Hinds Investments v. Angioli

• Decision Date: 01 August 2011
• Docket Number: 10–15951.,Nos. 10–15607,s. 10–15607
• Citation: 2011 Daily Journal D.A.R. 11562,654 F.3d 846,11 Cal. Daily Op. Serv. 9636
• Parties: HINDS INVESTMENTS, L.P., Plaintiff–Appellant,Patricia McLaughlin, Trustee of the Thomas F. Hinds and Mary Jane Hinds Living Trust, Plaintiff–counter–defendant–Appellant,v.Albert ANGIOLI; Burnell Angioli, Defendants,andMultimatic Corporation; Multimatic Dry Cleaning Machine Corporation; Multimatic LLC; Kirrberg Corporation; Hoyt Corporation; R.R. Street & Co., Inc., Defendants–Appellees,Team Enterprises, Inc., Defendant–cross–claimant–Appellee,v.CSK Auto, Inc., DBA Kragen Auto Parts and Cooper Industries Ltd., Third-party-defendant.Hinds Investments, L.P., Plaintiff–Appellant,Patricia McLaughlin, Trustee of the Thomas F. Hinds and Mary Jane Hinds Living Trust, Plaintiff–counter–defendant–Appellant,v.Albert Angioli; Burnell Angioli; Multimatic Corporation; Multimatic Dry Cleaning Machine Corporation; Multimatic LLC; Kirrberg Corporation; Hoyt Corporation; R.R. Street & Co., Inc., Defendants–Appellees,Team Enterprises, Inc., Defendant–cross–claimant–Appellee,v.CSK Auto, Inc., DBA Kragen Auto Parts and Cooper Industries Ltd., Third-party-defendant.
• Court: U.S. Court of Appeals — Ninth Circuit

654 F.3d 846

11 Cal. Daily Op. Serv. 9636

2011 Daily Journal D.A.R. 11,562

HINDS INVESTMENTS, L.P., Plaintiff–Appellant,Patricia McLaughlin, Trustee of the Thomas F. Hinds and Mary Jane Hinds Living Trust, Plaintiff–counter–defendant–Appellant,

v.Albert ANGIOLI; Burnell Angioli, Defendants,andMultimatic Corporation; Multimatic Dry Cleaning Machine Corporation; Multimatic LLC; Kirrberg Corporation; Hoyt Corporation; R.R. Street & Co., Inc., Defendants–Appellees,Team Enterprises, Inc., Defendant–cross–claimant–Appellee,

v.CSK Auto, Inc., DBA Kragen Auto Parts and Cooper Industries Ltd., Third-party-defendant.Hinds Investments, L.P., Plaintiff–Appellant,Patricia McLaughlin, Trustee of the Thomas F. Hinds and Mary Jane Hinds Living Trust, Plaintiff–counter–defendant–Appellant,

v.Albert Angioli; Burnell Angioli; Multimatic Corporation; Multimatic Dry Cleaning Machine Corporation; Multimatic LLC; Kirrberg Corporation; Hoyt Corporation; R.R. Street & Co., Inc., Defendants–Appellees,Team Enterprises, Inc., Defendant–cross–claimant–Appellee,

v.CSK Auto, Inc., DBA Kragen Auto Parts and Cooper Industries Ltd., Third-party-defendant.

Nos. 10–15607

10–15951.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 13, 2011.Filed Aug. 1, 2011.

Jordan S. Stanzler, Edward R. Firestone, and Melinda Jane Steuer of Stanzler Law Group, Palo Alto, CA, for plaintiffs-appellants Hinds Investments, L.P. and Patricia McLaughlin.Thomas F. Vandenburg and Ian P. Culver of Dongell Lawrence Finney LLP, Los Angeles, CA, for defendants-appellees Multimatic Corporation, Multimatic Dry Cleaning Machine Corporation, the Kirrberg Corporation, and Multimatic LLC.Eric Grant and John B. Thomas of Hicks Thomas LLP, Sacramento, CA, & Houston, TX, for defendant-appellee R.R. Street & Co., Inc.Richard S. Baron, Brian H. Phinney, and Marc P. Lawrence of Foley, Baron & Metzger, PLLC, Livonia, MI, and Mandy L. Jeffcoach of McCormick Barstow, LLP, Fresno, CA, for defendant-appellee Hoyt Corporation.Appeal from the United States District Court for the Eastern District of California, Lawrence J. O'Neill, District Judge, Presiding. D.C. No. 1:07–cv–00703–LJO–GSA.Before: DIARMUID F. O'SCANNLAIN, RONALD M. GOULD, Circuit Judges, and AMY J. ST. EVE, District Judge.^*

OPINION

GOULD, Circuit Judge:

Plaintiffs Hinds Investments, L.P. and Patricia McLaughlin (collectively, “Hinds”) appeal the district court's dismissal of their claims against manufacturers of dry cleaning equipment brought, inter alia, under the Resource Conservation and Recovery Act of 1976 (“RCRA”), 42 U.S.C. § 6901 et seq.¹ RCRA permits citizen suits against “any person ... who has contributed or who is contributing to the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste which may present an imminent and substantial endangerment to health or the environment.” Id. § 6972(a)(1)(B). The district court held that Hinds's allegations that the manufacturers contributed to waste disposal, by the design of machines that generated waste and by the instructions they gave on use of these machines, were insufficient as a matter of law to support a civil action under RCRA because all of the defendant manufacturers' alleged contributions were passive. We affirm. We hold that, for RCRA liability, “contribution” requires more active involvement than was alleged as to the defendant manufacturers.

