A Cal. Mun. Corp.. v. American Promotional Events Inc.-west

Decision Date02 August 2010
Docket NumberNo. 06-56718.,06-56718.
Citation614 F.3d 998
PartiesCITY OF COLTON, a California municipal corporation, Plaintiff-Appellant, v. AMERICAN PROMOTIONAL EVENTS, INC.-WEST; Apollo Manufacturing Co.; Astro Pyrotechnics, Inc.; Atlas Fireworks Company, Inc.; Black & Decker, Inc.; California Fireworks Display Company; County of San Bernardino; Emhart Industries, Inc.; Goodrich Corporation; Kwikset Locks, Inc.; Pyro Spectaculars, Inc.; Pyrotronics Corp.; Red Devil Fireworks Company; Thomas O. Peters; The 1966 Thomas O. Peters and Kathleen S. Peters Revocable Trust; Trojan Fireworks, Co.; United Fireworks Manufacturing Company Inc.; Whittaker Corporation, Defendants-Appellees.
CourtU.S. Court of Appeals — Ninth Circuit




Roderick E. Walston, Best Best & Krieger LLP, Walnut Creek, CA, argued the cause and filed briefs for plaintiff-appellant. With him on the briefs were Gene Tanaka, Cynthia Germano, and Danielle G. Sakai, Best Best & Krieger LLP, Walnut Creek, CA.

James L. Meeder, Allen Matkins Leck Gamble Mallory & Natsis LLP, San Francisco, CA, argued the cause and filed a brief for defendants-appellees American Promotional Events, Inc.-West, Astro Pyrotechnics, Inc., Black & Decker, Inc., County of San Bernardino, Emhart Industries, Inc., Kwikset Locks, Inc., Thomas O. Peters, The 1996 Thomas O. Peters and Kathleen S. Peters Revocable Trust, Trojan Fireworks, and Whittaker Corp. With him on the brief were Ruth E. Stringer, Maxine M. Morisaki, Robert L. Jocks, Office of the County Counsel, County of San Bernardino, San Bernardino, CA; Timothy V.P. Gallagher, Martin N. Refkin, Thomas A. Bloomfield, and Thomas S. Sites, Gallagher & Gallagher, P.C., Los Angeles, CA; John E. Van Vlear and Daniel S. Kippen, Voss Cook & Thel LLP, Newport Beach, CA; Richard A. Dongell, Matthew Clark Bures, and Christopher T. Johnson, Dongell Lawrence Finney, Los Angeles, CA; Robert D. Wyatt and Gary A. Slodoba, Allen Matkins Leck Gamble Mallory & Natsis LLP, San Francisco, CA; Steven H. Goldberg, Daniel J. Coyle, and Amilia Glikman, Downey Brand LLP, Sacramento, CA; Steven J. Renshaw, Renshaw & Associates, PLC, Torrance, CA; Philip Hunsucker and Allison McAdam, Resolution Law Group, P.C., Lafayette, CA; David C. Solinger and Erik Mroz, Resolution Law Group, P.C., Woodland Hills, CA.

Jeffrey D. Dintzer, Gibson, Dunn & Crutcher LLP, Los Angeles, CA, filed a brief on behalf of defendant-appellee Goodrich Corporation. With him on the brief were Denise G. Fellers, Gibson, Dunn & Crutcher LLP, Los Angeles, CA, and Michael K. Murphy, Gibson, Dunn & Crutcher LLP, Washington, D.C.

Philip C. Hunsucker, Resolution Law Group, P.C., Lafayette, CA, filed a brief on behalf of defendant-appellant Pyro Spectaculars, Inc. With him on the brief were Brian L. Zagon and Allison E. McAdam, Resolution Law Group, P.C., Lafayette, CA.

Appeal from the United States District Court for the Central District of California, John F. Walter, District Judge, Presiding. D.C. No. CV-05-01479-JFW.



O'SCANNLAIN, Circuit Judge:

We must decide, among other things, whether the City of Colton, California, can recover response costs under the Comprehensive Environmental Response, Compensation, and Liability Act allegedly incurred as a result of perchlorate contamination in its water supply.


The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”) “is a comprehensive statute that grants the President broad power to command government agencies and private parties to clean up hazardous waste sites.” Key Tronic Corp. v. United States, 511 U.S. 809, 814, 114 S.Ct. 1960, 128 L.Ed.2d 797 (1994). Under CERCLA section 107(a), 42 U.S.C. § 9607(a), a private party may “recover expenses associated with cleaning up contaminated sites.” United States v. Atl. Research Corp., 551 U.S. 128, 131, 127 S.Ct. 2331, 168 L.Ed.2d 28 (2007).

