City of Chula Vista, Corp. v. Monsanto Co.

• Decision Date: 21 March 2019
• Docket Number: Case No.: 18cv1942-WQH-AGS
• Parties: CITY OF CHULA VISTA, a municipal corporation, Plaintiff, v. MONSANTO COMPANY, SOLUTIA INC., PHARMACIA CORPORATION, Defendants.
• Court: U.S. District Court — Southern District of California

CITY OF CHULA VISTA, a municipal corporation, Plaintiff, v. MONSANTO COMPANY, SOLUTIA INC., PHARMACIA CORPORATION, Defendants.

Case No.: 18cv1942-WQH-AGS

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

March 21, 2019

ORDER

HAYES, Judge:

The matter before the Court is the motion to dismiss or stay filed by Defendants. (ECF No. 5).

I. BACKGROUND

On August 21, 2018, Plaintiff City of Chula initiated this action by filing a Complaint against Defendants Monsanto Company, Solutia Inc., and Pharmacia Corporation. (ECF No. 1). Plaintiff brings a claim for continuing public nuisance, alleging that Defendants are responsible for damage to Plaintiff's stormwater system caused by polychlorinated biphenyls (PCBs).

On September 14, 2018, Defendants filed a Motion to Dismiss or Stay based on Plaintiff's failure to exhaust administrative remedies. (ECF No. 5).

On October 16, 2018, Plaintiff filed a Response in Opposition to the Motion to Dismiss. (ECF No. 16).

On October 29, 2018, Defendants filed a Reply in support of the Motion to Dismiss. (ECF No. 20).

II. ALLEGATIONS OF THE COMPLAINT

Plaintiff is a "California Charter City and municipal corporation." (ECF No. 1 ¶ 9). "The City was a trustee of certain relevant tidelands and submerged lands in and around the [San Diego] Bay from the early 1900s through 1963, when that property was transferred to the Port District." Id.

Defendants Monsanto Company, Pharmacia LLC, and Solutia Inc. are three separate corporations spun off from the original Monsanto Company. Id. ¶ 15. "Monsanto Company has repeatedly held itself out as the sole manufacturer of PCBs in the United States from 1935 to 1979, and trademarked the name 'Aroclor' for certain PCB compounds." Id. ¶ 2.

"Polychlorinated biphenyls (or 'PCBs') are man-made chemical compounds that have become notorious as global environmental contaminants - found in bays, oceans, rivers, streams, soil, and air." Id. ¶ 1. "In humans, PCB exposure is associated with cancer as well as serious non-cancer health effects, including effects on the immune system, reproductive system, nervous system, endocrine system and other health effects." Id.

"Monsanto's commercially-produced PCBs were used in a wide range of industrial applications in the United States, including electrical equipment such as transformers, motor start capacitors and lighting ballasts. In addition, PCBs were incorporated into a variety of products such as caulks, paints and sealants." Id. ¶ 69. "PCBs easily migrate or leach out of their original source material or enclosure and contaminate nearby surfaces, air, water, soil, and other materials." Id. ¶ 71.

Despite knowledge of PCB toxicity, Monsanto continued to "promot[e] the use and sale of Aroclor and other PCB compounds." Id. ¶ 84. "Monsanto remained steadfast in its production of . . . PCBs." Id. ¶ 92. "While the scientific community and Monsanto knew that PCBs were toxic and becoming a global contaminant, Monsanto repeatedly misrepresented these facts, telling governmental entities . . . that the compounds were not toxic and that the company would not expect to find PCBs in the environment in a widespread manner." Id. ¶ 106. "Although Monsanto knew for decades that PCBs were toxic, knew that they could not be contained and as a result were widely contaminating all natural resources and living organisms, and knew that there was no safe way to dispose of PCBs, Monsanto concealed these facts and continued producing PCBs until Congress . . . banned the manufacture of and most uses of PCBs as of January 1, 1979." Id. ¶ 2.

"Instead of having customers return fluids, Monsanto instructed its customers to dispose of PCB containing material in local landfills, knowing that landfills were not suitable for PCB contaminated waste." Id. ¶ 101. "Monsanto had determined that the only effective m[e]th[o]d of disposing of PCBs was incineration, and it constructed an incinerator for disposal of its own PCB contaminants." Id. "Nevertheless . . . Monsanto instructed its customers to dispose of PCB contaminated waste in landfills . . . ." Id.

