Adobe Luber, Inc. v. Hellman

• Decision Date: 04 January 2006
• Docket Number: No. CIV.S 05 1510 WBS PA.,CIV.S 05 1510 WBS PA.
• Citation: 415 F.Supp.2d 1070
• Parties: ADOBE LUMBER, INC., a California corporation, Plaintiff, v. F. Warren HELLMAN and Wells Fargo Bank, N.A., as Trustees of Trust A created by the Estate of Marco Hellman, F. Warren Hellman as Trustee of Trust B created by the Estate of Marco Hellman, The Estate of Marco Hellman, deceased, Woodland Shopping Center, a limited partnership, Joseph Montalvo, Harold Taecker, Geraldine Taecker, Hoyt Corporation, a Massachusetts corporation; PPG Industries, Inc., a Pennsylvania corporation, Occidental Chemical Corporation, a New York corporation, and City of Woodland, Defendants.
• Court: U.S. District Court — Eastern District of California

415 F.Supp.2d 1070

ADOBE LUMBER, INC., a California corporation, Plaintiff, v. F. Warren HELLMAN and Wells Fargo Bank, N.A., as Trustees of Trust A created by the Estate of Marco Hellman, F. Warren Hellman as Trustee of Trust B created by the Estate of Marco Hellman, The Estate of Marco Hellman, deceased, Woodland Shopping Center, a limited partnership, Joseph Montalvo, Harold Taecker, Geraldine Taecker, Hoyt Corporation, a Massachusetts corporation; PPG Industries, Inc., a Pennsylvania corporation, Occidental Chemical Corporation, a New York corporation, and City of Woodland, Defendants.

No. CIV.S 05 1510 WBS PA.

United States District Court, E.D. California.

January 4, 2006.

COPYRIGHT MATERIAL OMITTED

Howard L. Pearlman, Robert L. Wainess, Bartko, Zankel, Tarrant & Miller, San Francisco, CA, for Plaintiff.

Thomas M. Donnelly, Ryan Reside Tacorda, Heller Ehrman White & McAuliffe, Peter C. Labrador, Leach McGreevy and Labrado LLP, Gary J. Smith, Beveridge and Diamond PC, R. Morgan Gilhuly, Donald Evan Sobelman, Barg Coffin Lewis & Trapp LLP, San Francisco, CA, Merswind C. Reyer, Steven H. Goldberg, Downey Brand LLP, Robert M. Shannon, Lewis, Breisbois, Bisgaard & Smith, J. Scott Smith, Angelo, Kilday & Kilduff, Daniel Mark Fuchs, Best Best and Krieger LLP, Sacramento, CA, Brian H. Phinney, Kim J. Sveska, Richard S. Baron, Foley Baron & Metzger, PLLC, Farmington Hills, MI, for Defendants.

MEMORANDUM AND ORDER RE: MOTION TO DISMISS

SHUBB, District Judge.

Based on contamination discovered on its commercial property, plaintiff Adobe Lumber, Inc. filed suit against defendants, alleging violations of the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901-6992k ("RCRA"), the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §§ 9601-9675 ("CERCLA"), and California state law. Defendants, in various groupings, move to dismiss the complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6).

I. Factual and Procedural Background

Plaintiff purchased the Woodland Shopping Center ("the Center") located at 120 Main St., Woodland, Ca, in 1998. (First Am. Compl. ¶¶ 13, 22.) At that time, defendants Harold and Geraldine Taecker operated a dry cleaning business in Suite K, a location they began leasing for that purpose in 1974. (Id. ¶¶ 4, 19.) Plaintiff continued to lease this space to the Taeckers through October 2001. (Id. ¶¶ 22.)

From 1974 until plaintiffs purchase in 1998, various parties, including the trustees of the trusts created by the Estate of Marco Hellman, the estate itself, the Woodland Shopping Center ("WSC") partnership, and Joseph Montalvo, all named defendants in this action, had ownership interests in the Center. (Id. ¶¶ 5-9, 22.) Defendant Hoyt Corporation manufactured the equipment used in the dry cleaning business and defendants PPG Industries and Occidental Chemical Corporation allegedly manufactured the solvent perchloroethylene ("PCE") used in Hoyt's machines. (Id. ¶¶ 10-12.) Based on these relationships with the Taeckers' dry cleaning business, plaintiff seeks to hold these defendants liable for the environmental damage described infra.

Around August 2001, plaintiff conducted a "limited surface investigation ... to assess whether activities from the Taeckers' dry cleaning operation had impacted subsurface soil and/or groundwater beneath the Site." (Id. ¶ 35.) The investigation revealed the presence of contamination, which plaintiff reported to the California Regional Water Quality Control Board. Both plaintiff and the Regional Board subsequently demanded that the Taeckers begin to take steps to remediate the contamination, but the Taeckers failed to respond to these requests. (Id. ¶¶ 36-38.) Plaintiff thereafter filed suit against the Taeckers on January 22, 2002, "seeking to recover costs incurred in response to the contamination ... under both section 107(a) and section 113(f)(1) of CERCLA as well as declaratory relief as to liability for future cleanup costs pursuant to section 113[(g)](2) of CERCLA." (Pl.'s Opp'n to Def. Owners' Mot. to Dismiss 4.)

