Opinion
No. C 04-02225 SI.
July 6, 2006
On June 9, 2006, the Court heard oral argument on defendants' motion to dismiss state law claims and defendants' motion to stay this action on primary jurisdiction grounds. After careful consideration of the parties' papers and the arguments of counsel, the Court enters the following order.
BACKGROUND
Plaintiff West Coast Home Builders, Inc. ("West Coast") is a developer and builder of homes in Contra Costa County, California. First Amended Complaint ("FAC") ¶ 49. West Coast owns a parcel of property (the "Property") near or adjacent to the Contra Costa Sanitary Landfill near Antioch, California (the "CCSL Landfill"). Id. at ¶¶ 49-51. The CCSL Landfill is comprised of (a) the former GBF Landfill (the eastern 63-acre parcel), and (b) the former Pittsburg Landfill (the western 25-acre parcel), both of which were consolidated into (c) an 88-acre solid waste landfill that was operated as the Contra Costa Sanitary Landfill. Id. at ¶ 52. The CCSL Landfill was used as a disposal area for hazardous materials during the 1960s and 1970s, and for the disposal of municipal waste, including hazardous materials, until approximately 1992. Id.
West Coast alleges that the CCSL Landfill is the source of groundwater contamination on and under West Coast's Property. West Coast's First Amended Complaint requests recovery of response costs and contribution under CERCLA, 42 U.S.C. § 9601 et seq., declaratory relief under federal law, and monetary and injunctive relief under state tort law.
DISCUSSION
1. Motion to Dismiss State Law Claims as Untimely
A. Negligence, negligence per se, ultrahazardous activity, and state law declaratory relief claims
Defendants GBF Holdings LLC and TRC Companies move to dismiss plaintiff's claims for negligence, negligence per se, ultrahazardous activity, and state law declaratory relief on the ground that they are barred by the three year statute of limitations set forth in California Code of Civil Procedure Section 338(b). Defendants contend these claims are time-barred because they accrued no later than 1993, when the contaminated groundwater traveled under West Coast's property, and West Coast had actual notice of such contamination no later than 1996. Due to an earlier tolling agreement between the parties, the effective filing date of the complaint for statute of limitations purposes is October 1, 2001.
Numerous co-defendants have joined in this motion.
On October 1, 2001, West Coast filed a related case in this Court, with claims arising from the same groundwater contamination alleged in the current case. See West Coast Home Builders, Inc. v. Ashland Inc., et al., C 01-4029 SI. The present defendants were originally named in the Ashland case before being dismissed without prejudice in exchange for an agreement tolling West Coast's causes of action.
Plaintiff contends that these claims are not time-barred because it is still unclear whether the contamination can be abated, and thus these claims have not yet accrued. Relatedly, plaintiff argues that its claims are timely because TRC's "last act is its failure to take affirmative steps to mitigate the nuisance and trespass for which it is responsible." Opposition at 11:17-18.
The Court notes that plaintiff's opposition did not advance this argument with respect to the negligence, negligence per se, ultrahazardous activity, or state law declaratory relief claims. However, at the June 9, 2006 hearing, plaintiff's counsel stated that, although framed in connection with the nuisance and trespass claims, plaintiff intended to assert the "abatability" theory with regard to all the state law claims.
The Court concludes that plaintiff's claims for negligence, negligence per se, ultrahazardous activity, and state law declaratory relief are barred by the statute of limitations. CAMSI IV v. Hunter Technology Corporation, 230 Cal. App. 3d 1525 (1991), is instructive. In CAMSI IV, a plaintiff landowner sued a company that had previously owned the land, alleging that the former property owner had discharged volatile organic chemicals onto the property. The plaintiff alleged claims for negligence, negligence per se, and strict liability/ultrahazardous activity. Id. at 1532. The Court of Appeal held these claims were time-barred because the complaint alleged that the former property owner, Hunter, had manufactured circuit boards on the property until 1983, and thus "[u]nder the orthodox rule, the three-year limitation period would have commenced no later than 1983 and expired in 1986," two years before the plaintiff filed suit. Id. at 1534. The court rejected the plaintiff's argument that its claims did not accrue until a regional water quality control board issued an order in 1987 requiring cleanup of the property:
[F]rom the face of the second amended complaint, it is apparent that any harm the alleged tortfeasor, Hunter, had done to the property had been completed by no later than 1983, and that so far as the complaint reflects the physical aspects of that harm were not progressive: The contamination of the soil and groundwater, once and to the extent caused by Hunter, apparently remained constant.Id. at 1535.
The court also rejected the plaintiff's attempt to invoke the "discovery rule," which postpones commencement of the limitation period until "the plaintiff discovers or should have discovered all facts essential to his cause of action, which is to say when plaintiff either (1) actually discovered his injury and its negligent cause or (2) could have discovered injury and cause through the exercise of reasonable diligence." Id. at 1536 (internal citations and quotations omitted). The court noted that the complaint alleged that as early as July 1985 the regional water board mandated investigation of the groundwater and soil of the property. "We conclude as a matter of law, from the allegations of the second amended complaint, that as of July 1985 CAMSI IV possessed information sufficient at least to place it on notice of serious contamination problems on the parcel it owned, and from which by exercise of reasonable diligence it could have learned the full extent of the problems and the nature of their source." Id. at 1538.
