Tesoro Refining And Marketing Company Llc et al v. City of Long Beach, A California Municipality et al

NOTICE OF MOTION AND MOTION to Dismiss for Lack of Jurisdiction

C.D. Cal.March 9, 2017

DEFENDANT PLAINS ALL AMERICAN PIPELINE L.P. ET. AL.’S NOTICE OF MOTION AND MOTION TO DISMISS Case No. 2:16-cv-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 MITCHELL CHADWICK LLP CLIFTON J. MCFARLAND (SBN 136940) cmcfarland@mitchellchadwick.com VINCENT K. WONG (SBN 291436) vwong@mitchellchadwick.com 3001 Lava Ridge Court, Suite 120 Roseville, CA 95661 Telephone: (916) 462-8888 Facsimile: (916) 788-0290 Attorneys for Defendants PLAINS ALL AMERICAN PIPELINE, L.P. [COUNSEL LIST CONTINUED ON THE FOLLOWING PAGE] UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA TESORO REFINING & MARKETING COMPANY LLC, et al. Plaintiffs, vs. COUNTY SANITATION DISTRICT NO. 3 OF LOS ANGELES COUNTY, et al. Defendants. Case No. 2:16-cv-06963-BRO (FFMx) DEFENDANT PLAINS ALL AMERICAN PIPELINE, L.P., ENI OIL & GAS INC., GETTY OIL COMPANY, UNION OIL COMPANY OF CALIFORNIA, AND CRIMSON PIPELINE L.P.’S NOTICE OF MOTION AND MOTION TO DISMISS FIRST AMENDED COMPLAINT [Fed R. Civ. P. 12(b)(1)] Judge Beverly Reid O’Connell Department 7C, United States Courthouse Date: April 10, 2017 Time: 1:30 P.M. Courtroom: 7C Location: 350 West 1st Street Los Angeles, CA 90012 Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 1 of 21 Page ID #:595 DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS CASE NO: 2:16-CV-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 GREENBERG GLUSKER FIELDS CLAMAN & MACHTINGER LLP DAVID E. CRANSTON (State Bar No. 122558) DCranston@GreenbergGlusker.com SHERRY E. JACKMAN (State Bar No. 274030) SJackman@GreenbergGlusker.com 1900 Avenue of the Stars, 21st Floor Los Angeles, California 90067-4590 Telephone: 310.553.3610 Facsimile: 310.553.0687 Attorneys for Defendant ENI OIL & GAS INC. COX CASTLE & NICHOLSON LLP PERRY S. HUGHES (State Bar No. 167784) phughes@coxcastle.com KAREN I. GOLD (State Bar No. 258360) kgold@coxcastle.com 2029 Century Park East, 21st Floor Los Angeles, CA 90067-3284 Telephone: (310) 284-2200 Facsimile: (310) 284-2100 Attorneys for Defendant Crimson Pipeline, L.P. ROGERS JOSEPH O’DONNELL Robert C. Goodman (State Bar No. 111554) rgoodman@rjo.com Nicholas T. Niiro (State Bar No. 281762) nniiro@rjo.com 311 California Street San Francisco, CA 94104 Telephone: 415.956.2828 Facsimile: 415.956.6457 Attorneys for Defendants Getty Oil Company and Union Oil Company of California Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 2 of 21 Page ID #:596 1 DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS Case No. 2:16-cv-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 NOTICE TO THE COURT AND ALL PARTIES AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE that on April 10, 2017, at 1:30 p.m., or as soon thereafter as counsel may be heard, in Department 7C at 350 West 1st Street, Los Angeles, CA 90012, defendants Plains All American Pipeline L.P., Eni Oil and Gas Inc., Getty Oil Company, Union Oil Company of California, and Crimson Pipeline, L.P. (collectively, “Moving Parties”) will, and hereby do, move this Court for an order dismissing them from this action for lack of subject matter jurisdiction (“Motion”). As set forth in the Memorandum of Points and Authorities below, this Motion is brought pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, which provides a defense for lack of subject-matter jurisdiction. This Court should decline to exercise supplemental jurisdiction in this matter because the state law claims pled by Plaintiffs substantially predominate over the federal claims over which this Court has original jurisdiction. Plaintiffs’ First Amended Complaint pleads two federal causes of action – both under the federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) – against one defendant, the Los Angeles County Sanitation District No. 3, a public entity. In contrast, Plaintiffs’ First Amended Complaint pleads eight state law causes of action – seven common law claims and one statutory claim – against eleven different defendants. The state law claims substantially predominate over the federal claims. The Court may also consider the apparent weakness of Plaintiffs’ CERCLA claim, even evaluated prior to discovery, in declining to exercise supplemental jurisdiction. Here, Plaintiffs carry a heavy burden in defeating the applicability of CERCLA’s petroleum exclusion. This Motion is made following the conference of counsel pursuant to L.R. 7- 3, which took place on February 23, 2017. The Motion is based on the papers, records, and pleadings on file and any such argument or evidence permitted by the Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 3 of 21 Page ID #:597 2 DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS CASE NO: 2:16-CV-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 Court at the hearing on the Motion. Should the Court deem it necessary, Moving Parties reserve the right to participate in oral argument at the time of the hearing on the Motion. DATED: March 9, 2017 MITCHELL CHADWICK LLP By: /s/ CLIFTON J. MCFARLAND