Ecological Rights Foundation v. Pacific Gas and Electric Company

RESPONSE

N.D. Cal.September 13, 2012

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS ROCKY N. UNRUH, CA Bar #84049 runruh@schiffhardin.com SCHIFF HARDIN LLP ATTORNEYS AT LAW ONE MARKET SPEAR STREET TOWER, THIRTY-SECOND FLOOR SAN FRANCISCO, CA 94105 TELEPHONE: 415.901.8700 FACSIMILE: 415.901.8701 RUSSELL B. SELMAN IL Bar # 6195396, pro hoc vice rselman@schiffhardin.com BRADLEY S. ROCHLEN IL Bar # 6244780, pro hoc vice brochlen@schiffhardin.com J. MICHAEL SHOWALTER IL Bar #6301455, pro hoc vice mshowalter@schiffhardin.com SCHIFF HARDIN LLP ATTORNEYS AT LAW 233 S. WACKER DR., SUITE 6600 CHICAGO, IL 60606 TELEPHONE: 312.258.5500 FACSIMILE: 312.258.5600 Attorneys for Pacific Gas and Electric Company UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA Ecological Rights Foundation, Plaintiff, v. Pacific Gas and Electric Company, Defendant. Case No.: 3:CV 10-00121 RS PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE Judge: Judge Richard G. Seeborg Date Complaint Filed: February 9, 2011 Hearing Date: Nov. 8, 2012 Time: 1:30 p.m. Case3:10-cv-00121-RS Document202 Filed09/13/12 Page1 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS i PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS I. INTRODUCTION AND STATEMENT OF EVIDENTIARY OBJECTIONS ................. 1 II. EVIDENTIARY ISSUES AND MOTIONS TO EXCLUDE ............................................ 4 A. Legal Standards for use of Evidence in Summary Judgment ................................. 4 1. Duty to Disclose - Fed. R. Civ. P. 26 and 37 .............................................. 5 2. Admissibility of Expert Testimony - Fed. R. Evid. 701 – 703 ................... 5 3. Supplementation - Fed. R. Civ. P. 26(e) ..................................................... 6 4. Appropriate Use of “Rebuttal” Witnesses................................................... 7 B. ERF’s Claims are Premised on Inadmissible Testimony ........................................ 7 1. Matthew Hagemann is not Qualified to Testify as a Hydrologist ............... 7 2. Hagemann never disclosed the basis for his sampling methodology .......... 8 3. Hagemann Failed to Collect Representative Stormwater Samples ............. 9 4. Hagemann provides no basis for why his methodology is “good science” which is admissible under Daubert ............................................. 11 5. Rogers cannot rely on Hagemann’s invalid samples ................................ 12 6. ERF’s Declarations Supporting Its “Tire-Tracking” CWA Claims Fail Because they Are Based on Speculation, not Testing or Literature ................................................................................................... 14 C. ERF’s Motion Relies on Testimony Never Appropriately Disclosed ................... 15 1. Parker’s Testimony Regarding “1,109 Separate CWA Claims.” .............. 15 2. Isaac’s Testimony Regarding “1,109 Separate CWA Claims.” ................ 17 3. Rogers’s Statements Regarding “1,109 Separate CWA Claims.” ............ 18 4. Miscellaneous evidentiary objections related to Rogers .......................... 19 5. The Testimony of Michael Bercovich was Never Disclosed .................... 20 III. PG&E’s OPPOSITION ..................................................................................................... 21 A. PG&E’s Facilities are Classified with a Group 49 SIC Code under CWA .......... 22 Case3:10-cv-00121-RS Document202 Filed09/13/12 Page2 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS (Continued) ii PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS B. ERF Does Not Show that “Pollutants” reach “Waters of the United States” through Stormwater Run-Off ................................................................................ 27 C. ERF’s Tire-Focused Claims are Wholly Speculation and Must Be Dismissed .............................................................................................................. 28 D. ERF Cannot Prove 1,109 Separate CWA Violations ............................................ 30 IV. CONCLUSION ................................................................................................................. 30 Case3:10-cv-00121-RS Document202 Filed09/13/12 Page3 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iii PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS TABLE OF AUTHORITIES CASES Am. Mining Cong. v. EPA, 965 F.2d 759, 765 (9th Cir. 1992) ..................................................................................... 25 Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912 (9th Cir. 2001) ............................................................................................. 29 Beller ex rel. Beller v. U.S., 221 F.R.D. 696 (D.N.M. 2003) ........................................................................................... 6 Bragdon v. Abbot, 524 U.S. 624 (1998) .................................................................................................. 3, 9, 27 Brumfield v. Hollins, 551 F.3d 322 (5th Cir. 2008) ........................................................................................... 5, 8 City of Tenakee Springs v. Clough, 750 F. Supp. 1406 (D. Alaska) ............................................................................................ 4 Colony Ins. Co. v. Kuehn, No. 2:10-CV-1943, 2011 WL 4402738 (D. Nev. 2011) ................................................... 20 Cook ex rel. Estate of Tessier v. Sheriff of Monroe Cnty., Fla., 402 F.3d 1092 (11th Cir.2005) .......................................................................................... 14 Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993) ................................................................................................... passim Decker v. Nw. Env. Def. Ctr., Case No. 11-338 (2012) .................................................................................................... 24 Del. Valley Citizens Council for Clean Air v. Davis, 932 F.2d 256 (3d Cir. 1991) ................................................................................................ 3 Donell v. Fidelity National Title Agency of Nevada, No. 2:07-CV-0001, 2012 WL 170990 (D. Nev. 2012) ..................................................... 15 Foster v. Arcata Assocs., 772 F.2d 1453 (9th Cir.1985) ............................................................................................ 30 Gleklen v. Democratic Cong. Campaign Comm., Inc., 199 F.3d 1365 (D.C. Cir. 2000) .......................................................................................... 4 Hoffman v. Constr. Protective Serv., Inc., 541 F.3d 1175 (9th Cir. 2008) ............................................................................................. 5 In re Paoli R.R. Yard PCB Litigation, 916 F.2d 829 (3d Cir. 1990) ............................................ 12 Keener v. United States, 181 F.R.D. 639 (D. Mont. 1998) ......................................................................................... 7 Case3:10-cv-00121-RS Document202 Filed09/13/12 Page4 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iv PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS Luke v. Family Care & Urgent Med. Clinics, 323 Fed. Appx. 496 (9th Cir. 2009) ......................................................................... 7, 16-17 Lust v. Merrell Dow Pharmaceuticals, Inc., 89 F.3d 594, 597 (9th Cir. 1996) ....................................................................................... 27 Metro Ford Truck Sales v. Ford Motor Co., 145 F.3d 320 (5th Cir. 1998) ............................................................................................... 6 Natural Resources Def. Council v. EPA, 673 F.2d 400 (D.C. Cir. 1982) ............................................................................................ 3 Nelson v. City of Davis, 571 F.3d 924 (9th Cir. 2009) ...................................................................................... passim Nguyen v. IBP, Inc., 162 F.R.D. 675 (D. Kan. 1995) ........................................................................................... 5 Nilsson v. City of Mesa, 503 F.3d 947 (9th Cir. 2007) ............................................................................................. 14 Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir. 2000) ................................................................................. 23 Nw. Env. Def. Ctr. v. Brown, 640 F.3d 1063 (9th Cir. 2011) ........................................................................................... 24 Orr v. Bank of Am., NT & SA, 285 F.3d 764 (9th Cir. 2002) ............................................................................................. 28 Pfingston v. Ronan Eng’g Co., 284 F.3d 999 (9th Cir. 2002) ............................................................................................... 4 Plumley v. Mockett, 2010 WL 8160423 (C.D. Cal. 2010) ................................................................................... 7 Rogers v. Raymark Indus., 922 F.2d 1426 (9th Cir. 1991) ........................................................................................... 29 S.F. Baykeeper v. W. Bay Sanitary Dist., 791 F. Supp. 2d 719 (N.D. Cal. 2011) ................................................................................ 6 Scott v. Hammond, 741 F.2d 992 (7th Cir. 1984) ............................................................................................... 3 Scott v. Ross, 140 F.3d 1275 (9th Cir. 1998) ............................................................................................. 6 Seagate Tech., Inc. v. St. Paul Fire & Marine Ins. Co., 11 F. Supp. 2d 1150 (N.D. Cal. 1998) .............................................................................. 23 Skidmore v. Swift & Co., 323 U.S. 134 (1944) ............................................................................... 3 Stilwell v. Smith & Nephew, Inc., 482 F.3d 1187 (9th Cir. 2007) ................................................. 11 Case3:10-cv-00121-RS Document202 Filed09/13/12 Page5 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 v PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS Stipe v. Shinseki, 690 F. Supp. 2d 850 (E.D. Mo. 2010) ................................................................................. 4 Strong v. Valdez Fine Foods, No. 09-CV-01278, 2011 WL 455285 (S.D. Cal. 2011) ................................................ 7, 16 United States v. Powers, 59 F.3d 1460 (4th Cir. 1995) ............................................................................................. 12 United States v. Webb, 115 F.3d 711, 719 (9th Cir. 1997) ..................................................................................... 15 United Steelworkers of Am. v. Phelps Dodge Corp., 865 F.2d 1539 (9th Cir.1989) ............................................................................................ 29 Wash. PIRG v. Pendleton Woolen Mills, 11 F.3d 883 (9th Cir. 1993) ............................................................................................... 27 Westberry v. Gislaved Gummi AM, 178 F.3d 257 (4th Cir. 1999) ............................................................................................. 12 Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101 (9th Cir.2001) ........................................................................................ 5, 21 FEDERAL STATUTES 33 U.S.C. § 1311 ............................................................................................................................. 2 33 U.S.C. § 1342 .................................................................................................................... passim 33 U.S.C. § 1365 ............................................................................................................................. 