Nevada Power Co. v. Monsanto Co.
| Citation | 891 F. Supp. 1406 |
| Decision Date | 30 May 1995 |
| Docket Number | No. CV-S-89-555-DAE(LRL).,CV-S-89-555-DAE(LRL). |
| Parties | NEVADA POWER COMPANY, Plaintiff, v. MONSANTO COMPANY, et al., Defendants. |
| Court | U.S. District Court — District of Nevada |
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Douglas Cohen, Jones, Jones, Close & Brown, Las Vegas, NV, Ralph A. Bradley, Bradley & Gordon, Eugene, OR, Paul E. Merrell, Bradley & Merrell, Tidewater, OR, John H. Kim, Michael T. Gallagher, Craig Lewis, Fisher, Gallagher & Lewis, L.L.P., Houston, TX, and Richard Hinckley, Vice President, Secretary & Chief Counsel Nevada Power Co., Las Vegas, NV, for plaintiff.
John L. Thorndal, Peggy A. Leen, Thorndal, Backus, Maupin & Armstrong, Las Vegas, NV, for Westinghouse Elec. Corp. and Monsanto Co.
John Tatlock and Bruce A. Featherstone, Kirkland & Ellis, Denver, CO, for Monsanto Co.
John H. Bae, Konrad Cailteux, Jeffrey Klein, and Arvin Maskin, Weil, Gotshal & Manges, New York City, for Westinghouse Elec. Co.
David R. Clayson, Bruce Alverson, Alverson, Taylor, Mortensen, Nelson & Sanders, Las Vegas, NV, and Steven R. Kuney, Williams & Connolly, Washington, DC, for General Electric Co.
ORDER ADOPTING MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION ON DEFENDANTS GENERAL ELECTRIC AND WESTINGHOUSE'S MOTION FOR SUMMARY JUDGMENT AND DEFENDANT MONSANTO'S MOTION FOR SUMMARY JUDGMENT
On April 26, 1994, Defendants Monsanto Company ("Monsanto"), General Electric Company ("GE"), and Westinghouse Electric Corporation ("Westinghouse") filed a joint motion for summary judgment on claims of fraud by misrepresentation (Count I) and fraud by nondisclosure (Count IV) by Plaintiff Nevada Power Company ("Nevada Power") based on statute of limitations grounds. Monsanto filed a separate motion for summary judgment on the claims themselves on April 26, 1994. GE and Westinghouse also filed a motion for summary judgment on the misrepresentation and nondisclosure claims on April 26, 1994.
On November 9, 1994, after considering the parties' supporting and opposing memoranda as well as their oral arguments, Magistrate Judge Leavitt, filed a Report and Recommendation ("R & R") on each of the three motions. The magistrate judge found in favor of Defendants on all motions. Plaintiff Nevada Power subsequently filed specific objections to the R & Rs. The parties filed opposing and reply memoranda to these objections.
The court heard oral argument on these motions on May 9, 1995. Bruce Featherstone, Esq., appeared on behalf of Defendant Monsanto; Steven R. Kuney, Esq., and Bruce Alverson, Esq., appeared on behalf of Defendant GE; Arvin Maskin, Esq., appeared on behalf of Defendant Westinghouse; and John Kim, Esq., appeared on behalf of Plaintiff Nevada Power. After considering the oral arguments and making a thorough de novo review of the file and the supporting and opposing memoranda, the court finds that the record substantiates the magistrate judge's factual conclusions and interpretation of the law.
Because the court finds the magistrate judge correct in both his recitation of facts and his interpretation of the law, the court, pursuant to 28 U.S.C. § 636(b)(1)(C), ADOPTS the magistrate judge's R & Rs on Defendants' Motions for Summary Judgment on the misrepresentation and nondisclosure claims. Accordingly, the court GRANTS the Motion for Summary Judgment by GE and Westinghouse on the claims for fraud by misrepresentation (Count I) and fraud by nondisclosure (Count IV) and GRANTS Monsanto's separate Motion for Summary Judgment.
Plaintiff Nevada Power filed suit against Defendants Monsanto, GE, and Westinghouse in Nevada state court on July 7, 1989. Nevada Power alleged, inter alia, that all Defendants knew of the environmental dangers of polychlorinated biphenyl (PCB) products manufactured by Monsanto, and contained in electrical equipment sold by GE and Westinghouse to Nevada Power during the 1950s, 1960s, and 1970s. Plaintiff claims that all Defendants fraudulently misrepresented and failed to disclose the hazardous nature of PCBs contained in capacitors and transformers purchased by the utility company.
