City of Seattle v. Monsanto Co.

• Decision Date: 03 May 2019
• Docket Number: Case No. 2:16-CV-107-RSL
• Parties: CITY OF SEATTLE, Plaintiff, v. MONSANTO COMPANY, et al., Defendants.
• Court: U.S. District Court — Western District of Washington

387 F.Supp.3d 1141

CITY OF SEATTLE, Plaintiff,

v.MONSANTO COMPANY, et al., Defendants.

Case No. 2:16-CV-107-RSL

United States District Court, W.D. Washington, at Seattle.

Signed May 3, 2019

Carla Burke Pickrel, Pro Hac Vice, Celeste A. Evangelisti, Pro Hac Vice, Scott Summy, Pro Hac Vice, Brett Land, Baron & Budd, Dallas, TX, John Paul Fiske, Pro Hac Vice, Baron & Budd, P.C., John H. Gomez, Pro Hac Vice, Gomez Trial Attorneys, San Diego, CA, Peter Samuel Holmes, Laura B. Wishik, Seattle City Attorney's Office, Seattle, WA, for Plaintiff.

Andrea Hogan, Pro Hac Vice, Latham & Watkins, Donald F. Zimmer, Jr., Pro Hac Vice, Megan R. Nishikawa, Pro Hac Vice, Nicholas D. Kayhan, Pro Hac Vice, King & Spalding LLP, San Francisco, CA, Connie Sue Manos Martin, Jennifer Campbell, Schwabe Williamson & Wyatt, Seattle, WA, Kelly E. Richardson, Pro Hac Vice, Robert M. Howard, Pro Hac Vice, Latham & Watkins, San Diego, CA, for Defendants.

ORDER ON CITY OF SEATTLE'S MOTION TO DISMISS DEFENDANTS' COUNTER-CLAIMS AND STRIKE CERTAIN DEFENSES

Robert S. Lasnik, United States District Judge

This matter comes before the Court on plaintiff City of Seattle's "Motion to Dismiss Defendants' Counterclaims and to Strike Certain Defenses." Dkt. #95.¹

INTRODUCTION

A. Background

This case concerns the presence of polychlorinated biphenyls ("PCBs") in water bodies in and around the City of Seattle ("Seattle"). PCBs are man-made environmental contaminants that cause harm to humans, wildlife and the environment. Dkt. #31 (Compl.) at ¶¶ 42–53. They are used in many industrial and commercial applications, including paint, transformers, sealants and inks. Id. at 4. On January 1, 1979, Congress enacted the Toxic Substances Control Act, which banned the manufacture and most uses of PCBs. Id.

PCBs have contaminated Seattle's drainage systems, stormwater and water bodies. Compl. at ¶¶ 5, 7. The Duwamish River comprises the final 12 miles of Washington State's Green River, which runs through Seattle. Id. at ¶ 4; Dkt. #91 (Countercl.) at ¶ 33. Harbor Island is located at the mouth of the Duwamish, bounded on one side by the East Waterway and on the other side by the West Waterway. Beginning at the upstream end of Harbor Island and continuing for about six miles upstream is a section of the river known as the Lower Duwamish,² also designated as the Lower Duwamish Waterway Superfund Site ("LDW Site"). Id. at ¶ 6; Countercl. at ¶ 33. The East Waterway and the West Waterway empty into Elliott Bay, a bay of Puget Sound. Countercl. at ¶ 33. The Lower Duwamish and the East Waterway are listed on the Washington State Water Quality Assessment list of impaired water bodies, in accordance with the Clean Water Act ("CWA"). Id. at ¶ 86; see 33 U.S.C. § 1313(d)(1). They are also listed on the National Priorities List as Superfund sites. Id. at ¶¶ 10, 14; see 65 Fed. Reg. 75179, 75182 (Dec. 1, 2000).

Seattle, King County, the Port of Seattle and the Boeing Company entered into an Administrative Order on Consent ("AOC") under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") with the EPA and the Washington Department of Ecology ("Ecology") in December 2000. Countercl. at ¶ 40. The AOC parties formed the Lower Duwamish Waterway Group ("LDWG") and completed a Remedial Investigation in 2010 and a Feasibility Study in 2012 (collectively, "RI/FS"). Id. at ¶¶ 41–42. In November 2014, the EPA issued its Record of Decision ("ROD") for the LDW Site. Its planned cleanup includes dredging, capping, and enhanced natural recovery. Id. at ¶ 43; see Ex. 6; Dkt. #76-6.³

Seattle has three types of drainage systems: a municipal separated stormwater system ("MS4"), a partially separated system, and a combined sewer system that collects stormwater and sewage. Compl. at ¶ 18. Heavy rains cause the combined system to overflow through Combined Sewer Overflows ("CSOs"). Id. Seattle's MS4 system is subject to a Phase I Municipal Stormwater Permit ("MS4 Permit") issued by Ecology. Id. at ¶ 19; Countercl. at ¶ 81; see Ex. 17, Dkt. #76-19. Seattle's other systems are subject to a Waste Discharge Permit ("Waste Discharge Permit") WA0031682. Id. at ¶¶ 19–20; Countercl. at ¶ 64; see Ex. 8, Dkt. #76-10. Seattle also has a Construction Stormwater General Permit ("Construction Permit") for the stormwater discharges associated with construction activity. Countercl. at ¶ 182; see Ex. 49, Dkt. #76-51.