CLIFTON J. MCFARLAND VINCENT K. WONG Attorneys for Defendant PLAINS ALL AMERICAN PIPELINE L.P. DATED: March 9, 2017 GREENBERG GLUSKER FIELDS CLAMAN & MACHTINGER LLP By: /s/ DAVID E. CRANSTON DAVID E. CRANSTON SHERRY E. JACKMAN Attorneys for Defendant ENI OIL & GAS INC. DATED: March 9, 2017 COX CASTLE AND NICHOLSON LLP By: /s/ PERRY S. HUGHES _____ PERRY S. HUGHES KERRY I. GOLD Attorneys for Defendant CRIMSON PIPELINE, L.P. DATED: March 9, 2017 ROGERS JOSEPH O’DONNELL By: /s/ ROBERT C. GOODMAN _____ ROBERT C. GOODMAN NICHOLAS T. NIIRO Attorneys for Defendants Getty Oil Company and Union Oil Company of California Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 4 of 21 Page ID #:598 i DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS Case No. 2:16-cv-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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. INTRODUCTION .......................................................................................... 1 II. STATEMENT OF THE ISSUE TO BE DECIDED ...................................... 1 III. RELEVANT FACTUAL BACKGROUND ................................................... 2 IV. LEGAL STANDARD ..................................................................................... 4 A. Motion to Dismiss for Lack of Subject Matter Jurisdiction ................. 4 V. ARGUMENT .................................................................................................. 6 A. The State Law Claims Substantially Predominate ............................... 6 1. The Scopes of the Federal and State Issues are Different ..................................................................................... 8 2. The Terms of Proof of the Federal and State Claims are Different ............................................................................... 9 3. The Remedies Available Under the Federal and State Claims are Also Different ............................................... 10 4. The State Law Claims Can Be Dismissed Without Prejudice ................................................................................... 11 B. The Apparent Weakness of the Federal Claims is Another Factor to be Weighed .......................................................................... 11 VI. CONCLUSION ............................................................................................. 13 Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 5 of 21 Page ID #:599 ii DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS CASE NO: 2:16-CV-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 AUTHORITIES Federal Cases Ashcroft v. Iqbal, 556 U.S. 662 (2009).............................................................................................. 12 California Dept. of Toxic Substances Control v. Alco Pacific, Inc., 217 F.Supp.2d 1028 (C.D. Cal. 2002) .................................................................... 9 City of Chicago v. International College of Surgeons, 522 U.S. 156 (1997)............................................................................................... 5 Cose v. Getty Oil Co., 4 F.3d 700 (9th Cir. 1993) .................................................................................... 12 De Asencio v. Tyson Foods, Inc., 342 F.3d 301 (3d. Cir. 2003) .................................................................................. 6 Diven v. Amalgamated Transit Union, 38 F.3d 598 (D.C. Cir. 1994) ............................................................................ 6, 11 Johnson v. Fitial, 2012 WL 12542689 (D. N. Mar. I. Sept. 26, 2012) ............................................... 7 Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375 (1994)................................................................................................ 4 Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992)................................................................................................ 4 MacKay v. Pfiel, 827 F.2d 540 (9th Cir. 1987) .................................................................................. 4 Org. for Advancement of Minorities with Disabilities v. Brick Oven Rest., 406 F.Supp.2d 1120 (S.D. Cal. 2005) .................................................................. 11 Stanton Road Associates v. Lohrey Enterprises, 984 F.2d 1015 (9th Cir. 1993) .............................................................................. 10 Trustees of Construction Industry and Laborers Health and Welfare Trust v. Desert Valley Landscape & Maint., Inc., 333 F.3d 923 (9th Cir. 2003) ............................................................................ 6, 11 United Mine Workers v. Gibbs, 383 U.S. 715 (1966)................................................................................................ 5 Wilshire Westwood Assocs. v. Atl. Richfield Corp., 881 F.2d 801 (9th Cir. 1989) ................................................................................ 13 Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 6 of 21 Page ID #:600 iii DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS CASE NO: 2:16-CV-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 AUTHORITIES (continued) California Cases Tesoro Refining & Marketing Company LLC, et al. v. Los Angeles Regional Water Quality Control Board, No. BS160502 (Los Angeles Super. Ct. Jan. 29, 2016) .. 