II. Discussion 3 A. HSAA 4 The HSAA allows any “person who has incurred response 5 or corrective action costs in accordance with [CERCLA to] seek 6 contribution or indemnity from any person who is liable pursuant 7 to [the HSAA].” Cal. Health and Safety Code § 25363(d). For the 8 purposes of the HSAA, a “‘responsible party’ or ‘liable person,’ 9 . . . means those persons described in section 107(a) of 10 [CERCLA].” Id. § 25323(a)(1). Thus, a cost recovery claim under 11 the HSAA has the same elements as a cost recovery claim under 12 CERCLA. Orange Cty. Water Dist. v. Alcoa Glob. Fasteners, Inc., 13 12 Cal. App. 5th 252, 297 (2017); Castaic Lake Water Agency v. 14 Whittaker Corp., 272 F. Supp. 2d 1053, 1084 n.40 (C.D. Cal. 2003) 15 (“HSAA creates a scheme that is identical to CERCLA with respect 16 to who is liable.”). 17 Because the court has already found defendants to be 18 liable under CERCLA § 107 (see Docket No. 125), defendants do not 19 dispute that plaintiffs have satisfied the elements of liability 20 on their claim under the HSAA. (See Defs.’ Opp’n at 2.) 21 Accordingly, plaintiffs’ motion summary judgment on the issue of 22 liability under the HSAA will be granted. Damages have yet to be 23 determined, and plaintiffs do not seek summary judgment on the 24 amount of damages at this time. 25 B. The Gatto Act 26 The Gatto Act authorizes California “local agencies,” 27 including cities and counties, to investigate and clean up 28 properties within their jurisdiction that have been contaminated 1 by hazardous materials and to recover the costs of investigation 2 and cleanup from responsible parties. See Cal. Health & Safety 3 Code §§ 25403.1, 25403.5. Section 25403.1 provides local 4 agencies with investigatory and cleanup authority, subject to 5 certain procedural requirements: 6 A local agency may, in accordance with this chapter, take any action that the local 7 agency determines is necessary and that is consistent with other state and federal laws 8 to investigate and clean up a release on, under, or from blighted property that the 9 local agency has found to be within a 10 blighted area within the local agency’s boundaries due to the presence of hazardous 11 materials following a Phase I or Phase II environmental assessment . . . . 12 13 Cal. Health & Safety Code § 25403.1(a)(1)(A). 14 This section applies “whether the local agency owns 15 that property or not.” Id. In other words, without the need for 16 a court order a local agency may enter blighted property that it 17 does not own to investigate and clean up the property so long as 18 (1) the agency provides the owner of the property with 60 days’ 19 notice to respond and to propose an investigation and/or cleanup 20 plan, and (2) the owner fails to respond or provides an 21 inadequate response. See id. §§ 25403.1(a)(1)(A), 22 25403.1(b)(2)(A). 23 Section 25403.5 further allows local agencies to 24 recover the costs they incur during the investigation and cleanup 25 of a site. See id. § 25403.5. “[I]f a local agency undertakes 26 action to investigate property or clean up, or to require others 27 to investigate or clean up, including compelling a responsible 28 party through a civil injunctive action, a release of hazardous 1 material, the responsible party shall be liable to the local 2 agency for the costs incurred in the action.” Id. Like the 3 HSAA, a “responsible party” for the purposes of the Gatto Act is 4 anyone who qualifies as a responsible party under CERCLA 5 § 107(a). See id. §§ 25403.5(a), 25403(s), 25323.5(a)(1). 6 Defendants again concede that they are responsible 7 parties under the Gatto Act § 25403.5 because the court has 8 already found them to be liable under CERCLA §107(a). (See 9 Defs.’ Opp’n at 2; Docket No. 125.) Defendants also do not 10 dispute that the City has fulfilled the remaining Gatto Act 11 requirements set out in section 25403.1--namely, (1) that 12 “releases” have occurred on the Site, (2) that the City has 13 determined the Site to be a “blighted property” within a 14 “blighted area” within the City’s boundaries due to the release 15 of hazardous materials, (3) that the City’s determination 16 followed Phase I and Phase II environmental assessments of the 17 Site, and (4) that the City provided defendants with requisite 18 notice to respond and to propose an investigation and/or cleanup 19 plan. See id. § 25403.1(a)(1)(A). 