Opinion
No. C 00-0256 SI
January 25, 2001
ORDER GRANTING MOTION FOR SUMMARY JUDGMENT
On January 19, 2001, the Court heard argument on defendants' motion for summary judgment. Having considered the arguments of counsel and the papers submitted, the Court hereby GRANTS defendants' motion.
BACKGROUND
Plaintiff San Francisco BayKeeper, Inc. ("BayKeeper") is a California non-profit organization dedicated to the preservation, protection, and defense of the environment, wildlife, and natural resources of the San Francisco Bay. Third Supplemental Complaint ("TSC") ¶ 7. Tosco Corporation, a Nevada corporation, owned and operated a petroleum coke facility ("Diablo facility") located in Pittsburg, California, on the New York Slough, in the San Francisco Bay estuary. TSC ¶¶ 8, 9.
On September 2, 1999, March 29, 2000 and July 24, 2000, BayKeeper sent notices of intent to sue to Tosco, to the Environmental Protection Agency ("EPA"), the Regional Administrator of the EPA, the State Water Resources Control Board of California ("State Board"), and the California Regional Water Control Board, San Francisco Bay Region ("Regional Board"). TSC ¶ 2. On January 24, 2000, BayKeeper filed an action in federal court against Tosco asserting violations of the Clean Water Act ("CWA") and California's Unfair Competition Law.
The Clean Water Act, 33 U.S.C. § 1251 et seq., makes it unlawful to discharge any pollutant into the nation's water except in compliance with the Clean Water Act. See 33 U.S.C. § 1311. The Clean Water Act empowers each state to establish a program to provide National Pollution Discharge Elimination System permits ("NPDES permits"), authorizing the discharge of certain pollutants. 33 U.S.C. § 1342. According to plaintiffs complaint, the State Board has issued a General Industrial Permit for discharges of storm water associated with industrial activity. This permit and the CWA require permit holders to eliminate storm water discharges that cause pollution or harm; implement a Storm Water Pollution Prevention Plan and a Monitoring and Reporting Program; employ the best available technology to control storm water discharges; and fulfill certain monitoring and reporting requirements. TSC ¶¶ 14-15.
According to BayKeeper's complaint, petroleum coke at the Diablo facility is stored in uncovered piles and is loaded onto ships via uncovered conveyors. TSC ¶ 16. Plaintiff alleges that Tosco unlawfully discharges petroleum coke when the coke spills during loading, when the wind blows discharges from storage piles, and through storm water discharges. TSC ¶¶ 18-19. Plaintiff also asserts that Tosco did not obtain individual NPDES permits regulating its stormwater and direct discharges. TSC ¶¶ 25-26. BayKeeper seeks relief under the Clean Water Act for Tosco's failure to: (1) obtain an individual NPDES permit authorizing direct discharge of pollutants to receiving waters; and (2) comply with the requirements of the General Industrial Permit. TSC ¶ 32. BayKeeper further seeks relief under California's Unfair Competition Act ("UCL"), California Business and Professions Code § 17200 et seq., based upon the Clean Water Act violations and violations of the California Water Code and Fish and Game Code. Plaintiff requests declaratory and injunctive relief and civil penalties against Tosco, as well as disgorgement of profits. TSC ¶¶ 33-35, 43, 56.
On August 31, 2000, Tosco sold the Diablo facility to Ultramar Diamond Shamrock Corporation ("Ultramar"). On December 1, 2000, defendants filed a motion for summary judgment, arguing that the sale of the facility renders plaintiffs Clean Water Act claims moot. BayKeeper opposes Tosco's motion for summary judgment, arguing that its Clean Water Act claims are not moot because this Court retains the power to order effectual relief.
LEGAL STANDARD
Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553 (1986). The moving party, however, has no burden to negate or disprove matters on which the non-moving party will have the burden of proof at trial. The moving party need only point out to the Court that there is an absence of evidence to support the non-moving party's case. See id. at 325, 106 S.Ct. at 2554.
The burden then shifts to the non-moving party to "designate `specific facts showing that there is a genuine issue for trial.'" Id. at 324, 106 S.Ct. at 2553 (quoting Fed.R.Civ.P.56(e)). To carry this burden, the non-moving party must "do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356 (1986). "The mere existence of a scintilla of evidence . . . will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party]." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2519 (1986).
In deciding a motion for summary judgment, the evidence is viewed in the light most favorable to the non-moving party, and all justifiable inferences are to be drawn in its favor. Id. at 255, 106 S.Ct. at 2513. "Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge [when she] is ruling on a motion for summary judgment." Id.