In the course of the 2002 litigation, plaintiffs discovered that the Taeckers' business used PCE, a substance hazardous to human health but commonly used as a dry cleaning solvent. (First Am. Compl. ¶¶ 23, 26(a)-(b).) Significantly, plaintiffs learned that "several sudden and accidental discharges of PCE to the environment occurred" "during the course of the Taeckers' dry cleaning operations ...." (Id. ¶ 30.) Plaintiffs also learned, in 2004, that the design of Hoyt's machinery and instructions from both Hoyt and the chemical manufacturers led to intentional discharges of PCE into the ground and public sewers. (Id. ¶ 29.)

The previous action against the Taeckers spawned a flurry of cross and third party complaints involving many of the defendants in the instant case. (Pl.'s Opp'n to Def. Owners' Mot. to Dismiss 4.) Eventually, the parties not dismissed by Judge Burrell stipulated to dismissing their claims against each other without prejudice and the court closed the case pursuant to Federal Rule of Civil Procedure 41(a). Adobe Lumber Inc v. Taecker, No. CIV-S-02-186 (E.D.Cal. Aug. 1, 2005). Prior to that order, however, plaintiff filed the instant motion on July 27, 2005, reinstating some of the claims from the earlier action.

In this current round of litigation, plaintiff seeks a clean up order against the Taeckers under RCRA, 42 U.S.C. § 6927(a) (First Claim), contribution under CERCLA section 107(a) against all defendants (Second Claim), declaratory relief against all defendants under CERCLA section 113(g)(2) (Third Claim), contribution and declaratory relief against all defendants under California Hazardous Substances Account Act ("HSAA"), Cal. Health & Safety Code §§ 25300-25395, (Fourth & Fifth Claims), damages and injunctive relief for continuing public and private nuisance and for trespass against all defendants except the city (Sixth, Seventh, & Eighth Claims), and strict product liability, negligence, and negligence per se against the manufacturer defendants (Ninth, Tenth, & Eleventh Claims). (First Am. Compl.; Pl.'s Opp'n to Def. Owners' Mot. to Dismiss 5-6.) On October 24, 2005, the trustees, the WSC partnership, and Montalvo filed a Rule 12(b)(6) motion to dismiss, which defendants City of Woodward, Hoyt, Occidental, and PPG all join. Occidental and PPG together and Hoyt individually also filed separate motions to dismiss on additional grounds. These motions to dismiss are now all before the court.

II. Discussion

A. Legal Standard

On a motion to dismiss, the court must accept the allegations in the complaint as true and draw all reasonable inferences in favor of the pleader. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Cruz v. Beto, 405 U.S. 319, 92 S.Ct. 1079, 31 L.Ed.2d 263 (1972). The court may not dismiss for failure to state a claim unless it appears beyond a doubt that the pleader can prove no set of facts in support of the claim which would entitle him or her to relief. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984). In other words, dismissal is appropriate where the pleader fails to allege facts that support a cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.1988).

In general, the court may not consider material other than the facts alleged in the complaint when deciding a motion to dismiss. Anderson v. Angelone, 86 F.3d 932, 934 (9th Cir.1996) ("A motion to dismiss ... must be treated as a motion for summary judgment ... if either party ... submits materials outside the pleadings in support or opposition to the motion, and if the district court relies on those materials."). However, reliance on matters of public record "does not convert a Rule 12(b)(6) motion to one for summary judgment." Mack v. S. Bay Beer Distribs., 798 F.2d 1279, 1282 (9th Cir.1986), abrogated on other grounds by Astoria Fed. Say. & Loan Ass'n v. Solimino, 501 U.S. 104, 111 S.Ct. 2166, 115 L.Ed.2d 96 (1991).

B. Motion to Dismiss for Failure to State a Claim under CERCLA section 107(a)

In the motion filed by the trustees, the WSC partnership, and Montalvo, in which all other defendants join, defendants argue that plaintiff, who voluntarily assumed initial investigatory costs in furtherance of an environmental clean up, cannot sue other potentially responsible parties ("PRPs") for contribution under CERCLA in light of the Supreme Court's decision in Cooper Industries, Inc. v. Aviall Services, Inc., 543 U.S. 157, 125 S.Ct. 577, 160 L.Ed.2d 548 (2004). In the absence of a valid claim for contribution under CERCLA, defendants ask the court to dismiss Claim Three (seeking declaratory relief under CERCLA section 113(g)(2)),¹ and to refuse to exercise supplemental jurisdiction over the remaining state law claims.

Prior to the Supreme Court's decision in Aviall, a PRP like plaintiff, who voluntarily incurred clean up costs to remediate environmental contamination, could unquestionably seek contribution from other PRPs. See Pinal Creek Group v. Newmont Mining Corp., 118 F.3d 1298 (9th Cir. 1997); W. Props. Serv. Corp. v. Shell Oil Co., 358 F.3d 678, 685, 689-90 (9th Cir. 2004) (explaining Final Creek). In Pinal Creek, the Ninth Circuit explained that such a right was evident from the historic implicit right to contribution in section 107, the "contours and mechanics" of which are governed by section 113 (which addresses how to apportion liability among PRPs). 118 F.3d at 1301-02; W. Props., 358 F.3d at 685 ("Pinal Creek held that the enactment of § 113 in 1986 did not replace the implicit right to contribution many courts had recognized in § 107(a)."). In so holding, the Ninth Circuit effectively created "a hybrid action under sections 107(a)(4)(B) and 113(f), with the former provision creating the implied right of contribution, and the latter qualifying the nature of...