20 Therefore, as the court reads the Gatto Act, the City 21 is entitled to enter the Site and take the necessary action to 22 clean up the contamination. No order of this court is required 23 for the City to do so. However, the City asks the court to go 24 further and to order defendants to do the investigation and 25 cleanup themselves. Considering the present posture of this 26 case, the court determines that such an order would be premature 27 and impractical at this time. 28 District courts have broad discretion “to manage their 1 own affairs so as to achieve the orderly expeditious disposition 2 of cases.” Dietz v. Bouldin, 136 S. Ct. 1885, 1891 (2016) 3 (quoting Link v. Wabash R. Co., 370 U.S. 626, 630–31 (1962)); see 4 also Zivkovic v. S. Cal. Edison Co., 302 F.3d 1080, 1087 (9th 5 Cir. 2002). Though the court has already found defendants to be 6 liable under plaintiffs’ CERCLA claim (see Docket No. 125) and 7 this Order finds them to be liable under plaintiffs’ HSAA claim, 8 several of plaintiffs’ claims remain outstanding, including their 9 claims under RCRA, the Porter-Cologne Water Quality Control Act, 10 California public nuisance law, California trespass law, and for 11 declaratory relief. (See Third Am. Compl. (“TAC”) (Docket No. 12 45); Docket Nos. 125, 203, 211.) For the reasons that follow, 13 the court finds that deferring its determination as to whether 14 the City is entitled to permanent injunctive relief under the 15 Gatto Act until final resolution of those remaining claims will 16 aid in the orderly and expeditious disposition of the case. See 17 Dietz, 136 S. Ct. at 1087. 18 Several of plaintiffs’ other outstanding claims also 19 seek some form of permanent injunctive relief requiring 20 defendants to investigate and clean up the Site. (See TAC ¶ 85 21 (“The City is entitled to injunctive relief under RCRA § 7002(a), 22 42 U.S.C. § 6972(a), compelling each defendant jointly and 23 severally to conduct a complete, timely, and appropriate 24 investigation and abatement of all actual and potential 25 endangerments arising from the presence of the Contaminants in 26 the environment at the Site, and to obtain regulatory closure of 27 the Site.”); id. ¶ 144 (“Plaintiffs are entitled to injunctive 28 relief compelling defendants jointly and severally, promptly and 1 competently to take such action as may be necessary to abate the 2 public nuisance at the Site and to obtain regulatory closure of 3 the Site.”); id. ¶ 157 (“The City is entitled to injunctive 4 relief compelling the defendants jointly and severally, promptly 5 and competently to take such action as may be necessary to abate 6 the trespass . . . .”).) 7 Because injunctive relief “must be narrowly tailored to 8 remedy the specific harm shown,” City and Cty. of San Francisco 9 v. Trump, 897 F.3d 1225, 1244 (9th Cir. 2018) (quoting Bresgal v. 10 Brock, 843 F.2d 1163, 1170-71 (9th Cir. 1987)), the precise 11 nature and extent of injunctive relief to which plaintiffs are 12 entitled will depend on which, if any, of those claims are 13 successful.1 14 For example, RCRA § 7002(a) authorizes an injunction 15 where a plaintiff can successfully show that a defendant was a 16 past or present generator of hazardous waste, contributed to the 17 handling, storage, treatment, or disposal of hazardous waste, and 18 that the hazardous waste “may present an imminent and substantial 19 endangerment to health or the environment.” See 42 U.S.C. § 20 6792(a); Meghrig v. KFC W., Inc., 516 U.S. 479, 484 (1996); 21 LAJIM, LLC v. Gen. Elec. Co., 917 F.3d 933, 943 (7th Cir. 2019). 22 California public nuisance law also authorizes injunctive relief 23 to abate a nuisance--i.e., something that is “injurious to 24 health” or “offensive to the senses”--where a plaintiff can show 25 that a defendant was a substantial factor in causing the 26 27 1 The court expresses no opinion in this Order as to the merits of any of plaintiffs’ claims beyond their Gatto Act and 28 HSAA claims. 1 nuisance, that the nuisance is “substantial and unreasonable,” 2 and that the nuisance affects an entire community or neighborhood 3 at the same time. See Cty. of Santa Clara v. Atl. Richfield Co., 4 137 Cal. App. 4th 292, 306 (2006); Cal. Code Civ. P. § 731. 5 Thus, if defendants are found to be liable under RCRA 6 § 7002(a), and the court finds that injunctive relief is 7 warranted, the court will have to shape any injunctive relief to 8 account for the “imminent and substantial endangerment” that the 9 hazardous waste at the Site poses to health or the environment. 10 See 42 U.S.C. § 6792(a); San Francisco, 897 F.3d at 1244. But if 11 defendants are also found to be liable under public nuisance law, 12 the injunction may take a different form, as the court will have 13 to ensure that the Site is remedied to the point that conditions 14 there are no longer “substantial and unreasonable” or “injurious 15 to health or offensive to the senses.” Santa Clara, 137 Cal. 16 App. 4th at 306. 