DISCUSSION
1. Clean Water Act Claims
This current posture of this case implicates the jurisdictional doctrine of mootness set within the particular confines and limitations of a Clean Water Act citizen suit. Tosco, as the party asserting mootness, carries the heavy burden of demonstrating that this case is moot. See. e.g., Tinoqui-Chalola Council of Kitanemuk and Yowlumne Tejon Indians v. U.S. Dep't of Energy, 232 F.3d 1200, 2000 WL 1720646 (9th Cir. 2000). However, the Court finds that in light of the post-complaint sale of the Diablo facility, Tosco has met this heavy burden and this action has become moot.
Tosco asserts that after the sale of the Diablo facility to Ultramar, BayKeeper's CWA claims are moot because Tosco no longer operates the facility and Tosco cannot commit the violations asserted in BayKeeper's complaint. Under the Clean Water Act mootness standard announced by the Supreme Court in Friends of the Earth v. Laidlaw Environmental Services, Inc., 528 U.S. 167, 189 (2000), a CWA case might become moot if it is "`absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur.'" Id. (citing United States v. Concentrated Phosphate Export Assn., 393 U.S. 199, 203 (1968). Tosco asserts that in this case, where Tosco no longer owns or operates the Diablo facility, it is absolutely clear that the alleged violations cannot reasonably be expected to recur. Tosco also asserts that because it no longer owns or operates the Diablo facility it cannot be making the discharges BayKeeper alleges, and there can no longer be any conflict between BayKeeper and Tosco over such discharges. In addition toLaidlaw, Tosco relies on a series of Supreme Court cases addressing mootness in the context of voluntary cessation of wrongful conduct which also indicate that a case can become moot where the wrongful behavior could not reasonably be expected to recur. See. e.g., Gwaltney v. Chesapeake Bay Foundation, 484 U.S. 49, 66-67 (1987) ("Longstanding principles of mootness, however, prevent the maintenance of suit when there is no reasonable expectation that the wrong will be repeated") (internal quotations omitted); United States v. Consolidated Phosphate Export Assn., 393 U.S. 199. 203 (1968) (rejecting mootness where possibility of effective relief remained and defendants failed to demonstrate that allegedly wrongful acts could not reasonably be expected to recur).
Tosco relies on a number of other cases to support its argument that mootness may occur where wholly past harms cannot be undone. The Court finds those cases inapposite as they address mootness where the plaintiff no longer has a concrete interest in the outcome of the litigation, see Pasadena City Board of Education v. Spangler, 427 U.S. 424, 430-31 (1976), or discuss the mootness exception for cases capable of repetition yet evading review. See, e.g., Presier v. Newkirk, 422 U.S. 395, 401-03 (1975); Weinstein v. Bradford, 423 U.S. 147, 147-49 (1975).
BayKeeper argues, however, that Tosco's CWA violations at the facility are ongoing and asserts that Tosco has retained liability for those violations. BayKeeper notes that under the terms of the agreement for the sale of the Diablo facility to Ultramar, Tosco retained liability for damages caused, or remediation necessitated by, Tosco operations of the facility. Under the terms of the agreement, Tosco would remain liable for remediation ordered by the Regional Board under the existing Cleanup and Abatement Order ("CAO"), and liable for any injunctive or remedial relief ordered by this Court. Tosco also retained a "remediation easement," allowing Tosco access to the facility for the purpose of performing remediation under the agreement. BayKeeper argues that, by its current motion, Tosco seeks to escape the liabilities it bargained for in the sale agreement.
The Court finds, however, that the fact that Tosco retained liability for CWA violations under its sale agreement does not preclude a determination that this citizen suit has become moot due to post-complaint events. For example, a determination of mootness in this action does not impact Tosco's liabilities under the agreement stemming from violations of the CWA prosecuted by the Regional Board or the EPA. Moreover, simply because a party retains certain liabilities under a contract does not mean that an action cannot become moot under the CWA. The mootness question does not address allocation of liability, but addresses whether there is a current case or controversy between the parties as determined by the particular cause of action at issue.
BayKeeper also argues that this Court retains the power to order Tosco to cease ongoing violations. In the Third Supplemental Complaint, BayKeeper asserts that Tosco is in violation of the CWA for discharges "of stormwater associated with industrial activity" from the Diablo facility, and discharges of petroleum coke "from their facility into the receiving waters" during loading and storage. TSC ¶¶ 18, 19. However, Tosco no longer owns and operates the facility and therefore cannot discharge stormwater associated with its current industrial activity, nor can it discharge during the loading or storage of petroleum coke.