3 33 U.S.C. § 1369 ............................................................................................................................... FEDERAL REGULATIONS 40 C.F.R. § 122.26 ................................................................................................................. passim FEDERAL RULES Fed. R. Civ. P. 26 ................................................................................................................... passim Fed. R. Civ. P. 37 ................................................................................................................... passim Fed. R. Civ. P. 56 ................................................................................................................... passim Fed. R. Evid. 401 .......................................................................................................................... 13 Fed. R. Evid. 402 .......................................................................................................................... 13 Fed. R. Evid. 403 .......................................................................................................................... 13 Fed. R. Evid. 701 ............................................................................................................................ 5 Case3:10-cv-00121-RS Document202 Filed09/13/12 Page6 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 vi PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS Fed. R. Evid. 702 ...................................................................................................................... 5, 18 Fed. R. Evid. 703 ............................................................................................................................ 5 FEDERAL GUIDANCE MATERIALS Standard Industrial Classification Code Manual ..................................................................... 23-25 NPDES Storm Water Sampling Guidance Document, EPA 833-8-92-001 (July 1992) .............. 10 Guidance Document, EPA 833-8-92-001 (July 1992) .................................................................... 9 Industrial Stormwater Monitoring and Sampling Guide, Final Draft, EPA 832-B-09-003 (March 2009) ................................................................................................................................... 9 Case3:10-cv-00121-RS Document202 Filed09/13/12 Page7 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS I. INTRODUCTION AND STATEMENT OF EVIDENTIARY OBJECTIONS To prevail on its Motion for Summary Judgment (“Motion”), Ecological Rights Foundation (“ERF”) needs to prove that Pacific Gas and Electric Company (“PG&E”): (i) discharged pollutants; (ii) from a point source; (iii) into the waters of the United States; and (iv) that PG&E was required to have a NPDES permit at the Facilities. ERF cannot prove these points. In its Motion, ERF frames the governing law such that ERF can win without demonstrating that PG&E is required to have a permit. (See ECF No. 197 at 28 n.2.) PG&E explained in its opening brief that, if the Facilities are classified with a Group 49 SIC Code, it wins absent a permit because its facilities are “in compliance with” CWA Section 402(p). See 33 U.S.C. § 1311(a). ERF submits proof in support of its Motion including lengthy Declarations based on:  Objectionable testimony from unqualified experts;  Testimony relying upon improperly collected samples that are not representative of stormwater;  Undisclosed “expert” testimony; and  Admittedly irrelevant “benchmarks” used to calculate ecological risk – not whether “pollutants” are discharged into the “waters of the United States.” As PG&E emphasizes in its Motion, ERF has filed an enforcement action, not a rulemaking. (ECF No. 196 at 15-16.)1 ERF must be held to the same standards as would an enforcing agency. In relevant part, the CWA has been unchanged since 1987 when Section 402(p) was added; 40 C.F.R. § 122.26(b)(14) existed in near-current form in the early 1990s; most of the relevant regulatory guidance materials were issued in the mid-to-late 1990s. (See generally ECF No. 196-19 to 196-23, and 196-25.) Rule challenges – which must be made within 120 days of a rule’s promulgation – have been barred for fifteen years. Beyond ERF’s failure to approach this case as an enforcement action, ERF’s Motion is built on a series of fallacies:2 1 Herein, PG&E cites ECF materials to the page number assigned by ECF, as opposed to the page number included in the underlying document. 2 ERF’s Motion is also undercut by ERF’s multiple failures to disclose much of its evidence and expert testimony within the time periods provided under applicable Case Management Orders, which are discussed in objections contained in this Response. Evidentiary objections Case3:10-cv-00121-RS Document202 Filed09/13/12 Page8 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS First, ERF’s Motion is premised on PG&E being able to choose whether it is regulated. (See ECF No. 197 at 25.) PG&E does not make the choice. As an initial matter, from years before this case to now, PG&E has been classified with a Group 49 SIC Code in its filings with the Securities and Exchange Commission.3 The provision of gas and electric services to California residents is PG&E’s primary activity. (See ECF No. 196-2.) Further, the Facilities’ activities all support what ERF admits to be PG&E’s primary activity, i.e. the provision of gas and electric services. (See id.) The Facilities’ activities are, therefore, classified as Group 49 SIC Code, and no other. The use of such a code is supported by a variety of federal and state regulatory materials. (See ECF No. 196-19, 196-20, 196-21, 196-22, and 196-25.) And, if PG&E should have a permit, regulators would notice during regular inspections and require PG&E to secure permit coverage. (See ECF No. 196-22, 196-23.) They never have because PG&E is in compliance with the CWA. Second, under ERF’s interpretation, the CWA contains an “absolute ban on the discharge of any pollutant unless the discharge is in compliance with the terms of an NPDES permit issued pursuant to CWA section 402.” (See ECF No. 197 at 1-2.) This is an intentional distortion of actual statute, CWA Section 301(a), 33 U.S.C. § 1311(a). Section 301(a) provides that “Except in compliance with this section and sections 1312, 1316, 1317, 1328, 1342, and 1344 of this title, the discharge of any pollutant . . . shall be unlawful.” (emphasis added). As PG&E has previously argued, see, e.g., ECF No. 196 at 17-21, since the four PG&E Facilities at issue here (“Facilities”) have Group 49 SIC Codes, any discharges from them do not violate CWA Section 301 because they are “in compliance” with CWA Section 402(p), 33 U.S.C. § 1342(p). Third, ERF insinuates that the Court should act as a regulator over PG&E because EPA ignored a 1994 “moratorium” on “unpermitted discharge.” (See ECF No. 197 at 27.) To the extent this argument is a challenge to the validity of EPA’s interpretation of CWA, the challenge should be against EPA, not PG&E.4 Until such a challenge is made, federal and state guidance related to non-experts will also be discussed herein. 3 See, e.g., Pacific Gas and Electric Co. Form 8-K, filed February 21, 2012, attached to the Showalter Decl. as Exh. 1, at 1; PG&E Corp. Form 8-K, filed May 25, 2004, Showalter Decl. Exh. 2, at 1. 4 Generally, parties that want to challenge the content of federal regulations must do so Case3:10-cv-00121-RS Document202 Filed09/13/12 Page9 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS materials and pre-existing regulatory interpretations which compel the dismissal of this case are binding upon both ERF and the Court in this citizen suit.5 Fourth, ERF pretends that it has leeway to evaluate whether PG&E discharges “pollutants” to the “waters of the United States” (i) using faulty samples; (ii) under a methodology of its own creation; and (iii) through the application of limits ERF itself sets. As is demonstratd below, the methods the Environmental Protection Agency (“EPA”) and the California State Water Resources Control Board (the “Board”) would use to evaluate whether a party was discharging stormwater do not resemble those employed by ERF in this case. PG&E’s expert, Timothy Simpson, testifies that none of Hagemann’s samples followed relevant EPA Guidance, which specifies how to take a reliable sample. (See Simpson Decl. filed herewith at § III.) Because ERF makes no effort to show that the methods employed by ERF’s consultants are reliable, ERF’s data must be rejected and the claims premised on the data dismissed. Fifth, even if ERF had followed the appropriate guidance materials, it failed to demonstrate necessary elements of its request for relief in a number of respects:  ERF’s Motion is premised on ERF’s demonstration that non-Group 49 SIC Codes should be applied to the Facilities. The plain meaning of the word “primary” forecloses ERF’s arguments that multiple activities at the Facilities could all be “primary.” Even if it did not, federal and state guidance materials conclusively establish that “primary” means “first and foremost” not “on occasion.”  ERF cannot establish that tire-tracking resulted in discharges of pollutants to waters of the United States because ERF’s experts have admitted that they have no under 33 U.S.C. § 1369, and not in a citizen suit against a private party. See Scott v. Hammond, 741 F.2d 992, 995 (7th Cir. 1984) (stating also that a proper citizens’ suit under CWA might arise against EPA to compel EPA to promulgate a substitute standard after EPA has disapproved of a state standard and the state has refused to act); Natural Resources Def. Council v. EPA, 673 F.2d 400, 403-04 (D.C. Cir. 1982) (holding that Courts of Appeals, and not district courts, have exclusive jurisdiction to review EPA regulations); Del. Valley Citizens Council for Clean Air v. Davis, 932 F.2d 256, 265 (3d Cir. 1991) (holding that the purpose of a citizen suit is to enforce EPA standards, not invalidate them). 5 As the Supreme Court has noted, “It is enough to observe that the well-reasoned views of the agencies implementing a statute ‘constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance.’” Bragdon v. Abbot, 524 U.S. 624, 642 (1998) (quoting Skidmore v. Swift & Co., 323 U.S. 134, 139-40 (1944)). Case3:10-cv-00121-RS Document202 Filed09/13/12 Page10 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS evidence – only speculation – supporting this conclusion.  ERF cannot establish that PG&E discharged on the 1,109 separate occasions referenced in its Motion. William Rogers, the witness whose testimony ERF relies to establish its 1,109 separate claims, stated at his deposition that his only opinion on the condition of the Facilities is based on when the site inspections occurred, and not before. David Parker, a hydrologist whose testimony provides the remainder of the support for this claim, was disclosed only as a “rebuttal” witness and cannot provide testimony needed to directly support ERF’s claims. Further, ERF’s claim is premised on a host of inadmissible evidence; PG&E’s evidentiary objections related to this evidence – set forth in full below – should be upheld. For these and other reasons appearing to the Court, ERF’s Motion should be denied. II. EVIDENTIARY ISSUES AND MOTIONS TO EXCLUDE For the reasons set forth in detail below, PG&E hereby moves to exclude: (1) the Declaration of Matthew Hagemann; (2) the Declaration of William J. Rogers; (3) the Declaration of David Parker; (4) the Declaration of Matthew Bercovich; and (5) the Declaration of Jodene Isaacs under the Federal Rules of Evidence and Civil Procedure.6 A. Legal Standards for use of Evidence in Summary Judgment To prevail on its motion for summary judgment, a party must submit admissible evidence demonstrating that there is no “genuine dispute of material fact” regarding an issue.7 The burden of showing that particular evidence is admissible is on the party proffering the evidence.8 6 Certain limited evidentiary objections are made in text. PG&E’s objections are listed in the Proposed Order filed herewith. 