"PCBs have traveled into the City of Chula Vista's stormwater system and San Diego Bay in a variety of ways." Id. ¶ 4. "The Bay is one of the region's most widely used natural resources, and the PCB contamination affects all Chula Vistans, who reasonably would be disturbed by the presence of a hazardous, banned substance in the sediment, water, and wildlife." Id. ¶ 113. "PCBs . . . have been found in samples of sediments and water taken from the Bay at varying times and locations, requiring substantial remediation work and cost." Id. ¶ 114. "PCBs leach from landfills and are found in commercial and industrial waste water as a result of Monsanto's directions to its customers on proper disposal methods when it knew . . . that disposal of PCBs in landfills was not proper." Id. ¶ 118. "PCBs regularly leach, leak, off-gas, and escape their intended applications, causing runoff during naturally occurring storm and rain events, after being released into the environment. The runoff originates from multiple sources and industries and enters the City of Chula Vista's stormwater system and San Diego Bay through stormwater and dry weather runoff." Id. ¶ 4.

"The City has property rights in its stormwater system, captured stormwater, and tidelands or submerged lands, and other public trust lands that are contaminated with Monsanto's PCBs, to the extent the City of Chula Vista owns or holds lands in public trust." Id. ¶ 23. "The City owns, manages, and operates a municipal stormwater and dry weather runoff system, which captures, collects, reuses for beneficial purposes, and/or transports stormwater and dry weather runoff." Id. ¶ 24. "Monsanto's PCBs have contaminated and damaged multiple facilities within the City's stormwater and dry weather runoff systems." Id. ¶ 25. "As a result of Monsanto's PCB's presence, the City cannot operate many of its stormwater and dry weather runoff systems as designed because the system now requires upgrades and retrofits to accommodate Monsanto's PCBs." Id. ¶ 26. "The City has incurred and will continue to incur costs to reduce PCBs from stormwater and dry weather runoff, which includes efforts to capture and beneficially use stormwater and dry weather runoff to augment existing water supplies." Id. ¶ 27. "The City's stormwater and dry weather runoff management system is damaged such that multiple facilities within the City's system have been and must be further retrofitted and improved in order to reduce and remove PCBs from stormwater and dry weather runoff. The retrofits and improvements required to reduce PCBs from stormwater and dry weather runoff have cost and will continue to cost the City money." Id. ¶ 28. "Retrofits . . . are required to reduce and remove Monsanto's PCBs to prevent further contamination of the San Diego Bay." Id. ¶ 31.

The municipal stormwater system "collects and transports stormwater to be discharged into the Bay." Id. ¶ 118. "In order to discharge stormwater into the Bay, Plaintiff is required to receive a Municipal Regional Stormwater Permit from the Regional Water Board, pursuant to the National Pollutant Discharge Elimination System under the Clean Water Act." Id. "As stormwater system owners and operators, Plaintiff has spent substantial amounts of money to limit the amount of PCBs in the Bay. Plaintiff will also likely continue to incur costs to remove PCBs from the Bay and to keep PCBs from entering the Bay for the foreseeable future." Id. ¶ 119.

California's Stormwater Resources Planning Act "authorizes the City to develop a stormwater resource plan, including compliance with stormwater regulations and beneficial capture of stormwater" and "confer[s] use or usufructuary rights on the City," "regarding . . . dry weather runoff and stormwater." Id. ¶¶ 38-39. Further, in Assembly Bill 2594, "the California State Legislature unanimously passed legislation confirming and codifying the Cities' use rights in stormwater." Id. ¶ 34. "The City built, owns, and manages an entire stormwater system, including plans and programs designed and intended to capture stormwater for beneficial uses outlined in The Stormwater Resources Planning Act . . . ." Id. ¶ 48. "The City has a usufructuary right and property interest in stormwater and dry weather runoff by its beneficial capture and use of stormwater." Id. ¶ 47.

III. APPLICABLE STANDARD

Federal Rule of Civil Procedure 12(b)(6) permits dismissal for "failure to state a claim upon which relief can be granted." In order to state a claim for relief, a pleading "must contain . . . a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Dismissal under Rule 12(b)(6) "is proper only where there is no cognizable legal theory or an absence of sufficient facts alleged to support a cognizable legal theory." Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010) (quotation omitted).

Stating a claim for relief "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Fed. R. Civ. P. 8(a)(2)). When considering a motion to dismiss, a court must accept as true all "well-pleaded factual allegations." Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). "[A]ccepting all factual allegations in the complaint as true and drawing 'all reasonable inferences in favor of the nonmoving party,'" the plaintiff's "allegations must 'plausibly suggest an entitlement to relief.'" Gregg v. Haw., Dep't of Pub. Safety, 870 F.3d 883, 886-87 (9th Cir. 2017) (first quoting TwoRivers v. Lewis, 174 F.3d 987, 991 (9th Cir. 1999); then quoting Iqbal, 556 U.S. at 681).

IV. REQUEST FOR JUDICIAL NOTICE

Monsanto requests judicial notice of the following documents: (1) Excerpts of "Polychlorinated Biphenyls and the Environment," a report issued by...