City of Lincoln v. Cnty. of Placer, 2:18-cv-00087-KJM-AC

• Court: United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
• Parties: City of Lincoln, Plaintiff, v. County of Placer, Defendant.
• Docket Number: 2:18-cv-00087-KJM-AC
• Decision Date: 14 September 2022

City of Lincoln, Plaintiff,
v.
County of Placer, Defendant.

No. 2:18-cv-00087-KJM-AC

United States District Court, E.D. California

September 14, 2022

ORDER

This matter is before the court on defendant and cross-claimant County of Placer's motion for judgment on the pleadings with respect to plaintiff City of Lincoln's equitable indemnity, contribution, and Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) section 113 claims. See generally Mot., ECF No. 46; Mem., ECF No. 46-1. The City opposes. See Opp'n, ECF No. 47. The County replied. Reply, ECF No. 48. The court heard argument on May 27, 2022, with Jeffrey Orrell appearing for plaintiffs and Jennifer Hartman King appearing for defendants. For the reasons below, the court grants the County's motion.

I. BACKGROUND

Since 1952, the City of Lincoln has owned, operated, and maintained a landfill in Placer County, California. Compl. ¶ 10, ECF No. 1. The landfill was open to residents and private and public entities, including defendant Placer County, until approximately 1976. Id. ¶¶ 10, 12. On

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“information and belief,” the City alleges the County generated, transported, and arranged for the disposal of hazardous waste at the landfill. Id. ¶¶ 11-12.

In mid-2014, the California Regional Water Quality Control Board, Central Valley Region (Regional Board) issued a Cleanup and Abatement Order, which required the City to “investigate, reduce, or eliminate groundwater, soil, surface water and air contamination at the Site and in near proximity to the Site.” Id. ¶ 13. Since receiving the order, the “City has incurred and continues to incur costs to investigate, remediate, and take additional actions to prevent further spreading of contamination of groundwater, soil, surface water and air at the Site, and in near proximity of the Site, and otherwise carry out the requirements of [the Abatement Order].” Id. ¶ 14. The City anticipates incurring additional costs in the future. Id.

In early 2018, the City filed the operative complaint against the County, alleging six claims: (1) continuing nuisance, (2) continuing trespass, (3) equitable indemnity/contribution, (4) cost recovery under CERCLA section 107, (5) contribution under CERCLA section 113, and (6) declaratory relief. See generally Compl. The County filed an answer and a counterclaim for contribution under CERCLA section 113. Answer at 13, ECF No. 10. Relying on Federal Rule of Civil Procedure 12(c), the County now moves for judgment on the pleadings as to the City's third and fifth claims for equitable indemnity/contribution and contribution under CERCLA section 113. Mem. at 2.^[1]

II. LEGAL STANDARD

“After the pleadings are closed-but early enough not to delay trial-a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). A Rule 12(c) motion is “functionally identical” to a Rule 12(b)(6) claim, thus the same standard of review applies. Gregg v. Hawaii, Department of Public Safety, 870 F.3d 883, 887 (9th Cir. 2017); Baiul v. NBC Sports, a division of NBCUniversal Media, LLC, 732 Fed.Appx. 529, 531 (9th Cir. 2018) (unpublished) (affirming district court's dismissal of plaintiff's claims based on res judicata because Rule 12(b)(6) and Rule 12(c) motions have same standard of review). A plaintiff must support each claim for relief with

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factual allegations that allow the court to draw a plausible inference of a defendant's potential liability. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). When considering a Rule 12(c) motion, the court assumes all factual allegations in the pleadings are true and draws inferences in favor of the non-moving party. Gregg, 870 F.3d at 886-87 (quoting TwoRivers v. Lewis, 174 F.3d 987, 991 (9th Cir. 1999)); see also Doutherd v. Motesdeoca, No. 17-02225, 2021 WL 1784917, at *3 (E.D. Cal. May 5, 2021).

III. ANALYSIS

A. Equitable Indemnity

“The right to equitable indemnity arises from the principle that an individual who has paid damages which ought to have been paid by another wrongdoer may recover from that wrongdoer.” Sullins v. Exxon/Mobil Corp., 729 F.Supp.2d 1129, 1139 (N.D. Cal. 2010) (citing Bush v. Sup. Ct., 10 Cal.App.4th 1374, 1380 (1992)). “It is premised on the doctrine that joint tortfeasors should share the burden of discharging their legal obligation to the injured party for damages caused by mutual negligence or wrongdoing.” Id. (citing Miller v. Ellis, 103 Cal.App.4th 373, 379-80 (2002)). An equitable indemnity cause of action accrues “when the indemnitee suffers a loss through payment of an adverse judgment or settlement.” Id. (citing Western Steamship Lines, Inc. v. San Pedro Peninsula Hosp., 8 Cal.4th 100, 110 (1994)); see also Christian v. County of Los Angeles, 176 Cal.App.3d 466, 471 (1986) (“[A] fundamental prerequisite to an action for partial or total equitable indemnity is an actual monetary loss through payment of a judgment or settlement.”).

The County argues the City's claim for equitable indemnity fails as a matter of law, “as the City has not incurred damages for payment to any third party in settlement of a claim or in satisfaction of a judgment . . . .” Mem. at 7 (citing City of San Diego v. U.S. Gypsum Co., 30 Cal.App.4th 575, 587-88 (1995); Valley Circle Ests. v. VTN Consol., Inc., 33 Cal.3d 604, 611 (1983)). The City points to caselaw suggesting a party may pursue a claim for equitable indemnity prior to accrual, i.e., the establishment of liability. Opp'n at 10 (citing NuCal Foods, Inc. v. Quality Egg LLC, 918 F.Supp.2d 1037, 1041-42 (E.D. Cal. 2013) (“equitable indemnity claims may be pled in a cross-complaint before any defendant has been found liable”);

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A&I Transp. Inc. v. KG Admin. Servs., Inc., No. 19-01992, 2021 WL 1152973, at *4 (C.D. Cal. Jan. 7, 2021) (third-party complaint for equitable indemnity not foreclosed “in a pending lawsuit that may result in comparative tort liability”). The City's reliance on this caselaw is misplaced. Rather, the cases the City cites involve cross-complaints and third-party complaints for equitable indemnity, rendering them distinguishable from the facts here. Reply at 3-4.

The City does not cite a case in which the court considered whether-and then concluded-a plaintiff may state a claim against a defendant for equitable indemnity prior to incurring damages for payment in a settlement or satisfaction of judgment. At hearing, the City's counsel suggested the case of Mangini v. Aerojet-General Corp., 230 Cal.App.3d 1125, 115354 (1991), stands for the proposition that equitable indemnity is available absent damages for payment in a settlement or satisfaction of judgment, so long as plaintiff has incurred “testing and abatement costs” or “suffered loss through payment.” However, the defendant in Mangini only challenged plaintiffs' equitable indemnity claim as barred by the statute of limitations, and thus the court did not analyze the precise contours of the question presented here. Furthermore, the three Supreme Court of California cases the Mangini court cites all discuss payments made following adverse judgments or settlement-not just any loss through payment. See Valley Circle Ests., 33 Cal.3d at 611; People ex rel. Dep't of Transp. v. Superior Ct., 26 Cal.3d 744, 748 (1980); E. L. White, Inc. v. City of Huntington Beach, 21 Cal.3d 497, 505 (1978). The City's reliance on City of Rialto v. U.S. Department of Defense is similarly unavailing because in that case the court relied upon Mangini in finding plaintiffs did not state a claim for equitable indemnity because they had “not pled that they are defendants in related...