7 Fed. R. Civ. P. 56; Stipe v. Shinseki, 690 F. Supp. 2d 850, 856 (E.D. Mo. 2010) (holding that a court is only obligated to consider admissible evidence in evaluating a motion for summary judgment and may disregard portions of affidavits and depositions that were made without personal knowledge, consist of hearsay, or purport to state legal conclusions as fact). 8 See Fed. R. Civ. P. 56(c)(2), Notes to 2009 Amendments; Pfingston v. Ronan Eng’g Co., 284 F.3d 999, 1004 (9th Cir. 2002). Because “[v]erdicts cannot rest on inadmissible evidence” and a grant of summary judgment is a determination on the merits of the case, the moving party's affidavits must be admissible evidence. Gleklen v. Democratic Cong. Campaign Comm., Inc., 199 F.3d 1365, 1369 (D.C. Cir. 2000); City of Tenakee Springs v. Clough, 750 F. Supp. 1406, 1416 (D. Alaska), rev'd on other grounds, 915 F.2d 1308 (9th Cir.1990) (“Since summary judgment is a substitute for a trial on the merits, it is vital that the party opposing the motion be accorded the same evidentiary safeguards that would be applicable at trial ....”). Case3:10-cv-00121-RS Document202 Filed09/13/12 Page11 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS 1. Duty to Disclose - Fed. R. Civ. P. 26 and 37 Rule 26 requires the disclosure of the identity of any potential expert witnesses to be called at trial, and that the potential expert witness provide a written report. Fed. R. Civ. P. 26(a)(2)(A), (B). Under Rule 26(a)(2)(B), an expert report must contain “(i) a complete statement of all opinions the witness will express and the basis and reasons for them, (ii) the data or other information considered by the witness in forming them, (iii) any exhibits that will be used to summarize or support them, (iv) the witness's qualifications, including a list of all publications authored in the previous ten years, (v) a list of all other cases in which, during the previous four years, the witness testified as an expert at trial or deposition, and (vi) a statement of the compensation to be paid for the study and testimony in the case” (formatting altered). “If a party fails to designate an expert witness, Fed. R. Civ. P. 37 prohibits the party from using that witness to supply evidence at a motion, hearing, or trial unless the failure was substantially justified or harmless.” Brumfield v. Hollins, 551 F.3d 322, 330 (5th Cir. 2008). “The selection and retention of an expert witness is within the control of the party employing the expert. To the extent there is a disadvantage created by the expert’s failure to disclose it must be borne by the party retaining the expert witness.” Nguyen v. IBP, Inc., 162 F.R.D. 675, 681 (D. Kan. 1995). “Implicit in Rule 37(c)(1) is that the burden is on the party facing sanctions to prove harmlessness” or substantial justification. Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1107 (9th Cir. 2001). Preclusion under Rule 37 is not dependent on finding of willfulness or bad faith. Hoffman v. Constr. Protective Serv., Inc., 541 F.3d 1175, 1180 (9th Cir. 2008). 2. Admissibility of Expert Testimony - Fed. R. Evid. 701 – 703 Fed. R. Evid. 702 provides that “A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if: (a) the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert has reliably applied the principles and methods to the facts of the case.” Under Rule 702, the trial court acts as a gatekeeper and ensures that the proffered Case3:10-cv-00121-RS Document202 Filed09/13/12 Page12 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS scientific testimony meets certain standards of both relevance and reliability before it is admitted. Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 590, 595–97 (1993). An expert opinion is reliable if it is based on proper methods and procedures rather than “subjective belief or unsupported speculation.” Id. at 590. Under Rule 702, the party proffering expert testimony has the burden of showing the admissibility of the testimony by a preponderance of the evidence. Daubert, 509 U.S. at 592 n. 10; S.F. Baykeeper v. W. Bay Sanitary Dist., 791 F. Supp. 2d 719, 737 (N.D. Cal. 2011). The court considers four factors to determine if expert testimony will assist the trier of fact: “(i) whether the expert is qualified; (ii) whether the subject matter of the testimony is proper for the jury's consideration; (iii) whether the testimony conforms to a generally accepted explanatory theory; and (iv) whether the probative value of the testimony outweighs its prejudicial effect.” Scott v. Ross, 140 F.3d 1275, 1285–86 (9th Cir. 1998). Implicit in the Daubert analysis is whether the proposed testimony “fits” the facts of the case. Id. at 591- 92. Moreover, proffered testimony must “assist the trier of fact to understand the evidence or determine a fact is in issue.” Id. at 591. Fed. R. Civ. P. 56(c) allows the Court to strike unsupported portions of a motion for summary judgment. 3. Supplementation - Fed. R. Civ. P. 26(e) Under Fed. R. Civ. P. 26(e)(2), a party is under an obligation to supplement an expert report to include any additions or changes prior to pretrial disclosures. However, “’[a]lthough Fed. R. Civ. P. 26(e) requires parties to ‘supplement or correct’ disclosure upon information later acquired, that provision does not give license to sandbag one’s opponent with claims and issues which should have been included in the expert witness’ report.” Beller ex rel. Beller v. United States, 221 F.R.D. 696, 701 (D.N.M. 2003) (citation omitted). “The purpose of supplementary disclosure is just that-to supplement. Such disclosures are not intended to provide an extension of the expert designation and report production deadline.” Metro Ford Truck Sales v. Ford Motor Co., 145 F.3d 320, 324 (5th Cir. 1998). “‘Supplementation under the Rules means correcting inaccuracies, or filling the interstices of an incomplete report based on information that was not available at the time of the initial disclosure.’” Luke v. Family Care & Urgent Med. Clinics, 323 Fed. Appx. 496, 499 (9th Cir. Case3:10-cv-00121-RS Document202 Filed09/13/12 Page13 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS 2009) (emphasis added) (quoting Keener v. United States, 181 F.R.D. 639, 640 (D. Mont. 1998)).9 Rule 26(e) does not “create a loophole” that would allow a litigant to “revise her disclosures in light of her opponent’s challenges to the analysis and conclusions therein . . . after the court’s deadline for doing so has passed.” Luke, 323 Fed. Appx. at 500. “[A] supplemental expert report that states additional opinions or ‘seeks to ‘strengthen’ or ‘deepen’ opinions expressed in the original expert report’ is beyond the scope of proper supplementation and subject to exclusion under Rule 37(c).” Plumley v. Mockett, 836 F.Supp.2d 1053, 1062 (C.D. Cal. 2010). 4. Appropriate Use of “Rebuttal” Witnesses. This Court’s Scheduling Order specifically stated that March 1, 2012 was the deadline for ERF to disclose “any expert that it will use to support its motion for summary judgment concerning [CWA] liability . . .” (ECF No. 190.) ERF now attempts to rely on “rebuttal” experts (i.e. David Parker, William Rogers) and testimony to support its Motion. Such reliance on “rebuttal” witnesses and testimony to support a party’s case-in-chief is inappropriate under this Court’s Orders and the Fed. R. Civ. P. See e.g., Strong v. Valdez Fine Foods, No. 09-CV-1278, 2011 WL 455285 at *4 (S.D. Cal. 2011) (holding that plaintiff’s “rebuttal” expert’s “declaration and rebuttal report are not admissible to support Plaintiff's motion for summary judgment, except for rebuttal purposes. Plaintiff's decision to designate [its expert] solely as a rebuttal expert necessarily limits how Plaintiff may utilize [his] testimony.”). B. ERF’s Claims are Premised on Inadmissible Testimony. 1. Matthew Hagemann is not Qualified to Testify as a Hydrologist. Matthew Hageman is a hydrogeologist, which studies the movement of water below ground. (Hagemann Dep., Showalter Decl. Exh. 5, at 12.) Mr. Hagemann does not have significant training, and has not practiced in hydrology, the study of movement of water above ground. (Id. at 19.) PG&E’s expert, Dr. Spongberg, a hydrologist, testified that “the distinction is important because estimating the mass of contaminants that may have discharged from the 9 Keener is instructive. There, the court limited the expert to the opinions in his initial disclosure, finding that the claimed “supplemental disclosure” was based on the expert’s failure of omission: “the information was there to review. He did not review it in detail before expressing his opinion.” 181 F.R.D. at 641. Case3:10-cv-00121-RS Document202 Filed09/13/12 Page14 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS subject sites [as Mr. Hagemann attempted to do in his expert report] requires expertise in surface water hydrology.” (Spongberg Decl. ¶¶ 5-12.) Hagemann’s lack of qualifications appear to have occasioned the mistakes identified by Timothy Simpson and Dr. Spongberg. Hagemann does not have expertise or experience in properly collecting representative stormwater samples, nor does he have experience or expertise in calculating stormwater volume. Hagemann’s lack of experience appears to have led to his use of an ad hoc formula for stormwater instead of the industry standard.10 Hagemann also used the wrong rain water data in his expert report. 2. Hagemann never disclosed the basis for his sampling methodology. Hagemann failed to include any references to regulatory guidance materials in his opening report, reply report or declaration.11 Similarly, Hagemann’s report contains no reports, published or unpublished studies, or analysis documenting how amount of “pollutants” can be calculated based on his sampling methodology, or how his sampling methodology relates to one EPA or California regulators would use in an enforcement action. Further, Hagemann’s report contains no discussion or analysis supporting his expressed belief that the myriad ways he deviated from standard guidance had no effect on the validity of the analysis resulting from the samples he took. Fed. R. Civ. P. 37 provides the Court with discretion to exclude an expert witness whose designation is not accompanied by a report in compliance with Fed. R. Civ. P. 26. See Fed. R. Civ. P. 37(b)(2). Brumfield, 551 F.3d at 330. To decide whether to exclude an expert not properly designated, the Court considers four factors, all of which favor excluding Hagemann’s testimony. “(1) the explanation for the failure to identify the witness”: ERF never even attempted to explain the failure to disclose the materials relied upon, despite repeated opportunities to do so: his original report, rebuttal report, deposition, and summary judgment motion declaration. “(2) the importance of the testimony”: Hagemann’s testimony is the lynch-pin to ERF’s case; ERF’s experts admit that without it, they cannot enforce their CWA claims against PG&E. While it is indisputable that citizens are statutorily authorized to enforce CWA, see 33 U.S.C. § 10 After Dr. Spongberg outlined the myriad problems with Mr. Hagemann’s stormwater volume formula, ERF abandoned his calculations and attempted a “re-do” with David Parker. (See Showalter Decl. ¶¶ 19-22.) 