2 Federal Statutes 28 U.S.C. § 1367(c)(2) ....................................................................................... 1, 6, 7 42 U.S.C. § 9601(14) ........................................................................................... 3, 13 42 U.S.C. § 9607(a) .......................................................................................... 8, 9, 10 California Statutes Cal. Bus. & Prof. Code § 17200 ........................................................................... 8, 10 Other Authorities Environmental Protection Agency, Scope of the CERCLA Petroleum Exclusion Under Sections 101(14) and (104)(a)(2) (July 31, 1987) .................................... 13 Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 7 of 21 Page ID #:601 1 DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS Case No. 2:16-cv-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 MOTION I. INTRODUCTION Plaintiffs Tesoro Refining & Marketing Company LLC and Tesoro SoCal Pipeline Company LLC (“Plaintiffs”) brought this action against Defendant Plains All American Pipeline, L.P., Eni Oil & Gas Inc., Getty Oil Company, Union Oil Company of California, Crimson Pipeline, L.P. (collectively, “Moving Parties”) and seven other defendants, seeking various types of damages allegedly suffered with respect to petroleum contamination occurring along a petroleum pipeline corridor in Long Beach, California. Plaintiffs’ First Amended Compliant (“FAC”) (Filing No. 58, at CM/ECF) alleges: (1) two federal claims under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) against one defendant, Los Angeles County Sanitation District No. 3 (“LACSD”), that allegedly owned a sewer line in proximity to the contamination; and (2) eight state law causes of action against eleven different entities, including Moving Parties, that allegedly owned or operated petroleum pipelines (the “petroleum pipeline defendants”) in proximity to the contamination. Plaintiffs assert federal question jurisdiction over LACSD pursuant to Section 1331 of Title 28 of the United States Code. Filing No. 58, at CM/ECF ¶ 24. Plaintiffs assert supplemental party jurisdiction over Moving Parties, and six other petroleum pipeline defendants, pursuant to Section 1367 of Title 28. Id. However, because the eight state law claims substantially predominate over the CERCLA claims over which this Court has original jurisdiction, the Court should decline to exercise supplemental jurisdiction and should dismiss the state law claims. See 28 U.S.C. § 1367(c)(2). II. STATEMENT OF THE ISSUE TO BE DECIDED Whether the Court should exercise supplemental jurisdiction over the eight state law claims for relief. Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 8 of 21 Page ID #:602 2 DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS CASE NO: 2:16-CV-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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. RELEVANT FACTUAL BACKGROUND In September 2014, the California Regional Water Quality Control Board (“Regional Board”) issued a Cleanup and Abatement Order (“Cleanup Order”) to parties from whom Plaintiffs purchased assets and agreed to assume environmental liabilities under the Cleanup Order. Filing No. 58, at CM/ECF ¶ 30. The Regional Board found that petroleum pipelines currently owned or operated by Plaintiffs released petroleum into the environment. Filing No. 58, at CM/ECF ¶ 32. None of the defendants herein were named as respondents in the Regional Board’s Cleanup Order. Plaintiffs are challenging the Cleanup Order in state court. Tesoro Refining & Marketing Company LLC, et al. v. Los Angeles Regional Water Quality Control Board, No. BS160502 (Los Angeles Super. Ct. Jan. 29, 2016); see Plaintiffs’ Amended Notice of Pendency of Other Action or Proceeding (Filing No. 36, at CM/ECF). Plaintiffs have been investigating and cleaning up the petroleum contamination since 2014. Filing No. 58, at CM/ECF ¶ 2. Plaintiffs allege that a sewer line, owned and operated by LACSD, and that the pipelines owned or operated by the petroleum pipeline defendants, including Moving Parties, contributed to the contamination at issue. Filing No. 58, at CM/ECF ¶ 31. In their first claim for relief for the recovery of past response costs under CERCLA (asserted against LACSD only), Plaintiffs allege that hazardous substances within the meaning of CERCLA were released from LACSD’s sewer line and seek the recovery of past response costs. Filing No. 58, at CM/ECF ¶ 55. In their second claim for relief for declaratory relief under CERCLA (asserted against LACSD only), Plaintiffs allege that they are entitled to a declaratory judgment with respect to future response costs in connection with releases of hazardous substances from the sewer line. Filing No. 58, at CM/ECF ¶ 68. Plaintiffs have not pled claims for relief under CERCLA against Moving Parties or the six other petroleum pipeline defendants. Presumably, this is because of the CERCLA petroleum exclusion, which provides that neither petroleum nor Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 9 of 21 Page ID #:603 3 DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS CASE NO: 2:16-CV-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 any fraction thereof falls within the CERCLA definition of “hazardous substance.” 