Tesoro Ref. & Mktg. Co. v. City of Long Beach

Decision Date07 April 2017
Docket NumberCase No. CV 16-06963-BRO (FFMx)
Citation334 F.Supp.3d 1031
Parties TESORO REFINING AND MARKETING COMPANY LLC et al. v. CITY OF LONG BEACH, a California Municipality et al.
CourtU.S. District Court — Central District of California

Scott T. Tropio, Wilson Elser Moskowitz Edelman and Dicker, Gregory J. Newmark, Meyers Nave Riback Silver and Wilson, Los Angeles, CA, for Tesoro Refining and Marketing Company LLC et al.

Viviana Lamanna Heger, Meyers Nave Riback Silver & Wilson, Los Angeles, CA, pro se.

Cathy Moses, Perry S. Hughes, Cox Castle and Nicholson LLP, David Edward Cranston, Sherry Elizabeth Jackman, Brian Edward Moskal, Jonathan B. Sokol, Greenberg Glusker Fields Claman Machtinger & Kinsella, Rosslyn Stevens Hummer, Claire Hervey Collins, Marshal P. Wilke, Sara E. Atsbaha, Lewis Brisbois Bisgaard and Smith LLP, Susan C. Yu, Eric Matthew Lode, Susan Yu Law Group APC, Los Angeles, CA, Tara B. Voss, Peacock Piper Tong and Voss, Elizabeth P. Beazley, John C. Cox, Keesal Young and Logan APC, Long Beach, CA, Robert Cedric Goodman, Edward Jacob Lubarsky, Nicholas Tokiuki Niiro, Rogers Joseph O'Donnell, Simon Maxwell Levy, Keesal Young and Logan APC, San Francisco, CA, James Angelo Geocaris, Lewis Brisbois Bisgaard and Smith LLP, L. Allan Songstad, Jr., William Daniel Coffee, Jenna L. Griffin, Songstad Randall Coffee & Humphrey LLP, Costa Mesa, CA, Joshua Davis Adams, Lewis Brisbois Bisgaard and Smith LLP, Indian Wells, CA, Clifton J. McFarland, Vincent K. Wong, Mitchell Chadwick LLP, Roseville, CA, for City of Long Beach, a California Municipality et al.

Proceedings: (IN CHAMBERS)

ORDER RE DEFENDANTS' MOTIONS TO DISMISS PLAINTIFFS' FIRST AMENDED COMPLAINT [63, 65, 68]

BEVERLY REID O'CONNELL, United States District Judge

I. INTRODUCTION

Currently pending before the Court are three Motions: (1) Getty Oil Company ("Getty"), Union Oil Company of California ("Union"), ENI Oil & Gas Inc. ("ENI"), and Plains All American Pipeline, L.P.'s ("Plains") Motion to Dismiss Plaintiffs' First Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) ; (2) an amended version of the same Motion; and, (3) Plains, ENI, Crimson Pipeline, L.P. ("Crimson"), and Union's1 Motion to Dismiss Plaintiffs' First Amended Complaint pursuant to Rule 12(b)(1).2 (See Dkt. Nos. 63, 65 (hereinafter, "Getty MTD"), 68 (hereinafter, "Plains MTD").) After considering the papers filed in support of and in opposition the instant Motion, the Court finds this matter appropriate for resolution without oral argument of counsel. See Fed. R. Civ. P. 78 ; C.D. Cal. L.R. 7-15. For the reasons set forth below, the Moving Defendants' 12(b)(1) Motion is DENIED and their 12(b)(6) Motion is GRANTED in part and DENIED in part .

II. BACKGROUND
A. The Parties

Plaintiffs Tesoro Refining & Marketing Company LLC and Tesoro Socal Pipeline Company LLC (collectively, "Plaintiffs") are limited liability companies who "use subterranean pipelines to transport crude oil and products" beneath property in Long Beach, California, "within Golden Avenue, between Baker Street and West Wardlow Road" (the "Site"). (Dkt. No. 58 (hereinafter, "FAC") ¶ 1.) The Site is located adjacent to a former wastewater plant operated by Oil Operators Incorporated (the "OOI Site"). (FAC ¶ 4.) Plaintiffs bring this action against multiple defendants who Plaintiffs claim each "owned, operated, controlled, or used various subterranean pipelines that have run, in relevant part, under the Site." (FAC ¶ 5.) Specifically, Defendants include: (1) County Sanitation District No. 3 of Los Angeles County, a municipal entity ("LACSD"); (2) Crimson; (3) Getty; (4) Union; (5) Doe No. 1, the successor-in-interest to General Exploration Company International ("General Exploration"); (6) Plains, who is the successor-in-interest to PPS Holding Company; (7) Ultramar Inc. ("Ultramar"), as parent company to Golden Eagle Oil Company ("Golden Eagle"); (8) Valero Energy Corporation ("Valero"), the successor-in-interest to Ultramar3 ; (9) NuStar GP, Inc. ("NuStar"), as successor-in-interest to a Valero subsidiary; (10) ENI, a successor-in-interest to Ultramar and Golden Eagle; (11) Sunset Oil Corporation; and, (12) Douglas Oil Company.4 (FAC ¶¶ 6–16.) Plaintiffs claim that each Defendant either owns, operates, or "is legally responsible to indemnify the owner or operator" of a pipeline at the Site or beneath Baker Street, Golden Avenue, or both. (FAC ¶ 18.)