11 Hagemann’s Expert Report is attached to the Showalter Decl. filed herewith (“Showalter Decl.”) as Exhibit 3. The Reply Report is Showalter Decl. Exh. 4. Case3:10-cv-00121-RS Document202 Filed09/13/12 Page15 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS 1365, they must enforce the statute in the same manner as would the government, and not through a matter justified solely through their own methodology. See id.; accord Bragdon 524 U.S. at 642 (“It is enough to observe that the well-reasoned views of the agencies implementing a statute ‘constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance.’”). “(3) potential prejudice in allowing the testimony”: Requiring an expert functioning in an enforcement capacity to disclose their methodology is virtually the only guaranty a citizen-suit defendant has to due process. Given the substantial fines and attorneys’ fees ERF will seek in this matter, requiring it to make obligated disclosures is essential. “(4) the availability of a continuance to cure such prejudice”: No continuance can “cure” ERF’s failure to disclose the relevant data. Hagemann has been disclosed for months. When he was asked about the authorities upon which he relied in his deposition, he failed to provide a full list of the guidance materials which supported his sampling methodologies. (See, e.g., Hagemann Dep. at 79:1-17 (“So I looked at general references for sampling stormwater and planning for sampling stormwater.”). The failure of Hagemann to demonstrate a reliable methodology for collecting samples is a tactic designed to prevent holding Hagemann accountable for his myriad failures. 3. Hagemann Failed to Collect Representative Stormwater Samples. In this case, it is clear that Hagemann set out to take stormwater samples. (See Sample Analysis Plan [“SAP”] at 4) (“Sample locations for water will be chosen on the basis of the potential to provide representative samples of water quality . . . . ). EPA provides clear guidance on how to collect reliable storm water samples. See, e.g., NPDES Storm Water Sampling Guidance Document, EPA 833-8-92-001 (July 1992) (attached to the Showalter Decl. filed herewith as Exh. 18); Industrial Stormwater Monitoring and Sampling Guide, Final Draft, EPA 832-B-09-003 (March 2009) [“2009 Guidance”] (attached to the Showalter Decl. as Exh. 19.) It is also clear that Hagemann failed to follow standard practices in collecting the samples. Timothy Simpson, a civil engineer who specializes in stormwater issues, testifies that Case3:10-cv-00121-RS Document202 Filed09/13/12 Page16 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS Hagemann’s samples included the following flaws, all deviations from standard sampling protocols that prevented the samples from being considered representative of stormwater:  Collected samples of standing water (OAKWTR-1, OAKWTR-2, HAYWTR-1, HAYWTR-2, MYRTWTR-1)  Walked in water he was sampling (OAKWTR-1, EURWTR-2)  Otherwise cross-contaminating the sample (OAKWTR-2, HAYWTR-1, HAYWTR-2, EURWTR-1, MYRTWTR-1, MYRTWTR-2)  Agitated sediment in water before collecting water samples (OAKWTR-1, OAKWTR-2, HAYWTR-1, EURWTR-1)  Collected samples outside of the area stated in guidance materials (OAKWTR-2)  Claimed tidally influenced water was actually stormwater representative of water discharging from a facility (OAKWTR-4)  Collected water potentially impacted by off-site sources (HAYWTR-1)  Collected samples upstream of an oil-water separator (EURWTR-1, EURWTR-2) (See Simpson Decl. ¶¶ 30-41.) Each of these actions represents a deviation from standard guidance materials and from Mr. Hagemann’s self-created Sample Analysis Plans. Each deviation has the potential to introduce variables that render the sample unreliable.12 (E.g., id. ¶¶ 31-32.) Simpson noted the following deviations between Mr. Hagemann’s procedures and the procedures set forth in regulatory guidance:  Collecting non-representative samples (OAKSED-1, OAKSED-2, HAYSED-1, HAYSED-2, HAYSED-3, HAYSED-4, EURSED-1, EURSED-2, MYRTDUMPSED-1)  Cross-contamination issues occasioned by touching sampling implements or walking in area to be sampled without decontaminating (OAKSED-1, OAKSED-2, HAYSED-1, HAYSED-2, HAYSED-3, HAYSED-4, EURSED-1, EURSED-2, MYRTDUMPSED-1) 12 Hagemann and William Rogers (in a rebuttal report, attached to the Showalter Decl. as Exh. 7) seek to flip the burden to PG&E to demonstrate that these deviations did, in fact, compromise the samples. (See, e.g., Hagemann Reply at 3; Rogers Rebuttal at 24 (“This statement is unfounded and speculation without supporting data.”). It is clear under Daubert that it is ERF’s burden to demonstrate that its methodologies are reliable, and not PG&E’s burden to demonstrate that they are unreliable. Case3:10-cv-00121-RS Document202 Filed09/13/12 Page17 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS (See id. ¶¶ 58-70.) Hagemann does not question Simpson’s observations – which were backed up by photographs and videotape evidence – but instead notes that Simpson’s views are “irrelevant,” see, e.g., Hagemann Reply at 6; “erroneous,” see id.; or “trivial,” id. at 3. Hagemann reports that he collected his samples pursuant to a SAP. (Hagemann Dep. at 69-70.) It is undisputed that acknowledgements of SAP deviations are important. (Hagemann Dep. at 81.) These notations are important because they can be used to assess the resulting validity of the samples. (See Simpson Decl. ¶¶ 87, 90, 93.) While Hagemann did note minor deviations from his SAP in limited instances, in most instances, he failed to note deviations including: 1) collection of water samples from stagnant puddles of water; 2) collection of “sediment” samples by using a trowel to scrape embedded material from asphalt; and 3) homogenizing solids samples on the ground surface, instead of through a bowl as is referenced in the SAP. (See Simpson Decl. ¶ 93.) None of these deviations were noted by Hagemann in his field notes. Simpson testifies that each of these should have been noted, and that Hagemann’s failure to note these issues calls into question the validity of his testimony. (Id. ¶¶ 86-88.) 4. Hagemann provides no basis for why his methodology is “good science” which is admissible under Daubert. Under Fed. Rule of Evidence 702, the trial court acts as a gatekeeper and ensures that the proffered scientific testimony meets certain standards of both relevance and reliability before it is admitted. Daubert 509 U.S. at 590, 595–97. An expert opinion is reliable if it is based on proper methods and procedures rather than “subjective belief or unsupported speculation.” Id. at 590. The test for reliability “’is not the correctness of the expert's conclusions but the soundness of his methodology.’ ” Stilwell v. Smith & Nephew, Inc., 482 F.3d 1187, 1192 (9th Cir. 2007). As was discussed above, Hagemann failed to disclose the sources for his sampling methodology. (See discussion supra at Section II.B.2.) Further, Hagemann provided no basis to demonstrate the soundness of the methodology he followed. (See discussion supra at Section II.B.3.) Given his limited hydrological background, and particular his limited background for taking samples, Hagemann’s sampling, and the analytical results resulting, should be excluded. Further, even if Hagemann began with a reliable methodology, he failed to follow it. Case3:10-cv-00121-RS Document202 Filed09/13/12 Page18 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS Across the board, Hagemann’s erratic sampling protocol, as catalogued in the Simpson Declaration, presents methodologies which are “so altered as to skew the methodology itself,” in that Hagemann’s “methodology” – if there was one – is a new procedure which itself would need to be established as valid. Accord In re Paoli R.R. Yard PCB Litigation, 916 F.2d 829, 857 (3d Cir. 1990) (“If the allegation is that a reliable methodology was so altered as to skew the methodology itself,” [a Rule 702 challenge] would be the appropriate vehicle for evaluation.”). Hagemann makes no effort to demonstrate the validity of his methodology. 5. Rogers cannot rely on Hagemann’s invalid samples. William Rogers, another ERF expert, testifies that sampling data or is required to establish whether “pollutants” are leaving the Facilities. (Rogers Dep., Showalter Decl. Exh. 8, at 152.) Rogers’s testimony is based on analytical reports of Hagemann’s samples. (Rogers Dep. 33-34.) Rogers’s testimony is based neither on direct evidence of chemical transport or modeling of chemical transport. (See Steven Ellis Decl., filed herewith, ¶¶ 7-15.) For the reasons above, PG&E submits that ERF has presented no methodologically reliable sampling evidence. A key consideration in Daubert is whether proffered expert testimony is helpful, i.e. whether it “fits” the needs of a particular case. 509 U.S. at 591-92 (stating that the second prong of a Daubert inquiry is whether an opinion is relevant to the facts at issue); see, e.g., United States v. Powers, 59 F.3d 1460, 1472 (4th Cir. 1995). Courts recognize that, when testifying on complicated issues, expert witnesses have the potential to be both quite powerful, and quite misleading. Westberry v. Gislaved Gummi AM, 178 F.3d 257, 260-61 (4th Cir. 1999). “Helpful” evidence regarding whether pollutants were “discharged” offsite would include sampling data or modeling based on reliable sampling. (Ellis Decl. ¶¶ 6, 9-12, 17.) Much of Rogers’ Declaration consists of a discussion of “benchmarks.” (See, e.g., id. ¶¶ 8-37.) “Benchmarks” relate to environmental risk in a RCRA setting, not whether “pollutants” are “discharged” into the “waters of the United States.”13 How Rogers’ RCRA “benchmarks” are 13 Steven Ellis, a risk assessment expert retained by PG&E, discusses the origin and general use of Rogers’s “benchmarks” in his Declaration. (See Decl. of Steven Ellis, filed herewith, at ¶¶ 15-20.) Rogers generally agrees that benchmarks are used to evaluate risk, and not CWA issues. see, e.g., ECF No. 197-14 ¶¶ 7-8 (“I have compared sample results reported by TestAmerica to various benchmarks established by regulatory agencies for evaluating the level of dioxins, furans, Case3:10-cv-00121-RS Document202 Filed09/13/12 Page19 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS relevant to a CWA action are not clear. Rogers admits “EPA has indicated that the benchmark concentrations are not effluent limitations.” (See Rogers Decl. ¶ 8 n.3.) Similarly, the “benchmarks” are not background numbers, which could support an inference that any elevated levels of “pollutants” in close proximity to the Facilities originated at them. (Rogers Dep. at 156- 57.) While Rogers states, that “EPA has emphasized . . . that facilities whose storm water discharges exceed these benchmark values should at a minimum conduct additional monitoring and evaluate whether the facilities need to install additional control measures to reduce the pollutant level in their storm water discharges.” (Id.) (discussing a Federal Register preamble to the 2000 Multi-Sector NPDES General Permit for Stormwater Associated with Industrial Activity.”), the whole premise of ERF’s Claim One is that PG&E’s facility should have a permit and does not. Neither Rogers nor Hagemann testified to having reviewed the general levels of dioxin or pentachlorophenol released from geographically proximate NPDES permitted facilities, or the specific levels generally included in permits. (See Rogers Dep. at 173:18-174:1; Hagemann Dep. at 206:1-24.) Rogers’ “benchmarks” cannot substitute for valid sampling or modeling and do not make it more or less likely that “pollutants” reach “waters of the United States,” and should be excluded.14 ERF must demonstrate that Rogers’ “benchmark” testimony is relevant to advancing a claim or defense. Daubert, 509 U.S. at 592 n. 10; see Fed. R. Evid. 402; see also Bourjaily, 483 U.S. at 175-76. “ ‘Relevant evidence’ means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” Fed. R. Evid. 401. It is undisputed that “benchmarks” relate to risk, not CWA. Accordingly, they have no tendency to make the existence of any fact of consequence more or less probable, and Rogers’s should be precluded from testifying regarding them in this case under Fed. R. Evid. 