42 U.S.C. § 9601(14). Plaintiffs’ eight remaining causes of action against the eleven petroleum pipeline defendants are based entirely on state law: • In their third cause of action, Plaintiffs seek common law contribution from the petroleum pipeline defendants for all costs Plaintiffs have incurred in complying with the Cleanup Order. Filing No. 58, at CM/ECF ¶ 70. • In their fourth cause of action, Plaintiffs seek declaratory relief delineating the rights, duties, and obligations as between the Plaintiffs and the petroleum pipeline defendants. Filing No. 58, at CM/ECF ¶ 74. Plaintiffs seek a court judgment apportioning their past and future costs of compliance with the Cleanup Order. Filing No. 58, at CM/ECF ¶¶ 71-73. • In their fifth cause of action, Plaintiffs seek equitable indemnity for all costs incurred in investigating and remediating the contamination, including costs of compliance with the Cleanup Order. Filing No. 58, at CM/ECF ¶ 76. Plaintiffs base this demand for equitable indemnity on the defendants’ alleged negligent and intentional conduct. Filing No. 58, at CM/ECF ¶¶ 76-78. • In their sixth cause of action, Plaintiffs allege that the petroleum pipeline defendants’ acts or omissions relating to their respective pipelines caused or contributed to contamination at the Site, constituting a continuing and permanent trespass. Filing No. 58, at CM/ECF ¶¶ 80-81. • In their seventh cause of action, Plaintiffs allege that the petroleum pipeline defendants’ acts or omissions have, and continue to, interfere with Plaintiffs’ use and enjoyment of their property, and thus constitute a continuing and permanent private nuisance. Filing No. 58, at CM/ECF ¶¶ Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 10 of 21 Page ID #:604 4 DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS CASE NO: 2:16-CV-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 84-86. • In their eighth cause of action, Plaintiffs allege that the petroleum pipeline defendants’ acts or omissions have resulted in adverse impacts to the adjacent community and public as a whole. Filing No. 58, at CM/ECF ¶ 90. Plaintiffs allege that these harms to the public, in addition to the harm suffered by Plaintiffs themselves, constitute a public nuisance. Filing No. 58, at CM/ECF ¶¶ 92-95. • In their ninth cause of action, Plaintiffs allege that the petroleum pipeline defendants’ acts or omissions relating to their respective pipelines constitute violations of various laws, statutes, and regulations, and thus constitute a nuisance per se. Filing No. 58, at CM/ECF ¶ 97. • In their tenth cause of action, Plaintiffs allege that the petroleum pipeline defendants violated California Business & Professions Code section 17200 et seq. in that the defendants gained an unfair business advantage by avoiding the costs of proper environmental compliance and remediation. Filing No. 58, at CM/ECF ¶ 101. IV. LEGAL STANDARD A. Motion to Dismiss for Lack of Subject Matter Jurisdiction Dismissal under Rule 12(b)(1) is warranted where subject matter jurisdiction is lacking. MacKay v. Pfiel, 827 F.2d 540, 543 (9th Cir. 1987). The plaintiff carries the burden of establishing that the Court has subject matter jurisdiction. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). Federal courts are courts of limited jurisdiction, and the plaintiff must overcome the presumption that a cause of action lies outside that limited jurisdiction. Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377 (1994). Plaintiffs assert that the Court has federal question jurisdiction over the two CERCLA claims pursuant to Section 1331 of Title 28 (federal question Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 11 of 21 Page ID #:605 5 DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS CASE NO: 2:16-CV-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 jurisdiction) and Section 9613(b) of Title 42 (district courts have exclusive jurisdiction over CERCLA claims). Filing No. 58, at CM/ECF ¶ 24. Moving Parties do not contest this assertion of federal jurisdiction over the two CERCLA claims for purposes of this Motion. Plaintiffs assert supplemental party jurisdiction over the state law claims pursuant to Section 1367 of Title 28. Id Moving Parties contest this assertion in this Motion. For the court to exercise supplemental party jurisdiction: (1) the claims against the petroleum pipeline defendants must arise from the same case or controversy as the claims against LACSD; and (2) the court must decide to exercise its discretion to assert jurisdiction over the petroleum pipeline defendants. In order for the claims to arise from the same case or controversy, the relationship between the federal and state claims must be such that: (1) they arise from a common nucleus of