Team Enter.s LLC. v. Western Inv. Real Estate Trust

• Decision Date: 11 June 2010
• Docket Number: Case No. CV F 08-0872 LJO SMS.
• Court: U.S. District Court — Eastern District of California
• Parties: TEAM ENTERPRISES, LLC, Plaintiff, v. WESTERN INVESTMENT REAL ESTATE TRUST, et al., Defendants. and Related Actions.

721 F.Supp.2d 898

TEAM ENTERPRISES, LLC, Plaintiff,

v. WESTERN INVESTMENT REAL ESTATE TRUST, et al., Defendants.and Related Actions.

Case No. CV F 08-0872 LJO SMS.

United States District Court,E.D. California.

June 11, 2010.

COPYRIGHT MATERIAL OMITTED.

Jan A. Greben, Danielle Lauren De Smeth, Greben & Associates, Santa Barbara, CA, for Plaintiff.

Kathleen E. Finnerty, Greenberg Traurig, LLP, Eric Grant, Hicks Thomas LLP, Sacramento, CA, Aaron P. Silberman, David Kevin Shipp, Robert Cedric Goodman, Rogers Joseph O'Donnell, Blanca F. Young, Munger, Tolles & Olson LLP, San Francisco, CA, Jeffrey S. Wolff, PHV, Stephen C. Dillard, PHV, Fulbright and Jaworski, LLP, Brian M. Keller, PHV, Paula Whitten, Hicks Thomas & Lillienstern, LLP, Houston, TX, Ian Paul Culver, Dongell Lawrence Finney Claypool LLP, Los Angeles, CA, Danielle Lauren De Smeth, Greben & Associates, Santa Barbara, CA, for Defendants.

ORDER ON MULTIMATIC'S MOTION FOR JUDGMENT ON PLEADINGS (Doc. 288.)

LAWRENCE J. O'NEILL, District Judge.

INTRODUCTION

Defendant dry cleaning machine manufacturers Multimatic Corporation, Multimatic LLC, and The Kirrberg Corporation (collectively “Multimatic”) ¹ seek F.R.Civ.P. 12(c) judgment on plaintiff Team Enterprises, LLC (“Team's”) hazardous substances clean up contribution claims on grounds that Team's operative Third Amended Complaint (“TAC”) lacks allegations to render Multimatic liable under federal and state law, including the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. §§ 9601, et seq., and the Hazardous Substance Account Act (“HSAA”), California Health & Safety Code, §§ 25300- 25395.45. Team responds that it “has sufficiently pled facts (or can plead additional facts) to constitute a plausible basis for liability.” This Court considered Multimatic's motion for judgment on pleadings on the record without a hearing. For the reasons discussed below, this Court GRANTS Multimatic judgment on the pleadings on Team's claims against Multimatic.

BACKGROUND ²

Summary

Team is a New Mexico limited liability company. Since March 1980, Team has leased a portion of a Modesto shopping center (“property”) where it has operated a One Hour Martinizing dry cleaner. During March 1980 to 2004, perchloroethylene (“PCE”), a volatile organic compound used in dry cleaning and a hazardous substance, was used on the property. In addition to Multimatic, Team pursues hazardous substance clean up and remediation claims against numerous defendants, including property owners.

Allegations Against Multimatic

The TAC alleges that Multimatic:

1. “[M]anufactured, distributed, designed, assembled, maintained, supervised, controlled, sold, operated and/or repaired equipment, parts, and appurtenances, including ... dry cleaning equipment, in the State of California specifically designed for the storage, application, and disposal of PCE by TEAM that have contributed to the contamination”;

2. “[A]rranged for and exercised control over the disposal of PCE”;

3. “[D]isposed of and arranged for the disposal of PCE in such a way that contamination of soil and groundwater occurred”;

4. “[F]ailed to warn, and/or failed to adequately warn, TEAM as to the dangers related to the use and disposal of PCE and/or the use of its equipment”;

5. “[I]s legally responsible for and committed each of the tortious and wrongful acts alleged herein”; and

6. “[A]cted in capacity of co-conspirator, aider, abettor, joint venturer, partner, agent, alter ego, principal, successor-in-interest, surviving corporation, fraudulent transferee, fraudulent transferor, controller, alter ego, licensee, licensor, patent holder and/or indemnitor of each of the remaining Defendants.”

The TAC further alleges that the “Regional Water Quality Control Board, Central Valley Region (‘RWQCB’), the State of California agency that oversees groundwater contamination issues, has indicated that the property requires clean up” and that Team “has incurred costs ... due to contamination at the Property.” The TAC alleges against Multimatic claims under CERCLA and HSAA and for nuisance, trespass, equitable indemnity and declaratory relief, which will be discussed below. The TAC seeks to recover Team's costs to respond to contamination at the property and a declaration that Multimatic and the other defendants are jointly and severally liable for future costs.

DISCUSSION

F.R.Civ.P. 12(c) Motion For Judgment On Pleadings Standards

Multimatic contends that the TAC fails to support claims against Multimatic in that under the alleged circumstances, dry cleaning equipment manufacturers are not “properly made parties.” Multimatic argues that the TAC “contains nothing more than conclusions with regard to Multimatic” and that even if the TAC pled facts consistent with its conclusory statements, Team would not be entitled to relief.