401-403 and 701-703. and pentachlorophenol that pose environmental risk.”) 14 (Ellis Decl. ¶¶ 9, 15.) Since this case was filed, PG&E has contended that ERF is seeking to make an improper “programmatic” challenge to how EPA and California regulators choose to regulate PG&E’s Facilities. (See ECF No. 67 at 19-23.) ERF’s use of “imminent and substantial endangerment” “benchmarks” not relevant to the narrow CWA issue of whether “pollutants” reach “waters of the United States” stems from this theme and ERF’s policy preference for this Court modifying EPA and California regulatory decisions without these agencies’ participation. Case3:10-cv-00121-RS Document202 Filed09/13/12 Page20 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS 6. ERF’s Declarations Supporting Its “Tire-Tracking” CWA Claims Fail Because they Are Based on Speculation, not Testing or Literature. ERF’s tire-related testimony is based on speculation and should be excluded under Daubert. “Knowledge,” as the term is used regarding expert testimony, “connotes more than subjective belief or unsupported speculation.” Daubert, 509 U.S. at 590. “[A] trial court may exclude expert testimony that is imprecise and unspecific, or whose factual basis is not adequately explained.” Cook ex rel. Estate of Tessier v. Sheriff of Monroe Cnty., Fla., 402 F.3d 1092, 1111 (11th Cir.2005) (internal quotations omitted)). ERF conducted no testing to demonstrate that pollutants were tracked from the Facilities on vehicle tires. Hagemann testifies only that pollutants were likely tracked from the Facilities on vehicle tires. (Hagemann Decl. ¶¶ 34-35.) He says this because ERF has “no direct evidence that contamination from the sites has been tracked off site.” (Hagemann Dep. at 154.) He has “no samples of any materials that would have been tracked off site.” (Id.) Indeed, he only saw tire tracks at one of the four Facilities. (Id. at 156.)15 He never employed any “methodology” to determine the amount of “pollutants” that were tracked; he only asserts that it is “likely” that “pollutants” were based on his general impressions of the Facilities. (See Hagemann Decl. ¶ 35.) Rogers, another ERF expert witness, testified that it is possible to determine the amount of pollutants on vehicle tires. (Rogers Dep. at 91, 98.) Indeed, even at sites where “pollutants” can be seen on pavement outside of Facilities, one would still need “methodologies to calculate the amount of [pollutants removed by] road tracking[.]” (Id. at 91-93.) To compound the lack of factual evidence, Hagemann readily admitted that he had consulted no literature or documentation illustrating that tire tracks could be sufficient to spread contamination offsite. (Hagemann Dep. at 157.) Something more than “bald assertion” is required to establish admissibility under Daubert. 15 At Hayward, the only facility where Hagemann reported seeing tire tracks, Hagemann’s Declaration testimony contradicts his deposition testimony where he responds to the question “Did you see any tire marks that would indicate to you contamination leaving the facility?” with “no.” (Compare ECF No. 197-1 at 23:10-16 with Hagemann Dep. at 157:18-21.) Generally, a party cannot create an issue of fact precluding summary judgment by signing an affidavit contradicting prior deposition testimony. Nelson v. City of Davis, 571 F.3d 924, 927-28 (9th Cir. 2009). Contradictory, self-serving affidavits lacking detailed facts and supporting evidence are insufficient to create a genuine issue of material fact, as is required to avoid summary judgment. Nilsson v. City of Mesa, 503 F.3d 947, 952 (9th Cir. 2007). Case3:10-cv-00121-RS Document202 Filed09/13/12 Page21 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS Alternatively, the testimony should be excluded under Fed. R. Evid. 401-403 because evidence that “pollutants” were “likely transported” from the Facilities does not “fit” with what ERF is required to prove, i.e. that they were discharged from the Facilities and reached the “waters of the United States.” See Daubert, 509 U.S. at 591-92. No evidence of “pollutants” reaching “waters of the United States” has been offered. C. ERF’s Motion Relies on Testimony Never Appropriately Disclosed. 1. Parker’s Testimony Regarding “1,109 Separate CWA Claims.” Parker’s testimony should be excluded on the grounds that Parker cannot be classified as a “rebuttal” expert in this case; rebuttal testimony cannot be used to support a party’s case-in-chief; and the late-disclosed opinions and calculations contained in Parker’s two addenda and declaration violate the Fed. R. Civ. Procedure and this Court’s prior orders. ERF appears to have disclosed Parker only after ERF realized that its first disclosed expert – Matthew Hagemann – was completely unqualified to offer the opinions he was tasked to make.16 As part of this “do over” designation, ERF classifies Parker as a “rebuttal” expert; however, Parker’s testimony does not respond to evidence offered by PG&E. Instead he attempts to offer calculations and opinions based on methodology not previously utilized by ERF. “Rebuttal” witnesses are “intended solely to contradict or rebut evidence on the same subject matter identified by another party.” Fed. R. Civ. P. 26(a)(2)(D)(ii). “The proper scope and function of rebuttal is . . . refutation, which involves evidence which denies, explains, qualifies, disproves, repels, or otherwise sheds light on evidence offered by the [opposing party] . . . .” United States v. Webb, 115 F.3d 711, 719 (9th Cir. 1997). “[R]ebuttal testimony is not an opportunity to cure oversights in a party’s case in chief.” Donell v. Fidelity National Title Agency of Nevada, No. 2:07-cv-0001, 2012 WL 170990, at *5 (D. Nev. 2012) (internal citation omitted). ERF and its attorneys plainly know what comprises “rebuttal” testimony as they have previously made motions to exclude “rebuttal experts” from testifying to support an opposing 16 Hagemann improvised an equation to predict the amount of stormwater needed to produce a measurable “discharge” from the Facilities instead of using one of the standard equations. Parker, in essence, appears to be disclosed to rebut Hagemann’s testimony, and not PG&E witness testimony. (See Showalter Decl. ¶¶ 20-23.) Case3:10-cv-00121-RS Document202 Filed09/13/12 Page22 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS parties’ cases-in-chief.17 Parker is not responding to Spongberg, whose opinion was limited to criticizing Hagemann’s methodology and assumptions. Instead, as Parker testified, he “can’t tell you that [he is] trying to rebut anything. I am just presenting the calculations as asked to me to do.” (Parker Dep., Showalter Decl. Exh. 12, at 143:11-17.) Parker presents new testimony. Parker should therefore not be allowed to offer testimony in this case as ERF did not properly disclose him as required by this Court’s orders and the Fed. R. Civ. Procedure. However, should the Court decide to allow Parker to provide some testimony in this matter, as a “rebuttal” expert that testimony cannot be offered to support ERF’s case-in-chief. See, e.g. Strong v. Valdez Fine Foods, Case No. 09-CV-01278, 2011 WL 455285, at *3 (S.D. Cal. 2011) (holding that a rebuttal expert’s declaration and report could not directly support plaintiff’s Rule 56 motion, except for rebuttal). Because ERF abandoned Hagemann’s earlier attempt at calculations, there is nothing for Parker to “rebut” on reply and therefore his testimony should similarly be excluded. Even beyond the “rebuttal” issue, ERF’s disclosure of and reliance on Parker’s opinions and calculations violate the strict requirements of Rule 26(a)(2). ERF has continued to have Parker testify on new issues even after his initial “rebuttal” report was issued in the guise of him “supplementing” his testimony - through two late-disclosed addenda and revisions and changes to his testimony in his declaration. Parker admitted that the information he used as the basis for the opinions and calculations in the two addenda was available to him at the time he wrote his initial report and, therefore, the addenda do not constitute proper supplementation under Rule 26(e). See, e.g., Luke v. Family Care & Urgent Medical Clinics, 323 Fed. Appx. at 499 (recognizing that “supplementation under the Rules means correcting inaccuracies, or filling the interstices of an incomplete report based on 17 See Humboldt Baykeeper and ERF v. Union Pac. Railroad Co. (N.D. Cal. Case No. 3:06- cv-02560-JSW) [“ERF Motion”], ECF No. 349 attached as Showalter Decl. Exh. 14. There, ERF argued that: “By virtue of Defendants’ designation of Mr. Warner solely as a rebuttal expert, Defendants have limited his testimony to rebuttal testimony only. . . . Thus, the opinions in rebuttal reports may only rebut, they may not offer new opinions.” ERF Motion at 2:15-22. The problems with Parker’s testimony go further than this; statements in his Declaration lead to the conclusion that he was visiting Facilities and revising his opinions after he was deposed. (See generally Showalter Decl. ¶¶ 16-18.) Case3:10-cv-00121-RS Document202 Filed09/13/12 Page23 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS information that was not available at the time of the initial disclosure.”). Regarding the information and calculation in his first Addendum [Showalter Decl., Exh. 10], Parker testified that he “just forgot” to put it in. (Parker Dep. at 54:13-15.) Regarding the information and calculations in his Addendum No. 2 [Showalter Decl., Exh. 11], Parker testified that he just “didn't believe it was important" until he was prepping for his deposition. Id. at 149:11-23. These materials cannot be considered in support of ERF’s motion for summary judgment as they were produced in clear violation of Rule 26 and this court’s orders. Finally, Parker’s Declaration contains numerous revisions to his calculations from his original report and addenda. (See Showalter Dec. ¶¶ 16-18.) Neither ERF nor Parker provides any explanation for offering revisions well past the deadline for expert disclosures and after Parker’s deposition in this case. Under Fed. R. Civ. P. 26 and 37, Parker must be limited to providing testimony in this case that was properly disclosed in his expert report. For these reasons, ERF cannot rely on the testimony of Parker to support its Motion. Without the support provided by Parker’s testimony, ERF has no support for its claims regarding the number of CWA violations, and these claims must fail. 2. Isaac’s Testimony Regarding “1,109 Separate CWA Claims.” ERF may not submit expert evidence in the guise of an attorney affidavit, as it does in Paragraphs 3 to 5 of the Isaacs Declaration. As ERF previously summarized, “[p]ursuant to Rules 26 and 37 of the Federal Rules of Civil Procedure, [improperly disclosed] expert witnesses are limited to testifying at trial only as to those matters that were properly disclosed in their expert reports.” (ERF Motion, Showalter Decl. Exh. 14.) The reasons why are clear. First, ERF never disclosed Jodene Isaacs as an expert witness in this case, nor did she ever provide an expert report.18 Isaacs is not qualified to serve in such a capacity for the topics she presents here. ERF has not even attempted to demonstrate that Isaacs has the requisite knowledge, skill, experience, training, or education to qualify as an expert on stormwater runoff calculations under Fed. R. Evid. 702. That Isaacs’s testimony in Paragraphs 3 18 It is worth noting that this is the second time Isaacs attempted to provide Expert Testimony in this matter. (See ECF N. 179-1 at 3 ¶ 7, where Isaacs reviews piping diagrams in Eureka, California and opines about where piping leads). Case3:10-cv-00121-RS Document202 Filed09/13/12 Page24 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS to 5 of her Declaration requires “scientific, technical, or other specialized knowledge” such that expert testimony is necessary is demonstrated by these issues originally being raised in Dr. Parker’s Addendum No. 2.19 Second, allowing ERF to funnel improperly disclosed “expert” testimony into a case through attorney affidavit effectively renders disclosure obligations meaningless. ERF never disclosed Isaacs as a witness it may use to support its claims or defenses under the requirements of Fed. R. Civ. P. 26(a)(1). Isaacs was never deposed, or even disclosed, as a witness here. Third, Isaacs incorrectly analyzes the data in a way that renders her conclusions incorrect.20 Isaacs’s assertion of and reliance on a substantially lower level of precipitation (a decrease of 33.8% from the number actually stated by Parker) resulted in Isaacs overestimating in her sworn declaration to the Court the total number of days of stormwater discharge by at least 29 days. For all these reasons, this Court should strike Paragraphs 1 through 5 of the Issacs Declaration wherein ERF attempts to improperly channel and present the opinions and calculations of Parker. 