Orange Cnty. Water Dist. v. Sabic Innovative Plastics United States, LLC

• Decision Date: 04 August 2017
• Docket Number: D070553
• Citation: Orange Cnty. Water Dist. v. Sabic Innovative Plastics United States, LLC, 222 Cal.Rptr.3d 83, 14 Cal.App.5th 343 (Cal. App. 2017)
• Parties: ORANGE COUNTY WATER DISTRICT, Plaintiff and Appellant, v. SABIC INNOVATIVE PLASTICS US, LLC, et al., Defendants and Respondents.
• Court: California Court of Appeals

14 Cal.App.5th 343

222 Cal.Rptr.3d 83

ORANGE COUNTY WATER DISTRICT, Plaintiff and Appellant,

v.SABIC INNOVATIVE PLASTICS US, LLC, et al., Defendants and Respondents.

D070553

Court of Appeal, Fourth District, Division 1, California.

Filed August 4, 2017

As Modified on Denial of Rehearing August 25, 2017

Connor Fletcher & Hedenkamp, Edmond M. Connor, Douglas Aaron Hedenkamp, Irvine; Miller & Axline, Duane C. Miller, Michael Dana Axline and Justin Morgan Massey, Sacramento, for Plaintiff and Appellant.

Squire Patton Boggs, Adam R. Fox, Helene Huang Yang and Marisol Corral Mork, Los Angeles, for Defendants and RespondentsSabic Innovative Plastics US, LLC, and General Electric Company.

Hennelly & Grossfeld and Paul T. Martin, Marina Del Rey, for Defendant and RespondentEmerson Electric Company.

Beveridge & Diamond and Gary J. Smith, San Francisco, for Defendant and RespondentUNISYS Corporation.

Newmeyer & Dillion and John E. Van Vlear, Newport Beach, for Defendant and RespondentGE Aviation Systems, LLC.

WFBM, Sean C. McGah and Sage R. Knauft, Orange, for Defendant and RespondentMarotta Controls, Inc.

Morrison & Foerster and Peter Hsaio, Los Angeles; Call & Jensen and Joshua G. Simon, Newport Beach, for Defendant and Respondent Ricoh Electronics.

Demetriou Del Guercio Springer & Francis, Brian D. Langa and Michael Anthony Francis, Los Angeles, for Defendant and RespondentUniversal Circuits, Inc.

Hinson & Gravelle and Douglas Arthur Gravelle, Valencia, for Defendant and RespondentICI Americas, Inc.

Bassi, Edlin, Huie & Blum and Paul David Rasmussen, Los Angeles, for Defendant and RespondentBell Industries, Inc.

Kutak Rock and Jad Terrell Davis, Irvine, for Defendant and RespondentSanmina Corporation.

Dykema Gossett and John Anthony Ferroli, Los Angeles, for Defendant and RespondentBorgwarner Morse TEC Inc.

McGrath North Mullin & Kratz and John A. Andreasen, Omaha; McGuireWoods and Leslie Mark Werlin, Los Angeles, for Defendant and RespondentBeatrice Companies, Inc.

Ring Bender, J.W. Ring, Philip M. Bender and Christine L. Hein, Portland, for Defendant and RespondentGallade Chemical, Inc.

Ring Bender and Norman A. Dupont, Costa Mesa, for Defendants and RespondentsDRSS–1 LLC, and Brenntag Pacific, Inc.

Lewis, Brisbois, Bisgaard & Smith and James Angelo Geocaris, Costa Mesa, for Defendant and RespondentAccurate Circuit Engineering, Inc.

Morris Polich & Purdy and Christopher Geoffrey Foster, Los Angeles, for Defendant and RespondentDyer Business Associates, LP.

Musick Peeler & Garrett and Steven J. Elie, Costa Mesa, for Defendant and RespondentSteelcase, Inc.

Morgan Lewis & Bockius, David Louis Schrader and

Yardena R. Zwang–Weissman, Los Angeles, for Defendant and RespondentITT Corporation.

Wood Smith Henning & Berman, David Ferguson Wood and Jade Tran, Newport Beach, for Defendant and RespondentEmbee, Inc.

Morrison & Foerster and Peter Hsaio, Los Angeles, for Defendant and RespondentBASF Corporation.

HALLER, J.

The Orange County Water District(District) was created by the California Legislature to protect and manage groundwater supplies within its territory, which covers most of Orange County, California.The District and other regulatory agencies have long been aware of localized groundwater contamination caused by hazardous substance releases at various sites in the so-called "South Basin" area of Orange County.The hazardous substances in question include various volatile organic compounds (VOC's) and percholorate.A number of these sites have been the subject of government investigations and remediation efforts over the past three decades.

In 1998, two VOC's, tetrachloroethylene (also known as perchloroethylene or PCE) and trichloroethylene (TCE), were detected in groundwater drawn from a drinking water well in the South Basin area operated by the Irvine Ranch Water District(IRWD).Three years later, perchlorate was also detected in the well.The District believed these detections reflected more extensive groundwater contamination than it had previously been aware of.The District undertook efforts to identify the source of groundwater contamination and engaged consultants to recommend further avenues of investigation.The District's goal was to determine the extent of groundwater contamination in the South Basin area and develop a plan to remediate it.Although the District's investigation has continued, it had not yet developed a final treatment plan or remediated any contamination by the time of the underlying litigation.