17 Because plaintiffs’ remaining claims have the potential 18 to alter the scope and extent of any eventual injunctive relief 19 in this way, the court finds that, regardless of whether the City 20 is entitled to an injunction under the Gatto Act,2 issuing a 21 2 Whether the Gatto Act authorizes suits for injunctive 22 relief is not entirely clear. Section 25323.5 of the Act contemplates that, in instances where a local agency “undertakes 23 action to investigate property or clean up, or to require others to investigate or clean up, including compelling a responsible 24 party through a civil injunctive action, a release of hazardous material, the responsible party shall be liable to the local 25 agency for the costs incurred in the action.” See Cal. Health & Safety Code §§ 25323.5(a). One California Court of Appeals has 26 held that similar language contained in the Polanco Redevelopment 27 Act, when read in concert with language authorizing redevelopment agencies to take “any action” necessary to remove hazardous 28 substances from properties within a redevelopment project area, 1 permanent injunction prior to final judgment would be premature. 2 Cf. Lincoln Props., Ltd. v. Higgins, No. S-91-760 DFL GGH, 1993 3 WL 217429 at *16 (E.D. Cal. Jan. 21, 1993) (stating that, 4 although plaintiff was entitled to injunctive relief under RCRA 5 and public nuisance law at summary judgment stage, “[t]he precise 6 nature and scope of injunctive relief shall be determined, and 7 the injunction shall issue, at a later date”). 8 Moreover, issuing permanent injunctive relief at this 9 10 authorized redevelopment agencies to seek injunctive relief requiring responsible parties to clean up hazardous substances on 11 property within a redevelopment project area. See Redev. Agency of San Diego v. San Diego Gas & Elec. Co., 111 Cal. App. 4th 912, 12 920 (2003). This interpretation may also apply to the language in 13 the Gatto Act, inasmuch as the California Legislature has declared the Gatto Act to be the “policy successor to the Polanco 14 Redevelopment Act” and “that any judicial construction or interpretation of the Polanco Redevelopment Act also apply to [the 15 Gatto Act].” Cal. Health & Safety Code § 25403.8. On the other hand, plaintiffs do not point to, and the 16 court is not aware of, any case in which a local agency has obtained an injunction under the Gatto Act compelling a 17 responsible party to investigate or clean up a site contaminated 18 with hazardous materials. The Act’s text and structure seem overwhelmingly concerned with authorizing local agencies to 19 investigate, clean up, and recover costs for contaminated sites themselves. See Cal. Health & Safety Code § 25403.1-25403.5. 20 For instance, the Act imposes a number of detailed requirements on local agencies to ensure that their investigations and/or 21 cleanups receive California Department of Toxic Substances 22 Control (“DTSC”) or the appropriate regional water board approval. See, e.g., id. § 25403.1(a)(2)(B) (requiring that the 23 local agency “submit an investigation plan and cost recovery agreement to the regional board or the department for review and 24 approval” before taking action to clean up the release); § 25403.1(a)(2)(C) (“After completion of the investigation plan, 25 have a cleanup plan prepared by a qualified independent contractor.”). These requirements would seem to be superfluous 26 if local agencies were simply entitled to injunctive relief 27 compelling responsible parties to investigate and clean up the site instead of the agency. However, the court does not resolve 28 that issue at this time. ee nee en ne nnn nn nn nn on nn IE OE ONE ED eee 1 juncture would be inconsistent with Orders previously issued by 2 the court pertaining to plaintiffs’ CERCLA § 107 claim. (See 3 Docket Nos. 125, 203). Since the court has already found 4 | defendants to be jointly and severally liable for plaintiffs’ 5 necessary response costs under CERCLA § 107 (see id.), this Order 6 finds that the defendants are also liable under the HSAA, and the 7 City has its remedies under the Gatto Act, the City will be 8 entitled to enter the Site, perform its own investigation and 9 cleanup, and to recover the resulting costs from defendants. See 10 42 U.S.C. § 9607 (a); Cal. Health & Safety Code $§ 25363 (d), 11 25403.5. Either the City should do the cleanup or the defendants 12 should; to have both of them doing it at the same time would 13 | potentially lead to chaos. This potential conflict would more 14 appropriately be resolved at the time of final judgment, when the 15 | precise scope of the plaintiffs’ remedy under CERCLA and their 16 other claims are determined after hearing. 17 IT IS THEREFORE ORDERED that plaintiffs’ motion for 18 summary judgment on the issue of liability on their claim under 19 the Carpenter-Presley-Tanner Hazardous Substance Account Act, 20 Cal. Health & Safety Code $§ 25363(d), is hereby GRANTED; 21 AND IT IS FURTHER ORDERED that plaintiffs’ motion for 22 summary judgment on their claim for violation of the Gatto Act, 23 Cal. Health & Safety Code §§ 25403.1, 25403.5, is hereby DENIED. 24 Dated: December 15, 2020 L - ak. 25 WILLIAMB.SHUBB 26 UNITED STATES DISTRICT JUDGE 27 28 10