3. Rogers’s Statements Regarding “1,109 Separate CWA Claims.” Rogers first offered an opinion designed only to support ERF’s RCRA claim, not at issue in this motion. Rogers admitted as much. (See Rogers Decl. ¶ 10.) Now, however, Rogers has offered several previously undisclosed opinions including that “PG&E’s storm water discharges from the Facilities since January 2005 have always contained pollutants, especially dioxins.” (Decl. ¶¶ 50-51.) In support of this opinion, Rogers cites various deposition materials, etc. which he never reported reviewing. That PG&E’s discharges have “always contained pollutants” is similarly a new opinion which has never been appropriately disclosed. 19 Dr. Parker’s Addendum No. 2 contains spreadsheets that set forth the “dates in which runoff was expected” for each of the four facilities and included total runoff totals in inches and gallons. Addendum 2 at 5-49. These date spreadsheets are almost identical to the spreadsheets offered by Isaacs as Exhibits 2-4 to her Declaration. Parker’s spreadsheets are voluminous and inadmissible and PG&E has not filed them with the Court. They are available upon request. 20 Whereas Ms. Isaacs represents to the Court that a discharge will occur “anytime daily precipitation at the Hayward Airport Station exceeds 0.062”, Paragraph 15 of Parker’s Declaration, which was cited to by Isaacs, clearly indicates that Parker opines that the precipitation would need to exceed 0.083 inches for there to be runoff at the Clawiter Facility. (See ECF No. 197-11 ¶ 15.) Case3:10-cv-00121-RS Document202 Filed09/13/12 Page25 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS When Rogers was deposed, he clearly testified that he was not there to opine regarding the condition of the Facility at any time prior to when Hagemann took samples and that testifying about any time before they were taken would be “sheer speculation on his part.” (See Rogers Dep. at 74-77.) Indeed, he testified that any information from the period before Hagemann’s samples were taken was “irrelevant” to his work. (Id. at 77.) “[W]hat was [on the Facilities] in 2010 – [was] not really that important” to his evaluation. (Id. at 76.) Rogers never reviewed “historic activities” at the Facilities. (Id. at 164-67.) Generally, a party cannot create an issue of fact precluding summary judgment by an affidavit contradicting his prior deposition testimony. Nelson, 571 F.3d at 927-28. Allowing ERF to show Rogers new, never disclosed information which was always in the possession of ERF attorneys after Rogers was deposed is unfair, and grounds for exclusion of these opinions under Fed. R. Civ. P. 26 and 37. Rogers’s opinions on pre-site inspection activities should be excluded. 4. Miscellaneous evidentiary objections related to Rogers. The Rogers Declaration provides testimony regarding other areas never previously disclosed. These include:  Factual descriptions of the Facilities (Decl. ¶¶ 13, 16);  Factual descriptions of stormwater flow at the Facilities (Id. ¶ 21). Rogers never visited the Facilities, and should be precluded based on his lack of personal knowledge from providing general factual testimony regarding them. Fed. R. Evid. 701. Rogers’s testimony should be excluded from the Court’s consideration on summary judgment. Additionally, the Rogers Declaration contains a number of opinions and/or resources which were never appropriately disclosed. These include:  The number of days the Facilities “discharged” “pollutants” for CWA purposes;  How to sample from a three-stage water separator;21 and 21 More specifically, Paragraph 35 of Rogers’s Declaration references CASQA’s California Stormwater BMP Handbook 1 of 6. (See id. n.22.) Like several other aspects of Rogers’s Declaration, a discussion of this topic was not included in his disclosures or referenced it during his lengthy deposition. (See generally Rogers Rep.; Rogers Reply; Rogers Dep.) Case3:10-cv-00121-RS Document202 Filed09/13/12 Page26 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 20 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS  The amount of water necessary to flush sediment from underground pipe. Rogers should be precluded from testifying about these topics as he has never disclosed his opinions regarding them and/or failed to demonstrate the expertise required by Daubert. 5. The Testimony of Michael Bercovich was Never Disclosed The Declaration of Michael Bercovich (See ECF No. 197-9), in-house counsel for Alco Iron and Metals Company (“Alco”), is yet another example of ERF’s complete disregard for its obligations under the Federal Rules of Civil Procedure and this Court’s orders. The Bercovich Declaration contains significant testimony regarding Alco’s business dealings with PG&E and the manner in which recycled scrap materials are collected by and compensated for by Alco. (Id. at ¶¶ 4-8.) ERF did not disclose their intent to rely upon a representative from Alco until June 28, 2011, the last day to complete fact discovery. Even then, ERF stated that it only intended “to rely on a representative from Alco Iron and Metals Company for the purpose of authenticating documents produced to ERF pursuant to ERF's Subpoena for Documents.” (See ECF No. 165 at 3:14-16). ERF did not disclose any Alco representative as providing testimony beyond the authentication of documents. Further, ERF sought to depose Alco, serving a subpoena on Alco without notifying PG&E, later withdrawing the subpoena, and only then notifying PG&E. Rule 26(a)(1)(A) states that “a party must, without awaiting a discovery request, provide to the other parties: (1) the name and, if known, the address and telephone number of each individual likely to have discoverable information – along with the subjects of that information – that the disclosing party may use to support its claims or defenses, unless the use would be solely for impeachment; . . .” (emphasis added). “The rule does not require a detailed summary of a potential witness's expected testimony. It does require at minimum, however, that the party identify the specific subjects or topics on which the witness may be called to testify.” Colony Ins. Co. v. Kuehn, No. 2:10-CV-1943, 2011 WL 4402738, at *3 (D. Nev. 2011) (excluding witness testimony not identified in the defendants’ initial disclosures). ERF has never previously disclosed any Alco employee as offering testimony on anything other than the authentication of documents, let alone on the other subjects discussed in the Bercovich Declaration. ERF cannot be allowed to rely on undisclosed topics in the Bercovich Declaration to Case3:10-cv-00121-RS Document202 Filed09/13/12 Page27 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS support its Motion. The burden is on ERF to prove that the failure to disclose the testimony now offered by Mr. Bercovich was harmless or substantially justified; however, ERF has not offered the Court any explanation at all, let alone come close to meeting its burden. Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1107 (9th Cir.2001). Therefore, this Court should strike the portions of the Bercovich Declaration that go beyond mere authentication of documents. III. PG&E’s OPPOSITION. PG&E submits that the following issues are present before the Court along with what the evidence shows: (1) With what SIC Code are PG&E’s Facilities classified under CWA regulations: PG&E’s Facilities have only Group 49 SIC Codes, because all activities that occur at them are direct support functions for provision of gas and electric services. (ECF No. 196 at 20-33.) (2) Whether ERF followed the regulatory guidance materials in taking stormwater samples which would be binding on the relevant agencies, if the agencies were enforcing CWA: Valid stormwater samples are required to prevail in an action to enforce CWA. While it is unclear what resources Matthew Hagemann used to construct his sampling methodology, it is clear that Hagemann deviated from EPA’s standard methodologies in numerous instances which render the analytical results of his sampling unreliable and objectionable. (See Section II.B.) (3) Whether ERF can establish a CWA claim based on vehicle tire tracking even though ERF’s experts admit that they collected no evidence showing that “pollutants” were tracked from the Facilities: ERF’s tire-tracking related claims fail because no sampling demonstrates that tire-tracking has tracked “pollutants” from the Facilities. Further, ERF does not demonstrate that “pollutants” tracked from the Facilities reach relevant water bodies; and (4) Whether the Parker / Isaacs / Rogers testimony is sufficient to establish that PG&E committed 1,109 separate CWA violations even though it consists exclusively of evidence and/or testimony either never disclosed or disclosed as “supplemental” to rebuttal expert reports, and relies on factual misstatements by an ERF attorney: ERF cannot establish that PG&E committed 1,109 separate CWA violations because ERF never disclosed evidence establishing the facts necessary to support such claims within the relevant time period. Its initial Case3:10-cv-00121-RS Document202 Filed09/13/12 Page28 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 22 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS Expert Reports used a different methodology to establish this claim; this methodology has been rejected by both PG&E and ERF’s experts. Further, ERF’s own expert, William Rogers, who testifies that PG&E’s Facilities had discharges during all rain storms during the relevant period, explicitly disavowed testifying to time periods before site inspections occurred at his deposition. Each of these issues is discussed in turn below. A. PG&E’s Facilities are Classified with a Group 49 SIC Code under CWA. Because Facilities Assigned Group 49 SIC Codes are Not “Industrial” under CWA, ERF’s Summary Judgment Claim Fails. To win, ERF has the burden to establish that PG&E’s service centers are “associated with industrial activity” as that term is defined by the CWA and associated regulations and guidance. “Associated with industrial activity,” used in CWA Section 402(p), 33 U.S.C. § 1342(p), is defined by 40 C.F.R. § 122.26(b)(14). It is clear that this regulation guides the scope of the California permit. As recently as last year the California State Water Resources Control Board rejected ERF’s contentions that NPDES permits are required for facilities whose SIC Codes are not specifically listed in 40 C.F.R. § 122.26(b)(14).22 In response to the comment that “all discharges which are industrial in nature are subject to the CWA NPDES permitting requirements,” the Board notes that “The [California] Permit only covers dischargers as defined in the federal regulations. Authority to add other categories is limited to a formal designation process.” See Bd. Response at 1216. PG&E’s Facilities