operative facts; and (2) plaintiffs would ordinarily be expected to try them all in a single proceeding. United Mine Workers v. Gibbs, 383 U.S. 715, 725 (1966). For the purposes of this Motion, Moving Parties do not contest that the claims arise from the same nucleus of operative facts or that Plaintiffs would ordinarily be expected to try them in a single proceeding. Supplemental party jurisdiction, however, is discretionary and not by right, and therefore a court has discretion to decline to exercise jurisdiction under specified circumstances. City of Chicago v. International College of Surgeons, 522 U.S. 156,172 (1997). Section 1367 of Title 28 provides (emphasis supplied) that: (a) Except as provided in subsections (b) and (c) or as expressly provided otherwise by Federal statute, in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 12 of 21 Page ID #:606 6 DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS CASE NO: 2:16-CV-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 Constitution… (b) […] (c) The district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if— (1) the claim raises a novel or complex issue of State law, (2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction, (3) the district court has dismissed all claims over which it has original jurisdiction, or (4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction. In making its determination, a court considers the scope of the state and federal issues, terms of proof required by each type of claim, comprehensiveness of the remedies, the ability to dismiss the state claims without prejudice, and apparent weakness in the federal claim. De Asencio v. Tyson Foods, Inc., 342 F.3d 301, 312 (3d. Cir. 2003); Diven v. Amalgamated Transit Union, 38 F.3d 598, 602 (D.C. Cir. 1994). Declining jurisdiction over state law claims is proper when the objectives of economy, convenience, fairness to the parties, and comity are served. Trustees of Construction Industry and Laborers Health and Welfare Trust v. Desert Valley Landscape & Maint., Inc., 333 F.3d 923, 925 (9th Cir. 2003). V. ARGUMENT A. The State Law Claims Substantially Predominate The Court has discretion to decline the exercise of supplemental party jurisdiction when the state law claims substantially predominate over the federal claims over which the court has jurisdiction. 28 U.S.C. § 1367(c)(2). As an initial matter, the state law claims predominate over the federal claims in this matter by sheer numerosity. Plaintiffs have pled eight state law causes of action against Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 13 of 21 Page ID #:607 7 DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS CASE NO: 2:16-CV-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 eleven different defendants. In sharp contrast, Plaintiffs have pled only two federal causes of action against a single defendant in this action. Stated differently, Plaintiffs are asserting that they can prove and obtain relief under 88 different state claims — eight causes of action asserted against eleven different parties. Plaintiffs assert that they can prove that each of the eleven defendants against whom they have pled a state law cause of action for contribution is liable under a common law contribution theory. Filing No. 58, at CM/ECF ¶ 70. Plaintiffs assert that they can prove that each of the eleven defendants against whom they have pled a trespass claim is liable to it under a common law trespass theory. Filing No. 58, at CM/ECF ¶¶ 80-82. And so on, with respect to the other six state law causes of action. Plaintiffs have set themselves the task of proving up these 88 different state law claims. Conversely, with respect to the federal claims over which the court has original jurisdiction, Plaintiffs are asserting that they can prove and obtain relief against one single party under two different causes of action. Plaintiffs assert that they can prove that LACSD is liable to it under a CERCLA cost recovery cause of action for recovery of past response costs. Filing No. 58, at CM/ECF ¶¶ 63-64. And Plaintiffs assert that they can prove that LACSD is liable to it under a CERCLA declaratory relief cause of action for the recovery of future response costs. Filing No. 58, at CM/ECF ¶ 68. It is apparent that the discovery and other proceedings in this case will be dominated by the Plaintiffs’ need to prove up the 88 different state law claims as opposed to the two federal claims. See Johnson v. Fitial, No. 1:09-CV-000023, 2012 WL 12542689, at *8 (D. N. Mar. I. Sept. 26, 2012) (four state claims substantially predominate over the two federal claims). To the extent that further inquiry is needed under Section 1367(c)(2), courts typically examine: (1) the scope of the state and federal issues; (2) the terms of Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 14 of 21 Page ID #:608 8 DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS CASE NO: 2:16-CV-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 proof required by each type of claim; (3) the comprehensiveness of the remedies; and (4) the ability to dismiss the state claims without prejudice. We examine each of