B. Factual Background

Plaintiffs claim that LACSD owned or operated a vitrified clay sewer line of approximately thirty inches in diameter running beneath portions of the Site. (FAC ¶ 20(a).) This sewer line was used to transport waste discharged from the OOI Site, as well as various other wastes from nearby facilities. (Id. ) Plaintiffs contend that Crimson owned or operated two pipelines designated for the transportation of crude oil, one of which eventually became inactive. (FAC ¶ 20(b).) Getty owned or operated two eight-inch pipelines under Baker Street and a portion of the Site, one of which was subsequently abandoned. (FAC ¶ 20(c).) Golden Eagle and its parent Ultramar, or successors ENI, Valero, or NuStar owned and operated a six-inch and an eight-inch pipeline near the Site, that were used to transport naphtha and other materials to the Golden Eagle refinery. (FAC ¶ 20(d).) Plains owned and was responsible for a six-inch pipeline commonly referred to as Line 52 used to transmit refined gasoline and crude oil. (FAC ¶ 20(e).) Union Oil owned and operated three separate lines running under Baker Street on or near the Site. (FAC ¶ 20(f).) Finally, General Exploration owned or operated a four-inch pipeline that has been abandoned running under Baker Street near the Site.5 (FAC ¶ 20(g).)

Plaintiffs use the Site to distribute crude oil and petroleum products that they sell to their customers. (FAC ¶ 28.) Plaintiffs acquired its interest at the Site on or about June 1, 2013, when it purchased pipelines from BP Pipelines (North American), Inc., Atlantic Richfield Company, and ARCO Terminal Services Corporation (collectively, "BP"). (FAC ¶¶ 28, 30.) On or about September 18, 2014, the Los Angeles Regional Water Quality Control Board ("Regional Board") issued Cleanup and Abatement Order No. R4-2013-0064 pursuant to California Water Code section 13304, which required BP to investigate and remediate contaminants in the subsurface of the Site. (FAC ¶ 30.) This Order alleges that three pipelines formerly owned by BP and acquired by Plaintiffs in 2013, numbered 32, 34, and 252, are a "gasoline source" and are responsible for a discharge of benzene and other contaminants at the Site. (Id. ) Plaintiffs contend that these contaminants come from Defendants' Pipelines. (See FAC ¶¶ 30–32.)

Plaintiffs have investigated and now claim that they have "found a lack of sufficient credible evidence that [their] pipelines are a viable source responsible for the benzene at the Site." (FAC ¶ 33.) In addition, Plaintiffs aver that Line 252 has never run beneath the relevant portions of Baker Street or Golden Avenue and, therefore, cannot be a cause of any contaminants at the Site. (FAC ¶ 34.) According to Plaintiffs' investigation, they allege that the contamination at the Site is attributable to products that Defendants' Pipelines carried, including gasoline, naphtha, crude oil, diesel fuel, wastes, and industrial solvents. (FAC ¶ 35.) Due to Defendants' conduct, Plaintiffs aver that they have had to incur numerous expenses investigating and remediating the Site's contamination despite the lack of credible evidence that Plaintiffs or their pipelines caused the contamination. (FAC ¶ 40.) According to Plaintiffs, though the Regional Board was aware that Defendants' Pipelines were in the area, they have generally refused to investigate or hold any of the Defendants liable for their contribution to the contamination.6 (FAC ¶ 42.)

C. Procedural Background

Accordingly, on September 16, 2016, Plaintiffs initiated this action by filing a Complaint in this Court.7 (Dkt. No. 1.) In February 2017, Defendants filed three Motions to Dismiss all or part of Plaintiffs' Complaint. (Dkt. Nos. 40, 45, 50.) Rather than oppose Defendants' Motions, Plaintiffs filed a First Amended Complaint ("FAC") on February 16, 2017. (See FAC.) Plaintiffs' FAC alleges ten causes of action: (1) Cost Recovery pursuant to the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601(21) (against LACSD only); (2) declaratory relief under CERCLA (against LACSD only); (3) contribution (against all Defendants except LACSD); (4) declaratory relief (against all Defendants except LACSD); (5) equitable indemnity (against all Defendants except LACSD); (6) trespass (against all Defendants except LACSD); (7) private nuisance (against all Defendants except LACSD); (8) public nuisance (against all Defendants except LACSD); (9) nuisance per se (against all Defendants except LACSD); and, (10) violation of California Business and Professions Code section 17200 (the "UCL") (against all Defendants except LACSD). (See FAC ¶¶ 49–103.)

On March 2, 2017, the Moving Defendants filed their 12(b)(6) Motion to Dismiss, (see Dkt. No. 63), along with a Request for Judicial Notice, (see Dkt. No. 64 (hereinafter, "RJN") ). The next day, they filed their amended Motion. (See Getty MTD.) On March 9, 2017, Plains filed its 12(b)(1) Motion to Dismiss. (See Plains MTD.) On March 20, 2017, Plaintiffs filed their Oppositions. (See Dkt. Nos. 69, (hereinafter, "Getty Opp'n"), 70 (hereinafter, "Plains Opp'n").) On March 27, 2017, the Moving Defendants replied.8 (Dkt. Nos. 71 (hereinafter, "Getty Reply"), 72.)

III. REQUEST FOR JUDICIAL NOTICE

As mentioned above, along with their 12(b)(6) Motion, Defendants filed a Request for Judicial Notice. (See RJN.) When deciding a motion to dismiss, a court typically does not look beyond the complaint in order to avoid converting a motion to dismiss into a motion for summary judgment. See Mack v. S. Bay Beer...

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