City of Lodi v. Randtron

• Decision Date: 05 May 2004
• Docket Number: No. C037445.,No. C038921.,C037445.,C038921.
• Parties: CITY OF LODI, Plaintiff and Appellant, v. RANDTRON, Defendant and Appellant.
• Court: California Court of Appeals Court of Appeals

13 Cal.Rptr.3d 107

118 Cal.App.4th 337

CITY OF LODI, Plaintiff and Appellant, v. RANDTRON, Defendant and Appellant.

No. C037445.

No. C038921.

Court of Appeal, Third District.

May 5, 2004.

Horvitz & Levy, Peter Abrahams, John A. Taylor, Jr., Encino; Gibson, Dunn & Crutcher, Daniel S. Floyd and Clifton J. McFarland, Los Angeles, for Defendant and Appellant.

Bill Lockyer, Attorney General, Donald A. Robinson, Supervising Attorney General, as Amicus Curiae on behalf of Defendant and Appellant Randtron.

D. Stephen Schwabauer, City Attorney; Kronick, Moskovitz, Tiedemann & Girard, Daniel J. O'Hanlon, Sacramento, Robin Leslie Stewart; Randall A. Hays, Envision Law Group, Michael C. Donovan, Cecelia C. Fusich, Brian R. Paget, John R. Till, City Attorneys for Plaintiff and Appellant.

BLEASE, Acting P.J.

In this consolidated appeal, defendant Randtron, a dissolved corporation, appeals from the summary judgment and mandatory injunction issued in favor of plaintiff, the "People of the State of California." However, since the City has no authority to act in the name of the People, we shall refer to plaintiff as the City of Lodi (hereafter the City).¹

The injunction requires Randtron to comply with an administrative order directing it to abate an environmental nuisance on property it formerly owned and operated and to reimburse the City for all abatement and adjudication costs incurred by the City in connection with the cleanup of hazardous substances on the property. The order was issued pursuant to a city ordinance, entitled the Comprehensive Municipal Environmental Response and Liability Ordinance (MERLO) (Lodi Mun.Code, ch. 8.24),² which authorizes the City to investigate and remediate the contamination of its soil and groundwater.

On appeal, Randtron contends the administrative abatement order is void and unenforceable because it was issued pursuant to MERLO, which is preempted by the state Carpenter-Presley-Tanner Hazardous Substance Account Act (HSAA)(Health & Saf.Code, §§ 25300-25395.40.)³, and accordingly the City is also not entitled to the award of costs and attorney fees as the prevailing party.⁴ We agree.

We hold that an administrative abatement action order issued pursuant to MERLO is preempted by HSAA because the City of Lodi is a site listed by the Department of Toxic Substances Control (DTSC or department) for which the state has exclusive jurisdiction over all remedial response actions. (§ 25356, subd. (d).) Although a city may itself initiate and carry out the cleanup of a listed site upon notice to the department and approval of the response action plan by the department, HSAA does not authorize a city to issue an administrative order directing a Responsible Party (RP) to take remedial action. (§§ 25351.2, 25322, 25323.)

We shall reverse the summary judgment and injunction against Randtron, and the resulting costs and attorney fees.

FACTUAL AND PROCEDURAL BACKGROUND⁵

A. Contamination of the City's Groundwater⁶

In 1989, the City discovered, during a quality control sampling of its water, that its soil and groundwater were contaminated by tetrachloroethene and trichloroethene. These are solvents used in dry-cleaning, metal degreasing, and other industrial applications, and are known carcinogens. Subsequent investigations conducted by the DTSC⁷ and the California Regional Water Quality Control Board (regional board) confirmed that these solvents were present in the City's groundwater and several City wells.

Meanwhile, beginning in fiscal year 1993-94, the DTSC listed the "Lodi Groundwater Site" as a state hazardous waste site pursuant to section 25356.⁸ The site was still listed in fiscal year 1999-00, by the DTSC on its CalSites list of "Active Annual Workplan Sites" published by the DTSC.⁹ The address of the site is described as the "the City of Lodi."

B. The City's Efforts to Remediate the Contamination

In May 1997, the City and DTSC entered into a Comprehensive Joint Cooperative Agreement (joint agreement) pursuant to the DTSC's authority under HSAA. The parties agreed the City, in cooperation and consultation with DTSC, would assume the "lead agency" role with responsibility to prosecute actions against Potentially Responsible Parties (PRPs) or clean up the contamination itself and seek reimbursement from the PRPs. The joint agreement did not authorize the City to depart from the procedures required by HSAA.