these elements in turn. 1. The Scopes of the Federal and State Issues are Different Plaintiffs allege that the eleven petroleum pipeline defendants owned or operated welded metal pipelines carrying petroleum products of one type or another and that those pipelines released contamination into the subsurface. Filing No. 58, at CM/ECF ¶ 31. Conversely, Plaintiffs allege LACSD operated a vitrified clay sewer line carrying wastewater and that LACSD’s sewer line released wastewater into the subsurface that contained benzene. Filing No. 58, at CM/ECF ¶ 20(a). The scope of the federal law issues is narrow and is limited to determining whether Plaintiffs incurred response costs in responding to a release of a hazardous substance from LACSD’s sewer line. See 42 U.S.C. § 9607(a). The scope of the state law issues is broad and sprawls across eight causes of action — common law contribution, state law declaratory relief, equitable indemnity, trespass, nuisance, public nuisance, nuisance per se, and violations of California’s unfair competition law (Cal. Bus. & Prof. Code § 17200). For example, Plaintiffs base their equitable indemnity cause of action on the petroleum pipeline defendants’ alleged negligent and intentional conduct. Filing No. 58, at CM/ECF ¶¶ 76-78. In contrast, the CERCLA cause of action provides for strict liability. To take another example, in their nuisance cause of action, Plaintiffs allege that the petroleum pipeline defendants have interfered with the use and enjoyment of Plaintiffs’ property. Filing No. 58, at CM/ECF ¶¶ 84-86. The scope of the nuisance cause of action thus goes well beyond the scope of the CERCLA cause of action. In their public nuisance cause of action, Plaintiffs allege that the acts or omissions of the petroleum pipeline defendants have resulted in adverse impacts to the adjacent community. Filing No. 58, at CM/ECF ¶ 90. Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 15 of 21 Page ID #:609 9 DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS CASE NO: 2:16-CV-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 These allegations go well beyond the scope of the CERCLA cause of action. In their nuisance per se cause of action, Plaintiffs allege that the petroleum pipeline defendants have violated various statutes and regulations with respect to their pipelines. Filing No. 58, at CM/ECF ¶ 97. Again, these allegations go well beyond the scope of CERCLA. Finally, in their Business & Professions Code cause of action, Plaintiffs allege that the petroleum pipeline defendants have gained an unfair business advantage by avoiding the costs of proper environmental compliance. Filing No. 58, at CM/ECF ¶ 101. This cause of action, too, goes well beyond the scope of CERCLA. Taken together, it is clear that the scope of the state law claims is very broad in comparison to the narrow scope of the CERCLA claims. Resolving the various state law allegations will predominate over the narrow CERCLA issues. 2. The Terms of Proof of the Federal and State Claims are Different The two interrelated CERCLA causes of action differ from the eight state law causes of action in several material respects. First, subject to a limited number of statutory defenses, CERCLA imposes strict liability. 42 U.S.C. § 9607(a). In contrast, the state law claims are not strict liability claims and Plaintiffs will need to prove causation. Second, the state law claims are subject to varying levels of proof, and are subject to a large number of common law and statutory defenses. Traditional equitable defenses to liability are not available to defendants in CERCLA cost recovery actions. California Dept. of Toxic Substances Control v. Alco Pacific, Inc., 217 F.Supp.2d 1028, 1040 (C.D. Cal. 2002). The principal defenses to the CERCLA claims will likely be: (1) the CERCLA petroleum exclusion; (2) the due care defense, which has particular applicability in the context of sewer lines; and (3) failure to comply with the National Contingency Plan. None of these defenses are applicable to any of the state law causes of action. Conversely, none of the Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 16 of 21 Page ID #:610 10 DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS CASE NO: 2:16-CV-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 defenses to the state law causes of action are applicable to the CERCLA causes of action. Third, as discussed in Section V(A)(1), infra, the scopes of the federal and state claims are vastly different. Under CERCLA, Plaintiffs must prove that they incurred response costs in responding to a release of a hazardous substance from LACSD’s sewer line. See 42 U.S.C. § 9607(a). Under the state law causes of action, Plaintiffs must prove all the elements of common law contribution, state law declaratory relief, equitable indemnity, trespass, nuisance, public nuisance, nuisance per se, and violations of California’s unfair competition law (Cal. Bus. & Prof. Code § 17200). 3. The Remedies Available Under the Federal and State Claims are Also Different Different remedies are available to Plaintiffs under the CERCLA cause of action and the various state law causes of action. Under CERCLA, Plaintiffs’ remedy is limited to recovery of their response costs. 