California v. Kinder Morgan Energy Partners, L.P.

• Decision Date: 25 January 2013
• Docket Number: CASE NO. 07-CV-1883-MMA(WVG)
• Parties: PEOPLE OF THE STATE OF CALIFORNIA, et al., Plaintiffs, v. KINDER MORGAN ENERGY PARTNERS, L.P., et al., Defendants.
• Court: U.S. District Court — Southern District of California

PEOPLE OF THE STATE OF CALIFORNIA, et al., Plaintiffs,

v.KINDER MORGAN ENERGY PARTNERS, L.P., et al., Defendants.

CASE NO. 07-CV-1883-MMA(WVG)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

Dated: January 25, 2013

OMNIBUS ORDER ON MOTIONS

FOR SUMMARY JUDGMENT

AND TO EXCLUDE EXPERT

EVIDENCE

[Doc. Nos. 202, 203, 204, 205, 206,

207, 208, 210, 211, 212, 213, 214, 215

& 216]

This matter is before the Court following a hearing on the parties' pending dispositive motions. After further consideration of the moving papers, exhibits, and oral arguments, the Court affirms its tentative rulings as explained in further detail below and enters judgment in favor of Defendants Kinder Morgan Energy Partners, L.P., Kinder Morgan Management, L.L.C., Kinder Morgan Operating, L.P. "D," SFPP, L.P., Kinder Morgan G.P., Inc., and Santa Fe Pacific Pipelines, Inc. (collectively, "Kinder Morgan").

I. BACKGROUND

This action arises from events surrounding the contamination and prolonged remediation of soil and groundwater on approximately 166 acres of City-owned land surrounding and underlying Qualcomm Stadium in San Diego, California (the "Property"). [First Amended Complaint ("FAC"), Doc. No. 32 ¶ 26.] Kinder Morgan owns land adjacent to the Property, on which itoperates the Mission Valley Terminal. [Id. ¶ 27.] The Mission Valley Terminal is an industrial facility engaged in the business of transporting, storing, and distributing petroleum products. [Id.] Since the 1960s, the Mission Valley Terminal has been the central hub of the gasoline distribution system in San Diego County.

The following facts are not reasonably in dispute. As early as 1992, the City was on notice that Kinder Morgan and its predecessors released petroleum products into the soil, contaminating the Property and groundwater. [Id. ¶ 30; Defs.' Stmt. of Uncontroverted Facts ("SUF") ¶ 1.] In 1992, the California Regional Water Quality and Control Board ("Water Board") ordered the investigation and remediation of contamination at the Mission Valley Terminal. Pursuant to this order, Kinder Morgan and its predecessors have spent approximately $60 million addressing the petroleum beneath the Property. Since 1992, the City has received copies of Kinder Morgan's reports to the Water Board, and has provided input in the Water Board's oversight of remediation efforts. [Id. ¶ 2.] Despite the contamination, the City has never cancelled a sporting event at the Property, lost use of the Property, or lost any revenue from operating the Property. [Id. ¶ 17.]

From 2001 through 2004, the City considered suing Kinder Morgan for damages allegedly caused by the contamination. [Id. ¶ 3.] In 2005, the Water Board issued Addendum No. 5 to its order, requiring Kinder Morgan to complete the soil remediation by December 31, 2010, and the groundwater remediation by December 31, 2013. [Add. No. 5 to CAO 92-01, Doc No. 206-4.] On August 14, 2007, the City sued Kinder Morgan, alleging that petroleum releases from the Mission Valley Terminal contaminated the Property and damaged the City. [Doc. No. 1.] The following claims remain: public nuisance, continuing private nuisance, continuing trespass, negligence, California Business and Professions Code section 17200, and declaratory relief. [Doc. Nos. 32, 97, 98.]

II. SUMMARY JUDGMENT

A party may move for summary judgment on all or part of its claims. Fed. R. Civ. P. 56(a). A party is entitled to summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R.Civ. P. 56(c)(2). "The moving party bears the initial burden to demonstrate the absence of any genuine issue of material fact." Horphag Research Ltd. v. Garcia, 475 F.3d 1029, 1035 (9th Cir. 2007) (citation omitted); see also Robinson v. G.D. Searle & Co., 286 F. Supp. 2d 1216, 1221 (N.D. Cal. 2003) ("As the moving party not bearing the burden of proof at trial, Defendant may carry its burden of production on summary judgment by showing that there is an absence of admissible evidence that [its product] caused Plaintiff's injuries."). "Once the moving party meets its initial burden, . . . the burden shifts to the nonmoving party to set forth, by affidavit or as otherwise provided in Rule 56, specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (internal quotation marks and citations omitted).