During its investigation, the District filed suit against various current and former owners and operators of certain sites in the South Basin area that it believed were in some way responsible for groundwater contamination, including the following defendants at issue in this appeal: Accurate Circuit Engineering, Inc.(Accurate Circuit); Beatrice Companies, Inc.(Beatrice); Bell Industries, Inc.(Bell); BorgWarner Morse TEC LLC(BorgWarner); Brenntag Pacific, Inc.(Brenntag); Dyer Business Associates, LP(Dyer); DRSS–1, LLC(DRSS); Embee, Inc.(Embee); Emerson Electric Co.(Emerson); Gallade Chemical, Inc.(Gallade); GE Aviation Systems LLC(GE Aviation); General Electric Company(GE); ICI Americas, Inc.(ICI); ITT Corporation(ITT); Marotta Controls, Inc.(Marotta); Ricoh Electronics, Inc.(Ricoh); SABIC Innovative Plastics US, LLC(SABIC); Sanmina Corporation(Sanmina); Soco West, Inc.(Soco West); Steelcase Inc.(Steelcase); UNISYS Corporation(UNISYS); and Universal Circuits, Inc.(UCI).The District sued a number of other parties that are not the subject of this appeal, either because they were dismissed at some point in the litigation or the District has not appealed the judgments in their favor.¹

The District asserted statutory claims for damages under the Carpenter–Presley–Tanner Hazardous Substance Account Act(HSAA;Health & Saf. Code, § 25300 et seq. ) and the Orange County Water District Act(OCWD Act;Stats. 1933, ch. 924, p. 2400;West's Ann. Wat. Append.(2010 ed.) ch. 40) and for declaratory relief ( Code Civ. Proc., § 1060 ).The District also asserted common law claims for negligence, nuisance, and trespass.Following numerous motions for summary judgment and summary adjudication, and a limited bench trial on the District's ability to bring suit under the HSAA, the trial court entered judgments in favor of the defendants on all of the District's claims.

The District appeals.It challenges the judgments on numerous grounds.In this opinion, we confirm that the HSAA allows the District to bring suit under the circumstances here ( Health & Saf. Code, § 25363, subd. (d) ) and that the District may recover certain remediation-related investigatory costs under the OCWD Act, section 8, subdivision (c).We will also address the HSAA's nonretroactivity provision ( Health & Saf. Code, § 25366, subd. (a) ) and conclude that its requirements were not satisfied here.We further conclude that the theory of continuous accrual applies to the District's negligence cause of action, such that no defendant except GE Aviation has shown the statute of limitations bars that claim.

As to the District's causes of action for trespass and nuisance, we conclude the District has raised a triable issue of fact regarding its potential groundwater rights in the South Basin.In doing so, we address the State of California's potential interests in groundwater (as allegedly delegated to the District), the District's regulatory powers over groundwater, and its rights based on its groundwater replenishment or recharge activities.We conclude the District's potential rights in groundwater are insufficient, on the current record in this case, to maintain a trespass cause of action.However, we determine that triable issues of fact preclude summary adjudication of the District's nuisance claim for all defendants except UCI.Finally, we conclude that most of defendants' site-specific arguments (primarily based on causation) do not entitle them to summary adjudication of any causes of action.The judgments will therefore be affirmed in part and reversed in part, as discussed in detail below.

The litigation underlying this appeal is separate from the litigation involving the District's remediation proposals for the "North Basin" area of Orange County, which we considered in two recently-filed opinions.( Orange County Water Dist. v. MAG Aerospace Industries, Inc.(2017)12 Cal.App.5th 229, 218 Cal.Rptr.3d 614( MAG );Orange County Water Dist. v. Alcoa Global Fasteners, Inc.(2017)12 Cal.App.5th 252, 219 Cal.Rptr.3d 474( Alcoa ).)The North Basin, as its name suggests, is geographically separate from the South Basin, and it is contaminated by different plumes of hazardous substances.As we will explain, however, several legal issues decided in the North Basin appeals ( MAG and Alcoa ) are relevant to our discussion of the issues in this appeal.We will therefore reference the North Basin appeals where appropriate.Moreover, although a number of the legal issues overlap, the procedural postures of the North Basin and South Basin appeals are quite different.The North Basin appeals involved judgments following a bench trial or motion for judgment under Code of Civil Procedure section 631.8, while this South Basin appeal largely involves judgments following orders granting summary judgment and summary adjudication.Our standards of review in the North Basin and South Basin appeals are therefore quite different, and this difference explains in large part the divergence between our disposition of the North Basin appeals and our disposition in this appeal.²

FACTUAL AND PROCEDURAL BACKGROUND

The District and Its Powers

The District is a public entity established by the California Legislature and empowered to manage, replenish, regulate, and protect groundwater supplies within its boundaries.(OCWD Act, §§ 1, 2.)Despite its name, the District is not a county water district under the County Water District Law( Wat. Code, § 30000...