are appropriately classified with SIC Code 49. (See generally ECF No. 196.) As PG&E has argued, EPA uses the SIC Codes as they are defined in the SIC Code Manual. (Id.) As the SIC Code Manual notes: For activities such as . . . electric, gas, and sanitary services and similar physically dispersed operations, establishments are represented by those 22 See, e.g., Cal. State Water Resources Board, Response to Comments on the 2011 Draft NPDES Industrial General Permit [“Bd. Response”], portions attached as Showalter Decl. Exh. 15, at lines 1216-20. It is important to note that the Board’s responses in this instance are directed to comments filed by the California Coastkeeper Alliance (“CCA”), of which Humboldt Baykeeper, an ERF affiliate, is a member. See CCA Comment Letter to Cal. State Water Res. Bd dated April 29, 2011, attached to the Showalter Decl. as Exh. 16, at 1. The specific arguments the Board rejects are substantively identical to those advocated by ERF in this case. See id. at 22-26. Case3:10-cv-00121-RS Document202 Filed09/13/12 Page29 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 23 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS relatively permanent branch or main offices, terminals, stations, etc. that are either (2) directly responsible for supervising such activities, or (2) the base from which personnel operate to carry out these activities . . . . (SIC Code Manual, ECF No. 196-13 at 12.) The parties agree that PG&E’s Facilities are “the base from which personnel operate to carry out” the activities which ERF admits are the primary purpose of the Facilities (ECF 196-2 at 3-4). In prior briefing, ERF also conceded this point: “While the primary purpose of [the] Facilities might not be to conduct [activities listed by SIC Code in the Permit], these activities are no less industrial because they are not the Facilities’ primary purpose . . . given [that] these Facilities support an industrial activity: the transmission and distribution of electricity and gas.” ECF No. 81 at 14:3:6. ERF acknowledges that transmission and distribution of electricity and gas is the primary purpose of the Facilities (a Group 49 activity) and that the other activities they are concerned with are not “primary.” Once again, ERF is more concerned with challenging the regulation than with following it. ERF attempts to argue that SIC Code Group 49 only applies to facilities which “generate electricity or natural gas [or] distribute that electricity or gas to PG&E’s customers.” (ECF No. 197 at 25.) However, the SIC Code is broader and applies to all aspects of gas and electric service – a service activity and not industrial as ERF has argued. (See SIC Code Manual at 284, ECF No. 196-13 at 47.) Because the statute, regulations and guidance do not support ERF’s argument, ERF’s summary judgment motion is based upon a misleading and inaccurate characterization of the regulations. Not only does this flawed characterization preclude ERF being awarded summary judgment, it also is insufficient to preclude PG&E being awarded it.23 Second, even had the Board not already rejected ERF’s theory, ERF attempts to ignore the 23 ERF would have the burden of proof to show PG&E’s SIC Code at trial. Where a party bears the burden of proof, “his showing must be sufficient for the court to hold that no reasonable trier of fact could find other than for the moving party.” Seagate Tech., Inc. v. St. Paul Fire & Marine Ins. Co., 11 F. Supp. 2d 1150, 1152 (N.D. Cal. 1998) (internal citation omitted). The party who will have the burden of proof must persuade the Court judgment that it will have sufficient admissible evidence to justify going to trial. Id. at 1153; Nissan Fire & Marine Ins. Co. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir. 2000). ERF’s case on this element is premised on the Court ignoring how SIC Codes are applied, and not on a meaningful factual dispute. Case3:10-cv-00121-RS Document202 Filed09/13/12 Page30 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 24 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS most important part of the definition of the SIC codes, i.e. not that an activity which occurs only occasionally at a facility, but instead is based upon what activity a facility is “primarily engaged.” (See ECF No. 196 at 25-33.) According to the SIC Code Manual itself, usually there is only one SIC code for a facility, with the only exceptions being physically separate economic activities (a hotel and a marina for example) as discussed in PG&E’s opening brief. However, ERF argues that if an activity occurs at all, an SIC code applies. Indeed, ERF states that the “Facilities are ‘primarily engaged’ in four different activities: recycling, transportation, metal fabrication, or aggregate handling activities.” (ECF No. 197 at 24.) Such a statement is inherently contradictory and presents a logical fallacy. Surely a facility cannot be primarily engaged in four activities. The SIC Code Manual establishes how codes are assigned where multiple activities occur. In its Motion, PG&E detailed the many ways in which ERF’s attempts at assigning SIC codes is incorrect. (See ECF No. 196 at 21-24.)24 It is important to note two different, but equally significant problems with ERF’s SIC code arguments. First, ERF does not apply proper SIC codes, taking into account the actual definition of the SIC code. Second, even if an SIC code might potentially apply, ERF ignores the word “primary” and assigns an SIC code for every activity that might ever occur at a facility,25 not just the “primary activity.” One SIC Code not addressed in PG&E’s opening brief is SIC Code 1442 for aggregate storage. While this is wholly inapplicable, it was not addressed because ERF’s summary judgment motion was the first time it was ever mentioned and should be struck for that reason. Further, even a cursory glance at the SIC code itself shows how inapplicable it is. The Group 14 SIC codes are within the “Mining” subdivision in a group called “Mining and Quarrying of 24 To prevent duplication, PG&E incorporates the arguments made in its Motion as if set forth in full here. The one issue which ERF discusses briefly in its Motion that is not discussed in PG&E’s Motion is ERF’s contention that CWA Section 402(p) created “a temporary moratorium for the EPA from having a duty to issue NPDES permits for certain storm water discharges.” (See ECF No. 197 at 27) (discussing ECF No. 26 at 9-13 and ECF No. 81 at 17-19.) This issue has been briefed to this Court, where it was rejected, before, and like ERF, PG&E incorporates and restates its earlier arguments. (See ECF No. 83 at 16.) If ERF’s position was correct, it would have foreclosed the need for any analysis under Section 402(p) in other stormwater cases like Nw. Env. Def. Ctr. v. Brown, 640 F.3d 1063 (9th Cir. 2011), cert. granted sub nom, Decker v. Nw. Env. Def. Ctr., Case No. 11-338 (2012), brought since then. 25 PG&E has used Best Buy stores as facilities that would be rendered “industrial” under ERF’s re-write of 40 C.F.R. § 122.26(b)(14). (ECF No. 196 at 33.) These stores would be “industrial recycling facilities” because they collect and resell some used batteries and computers. Case3:10-cv-00121-RS Document202 Filed09/13/12 Page31 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 25 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS Nonmetallic Minerals, Except Fuels.” The SIC Code 1442 itself is defined as “establishments primarily engaged in operations primarily engaged in operating sand and gravel pits and dredges, and in washing, screening or otherwise preparing sand and gravel for construction uses.” (See SIC Code Manual Excerpt addendum, attached to the Showalter Decl. as Exh. 17.) ERF presents evidence only that PG&E “stores” aggregate material at its Facilities. There is no evidence, because such activity does not happen, of any mining activity or any sand and gravel pits, nor is there any evidence that aggregates are “washed” “screened” or anything else but stored at the Facilities. As outlined in PG&E’s Motion, the Facilities are what the SIC Code Manual describes as auxiliary operations, which by its very definition includes storage of materials and provision of equipment for use by the business in the field. (See SIC Code Manual at 15.) The parties agree, in large part, the types of activities that occur at the Facilities; the parties disagree how these activities are characterized. Does welding approximately once a week (citation) equate to welding (light industrial) as a “primary activity”? So too with the other activities, three or four employees performing auto maintenance at a facility where dozens are employed – does this equate to a “primary activity?” To prevail on this argument, ERF must persuade the Court that its Complaint and discovery admissions do not matter. ERF admitted that the primary purpose of the facilities (though not the only purpose) was to maintain the transmission and distribution of electricity and gas. That admission is binding and clearly elucidates the Facilities’ “primary” purpose for SIC code analyses. Certainly, California regulators think that the purpose drives the analysis. (See ECF No. 196 at 21-33., supra note 22) The only question left, then, is whether more than one SIC Code is applicable to the Facilities. PG&E argues “no” in its Motion and will not repeat that argument. (See ECF No. 196 at 29-33.) In addition, ERF’s method of determining “primary purpose” (or four primary purposes) is flawed. ERF boldly asserts that each complained-of activity is primary for a different reason with no context to the larger Facility. For recycling, ERF cites objectionable material (e.g., ECF No. 197-9, Decl. of Michael Bercovich) to show that PG&E receives money for its recycling. ERF terms the money “substantial” without any comparison to PG&E’s overall business or any individual revenue Case3:10-cv-00121-RS Document202 Filed09/13/12 Page32 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 26 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS stream. That PG&E may have received $1.3 million dollars (spread over four facilities) in five years by selling its own recyclable materials (and merely recouping some of the money spent on the material in the first instance) to a wholesale recycling company tells the Court nothing about the materiality of that number. Some facts that undercut the materiality:  PG&E owns 141,215 miles of electric distribution lines, 18,616 miles of transmission lines, 42,141 miles of natural gas distribution pipelines, and 6,438 miles of transmission pipelines.  