In August 1997, the Lodi City Council enacted MERLO, which creates environmental investigatory tools and a remedial environmental response and liability scheme. (Lodi Mun.Code, ch. 8.24.)¹⁰ MERLO is similar in many ways to HSAA and its federal counterpart, the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) (42 U.S.C. § 9601 et seq.), in addressing serious hazardous substance environmental contamination. MERLO declares that every environmental nuisance as defined in section 8.24.010(7) is a public nuisance. (§ 8.24.020.) It authorizes the enforcing officer¹¹ to determine whether there is an actual or threatened environmental nuisance, and to undertake any abatement action¹² necessary and proper to secure adequate protection of the public health, welfare and the environment. (§ 8.24.030(1).) MERLO further authorizes the enforcing officer to issue an administrative order directing any RP to undertake partial or comprehensive abatement actions. (§ 8.24.030(A)(1) and (2).) MERLO also specifies that for any site within the City that is listed pursuant to HSAA, abatement action orders must comply with section 25356, subdivision (c). (§ 8.24.030(A)(7).)¹³

C. Proceedings Against Randtron

On November 5, 1998, the City's enforcing officer issued an administrative abatement action order to Randtron. (Docket No. A.O.-97-HOLZ-01-A.)¹⁴ The order makes extensive findings of fact, concluding that Randtron and its agents created or threatened to create an environmental nuisance on the subject property, located at 1129-1300 Sacramento Street in the City of Lodi. That property is located within the area encompassed by the Lodi Groundwater Site.¹⁵

The order directed Randtron to undertake jointly and severally, specified abatement actions. The order further requires Randtron to reimburse the City for all abatement action costs, including costs associated with the City's monitoring, oversight or review of Randtron's activities under the order. (§ 8.24.040.) The order advised Randtron that it had a right to contest the order and to request a hearing pursuant to section 8.24.060 of MERLO, and that its failure to make a timely request would result in the order becoming final and binding upon Randtron.

The final order was served on an officer of Randtron. Randtron did not take advantage of any of MERLO's review procedures and did not comply with the final order.

The City then filed a complaint against Randtron seeking a mandatory injunction compelling Randtron to comply with the order and pay all abatement action costs due under the order. The parties filed cross motions for summary judgment. The trial court ruled in favor of the City on both motions and issued the requested injunction. Randtron appeals from the judgment.

Following entry of judgment, the City filed a motion for costs and attorney fees as the prevailing party. The trial court granted the motion in part and denied it in part. Randtron appeals from the order making that award. The City cross-appeals from the part of the order denying a portion of its requested costs and attorney's fees.

On November 16, 2001, this court consolidated the two appeals.

DISCUSSION

I. Preemption

Randtron contends the administrative abatement order is invalid because it was issued pursuant to MERLO, which it argues is preempted by state and federal law. With respect to state law, Randtron argues, inter alia, that HSAA occupies the field of hazardous waste contamination at release sites listed by DTSC pursuant to section 25356, and because the Lodi Groundwater Site is a listed sight, MERLO is preempted when applied to remedial response actions relating to that site.¹⁶

The City takes the position that MERLO is not preempted by HSAA because "HSAA is a remedial statute designed to fund and facilitate state governmental response to hazardous substance contamination problems." The City also contends the administrative order is not subject to collateral attack because Randtron failed to exhaust its administrative and judicial remedies to challenge the validity of the order. Randtron contends neither doctrine is applicable.

We agree with Randtron's basic assertions on both points, but differ in our analysis. We hold that HSAA preempts local regulation of response actions on sites listed pursuant to section 25356 because it vests the state with sole jurisdiction over removal and remedial actions of all listed sites. Because the contaminated site formerly belonging to Randtron is located within a listed site, the enforcing officer acted without jurisdiction when he issued the abatement action order for that property. For that reason, we also hold the administrative and judicial exhaustion doctrines do not bar a challenge to the administrative order.

We do not disagree with the City's assertion that HSAA is a remedial statute that contemplates local action and regulation of environmental contamination. However, with respect to listed sites, the City's argument ignores the statutory language that all response actions for listed sites must be in compliance with HSAA and that DTSC, or the regional board when appropriate,¹⁷ is the sole agency with responsibility for ensuring the response action is carried out consistent with HSAA.

A. Standard of Review

A motion for summary judgment shall be granted when "all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." (Code Civ. Proc., § 437c, subd. (c); Merrill v. Navegar, Inc. (2001) 26...