42 U.S.C. § 9607(a). In contrast, the state law claims allow for the potential recovery of a wide range of other damages, including consequential, incidental, and general damages. The scope of the remedies sought is also substantially different. Plaintiffs seek a comparatively narrow remedy under CERCLA (i.e., recovery of response costs), but a broad range of unspecified past, present, and future consequential damages under the state law claims. Additionally, Plaintiffs have sought the recovery of attorney’s fees, which are available under some of the state law claims (e.g., in Plaintiffs’ alleged capacity as a private attorney general). Attorney’s fees are not recoverable under CERCLA. Stanton Road Associates v. Lohrey Enterprises, 984 F.2d 1015, 1016 (9th Cir. 1993). The broader remedies available pursuant to the state law causes of action further demonstrate that the state claims substantially predominate over the federal Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 17 of 21 Page ID #:611 11 DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS CASE NO: 2:16-CV-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 claims. Org. for Advancement of Minorities with Disabilities v. Brick Oven Rest., 406 F.Supp.2d 1120, 1131 (S.D. Cal. 2005) (state claims substantially predominate over plaintiff’s sole federal claim when statutory damages under the state Unruh Act are significantly greater than those available under the federal Americans with Disabilities Act cause of action). 4. The State Law Claims Can Be Dismissed Without Prejudice Moving Parties are aware of no reason the state law claims cannot be dismissed without prejudice. This action is in the pleading stage and no determination on the merits has been made. Each of the state law claims can be refiled in state court. Indeed, the essence of the claims that Plaintiffs have made against LACSD can be brought in state court under the state law analogue of CERCLA — the Hazardous Substance Account Act. See Health & Safety Code §§ 25300 et. seq. Plaintiffs allege that LACSD released “hazardous substances within the meaning of California Health & Safety Code section 25316.” Filing No. 58, at CM/ECF ¶ 55 at 18:12-13. Plaintiffs allege that LACSD is strictly liable to it pursuant to Health & Safety Code section 25363. Filing No. 58, at CM/ECF ¶ 61 at 19:19. And Plaintiffs seek contribution and/or indemnity against LACSD for all costs under Health & Safety Code section 25363. Filing No. 58, at CM/ECF ¶ 64 at 20:5-6. B. The Apparent Weakness of the Federal Claims is Another Factor to be Weighed A district court may consider the apparent weakness of the federal claim – even before discovery – as another factor in determining whether the state claims substantially predominate. Diven, 38 F.3d at 602; see Desert Valley Landscape & Maint., Inc., 333 F.3d at 926 (Section 1367(c)(3) helps prevent a federal court from unnecessarily determining issues of state law when the federal claim is not well- founded). As discussed below, Plaintiffs must overcome substantial obstacles for Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 18 of 21 Page ID #:612 12 DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS CASE NO: 2:16-CV-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 their sole bases for federal jurisdiction, the two CERCLA causes of action, to survive. First, Plaintiffs allege that they are remediating petroleum contamination pursuant to the Regional Board’s Cleanup Order. Filing No. 58, at CM/ECF ¶¶ 2, 30. The Cleanup Order alleged that pipelines owned and operated by Plaintiffs’ predecessors-in-interest released gasoline and benzene into the subsurface. Filing No. 58, at CM/ECF ¶ 30. Gasoline is undoubtedly a petroleum derivative. Benzene is a typical constituent of gasoline. Plaintiffs allege wastewater containing hazardous substances, particularly benzene, was discharged from LACSD’s sewer line. This sewer line allegedly was used to transport wastewater from a nearby petroleum wastewater treatment facility as well as other nearby facilities. Filing No. 58, at CM/ECF ¶ 20. Plaintiffs also allege that various petroleum pipelines owned or operated by the petroleum pipeline defendants released petroleum into the subsurface. Filing No. 58, at CM/ECF ¶ 31. If LACSD’s sewer line leaked, which Plaintiffs allege (and LACSD denies), it would release wastewater into the subsurface. It is plausible that the wastewater transported in the sewer line contained some small amount of petroleum and/or petroleum constituents. It seems implausible that these small amounts of petroleum would cause material contamination or result in material cleanup costs. In any event, the First Amended Complaint does not contain sufficient factual material with respect to releases of petroleum and/or petroleum constituents from LACSD’s sewer line to exceed any reasonable plausibility threshold. See Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009). Second, as part of Plaintiffs’ prima facie case, Plaintiffs must show that CERCLA’s petroleum exclusion does not apply. Cose v. Getty Oil Co., 4 F.3d 700, 703-704 (9th Cir. 1993). Benzene, the constituent that Plaintiffs allege was contained in wastewater that leaked from the sewer line, has been recognized by the Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 19 of 21 Page ID #:613 13 DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS CASE NO: 2:16-CV-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 Environmental Protection Agency as a substance indigenous to petroleum. Environmental Protection Agency, Scope of the CERCLA Petroleum Exclusion Under Sections 101(14) and (104)(a)(2) (July 31, 1987). As such, benzene presumptively falls within CERCLA’s petroleum exclusion. 