Pursuant to the Toxic Substances Control Act of 1976, the Environmental Protection Agency ("EPA") promulgated regulations restricting the use of PCBs. During the late 1970s, in response to the heightened awareness of PCB toxicity, Nevada Power began removing PCB-containing transformers and capacitors before their useful lives had been completed. Nevada Power seeks to recover the costs of replacing that equipment.
In its original complaint, Nevada Power sought damages under theories of fraud and misrepresentation, failure to warn, implied equitable indemnity, implied warranty, strict products liability, negligence, and nuisance. Defendants removed the case to federal court based on diversity of citizenship, and filed a joint motion for summary judgment. The court granted Defendants' motion, concluding that all of Plaintiff's claims were time-barred, and that Nevada Power had failed to state a claim for equitable indemnity. Order Granting Defendants' Joint Motion for Summary Judgment, July 30, 1990.
The Court of Appeals affirmed the district court's grant of summary judgment on the equitable indemnity claim, but reversed and remanded for further proceedings on the question of whether Nevada Power's fraud and failure to warn claims were barred by the Nevada statute of limitations. Nevada Power Co. v. Monsanto Co., 955 F.2d 1304, 1310 (9th Cir.1992).1
Nevada Power did not contest the fact that it knew of the hazards of PCBs by 1979. Defendants argued that such knowledge imposed a duty of due diligence on Nevada Power to investigate the possibility of fraud and that Nevada Power's action in fraud began accruing under Nevada's discovery-based statute of limitations by 1979. Id. at 1307. However, Nevada Power countered that it was not until 1988, by examining certain internal documents of the Defendants, that it discovered that the alleged misrepresentations were intentional. The Ninth Circuit ruled that the statute of limitations was tolled until Nevada Power learned that Defendants' alleged misrepresentations were not only false but willful as well. Id. The circuit court found that from the facts before the court at that time, it could be reasonably inferred that Nevada Power may have plausibly believed that any misrepresentations regarding PCBs were innocent mistakes rather than part of a willful coverup. Id. at 1308. The Ninth Circuit concluded that Defendants had not met their "extremely difficult burden to show that there existed no issue of material fact regarding notice," thus precluding summary judgment. Id.
After conducting further discovery following the Ninth Circuit's decision, however, Defendants now claim that additional information possessed by Nevada Power, as early as 1977 but no later than 1982, constituted notice for the purpose of initiating a fraud action. On April 26, 1994, Defendants filed a joint motion for summary judgment on Nevada Power's two remaining claims based on statute of limitations grounds. In addition, on April 26, 1994, Monsanto filed a separate motion for summary judgment on the claims themselves. GE and Westinghouse also filed a motion for summary judgment on the two fraud claims on April 26, 1994. After hearing oral argument and considering the supporting and opposing memoranda, the magistrate judge submitted an R & R on each of the three motions to the United States District Court for the District of Nevada on November 9, 1994, pursuant to Local Rule 510-2. The magistrate judge found in favor of the Defendants in each motion.
This court now ADOPTS the magistrate judge's reports and recommendations and holds that no issue of material fact exists precluding summary judgment in favor of Defendants Westinghouse, General Electric, and Monsanto and GRANTS summary judgment in favor of all Defendants.2
Any party may object to a magistrate judge's case-dispositive proposed order, findings, or recommendations. 28 U.S.C. § 636(b)(1)(B); Fed.R.Civ.P. 72(b); Local Rule 510-2. The district court must make a de novo determination of those portions of the magistrate judge's report to which objection is made and may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. Id. De novo review means the court must consider the matter anew, the same as if it had not been heard before and as if no decision previously had been rendered. Ness v. Comm'r of Internal Revenue Service, 954 F.2d 1495, 1497 (9th Cir.1992). Thus, although the district court need not hold a de novo hearing, the court's obligation is to arrive at its own independent conclusion about those portions of the magistrate judge's findings or recommendations to which objections are made. United States v. Remsing, 874 F.2d 614, 617 (9th Cir.1989).
Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). The moving party has the initial burden of "identifying for the court those portions of the materials on file in the case that it believes demonstrate the absence of any genuine issue of material fact." T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir.1987) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986)). In a motion for summary judgment, the court must view the facts in the light most favorable to the nonmoving party. State Farm Fire & Casualty Co. v. Martin, 872 F.2d 319, 320 (9th Cir.1989).
Once the moving party has met its burden of demonstrating the absence of any genuine issue of material fact, the nonmoving party must set forth specific facts showing that there is a genuine issue...
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