Moreover, the Court questions whether the CWA recognizes the theory of ongoing discharges asserted by BayKeeper. For example, BayKeeper asserts that the petroleum coke deposits exist on and around the facility as a result of Tosco's operations, and that these deposits will "discharge," and continue to discharge, when it rains in violation of both the Act and the General Permit. However, as Tosco points out, the CWA prohibits "the discharge of any pollutant by any person." 33 U.S.C. § 1311 (a), 1362(5). This provision does not on its face encompass the continued effect of past discharges. Cf. Friends of Santa Fe County v. LAC Minerals, 892 F. Supp. 1333 (D.N.M. 1995) (continuing impact from past discharges will not suffice to demonstrate an ongoing or "continuing" discharge for purposes of determining Gwaltney statutory standing under CWA). Moreover, while discharges from existing deposits may be in violation of the Act and the General Permit, any liability under the CWA will not lie with Tosco but with Ultramar, as the current owner and operator of the facility under the General Permit. The Court therefore rejects BayKeeper's argument that Tosco can be held liable for ongoing violations at the facility.
BayKeeper relies on Molokai Chamber of Commerce v. Kukui (Molokai) Inc., 891 F. Supp. 1389 (D. Haw. 1995) for support in asserting that Tosco is liable for continuing stormwater discharges, even after it has suspended operations at the Diablo facility. In Molokai, citizen plaintiffs sued the owner and contractor on a construction project for discharges in violation of the CWA. The court rejected defendants' theory that the violation of the CWA ended when construction was halted, and noted that it was the discharge of water without permit coverage that violates the Act, not the construction activity itself. Id. at 1400. The Court agrees with the Molokai's court definition of discharge, but notes in this situation it is Ultramar, as the current owner of the facility from which BayKeeper alleges discharges are continuing to occur, that may be liable for such discharges under the CWA, not Tosco.
BayKeeper also asserts that its claim for civil penalties remains live as the "Ninth Circuit has expressly held that voluntary post-complaint activities cannot moot a claim for Clean Water Act penalties." See Opposition at 10. BayKeeper relies on the post-Laidlaw Ninth Circuit caseEcological Rights Foundation v. Pacific Lumber Co., 230 F.3d 1141 (9th Cir. 2000). The Court in Ecological Rights did not, however, expressly hold that voluntary-post complaint events cannot moot CWA penalties. Rather, the court phrased the question of mootness under the CWA as whether post-complaint events preclude the court from ordering effective relief. The court found that the assessment of civil penalties in that case would be an effective form relief because civil penalties would help deter the defendant, which was still conducting operations at the site, from future CWA violations. Id. at 1153.
Tosco disagrees generally with the approach taken in Ecological Rights. See Tosco's Motion at 3 n. 2, ¶ n. 5, 7. However, there is nothing in Ecological Rights which is inconsistent with Laidlaw. TheLaidlaw court specifically noted that voluntary post-complaint actions taken by a defendant ordinarily do not suffice to moot a CWA case, and that in the context of deterrent civil penalties, a defendant's post-complaint conduct would moot a case only where it is absolutely clear that the wrongful conduct would not reasonably be expected to recur. 528 U.S. at 174, 194. In Ecological Rights, the defendant argued that the post-complaint issuance of a new 1997 NPDES permit rendered the case asserting violations of the 1992 permit moot. However, the court found that civil penalties assessed for violations of the 1992 permit would serve to deter future violation of the 1997 permit, since the defendant was still conducting activities at the site under the new permit. Id. at 1153. In other words, consistent with Laidlaw, the court found that it was not absolutely clear that future violations would not recur under the 1997 permit, and therefore, civil penalties would serve their deterrence purpose.
BayKeeper also argues that its interpretation of Ecological Rights is supported by the holding in Sierra Club v. Union Oil Co., 853 F.2d 667, 671 (9th Cir. 1988) and is consistent with the Supreme Court's decision in Gwaltney, 484 U.S. at 64-65. However, the portions of these cases cited by BayKeeper do not address the question of mootness, but address the requirement that a CWA plaintiff demonstrate ongoing violations at the time the CWA suit is filed to establish statutory standing.