I

Hinds owns two California shopping centers, located in Clovis and Fresno, that housed dry cleaning stores and whose groundwater is now contaminated with perchloroethylene (“PCE”), a hazardous substance often used in dry cleaning. Seeking declaratory relief and monetary damages to offset the cost of environmental remediation and clean-up, Hinds sued, among others, the manufacturers of equipment used at the dry cleaning stores. Defendant manufacturers are Multimatic Corporation, Multimatic Dry Cleaning Machine Corporation, Multimatic LLC, and their successor in interest, Kirrberg Corporation (“Multimatic”), manufacturers of the Solo Plus 35 dry cleaning machine; R.R. Street & Co., Inc. (“Street”), the manufacturer of a device known as the Puritan 800 Plus Filter Still (“Still”); and the Hoyt Corporation (“Hoyt”), the manufacturer of a device known as the Hoyt Sniffer (“Sniffer”) (collectively, “Defendants”).

Hinds alleges that Defendants are liable under RCRA for having “contributed to the past and present handling, storage, treatment, transportation or disposal of hazardous waste,” namely PCE. Hinds contends that Defendants “caused and contributed to the release of PCE into the environment.... [b]y either operating, providing, installing, maintaining, and/or repairing dry cleaning machinery which was designed so that wastewater contaminated with PCE would and did flow into drains and into the sewer system.” In so doing, Multimatic, Street and Hoyt allegedly “made a conscious decision to discharge used PCE” and “arranged for and controlled the disposal of PCE waste.”

Hinds alleges generally that Defendants employed faulty machine design and distributed manuals that instructed users that they should dispose of contaminated waste water in drains or open sewers. Specifically, Hinds contends that Multimatic is liable because, in addition to cleaning clothes, its Solo Plus 35 dry cleaning machine allegedly “performed a second and distinct function of waste disposal,” and the machine's instruction manual stated that waste water, which contained traces of PCE, “must flow into an open drain.” Hinds alleges that Street's Still, used at the Clovis shopping center to separate off used PCE for reuse, similarly “existed for the purpose of waste removal and disposal.” It contends that Street is liable for contamination caused by the use of its Still because Street explained that PCE-containing waste water produced by the Still “may be drained into a container or piped directly to a floor drain.” Similarly, Hinds alleges that Hoyt is liable for contamination generated by the Sniffer, which captured emitted PCE from the atmosphere for reuse in dry cleaning, because Hoyt's instruction manual said that drainage of PCE-laden waste water to an open sewer system was the appropriate disposal method.

Pursuant to Federal Rule of Civil Procedure 12(b)(6), Multimatic, Street, and Hoyt filed motions to dismiss for failure to state a claim, which the district court granted with prejudice in three separate, but similarly reasoned, orders. The district court held that Hinds's RCRA claims failed to state a claim for relief because they did not allege active involvement by Defendants in handling or disposing of waste, as required for RCRA contributor liability. It concluded that Hinds alleged, at most, passive conduct by Defendants (i.e., the manufacture and sale of their products). The district court entered judgment for Defendants, and Hinds timely appealed.

II

“We review de novo a district court's decision on a motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6),” Pakootas v. Teck Cominco Metals, Ltd., 452 F.3d 1066, 1072 (9th Cir.2006), construing the complaint in the light most favorable to the plaintiff and accepting all factual allegations as true, Hartman v. Gilead Scis., Inc. (In re Gilead Scis. Sec. Litig.), 536 F.3d 1049, 1055 (9th Cir.2008). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Dismissal is proper where there is either a lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal claim. Johnson v. Riverside Healthcare Sys., LP, 534 F.3d 1116, 1121 (9th Cir.2008).

III

In society's efforts to constrain or limit environmental pollution that is detrimental to all, RCRA is an important tool and a key federal statute that, if properly enforced, will help preserve our environment from the effects of harmful pollution. “RCRA is a comprehensive environmental statute that governs the treatment, storage, and disposal of solid and hazardous waste.” Meghrig v. KFC W., Inc., 516 U.S. 479, 483, 116 S.Ct. 1251, 134 L.Ed.2d 121 (1996). Its primary purpose is “to reduce the generation of hazardous waste and to ensure the proper treatment, storage, and disposal of that waste which is nonetheless generated, ‘so as to minimize the present and future threat to human health and the environment.’ ” Id. (quoting 42 U.S.C. § 6902(b)); see Pakootas, 452 F.3d at 1078.

To achieve this goal, RCRA permits citizen suits against:

any person ... including any past or present generator, past or present transporter, or past or present owner or operator of a treatment, storage, or disposal facility, who has contributed or who is contributing to the past or present handling, storage, treatment, transportation, or disposal of any solid or hazardous waste which may present an imminent and substantial endangerment to health or the environment....

§ 6972(a)(1)(B). RCRA does not itself define what acts of contribution are sufficient to trigger liability, and the issue is a matter of first impression before our court.

“Where terms are not defined within a statute, they are accorded their plain and ordinary meaning,” which “can be deduced through reference sources, including ... general usage dictionaries.” Greenwood v. CompuCredit Corp., 615 F.3d 1204, 1208 (9th Cir.2010), cert. granted, ––– U.S. ––––, 131 S.Ct. 2874, 179 L.Ed.2d 1187 (2011). “Contribute” commonly means to “lend assistance or aid to a common purpose” or to “have a share in any act or effect.” Webster's Third New International Dictionary 496 (1993). It is also defined as “to be an important factor in; help to cause.” The Random House Dictionary...