On April 16, 2013, the United States and the State of Washington jointly sued Seattle for violations of the CWA, see 33 U.S.C. § 1319(b), (d) and the Washington Water Pollution Control Act, see RCW §§ 90.48.037, 90.48.144 for the discharge of pollutants of raw sewage. Id. at ¶ 65; Ex. 11, Dkt. #76-13 at 2, 10-12. The suit was resolved by a consent decree ("Consent Decree") that requires Seattle to reduce its CSOs. Id. at ¶ 66; see Dkt. #100-1.⁴ Seattle was also required to pay a civil penalty of $ 350,000. Id.; see Ex. 10, Dkt. #76-12 at 3.

Monsanto⁵ was a manufacturer of PCBs in the United States until the 1970's.⁶

From 1946 to 1986, Monsanto owned and operated a plant that manufactured adhesives and vanillin on a site adjacent to the Lower Duwamish. Ex. A, Dkt. #94-1 at 4–5.⁷ On March 25, 2008, the EPA issued a Notice of Potential Liability Pursuant to Section 107(a) and a Request for Information Pursuant to Section 104(e) of CERCLA, for the LDW Site ("EPA Notice"). See id.

B. Procedural History

On January 25, 2016, the City of Seattle ("Seattle") filed a complaint against Monsanto. Dkt. #1. A First Amended Complaint ("FAC") was filed on May 4, 2016. Dkt. #31. Seattle alleged that Monsanto, as the sole manufacturer of PCBs in the United States between 1935 and 1979, was responsible for the presence of these contaminants in the city waters. Id. at ¶ 3. It brought five claims against Monsanto: public nuisance, defective design, failure to warn, negligence, and equitable indemnity. Id. at ¶¶ 91–142. Monsanto filed a motion to dismiss on May 18, 2016. Dkt. #34. The Court granted it in part, dismissing Seattle's claims for defective design, failure to warn and equitable indemnity. Dkt. #60. Monsanto filed an answer to the FAC and counterclaims against Seattle on March 24, 2017. Dkt. #63.

On April 28, 2017, Seattle filed a "Motion to Dismiss Counterclaims and Strike Certain Defenses and Allegations." Dkt. #66. Monsanto filed a "Motion For Leave to Amend Answer and Counterclaims" on May 22, 2017. Dkt. #76. This was granted on September 6, 2017. Dkts. #90, #91. Seattle filed a "Motion to Dismiss Defendants' Counterclaims and to Strike Certain Defenses," Dkt. #92, along with a motion requesting judicial notice of certain documents. Dkt. #94. Seattle then filed a "Praecipe to Substitute Corrected City of Seattle's Motion to Dismiss Defendants' Counterclaims and to Strike Certain Defenses," Dkt. #95, including a corrected version of the motion. Dkt. #95-1. Monsanto filed a response on October 30, 2017, Dkt. #99, along with a request for judicial notice of certain documents. Dkt. #100. It also filed an "Objection to Plaintiff's Request for Judicial Notice in Support of Motion to Dismiss Counterclaims." Dkt. #101. On November 13, 2017, Seattle filed a "Reply in Support of the Court Taking Judicial Notice of Exhibits C, D and E," Dkt. #102, and a reply in support of its motion to dismiss. Dkt. #103.

C. Monsanto's Counterclaims and Affirmative Defenses

Monsanto brings six counterclaims and asserts ninety affirmative defenses. Seattle's motion to strike is directed at fifteen of them. Defenses 69–72, 74–79, 80–81 and 86 pertain to provisions of CERCLA and the parallel state statute, the Model Toxics Control Act ("MTCA"). Dkt. #31 (Answer) at ¶¶ 69–72, 74–79, 80–81, 86; see RCW 70.105D.010 et seq. Defense 53 asserts that punitive damages are not available. Id. at ¶ 53. Defense 62 asserts that Seattle's contingency fee arrangement with its outside counsel violates Washington state law. Id. at ¶62.

The counterclaims are based upon Seattle's discharge of pollutants into the Duwamish River, the East Waterway, the West Waterway, Elliott Bay, Puget Sound and Lake Washington ("Affected Water Bodies"). Countercl. at ¶¶ 19–20.⁸ First, Monsanto brings a CERCLA claim for the recovery of necessary response costs and damages that it has incurred and will incur in investigating, removing, and/or remediating the hazardous substances released by Seattle. Id. at ¶¶ 160–162; see 42 U.S.C. § 9607(a). Second, it brings a claim for declaratory relief under CERCLA and the Declaratory Judgment Act. Id. at ¶¶ 164–165, 179; see 42 U.S.C. § 9613(g)(2) ; see 28 U.S.C. § 2201. Monsanto argues that it is entitled to a declaration that Seattle is jointly and severally liable to Monsanto for future response costs and damages incurred by it in connection with the Lower Duwamish and the East Waterway. Third, Monsanto brings a claim alleging that Seattle has violated the MS4 Permit, Waste Discharge Permit and Construction Permit (collectively, "the National Pollutant Discharge Elimination System (NPDES) Permits"), as well as provisions of the CWA, resulting in contingent liability and past and future injury to Monsanto. It contends that its costs and contingent liabilities would be reduced or would stop increasing if Seattle fully complied with the CWA. Id. at ¶¶ 189, 196, 204–208.

Fourth, Monsanto brings a negligence claim, alleging a breach of the duties owed by Seattle to Monsanto. Id. at 211–221. Fifth, Monsanto brings an unjust enrichment claim, arguing that any costs incurred by Monsanto as part of a judgment rendered by the Court would confer a benefit upon Seattle that would be unjust and inequitable for it to retain. Id. at ¶¶ 227–230. Finally, Monsanto brings a contribution claim. It argues that the expenses it has incurred and will incur to address the contamination in the Affected Water Bodies are the result of Seattle's conduct and that it is entitled to contribution from Seattle for these expenses. See RCW 4.22.040....