Here, the complaint alleges that the Landfill accepted waste until 1992. FAC ¶ 52. The complaint further alleges that in September 1987, the Department of Toxic Substances Control ("DTSC") issued an order directing numerous parties to investigate and remediate the groundwater-borne contamination at the Landfill. Id. at ¶ 73. The DTSC order was amended in 1988 and again in July 1993; according to the complaint, the July 1993 Remedial Action Order reported, inter alia, that "the groundwater contains levels of hazardous substances in excess of the [maximum contaminant levels]," that the "removal and remedial action is necessary at the Site [Landfill] because there may be an imminent and/or substantial endangerment to the public health or welfare or to the environment." Id. at ¶¶ 73-75.
Moreover, the record before the Court also shows that plaintiff had actual notice of the groundwater contamination no later than 1996 when West Coast's President Albert Seeno corresponded with DTSC regarding the issue. On November 13, 1996, Mr. Seeno wrote a letter to the DTSC stating that WCHB owned the Property northwest of the Landfill: "We are the owners of the undeveloped land northwest of [the Landfill]." Rissier Decl., Ex. R. Mr. Seeno requested that the DTSC advise him:
of the method by which we will be compensated and by which our property will be remediated or acquired as a result of the effects from contaminants. Who will remediate and/or acquire and whether it will be through condemnation, negotiations or otherwise?Id. Mr. Seeno also requested that DTSC explain "the method of reimbursement to us for fees and costs we will be obligated to incur for our consultants, attorneys, staff time and related expenses." Id.
The Court takes judicial notice of this document and of all other documents submitted by defendants that are part of the public files of the DTSC. The Court does not take judicial notice of the news articles submitted by defendants.
Thus, just as in CAMSI IV, the allegations of the complaint and the DTSC public records show that plaintiff was on notice of the facts giving rise to its claims well before the expiration of the statute of limitations. Plaintiff's arguments about abatement are misplaced; as discussed infra, whether a nuisance can be abated is relevant to determining whether a continuing nuisance or trespass claim is timely. See CAMSI IV, 230 Cal. App. 3d at 1539 (noting that, "in appropriate circumstances [a nuisance theory] would be subject to more favorable limitations rules"). However, these arguments are irrelevant to whether plaintiff's complaint alleges timely negligence, negligence per se, ultrahazardous activity, or state law declaratory relief claims.
B. Nuisance and trespass claims
Defendants also contend that although plaintiff labels its nuisance and trespass claims as "continuing," the alleged nuisance and trespass are actually "permanent," and thus these claims are also subject to the three year statute of limitations. Plaintiff has plead both of these claims as "continuing," which would make the claims timely. See FAC ¶¶ 103-110 (Fourth Cause of Action; Private Continuing Nuisance); ¶¶ 111-17 (Fifth Cause of Action; Continuing Trespass); see also Mangini v. Aerojet-General Corp., 230 Cal. App. 3d 1125, 1143 (1991) (" Mangini I") ("[W]here a private citizen sues for damages from a permanent nuisance, the statute of limitations begins to run upon the creation of the nuisance. Where a continuing nuisance is alleged, every continuation of the nuisance gives rise to a separate claim for damages caused by the nuisance.").
Citing Mangini v. Aerojet-General Corp., 12 Cal. 4th 1087 (1996) (" Mangini III"), defendants argue that plaintiff has failed to state claims for continuing nuisance and trespass because the complaint does not plead that cleanup of the groundwater contamination is possible for a reasonable cost. Contrary to defendants' assertions, the complaint does allege that the groundwater contamination is abatable. For example, Paragraph 79 alleges:
The remedial actions required by the 1997 Remedial Action Plan are reasonable and feasible; however as of the filing of this action, Defendants have failed to implement the requirements of the 1997 Remedial Action Plan and have failed to take adequate or appropriate steps to remediate and abate the condition of pollution, nuisance and trespass created on and under Plaintiff's Property.
FAC ¶ 79.
Defendants' reliance on Mangini III is misplaced. In Mangini III, the California Supreme Court held that a trial court should have granted a defendant judgment notwithstanding the verdict on continuing nuisance and trespass claims because the plaintiff had failed to produce any substantial evidence at trial that the nuisance was abatable. See Mangini III, 12 Cal. 4th at 1097-98. Here, in ruling on defendant's motion to dismiss, the Court's review is limited to the allegations of the complaint, which the Court must take as true. See Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337 (9th Cir. 1996) (stating standard of review for Rule 12(b)(6) motion).
Defendants also contend that, notwithstanding the language of the complaint, plaintiff is judicially estopped from characterizing these claims as "continuing" because West Coast pursued and offered testimony supporting "permanent" nuisance and trespass claims in the related Ashland case. Defendants base their judicial estoppel argument on the following: (1) West Coast's description of its nuisance and trespass claims as "permanent" in an opposition to a motion for summary judgment in the Ashland case; and (2) the under seal deposition testimony of West Coast representative Marty Rosenzweig, who testified that groundwater contamination at the Property could not be removed, and therefore was "permanent."
