104 F.3d 1507 (9th Cir. 1997), 95-55725, State of Cal. v. Montrose Chemical Corp. of California

Docket Nº:95-55725, 95-55736.
Citation:104 F.3d 1507
Party Name:27 Envtl. , 97 Cal. Daily Op. Serv. 420, 97 Daily Journal D.A.R. 673 STATE OF CALIFORNIA, Plaintiff-Appellant, v. MONTROSE CHEMICAL CORPORATION OF CALIFORNIA; PCB Industrial, Defendants-Appellees, Chris-Craft Industries, Inc.; Stauffer Management Company; ICI American Holdings, Inc.; Atkemix Thirty-Seven, Inc.; Rhone-Poulenc Basic Chemicals Company
Case Date:January 17, 1997
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 1507

104 F.3d 1507 (9th Cir. 1997)

27 Envtl. ,

97 Cal. Daily Op. Serv. 420,

97 Daily Journal D.A.R. 673

STATE OF CALIFORNIA, Plaintiff-Appellant,

v.

MONTROSE CHEMICAL CORPORATION OF CALIFORNIA; PCB

Industrial, Defendants-Appellees,

Chris-Craft Industries, Inc.; Stauffer Management Company;

ICI American Holdings, Inc.; Atkemix Thirty-Seven, Inc.;

Rhone-Poulenc Basic Chemicals Company,

Defendants-counter-claimants-cross-claimants-Appellees.

(Two Cases).

UNITED STATES of America, Plaintiff-Appellant,

v.

MONTROSE CHEMICAL CORPORATION OF CALIFORNIA; PCB

Industrial, Defendants-Appellees,

Chris-Craft Industries, Inc.; Stauffer Management Company;

ICI American Holdings, Inc.; Atkemix Thirty-Seven, Inc.;

Rhone-Poulenc Basic Chemicals Company,

Defendants-counter-claimants-cross-claimants-Appellees.

Nos. 95-55725, 95-55736.

United States Court of Appeals, Ninth Circuit.

January 17, 1997

Argued and Submitted Jan. 8, 1996.

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Page 1509

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John Saurenman, Deputy Attorney General, Los Angeles, CA, and Edward J. Shawaker, United States Department of Justice, Washington, DC, for plaintiffs-appellants.

Karl S. Lytz, Kristine L. Wilkes, Kimberly M. McCormick, Latham & Watkins, San Diego, CA, Paul B. Galvani, Ropes & Gray, Boston, MA, Frank Rothman and Jose R. Allen, Skadden, Arps, Slate, Meagher & Flom, Los Angeles, CA, Charles B. Cohler and David M. Rosenberg-Wohl, Lasky, Haas & Cohler, San Francisco, CA, for defendants-appellees and defendants-counter-claimants-cross-claimants-appellees.

Tom Udall, Attorney General of New Mexico, Charles DeSaillan, Assistant Attorney General, for Natural Resources, Office of the Attorney General, Environmental Enforcement Division, Santa Fe, NM, for the State of New Mexico.

Scott Harshbarger, Attorney General of Massachusetts, Karen McGuire, Assistant Attorney General, Environmental Protection Division, Boston, MA, for the Commonwealth of Massachusetts.

Hubert H. Humphrey, III, Attorney General of Minnesota, Stephen Shakman, Assistant Attorney General, St. Paul, MN, for the State of Minnesota.

Joseph P. Mazurek, Attorney General of Montana, Clay Smith, Solicitor, Robert G. Collins, Candace West, Charles E. Magraw, Assistant Attorneys General, Natural Resource Damage Litigation Program, Helena, MT, for the State of Montana.

Frankie Sue Del Papa, Attorney General of Nevada, William Frey, Assistant Attorney General, Carson City, NV, for the State of Nevada.

Bruce M. Botelho, Attorney General of Alaska, Marie Sansone, Robert K. Reges, Assistant Attorneys General, Natural Resources Section--Juneau, Alaska Department of Law, Juneau, AK, for the State of Alaska.

Grant Woods, Attorney General of Arizona, Phoenix, AZ, for the State of Arizona.

Winston Bryant, Attorney General of Arkansas, Charles L. Moulton, Assistant Attorney General, Little Rock, AR, for the State of Arkansas.

Richard Blumenthal, Attorney General of Connecticut, Brian J. Comerford, Assistant Attorney General, Office of the Attorney General, Hartford, CT, Alan G. Lance, Attorney General of Idaho, Clive J. Strong, Deputy Attorney General, Boise, ID, Deborah T. Poritz, Attorney General of New Jersey, Anthony T. Drollas, Jr., Deputy Attorney General, Trenton, NJ, for the State of New Jersey.

Jeffrey B. Pine, Attorney General of Rhode Island, Michael Rubin, Assistant Attorney General and Environmental Advocate, Office of the Attorney General, Providence, RI, for the State of Rhode Island.

Jan Graham, Attorney General of Utah, Salt Lake City, UT, for the State of Utah.

Jeffrey L. Amestoy, Attorney General of Vermont, Conrad W. Smith, Assistant Attorney General, Montpelier, VT, for the State of Vermont.