PG&E has 20,000 employees and services a 70,000 mile service area. (See PG&E website at http://www.pge.com/about/company/profile/) In this context, what ERF portrays as being “substantial” expenses are, in reality, relatively small sums related to PG&E’s periodical recoupment of the larger sums it spent to install different equipment in the first place, and which it was spending again to replace it. Again, as ERF admitted in discovery, the Facilities exist to further PG&E providing gas and electric services to California consumers. For “transportation facilities” ERF takes a completely different – but equally incorrect – approach. Instead of comparing maintenance with recycling in terms of what it claims is revenue, ERF now switches to salary. Again, ERF combines all four facilities which obscures the fact that no employees at the 14th Street Facility perform automobile maintenance. Further, ERF provides salary numbers in a vacuum. That 25 employees may have made approximately $8 million dollars in salary over a five year period tells the Court nothing about the rest of the Facility. How many other employees work at these large facilities? What percentage of the total salary earned by employees at the Facilities over 5 years does the $8 million dollars account for? For light industrial and aggregate storage, ERF does not even attempt to offer information, simply stating that they are “no less valuable” to PG&E. (ECF No. 197 at 18.) It is here, however, that ERF establishes for PG&E the very argument PG&E attempts to make in its Motion: that these are auxiliary establishments. ERF states, “without locations to store aggregates . . . PG&E would have no way to replace the portions of streets and other surfaces displaced by the digging of trenches . . . routinely conducted by PG&E’s crews.” Id. ERF also states, “the cutting, welding and fabrication of metal products and parts . . . plays a central role in Case3:10-cv-00121-RS Document202 Filed09/13/12 Page33 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 27 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS the process of staging and delivering PG&E’s electricity and gas services.” Id. The activities ERF here deems as “primary” are actually in service to the larger goal of the Facility: assisting in the delivery of “PG&E’s electricity and gas services.” That Congress and EPA have not chosen to require permits for these facilities upsets ERF, but does not give them a cause of action under the CWA. Accordingly, ERF’s Motion should be denied. B. ERF Does Not Show that “Pollutants” reach “Waters of the United States” through Stormwater Run-Off. CWA Section 505, 33 U.S.C. § 1365, is clearly an “enforcement provision” which is designed to supplement, not replace, enforcement by regulators. See, e.g., Wash. PIRG v. Pendleton Woolen Mills, 11 F.3d 883, 885 (9th Cir. 1993). As PG&E has indicatd, see ECF No. 196 at 23-33, federal, state, and local regulators have promulgated regulations defining key CWA terms and issued formal and informal guidance on how CWA is to be interpreted and enforced. These guidance materials are binding on ERF and the Court. Bragdon, 524 U.S. at 642. EPA and California regulators have issued regulatory guidance which bind agencies, as well as citizen-plaintiffs like ERF, to conduct sampling under specified parameters. See discussion supra. EPA’s materials provide methodologies which, if applied correctly, generate valid samples. While Hagemann indicates that he “used appropriate sampling methods,” see Hagemann Reply at 2, he makes no effort to explain what those methods were, or to justify his chosen methodology through reference to regulatory guidance or academic literature. (See generally Hagemann Report; Hagemann Reply; Hagemann Dep.) Timothy Simpson watched Hagemann take virtually all of the involved samples, and states explicitly that none of them were valid under regulatory guidance. (See Simpson Decl. ¶¶ 19-22.) With this Motion, PG&E objects to the testimony of Matthew Hagemann and William Rogers under Daubert and Fed. R. Civ. P. 26 and 37.26 PG&E submits that, unless either (a) Hagemann can demonstrate that he took stormwater samples in a methodologically reliable fashion; or (b) ERF has disclosed a methodology sufficient to withstand a Daubert challenge 26 Daubert objections can support summary judgment. Lust v. Merrell Dow Pharms., Inc., 89 F.3d 594, 597 (9th Cir. 1996) (upholding summary judgment based on Daubert motion). Case3:10-cv-00121-RS Document202 Filed09/13/12 Page34 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 28 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS which can transform Hagemann’s “invalid” samples to “valid” ones, ERF’s Motion must be denied because ERF has not demonstrated that any quantity of “pollutants” were discharged into the “waters of the United States.” ERF has no testimony linking the amount of “pollutants” on-site with the amount of “pollutants” offsite. Rogers admits that he cannot quantify the amount of “pollutants” that left the Facilities and that he cannot quantify the total amount of “pollutants” on any of the Facilities. (Rogers Dep. 23-24.) He cannot specify the amount of sediment to leave any of the sites. (Id. at 45.) Instead, Rogers’s “benchmarks” related to whether the Facilities may pose an “imminent and substantial endangerment,” a RCRA question, a separate inquiry to the one now pending before the Court. The RCRA analysis cannot serve as a proxy for the amount of “pollutants” leaving the site. The “benchmarks” are a list Rogers created and have no legal standing under CWA. (See Ellis Decl. ¶¶ 15-16.) As was discussed in detail above, outside of bald assertion, ERF has made no scientifically valid effort to tie on-site materials to to whether “pollutants” are discharged from the Facilities into the “waters of the United States” – the issue pending before the Court at this time. (See ECF No. 197 at 28.) Accordingly, ERF’s Motion should be denied. C. ERF’s Tire-Focused Claims are Wholly Speculation and Must Be Dismissed. ERF’s tire-focused claims are premised entirely on speculation. ERF’s tire-focused CWA claim exclusively relies on two paragraphs in the Hagemann Decl. (ECF No. 197 at 21) (discussing Hagemann Decl. ¶¶ 34-35.) These Paragraphs note that it is “well-known” among practitioners in the storm water pollution field that one means by which pollutants are transported from particular areas is by motor vehicles. (Hagemann Decl. ¶ 34.) Further, Hagemann discusses his “qualitative conclusion” that “motor vehicle traffic from the Facilities is likely transporting dioxins, pentachlorophenol, and other pollutants into the public streets.” (Id. ¶ 35.)27 27 ERF may try to supplement Hagemann’s scant evidence through reference to Issacs’s Exh. 35. Exh. 35 consists of a series of photographs that ERF allegedly took during site inspections at PG&E's Oakport, Clawiter, Myrtle, and West 14th St. Facilities. One photograph depicts tire tracks at an unknown facility. ERF counsel Jodene Isaacs’s declaration characterizes the photographs as “true and correct copies.” (Isaacs Decl. at ¶ 37.) This Declaration is not an adequate foundation upon which to introduce the photographs into evidence and they should be accordingly excluded. Isaacs never suggests she has personal knowledge of the photographs. Instead, she states that the photographs are “true and correct copies of photographs taken by ERF during site inspections of the Oakport, Clawiter, Myrtle, and West 14th St. Facilities.” (Isaacs Case3:10-cv-00121-RS Document202 Filed09/13/12 Page35 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS Hagemann’s speculation is insufficient to demonstrate that PG&E has discharged pollutants by tire-tracking. First, “conclusory allegations unsupported by factual data are insufficient” to prevail on summary judgment. Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 922 (9th Cir. 2001) (citation omitted). Hagemann’s “qualitative conclusion” is nothing more than a “conclusory assertion.” Second, even if it were sufficient, Hagemann’s conclusion that pollutants “are likely” being transported “from the Facilities” is insufficient to meet ERF’s burden of proof in this matter, which is to show that “pollutants” are being discharged from the Facilities into the “waters of the United States.” Third, a “quantitative” conclusion is required. Experts (particularly ones presenting testimony insufficient to withstand a Daubert challenge) cannot “eyeball” the level of hazardous substances present without supporting data and present their speculation dressed as reliable evidence. See Rogers v. Raymark Indus., 922 F.2d 1426, 1431 (9th Cir. 1991) (excluding visual testimony proferred by an expert in an asbestos case). There is no factual data to support Hagemann’s conclusion.28 Hagemann stated that he has “no direct evidence that contamination from the sites has been tracked off site.” (Hagemann Dep. at 154.) Hagemann took “no samples of any materials that would have been tracked off site.” (Id.) Indeed, only saw tire tracks at one of the four Facilities. (Id. at 156.) Further, Hagemann readily admits that he had no literature or documentation illustrating that tire tracks could be sufficient to spread contamination offsite. (Id. at 157.) While he states that he knew from “experience” that tire-tracked contamination could be an issue, he had no idea of the amount of material which would need to be tracked to pose a problem. (Id. at 159.)29 Decl. at ¶ 37.) Where the affiant cannot actually observe or perceive that to which she testifies, the affiant lacks personal knowledge necessary to establish admissibility. See Orr v. Bank of Am., NT & SA, 285 F.3d 764, 777 (9th Cir. 2002) (finding attorney’s affidavit used to introduce document could not authenticate a document where attorney lacked personal knowledge of it). Isaacs never states that she has personal knowledge of the photographs. In fact, Issacs fails to state even basic information (e.g. who took the photographs, when they were taken, or whether the photographs accurately depict site conditions). Thus, the photographs should be excluded. 28 Should the Court find that ERF has demonstrated that “pollutants” exist on-site, this evidence would constitute a “mere scintilla” of evidence that “pollutants” had been tracked from the Facilities on vehicle tires. A “‘scintilla of evidence,’ or evidence that is ‘merely colorable’ or ‘not significantly probative,’ is not sufficient to present a genuine issue as to a material fact” or to support an award of summary judgment. United Steelworkers of Am. v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir.1989) (citation omitted). 29 The disjunction between tire-track related evidence and Hagemann’s report is clear from a review of the relevant drafts. (Hagemann Dep. at 174-75.) The tire-track related testimony was, Case3:10-cv-00121-RS Document202 Filed09/13/12 Page36 of 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30 PG&E’S RESPONSE TO ERF’S MOTION FOR SUMMARY JUDGMENT ON CLAIM ONE CASE NO. 3:CV 10-00121 RS Hagemann’s deposition testimony is binding upon him and ERF. “[I]f a party who has been examined at length on deposition could raise an issue of fact simply by submitting an affidavit contradicting his own prior testimony, this would greatly diminish the utility of summary judgment as a procedure for screening out sham issues of fact.” See Foster v. Arcata Assocs., 772 F.2d 1453, 1462 (9th Cir.1985), cert. denied, 475 U.S. 1048 (1986). A party cannot create an issue of fact precluding summary judgment by an affidavit contradicting his prior deposition testimony. Nelson, 571 F.3d at 927-28 (9th Cir. 2009). Accordingly, ERF’s tire- focused CWA claim must be rejected. D. ERF Cannot Prove 1,109 Separate CWA Violations. As discussed in Sections II(C)(1-3) above, ERF’s attempt to establish 1,109 separate CWA claims, one for “[e]very day that there has been significant local rainfall,” see ECF No. 197 at 30, fails for three reasons. First, Dr. Parker, ERF’s expert supporting “1,109 separate violations” was not disclosed until the Reply phase of litigation.30 Second, the number 1,109 is premised on sworn testimony from an Jodene Isaacs, an ERF attorney, that is demonstrably false. Third, ERF cannot prove that its improper sampling in 2011 provides relevant evidence regarding conditions and alleged discharges occurring years before because William Rogers, ERF’s expert, testified that he lacked information necessary to determine this. IV. CONCLUSION For the reasons set forth herein, the evidentiary objections set forth in the accompanying Proposed Order should be sustained, and ERF’s Motion (ECF No. 197) should be denied. Dated September 13, 2012 Schiff Hardin LLP By:__/s/ Russell B. Selman__ Attorneys for PG&E in full, added by one of ERF’s attorneys, and not Hagemann. (Id. at 175.) 30 See Section II(C)(1) above. In short, ERF originally sought to rely on Hagemann to establish this testimony, but abandoned relying on him for these topics when his testimony was substantively demonstrated to be unreliable by PG&E. Case3:10-cv-00121-RS Document202 Filed09/13/12 Page37 of 37