The Court takes judicial notice of these documents. Plaintiff contends that the Court should not take judicial notice of Mr. Rosenzweig's deposition testimony because that testimony was filed under seal in the Ashland case. However, in light of the fact that the instant litigation is, in effect, "part two" of the Ashland case, the Court takes judicial notice of Mr. Rosenzweig's deposition testimony.
"Judicial estoppel, sometimes also known as the doctrine of preclusion of inconsistent positions, precludes a party from gaining an advantage by taking one position, and then seeking a second advantage by taking an incompatible position." Rissetto v. Plumbers and Steamfitters Local 343, 94 F.3d 597, 600 (9th Cir. 1996). Judicial estoppel is an equitable doctrine that the Court invokes at its discretion. Id. at 601. Courts have applied the doctrine when a party has advanced inconsistent positions before different courts. See Helfand v. Gerson, 105 F.3d 530, 534 (9th Cir. 1997) (party advocated "directly contrary" positions in state and federal court).
Here, the Court concludes that the record does not warrant application of judicial estoppel. The summary judgment opposition filed in Ashland states that West Coast was pursuing both continuing and permanent nuisance and trespass claims in the Ashland case. West Coast argued that its permanent nuisance and trespass claims were not untimely because "[u]ntil West Coast knows for certain that the contamination cannot be remediated, it cannot know whether it had an actionable claim for permanent nuisance and trespass." Id. at 3 (emphasis in original). West Coast also argued that it could maintain its claims for continuing nuisance and trespass because under the DTSC's Remedial Action Plan, "abatement remains feasible and in fact is mandated by DTSC." Id. at 1. Thus, there is no inconsistency between plaintiff's position in Ashland and the instant case.
Defendants' reliance on Mr. Rosenzweig's deposition testimony from the Ashland case is similarly unavailing. According to defendants, the testimony provided by Mr. Rosenzweig, West Coast's Rule 30(b)(6) designee on damages, was consistent with a permanent nuisance theory of damages. Defendants argue that Mr. Rosenzweig's testimony is a binding admission that the nuisance and trespass are not abatable, and further that West Coast's "permanent nuisance and trespass theory may have given WCHB a larger damages claim and greater leverage in the settlement negotiations with the Garaventa Defendants." Reply at 7. Here, it is not clear that Mr. Rosenzweig's testimony regarding damages is completely inconsistent with a continuing nuisance theory. More importantly, Ashland settled, and the Court did not make any findings adopting West Coast's purportedly inconsistent position.
Accordingly, for the foregoing reasons the Court GRANTS IN PART AND DENIES IN PART defendants' motion to dismiss, and holds that plaintiff's negligence, negligence per se, ultrahazardous activity and state law declaratory relief claims are untimely and the continuing nuisance and trespass claims are timely.
2. Motion to Stay Action Based on Primary Jurisdiction
Defendants GBF Holdings and TRC Companies move to stay this action on primary jurisdiction grounds based upon proceedings currently taking place before the California Department of Toxic Substances Control ("DTSC"). According to papers submitted by the parties, West Coast is currently in the midst of seeking a "No Further Action" ("NFA") letter from the DTSC. West Coast needs an NFA letter in order to develop the Property for residential housing. As set forth in the parties' December 7, 2005 stipulation and June 2, 2006 joint case management conference statement, the parties have been cooperating with respect to this regulatory process, and have hired a consultant and submitted a proposed work plan to the DTSC. The CMC statement states that the parties expect that testing will occur under the work plan during August and September of 2006.
Defendants contend that there are four possible outcomes of the investigation that West Coast will be conducting on the Property: (1) oily soil from Chevron's former operations will need to be remediated; (2) groundwater contamination as a result of the Landfill will need to be remediated; (3) both oily soil and groundwater will need to be remediated; or (4) no remediation will be necessary and DTSC will issue an NFA letter at the conclusion of the investigation. Defendants contend that which of these four outcomes occurs is of central importance to this lawsuit, and thus that judicial economy and the policies underlying the primary jurisdiction doctrine weigh in favor of a stay until the DTSC proceedings are completed.
The Court agrees, and finds that a limited stay through September 30, 2006 is appropriate. The two primary reasons expressed by plaintiff for opposing the stay — that a stay will be of indefinite duration and that the parties need the Court's active involvement to facilitate resolution — are not implicated by such a limited stay. A stay through September 30, 2006 will allow the parties to proceed with the work plan investigation, the results of which may significantly affect the complexion of this case. Accordingly, the Court GRANTS defendants' motion for a stay and STAYS this action through September 30, 2006.
CONCLUSION
For the foregoing reasons and for good cause shown, the Court hereby GRANTS IN PART and DENIES IN PART defendants' motion to dismiss, GRANTS defendants' motion for a stay and STAYS this action through September 30, 2006. (Docket No. 78). The Court also GRANTS IN PART and DENIES IN PART defendants' request for judicial notice. (Docket No. 36).
IT IS SO ORDERED.