Team responds that the TAC survive's Multimatic's F.R.Civ.P. 12(c) motion based on its allegations that Multimatic “designed and manufactured a dry cleaning machine-necessary to Team's dry cleaning operation-that disposed of hazardous waste as part of its routine operation.” Team offers to amend the TAC to add allegations that Multimatic's instruction manual directed that “[w]aste water must flow into an open drain” and addressed “foaming over or overboiling of [PCE].”

F.R.Civ.P. 12(c) permits a party to seek judgment on the pleadings “[a]fter the pleadings are closed-but early enough not to delay trial.” Multimatic notes that the pleadings have closed and that trial has not been set to render its motion timely.

“A motion for judgment on the pleadings should be granted where it appears the moving party is entitled to judgment as a matter of law.” Geraci v. Homestreet Bank, 347 F.3d 749, 751 (9th Cir.2003). A “judgment on the pleadings is appropriate when, even if all allegations in the complaint are true, the moving party is entitled to judgment as a matter of law.” Westlands Water Dist. v. Firebaugh Canal, 10 F.3d 667, 670 (9th Cir.1993).

“A judgment on the pleadings is a decision on the merits.” 3550 Stevens Creek Associates v. Barclays Bank of California, 915 F.2d 1355, 1356 (9th Cir.1990), cert. denied, 500 U.S. 917, 111 S.Ct. 2014, 114 L.Ed.2d 101 (1991). A F.R.Civ.P. 12(c) motion “is designed to dispose of cases where the material facts are not in dispute and a judgment on the merits can be rendered by looking to the substance of the pleadings and any judicially noticed facts.” Hebert Abstract Co. v. Touchstone Props., Ltd., 914 F.2d 74, 76 (5th Cir.1990) (per curiam). “[T]he central issue is whether, in light most favorable to the plaintiff, the complaint states a valid claim for relief.” Hughes v. Tobacco Inst., Inc., 278 F.3d 417, 420 (5th Cir.2001).

Courts dismiss complaints under F.R.Civ.P. 12(c) for either of two reasons: “(1) lack of a cognizable legal theory, or (2) insufficient facts under a cognizable legal theory.” Gutierrez v. RWD Technologies, Inc., 279 F.Supp.2d 1223, 1224 (E.D.Cal.2003).

The standards for deciding F.R.Civ.P. 12(b)(6) and F.R.Civ.P. 12(c) motions are the same.

Great Plains Trust v. Morgan Stanley Dean Witter, 313 F.3d 305, 313, n. 8 (5th Cir.2002). “Pleadings should be construed liberally, and judgment on the pleadings is appropriate only if there are no disputed issues of fact and only questions of law remain.” Hughes, 278 F.3d at 420. A court “can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Ashcroft v. Iqbal, 556 U.S. ----, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009).

With these standards in mind, this Court turns to Multimatic's challenges to the TAC.

CERCLA Arranger Liability

The TAC's (first) CERCLA cost recovery claim under 42 U.S.C. § 9607(a) ³ alleges that defendants are “arrangers” of “disposal and release of hazardous substances into the soil, groundwater and environment” and are liable for “necessary response costs” to address “the release of hazardous substances at or affecting the Property or surrounding properties.” The TAC's (second) CERCLA contribution claim under section 9613(f)(1) alleges that “if TEAM is found to be liable under CERCLA,” Multimatic and the other defendants “are liable to TEAM for their acts or omissions” to entitle Team to contribution.

CERCLA was enacted in 1980 to provide effective responses to health and environmental threats posed by hazardous waste sites. United States v. Burlington Northern & Santa Fe Ry. Co., 502 F.3d 781, 792 (9th Cir.2007), reversed on other grounds, --- U.S. ----, 129 S.Ct. 1870, 173 L.Ed.2d 812 (2009). Under CERCLA, federal and state governments may initiate cleanup of toxic areas and sue potentially responsible parties for reimbursement. Burlington Northern, 502 F.3d at 792. A key CERCLA purpose is to shift “the cost of cleaning up environmental harm from the taxpayers to the parties who benefitted from the disposal of the wastes that caused the harm.” EPA v. Sequa Corp. (In the Matter of Bell Petroleum Servs., Inc.), 3 F.3d 889, 897 (5th Cir.1993). CERCLA is a “super-strict” liability statute. Burlington Northern, 502 F.3d at 792. “[L]iability is joint and several when the harm is indivisible.” Burlington Northern, 502 F.3d at 793.

Section 9607(a) “allows private parties who incur cleanup costs to recover those costs from ‘various types of persons who contributed to the dumping of hazardous waste at a site.’ ” Carson Harbor v. County of Los Angeles, 433 F.3d 1260, 1265 (9th Cir.2006) (quoting Ascon Properties, Inc. v. Mobil Oil Co., 866 F.2d 1149, 1152 (9th Cir.1989)). Section 9607(a)(3) identifies “arrangers” as “covered persons” subject to CERCLA...