BayKeeper also argues that even if it were absolutely clear that Tosco would not commit future wrongdoing, its claims for civil penalties remain live. The cases relied on by BayKeeper, however, are those pre-Laidlaw cases which the Supreme Court identified as conflicting with the Fourth Circuit's holding. Laidlaw, 528 U.S. at 179-80. For example, in Atlantic States Legal Foundation v. Stroh Die Casting Co., 116 F.3d 814, 820 (7th Cir. 1997), the Second Circuit held that if it was "absolutely clear" that the wrongful conduct could not reasonably be expected to recur, citizen plaintiffs might lose their right to injunctive relief, but civil penalties would still be recoverable if plaintiffs had satisfied the Gwaltney statutory standing test at the time the suit was filed. Id. at 820. See also Natural Resources Defense Council v. Texaco Rfg. Mktg., Inc., 2 F.3d 493, 502-03 (3d Cir. 1993) (because violation could not reasonably be expected to recur, request for injunctive relief was moot but claims for civil penalties remained live); Atlantic States Legal Foundation v. Pan American Tanning Corp., 993 F.2d 1017, 1020-21 (2d Cir. 1993) (claims for civil penalties will not become moot even if voluntary compliance by defendant makes it unlikely that allegedly wrongful behavior could be expected to recur); Atlantic States Foundation v. Tyson Foods. Inc., 897 F.2d 1128, 1135 (11th Cir. 1990) (same);Chesapeake Bay Foundation v. Gwaltney of Smithfield, Ltd., 890 F.2d 690, 697 (4th Cir. 1989) (same); Comfort Lake Assoc. Inc., 138 F.3d at 356-57 (same).
While the Court in Laidlaw found that the Fourth Circuit erred by conflating Supreme Court case law on standing and mootness, the Court reasserted that a defendant's voluntary cessation of allegedly unlawful conduct might suffice to moot a case. Id. at 173-74. Specifically, in its discussion of mootness, the Court noted that the case might become moot if Laidlaw's voluntary compliance or closure of the facility "made it absolutely clear that Laidlaw's permit violations could not reasonably be expected to recur." Id. at 193. The Court remanded to allow the lower court to consider the disputed facts of "the effect of both Laidlaw's compliance and the facility closure on the prospect of future violations. . . ." Id. This remand was necessary, even in light of the asserted closure of the facility, in part because Laidlaw had retained its NPDES permit. Id. at 194.
Plaintiffs' discussion of Laidlaw is confined to noting that the Fourth Circuit's decision was reversed, and that the Court expressed no disapproval of the otherwise-uniform Court of Appeals precedent. However, the only remedy at issue in Laidlaw was the district court's award of civil penalties, and the Court specifically remanded for a determination of whether Laidlaw's voluntary compliance or facility closure might moot the case if those events made it absolutely clear that Laidlaw's permit violations could not reasonably be expected to recur.Id. at 193.
Justice Stevens, in concurrence, argued that petitioners' claim for civil penalties would not be moot on remand, even if it was absolutely clear that respondent had gone out of business and posed no threat of future permit violations, because the district court had already imposed the judgment awarding civil penalties and post-judgment conduct of the respondent could not retroactively invalidate that judgment. Laidlaw, 528 U.S. at 195-96. Justice Stevens also argued that even if respondents had achieved substantial compliance before judgment was entered, the claim for civil penalties would not be moot as, consistent with the cases relied on here by plaintiffs and the structure of the Clean Water Act, civil penalties under the CWA attach at the time a permit is violated.Id. at 196. This Court notes, however, that Justice Stevens' first point is not implicated by the procedural and factual posture of this case, and the second would appear to be rejected by the majority's opinion.
The Court finds that it is bound by Laidlaw's holding that post-complaint events may moot claims for civil penalties. Contrary to BayKeeper's assertion, this reading of Laidlaw does not render the CWA's provision for civil penalties in citizen enforcement cases illusory. Rather, as recognized by the Court in Laidlaw, ordinarily a defendant's post-compliance actions will not moot a citizen suit. Laidlaw, 528 U.S. at 174. In most cases, a defendant who has voluntarily come into compliance with an NPDES permit will not be able to meet the heavy burden to demonstrate that it is absolutely clear that violations will not recur. This burden will avoid the situation identified by BayKeeper where a defendant voluntarily comes into compliance with an NPDES permit only to avoid CWA liability. However, in this case, Tosco has sold the facility, which makes it absolutely clear that future violations by Tosco at this facility cannot be expected to recur. BayKeeper's claims for civil penalties are therefore moot.