To establish a prima facie claim for recovery of response costs under section 107(a), a private-party plaintiff must demonstrate:

(1) the site on which the hazardous substances are contained is a “facility” under CERCLA's definition of that term, Section 101(9), 42 U.S.C. § 9601(9); (2) a “release” or “threatened release” of any “hazardous substance” from the facility has occurred, 42 U.S.C. § 9607(a)(4); (3) such “release” or

“threatened release” has caused the plaintiff to incur response costs that were “necessary” and “consistent with the national contingency plan,” 42 U.S.C. §§ 9607(a)(4) and (a)(4)(B); and (4) the defendant is within one of four classes of persons subject to the liability provisions of Section 107(a).

Carson Harbor Village, Ltd. v. Unocal Corp., 270 F.3d 863, 870-71 (9th Cir.2001) (en banc) (“ Carson Harbor I ”) (internal quotation marks omitted). Only the third element-whether the response costs were necessary and consistent with the national contingency plan (“NCP”)-is at issue in this appeal.

Response costs are considered necessary when “an actual and real threat to human health or the environment exist[s].” Id. at 871. Response costs are considered consistent with the NCP “if the action, when evaluated as a whole, is in substantial compliance” with it. 40 C.F.R. § 300.700(c)(3)(i). The NCP “specifies procedures for preparing and responding to contaminations and was promulgated by the Environmental Protection Agency (EPA) pursuant to CERCLA § 105.” Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 161 n. 2, 125 S.Ct. 577, 160 L.Ed.2d 548 (2004); see also 40 C.F.R. Pt. 300 (codifying the NCP). “It is designed to make the party seeking response costs choose a cost-effective course of action to protect public health and the environment.” Carson Harbor Village LTD. v. County of Los Angeles, 433 F.3d 1260, 1265 (9th Cir.2006) (“ Carson Harbor II ”) (internal quotation marks omitted).


The City of Colton (Colton) draws its water supply from the Rialto-Colton groundwater basin (“Basin”) in San Bernardino County, California. In 1997, Colton began monitoring its municipal supply wells for perchlorate contamination. By 2002, Colton had detected perchlorate in three of its wells in concentrations ranging from about 4 to 10 micrograms per liter (“µg/L”). At the time, the California Department of Health Services (“CDHS”), which regulates water quality, had an “advisory action level” for perchlorate of 4 µ g/L. CDHS informed Colton that because “the perchlorate action level is an advisory action level, and thus, not enforceable,” the three impacted wells “may continue to be used to supply the system.” Nevertheless, in a closed-session meeting between its City Council and City Attorney, Colton adopted a policy of prohibiting the use of water with perchlorate levels above 4 µg/L. Pursuant to this policy, Colton took the impacted wells out of service and instituted a wellhead treatment program to eliminate the perchlorate in 2003.


In 2005, Colton filed suit against numerous entities that had engaged in industrial activities in the Basin over the years, alleging that they caused the release of perchlorate into the groundwater. In its third amended complaint, filed in December 2005, Colton alleged that it had spent $4 million to investigate the contamination and to implement the wellhead treatment program. Colton asserted claims for cost recovery and contribution under CERCLA, 42 U.S.C. §§ 9607(a), 9613(f); a claim for declaratory relief as to liability for future costs under the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202; and various claims under state law.

Numerous defendants filed a motion for summary judgment, arguing that Colton could not recover its wellhead treatment program costs under CERCLA. 1 In its opposition, Colton argued that the defendants were liable for not only its wellhead treatment program costs, but also costs associated with a future Basin-wide cleanup estimated to cost between $55 and $75 million. The district court granted summary judgment for the defendants on Colton's federal claims and declined to exercise supplemental jurisdiction over Colton's state law claims. 2 The district court held that Colton could not recover its costs associated with the wellhead treatment program because it failed to show that such costs were necessary and consistent with the NCP; furthermore, because Colton could not show that it was entitled to recover any of its past costs, its claim for declaratory relief as to its future costs necessarily failed. Colton timely appealed. 3


Colton first seeks reversal of the district court's summary judgment denying recovery of its past response costs. Colton challenges the district court's conclusion that the wellhead treatment program was unnecessary because there was no immediate threat to the public health or environment. See 42 U.S.C. § 9607(a)(4)(B). Colton concedes, however, that it failed to comply with the national contingency plan in its past response action. Because Colton's concession is a sufficient ground upon which to affirm the summary judgment with respect to past response costs, we decline to review the merits of the district court's conclusion that such costs were unnecessary. See Dorsey v. Nat'l Enquirer, Inc., 973 F.2d 1431, 1438 (9th Cir.1992). 4


Colton also contends that the district court erred in granting summary judgment denying its claim for declaratory relief as to its future response costs.


Before addressing the merits of the claim, we turn to the parties' various jurisdictional arguments.

The parties dispute whether Colton's claim for declaratory relief is ripe. “The constitutional ripeness of a declaratory judgment action depends upon whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to...

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