"[T]o defeat a properly supported motion for summary judgment . . . the nonmoving party must introduce some 'significant probative evidence tending to support the complaint.'" Fazio v. City & Cnty. of S.F., 125 F.3d 1328, 1331 (9th Cir. 1997) (quoting Anderson, 477 U.S. at 249, 252). However, when assessing the record to determine whether there is a "genuine issue for trial," the Court must "view the evidence in the light most favorable to the nonmoving party, drawing all reasonable inferences in [its] favor." Horphag Research Ltd., 475 F.3d at 1035 (citation omitted). The Court may not make credibility determinations or weigh conflicting evidence. See Anderson, 477 U.S. at 255. The ultimate question on a summary judgment motion is whether the evidence "presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Id. at 251-52.

III. DISCUSSION

A. Kinder Morgan's Motion to Exclude the Expert Testimony of Mr. Ray Forrester

As a threshold matter, Kinder Morgan moves to exclude the testimony of the City's expert, Ray Forrester, under Federal Rule of Evidence 702 and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). The Court finds that Forrester's opinion fails to satisfy the requirements of Daubert, and therefore GRANTS Kinder Morgan's motion.

1. Mr. Forrester's Opinion

The City retained Forrester as an expert to provide his opinion regarding the remediationefforts at the Mission Valley Terminal. Forrester is a chemical engineer with over 30 years of experience remediating contaminated sites. [See generally Forrester Rep., Doc. No. 206-4.]

Generally, Forrester opines that Kinder Morgan has not adequately remediated the Property, and that alternative technologies are better equipped to quickly and effectively remediate the site. Forrester's opinion rests, in large part, on the presupposition that both the groundwater and soil on the Property should be remediated to "background condition."¹ He is aware of the Water Board's remediation requirements, yet asserts that the goals of the Water Board and those of the City as a landowner are not the same. Forrester states:

The goals of the [Water Board] and those of a landowner who has been impacted by contamination from an off-site source may be similar but not the same. The Water Board has goals designed to address the interest of the state and community as a whole. The impacted landowner has concerns about the safety of those accessing their property, their property value, and its usability. Each of these three factors is heavily impacted by the time required to remedy the contamination that has migrated onto their property. . . . Just because [Kinder Morgan's] actions may have been approved by the [Water Board] doesn't mean that the [Water Board] would not have approved more responsive and timely attempts to address the contamination. . . . The distinction between the [Water Board's] goals and those of the City of San Diego is integral to understanding the points made in my opinions provided below.

[Forrester Rep., Doc. No. 221-7 at 11.]

Forrester's report contains the following eleven opinions:

1. The Mission Valley Basin is an identified resource to meet the City of San Diego's long-term water supply and storage needs.

2. Petroleum impacts resulting from releases from the Mission Valley Terminal have impacted the City of San Diego's property and the Mission Valley Basin, which represents a long-term water supply and storage source for the City of San Diego.

3. Petroleum releases have occurred at the Mission Valley Terminal prior to, during, and since 2005, and will likely continue to occur into the future. These ongoing releases have affected the groundwater and soils on the City of San Diego's property and will likely impact groundwater in the future.

4. Releases from the Mission Valley Terminal have occurred since the initial1987 response plan to address petroleum impacts. These releases have contributed further to the contamination and resulted in larger quantities of petroleum requiring remediation, and have extended the duration of remediation.

5. The remediation technologies selected at the site were not implemented in a timely manner. The remediation plan described in the October 1999 CAP was not sufficiently responsive to address then-known contamination by the completion date(s) required in the Order and subsequent addenda.

6. The Defendant's current remediation approach has not met their December 31, 2010, deadline to achieve specified target levels in the CAP, and will not meet their December 31, 2013, scheduled deadline.

7. Contingency plans identified by the Defendant's consultants as feasible to reduce the scheduled remediation times and achieve remediation deadlines have not been implemented.

8. If the contingency plans recommended by the Defendant's consultants were implemented in a reasonable time after being proposed, the actions would have reduced the time required for remediation.

9. If the contingency plans recommended by the Defendant's consultants are implemented, they would reduce contaminant mass at the site, reduce the time required to achieve remediation endpoints, and increase the likelihood of reaching background.

10. The approximate cost to implement the (Steam Enhanced Extraction) SEE in the source area of the Qualcomm site, which will assist in returning the

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