BayKeeper also asserts that the Court has the power to address the pollution caused by Tosco's violations by imposing injunctive and remedial relief requiring Tosco to clean up the petroleum coke that it previously deposited in the Bay and install Best Available Technology at the Diablo facility. This Court disagrees. In Natural Resources Defense Council v. Southwest Marine, 2000 WL 1847540 (9th Cir. December 19, 2000), the Ninth Circuit affirmed that a district court's equitable powers under the CWA "are limited to enforcing standards, limitations, and orders that have been violated. 33 U.S.C. § 1365(a). That enforcement authority does not allow equitable measures that are wholly unrelated to a violation of an existing standard, limitation, or order." Id. at *12. In this citizen suit, where Tosco has sold the facility and Ultramar is operating under the general permit, any exercise of this Court's CWA enforcement authority would not relate to an existing standard, limitation or order to which Tosco is subject. Equitable relief in this situation, therefore, is not appropriate under the CWA.
For the same reasons, BayKeeper's request for declaratory relief is also moot. Any declaration issued by this Court against Tosco would not be related to Tosco's violation of an existing standard, limitation or order challenged in this action.
The cases cited by BayKeeper to support its argument that equitable relief is still available under the circumstances of this case simply do not go so far. Some do not deal with the Clean Water Act at all, and some deal with other aspects of the CWA. None, however, suggests that equitable relief is available in a Section 402 Clean Water Act case where the post-complaint sale of the polluting facility raises the question of mootness. See. e.g., Sierra Club v. Union Oil, 853 F.2d 667, 671 (9th Cir. 1988) (discussing Gwaltney statutory standing, not mootness);Northwest Environmental Defense Center v. Gordon, 849 F.2d 1241, 1244-45 (9th Cir. 1988) (mootness challenge under the Fishery Conservation and Management Act, 16 U.S.C. § 1801 et seq. (1982)); Hudson River Fisherman's Assn. v. Arcuri, 862 F. Supp. 73, 77-78 (S.D.N.Y. 1994) (injunctive relief appropriate against current owners of construction site where discharges ongoing); Connecticut Fund for the Env't v. Job Plating Co., 623 F. Supp. 207, 213 n. 4 (D. Conn. 1985) (plaintiffs' complaint sufficiently alleged continuing violations to assert claim for injunctive relief); San Francisco BayKeeper et al v. Cargill Salt Division et al., C 96-2161 CAL, December 15, 1998 Order (addressing scope of injunctive relief assuming a finding of liability on the merits); see also Leslie Salt Co. v. United States, 55 F.3d 1388, 1392 (9th Cir. 1995) (Section 404 CWA discharge of fill case); United States v. Weissman, 489 F. Supp. 1331, 1346 (M.D. Fla. 1980) (Section 404 CWA discharge of fill case); but see In re Southdown, Inc., Litigation, 104 F. Supp.2d 765, 770 (S.D. Ohio 1999) (where defendant sold landfill that was source of alleged CWA violations, plaintiffs' request for injunctive relief rendered moot).
The Court notes that the court in Sierra Club v. Hyundai America, 1998 U.S. Dist. LEXIS 20783, at *19 (D. Or. 1998), found that although plaintiffs' claims for injunctive relief were rendered moot by the expiration of the underlying permit, plaintiffs' claims for remedial relief remained live against the owner of the property. However, the only case relied on by that court, Illinois v. Outboard Marine Corp, 680 F.2d 473, 480-81 (7th Cir. 1982), was decided before both Gwaltney and Laidlaw.
BayKeeper finally asserts that the Court retains the power to issue an injunction against Tosco under Federal Rule of Civil Procedure 25(c). Rule 25(c) provides that, in the case of a transfer of interest, an action may be continued against the original party unless the court directs that the transferee be substituted in. BayKeeper asserts that the Court could, under Rule 25(c), order an injunction against Tosco for failure to implement Best Available Technology. However, in the case BayKeeper relies on to support this argument, NRDC v. Texaco, 2 F.3d 493, 496-97, 506 (3d Cir. 1993), the transfer at issue was in part to a wholly-owned subsidiary of Texaco. The Court finds the Texaco case distinguishable on the facts, since in this case, Tosco transferred the Diablo facility to a wholly separate corporation and does not now control or participate to any extent in the operation of the facility. Compare In re Southdown, Inc., Litigation, 104 F. Supp. 2d at 770 (sale of facility moots request for injunctive relief even where successors-in-interest might allow defendant access to facility for remediation purposes).
In sum, the Court finds that Tosco has met its burden to demonstrate that the post-complaint sale of the Diablo facility has rendered moot BayKeeper's citizen suit action.
2. State Law Claims
As the Court finds that BayKeeper's CWA cause of action has been rendered moot by the sale of the facility, the Court will decline to exercise supplemental jurisdiction over BayKeeper's state law claims.
CONCLUSION
For the reasons discussed, this Court GRANTS defendants' motion for summary judgment.
IT IS SO ORDERED.