42 U.S.C. § 9601(14); See also Wilshire Westwood Assocs. v. Atl. Richfield Corp., 881 F.2d 801, 803–04 (9th Cir. 1989) (petroleum exclusion applies to unrefined and refined gasoline, as well as gasoline’s indigenous components and additives that may be individually considered as hazardous substances under CERCLA). Plaintiffs must prove that the benzene they allege leaked from LACSD’s sewer line emanated from a non- petroleum source. Because Plaintiffs allege that the wastewater that leaked from the sewer line emanating from a petroleum wastewater facility and other nearby industrial facilities, Plaintiffs have a difficult burden of proving that benzene released from LACSD’s sewer line originated from non-petroleum sources. Plaintiffs’ CERCLA claims suffer from substantial weaknesses. To the extent that the federal CERCLA claims succumb to these various weaknesses, the Court will be left adjudicating a purely state law action. This is an additional factor that mitigates against exercising supplemental party jurisdiction and in favor of dismissing the state law claims. VI. CONCLUSION Plaintiffs’ First Amended Complaint is, in overwhelming essence, a state court action. Plaintiffs appear to be trying to bootstrap federal court jurisdiction over the eleven petroleum pipeline defendants based on the thin reed of two CERCLA claims against a single defendant. Exercising supplemental party jurisdiction in this matter would be to allow the federal claims’ “tail” to wag the state claims’ “dog.” For the above reasons, this Court should grant Moving Parties’ Motion to Dismiss. Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 20 of 21 Page ID #:614 14 DEFENDANTS PLAINS ALL AMERICAN PIPELINE L.P., ET AL.’S NOTICE OF MOTION AND MOTION TO DISMISS CASE NO: 2:16-CV-06963-BRO (FFMx) 23921-00006/2765580.1 {00029344;1 } 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 DATED: March 9, 2017 MITCHELL CHADWICK LLP By: /s/ CLIFTON J. MCFARLAND CLIFTON J. MCFARLAND VINCENT K. WONG Attorneys for Defendant PLAINS ALL AMERICAN PIPELINE L.P. DATED: March 9, 2017 GREENBERG GLUSKER FIELDS CLAMAN & MACHTINGER LLP By: /s/ DAVID E. CRANSTON DAVID E. CRANSTON SHERRY E. JACKMAN Attorneys for Defendant ENI OIL & GAS INC. DATED: March 9, 2017 COX CASTLE AND NICHOLSON LLP By: /s/ PERRY S. HUGHES _____ PERRY S. HUGHES KERRY I. GOLD Attorneys for Defendant CRIMSON PIPELINE, L.P. DATED: March 9, 2017 ROGERS JOSEPH O’DONNELL By: /s/ ROBERT C. GOODMAN _____ ROBERT C. GOODMAN NICHOLAS T. NIIRO Attorneys for Defendants Getty Oil Company and Union Oil Company of California Case 2:16-cv-06963-BRO-FFM Document 68 Filed 03/09/17 Page 21 of 21 Page ID #:615 Page 1 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 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA – WESTERN DIVISION TESORO REFINING & MARKETING COMPANY LLC, et al. Plaintiffs, vs. COUNTY SANITATION DISTRICT NO. 3 OF LOS ANGELES COUNTY, et al. Defendants. Case No. 2:16-cv-06963-BRO-FFM [PROPOSED] ORDER GRANTING MOTION TO DISMISS FIRST AMENDED COMPLAINT Judge Beverly Reid O’Connell Date: April 10, 2017 Time: 1:30 pm Courtroom: 850 Location: 350 West 1st Street Courtroom 7C Los Angeles, CA 90012 Pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure, Defendants Plains All American Pipeline L.P., Eni Oil & Gas Inc., Getty Oil Company, Union Oil Company of California, and Crimson Pipeline L.P. (“Moving Parties”) filed a Motion to Dismiss each of Plaintiffs’ eight causes of action (i.e., the Third through Tenth causes of action) asserted against Moving Defendants, and eight other defendants in Plaintiffs’ First Amended Complaint (Dkt. No. 58). After consideration of all of the papers filed in connection herewith and the arguments of parties and of counsel, the Court declines to exercise supplemental jurisdiction over Case 2:16-cv-06963-BRO-FFM Document 68-1 Filed 03/09/17 Page 1 of 2 Page ID #:616 Page 2 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 the Third through Tenth causes of action because these causes of action substantially predominate over the First and Second causes of action. 28 U.S.C. § 1367(c)(2). Moving Defendants’ Motion to Dismiss is hereby GRANTED, and the Third through Tenth causes of action are dismissed with prejudice. IT IS SO ORDERED. DATED: ________________ _______________________________________ HONORABLE BEVERLY REID O’CONNELL U.S. DISTRICT COURT JUDGE Case 2:16-cv-06963-BRO-FFM Document 68-1 Filed 03/09/17 Page 2 of 2 Page ID #:617