Appeals from the United States District Court for the Central District of California, A. Andrew Hauk, District Judge, Presiding. D.C. No. CV-90-03122-AAH.

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Before BRIGHT, [*] SKOPIL, and WIGGINS, Circuit Judges.

WIGGINS, Circuit Judge:

This action was filed by the United States and the State of California ("the Trustees") in 1990 under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), as part of an effort to clean up DDT and PCBs released respectively by Montrose Chemical Corporation and Westinghouse Electric Corporation. The release over several decades of an estimated 5,500,000 pounds of DDT and 38,000 pounds of PCBs has allegedly harmed the marine environment in the San Pedro Channel, the Palos Verde Shelf, the Los Angeles-Long Beach Harbors and the area surrounding Santa Catalina Island and the Channel Islands.

In this action, the Trustees seek to recover (1) natural resource damages under 42 U.S.C. § 9607(a)(4)(C) for the harm to the marine environment caused by releases of DDT and PCBs and (2) response costs under 42 U.S.C. § 9607(a)(4) for the clean-up of the Montrose DDT plant site. The district court granted summary judgment as to the claim for natural resource damages on the ground that the claim was barred by CERCLA's statute of limitations, 42 U.S.C. § 9613(g). The district court also ruled that the Montrose defendants' collective liability for damages on the natural resource damages claim was capped at $50 million plus response costs under 42 U.S.C. § 9607(c)(1).

The Trustees appeal both orders, 1 arguing that the district court misinterpreted CERCLA's statute of limitations as well as the liability cap. The Trustees also argue this case should be reassigned upon remand, due to the district judge's conduct at the March 22, 1995 hearing on the defendants' motions. For the following reasons, we REVERSE and REMAND to the district court. We decline to reassign this case upon remand.

I.

Montrose operated a DDT manufacturing plant in Torrance, California, from 1947 through 1982, and during that time allegedly released DDT into the environment through ocean dumping, discharge into the sewer collection system, surface water runoff into the Los Angeles/Long Beach Harbors and aerial dispersal of waste from the manufacturing operation. Westinghouse Electric Corporation operated an electrical transmission equipment maintenance and repair plant in Los Angeles from approximately 1958 until recently. During this time, Westinghouse allegedly released PCBs into the marine environment through discharge into the sewer collection system and, from there, into the San Pedro Channel.

The Trustees filed this action in 1990, seeking to recover damages for harm to the marine environment from Westinghouse and from Montrose and its successor corporations, Chris-Craft Industries, Inc., Stauffer Management Company, ICI American Holdings, Inc., Atkemix Thirty-seven, Inc. and Rhone-Poulenc Basic Chemicals Company (collectively "the Montrose defendants").

The Montrose defendants and Westinghouse filed a motion for partial summary judgment on May 10, 1993 based on CERCLA's statute of limitations. The special master denied this motion. The district court, reviewing the special master's ruling de novo, granted the motion after a hearing on March 22, 1995. The district court held that under the second prong of 42 U.S.C. § 9613(g)(1), the statute of limitations began running on August 1, 1986, the date on which the Department of Interior ("DOI") promulgated final regulations under § 9651(c) setting forth alternative protocols for conducting assessments of natural resource damage ("Type B regulations"). The court rejected the Trustees' argument that the statute began running, at the earliest, on March 20, 1987, the date on which DOI promulgated final regulations under § 9651(c) setting forth standard procedures for simplified assessments of natural resource damage for certain environments ("Type A regulations"). The court also held that the Trustee agencies "discovered" the loss and its connection to the release of DDT from the Montrose defendants' facility and the release of PCBs from

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the Westinghouse plant more than 3 years prior to the filing of this action.

In addition, the Montrose defendants filed a motion in limine on February 24, 1993, requesting the court to limit their collective damages to $50 million plus response costs under 42 U.S.C. § 9607(c)(1)(D). The special master initially denied the motion. On October 18, 1993, the district court reviewed the recommendation de novo, and expressed doubts concerning the special master's ruling. The court ordered the special master to reconsider the issue in light of the court's statements at the hearing.

The special master's second recommendation granted the Montrose defendants' motion in part, and denied it in part. Again, the Montrose defendants objected to the ruling and the court held another hearing on January 6, 1995 to review the motion once again. At the hearing, the court agreed with the Montrose defendants' position and stated that the defendants should submit a written order for the court's consideration. The parties could not agree on a proposed order; the court therefore heard further argument on the liability cap issue on March 22, 1995. At the March 22 hearing the court granted the defendants' motion and entered a written order to that effect. In that order, the district court held that "[p]ursuant to 42 U.S.C. § 9607(c)(1)(D), and based on the allegations in Plaintiffs' Complaint, the Montrose defendants' collective maximum liability for 'damages' on Claim One is 'the total of all costs of response plus $50,000,000.' "

Although the court did not explain its reasoning in its written order, at the January 6, 1995 hearing the court stated two bases for this holding: (1) all the releases by the Montrose...

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