U.S. v. Southern California Edison Co.

Decision Date09 January 2004
Docket NumberNo. CIV-F-01-5167 OWW SM.,CIV-F-01-5167 OWW SM.
Citation300 F.Supp.2d 964
PartiesUNITED STATES of America, Plaintiff, v. SOUTHERN CALIFORNIA EDISON COMPANY, Defendant.
CourtU.S. District Court — Eastern District of California

Courtney J. Linn, United States Attorney, Michael A. Hirst, United States Attorney, Sacramento, CA, Robert Simmons, Office of General Counsel/Pacific Region, U.S. Department of Agriculture, San Francisco, CA, for Plaintiff.

George L. O'Connell, Stevens and O'Connell, Sacramento, CA, for Defendant.

MEMORANDUM DECISION AND ORDER RE: DEFENDANT'S MOTION TO DISMISS PLAINTIFF'S FIRST, SECOND AND FIFTH CLAIMS AND TO STRIKE PARAGRAPH 72 AND PLEA FOR ATTORNEYS' FEES AND REQUESTS FOR JUDICIAL NOTICE

WANGER, District Judge.

I. INTRODUCTION

Before the court are defendant's motions to dismiss first, second and fifth claims of the complaint for lack of subject matter jurisdiction, arising from a dispute over the interpretation of the authority of the Department of Agriculture to enforce conditions imposed pursuant to 16 U.S.C. § 797 of a license issued by the Federal Energy Regulatory Commission ("FERC"), under 16 U.S.C. § 797 on the Federal Power Act ("FPA"), for the construction, operation and maintenance of hydroelectric project works located on the public lands and reservations of the United States, including national forests. When issuing licenses under 16 U.S.C. § 797(e), FERC is required to accept without modification conditions imposed by the Secretary of the Department under whose supervision the subject territory falls for the purpose of allowing the responsible Secretary to impose conditions on FERC licenses to ensure the adequate protection and utilization of such territories. Id.

Here, the United States, through the Secretary of Agriculture and the United States Forest Service ("Forest Service") seek to enforce a FERC license condition that shifts the risk of loss and liability, regardless of fault, to a licensee, Southern California Edison Company ("SCE"), for any damages resulting from the construction, operation and/or maintenance of its hydroelectric utility power plant located in the Sierra National Forest. Plaintiff alleges standing as a third-party beneficiary of the license issued by FERC to SCE and seeks to enforce the risk-shifting condition which Plaintiff alleges was imposed under the "conditioning" jurisdiction of the Forest Service. Plaintiff alleges that the operation of SCE's utility plant constitutes an "ultra-hazardous" activity imposing strict liability for resulting damages and constitutes a "device which may kindle a fire" under Cal.Pub.Res.Code § 4435. The occurrence of a fire on the licensed property is alleged to be prima facie evidence of negligence under Cal.Pub.Res.Code § 4435. Plaintiff also seeks attorneys' fees pursuant to Cal. Health & Safety Code §§ 13009 and 13009.1 or, alternatively, under 31 U.S.C. §§ 3717, 3718.

SCE challenges the subject matter jurisdiction of the district court to hear any disputes arising out of a FERC license, arguing such claims fall exclusively within the jurisdiction of FERC and the Court of Appeals pursuant to 16 U.S.C. § 825i and 18 C.F.R. § 385.901. SCE further challenges the validity of the loss-shifting condition imposed by the FERC license. SCE claims its plant is neither an ultra-hazardous activity nor a "device which may kindle a fire" under applicable California law and there is no legal authority for recovery of attorneys' fees. In support of the present motion, SCE requests judicial notice of: (1) Project 2175 licensing Order, In the Matter of SOUTHERN CALIFORNIA EDISON COMPANY, Project 2175, 21 F.P.C. 419 (March 27, 1959); (2) Project 67 licensing Order, Southern California Edison Company, Project 67, 1978 WL 15720, 4 FERC P 61,147 (Aug. 9, 1978); (3) a document entitled "Memorandum of Understanding Between The Forest Service, United States Department of Agriculture and Southern California Edison, FPC Project No. 67" with bate stamp numbers "U.S. 013531" through "U.S. 013562;" (4) documents purported to be excerpts from a Forest Service Handbook published on the internet; and (5) a document entitled "Special Use Permit" with bate stamp numbers "U.S. 013563" through "U.S. 013566." Plaintiff argues that the foregoing documents are not properly subject to judicial notice.

II. BACKGROUND

On August 24, 1994 a fire originated at SCE's hydroelectric utility plant located in the Sierra National Forest when one of its transformers shorted as a result of a trespassing squirrel. See Doc. 1, Complaint, filed February 9, 2001, and Doc. 8, Answer, filed Jun. 6, 2001. The fire spread and eventually consumed over 5,600 acres of land in the Sierra National Forest. At issue here are two licenses from United States agencies permitting SCE to operate and maintain its hydroelectric plant on federal lands within the Sierra National Forest. Id. The two FERC licenses are Project 2175 License and Project 67 License (the "FERC licenses"). Both FERC licenses include clauses that purport to impose liability on SCE for any and all damages resulting from the plant's operation and maintenance, regardless of fault (the "damage clauses").

Plaintiff filed this case January 24, 2003, seeking damages for breach of the FERC licenses and pursuant to the damage clauses (claims 1 and 2); breach of a Memorandum of Understanding and Special Use Permit (claims 3 and 4);1 strict liability for ultrahazardous activity (claim 5); trespass by fire (claim 6); various theories of negligence (claims 7, 9 and 10); and for reimbursement for litigation costs and attorney fees under 31 U.S.C. §§ 3711, 3717. See Doc. 19, Amended Complaint, filed Jun. 24, 2003. SCE moves to dismiss the Amended Complaint under F.R.C.P. Rules 12(b)(1), (b)(6), and (f). See Doc. 20, Motion to Dismiss, filed July 28, 2003.

SCE argues that the damage clauses are invalid and unenforceable (see Doc. 21, Defendant's Memo, filed July 28, 2003) and that Plaintiff's claims are under the exclusive jurisdiction of FERC so that FERC's decision not to pursue enforcement of its license provisions bars Plaintiff from raising such claims here. Id. SCE disputes that its plant constitutes an ultra-hazardous activity (creating a separate basis for strict liability under California law) and whether SCE's plant constitutes a "device which may kindle a fire" under Cal.Pub.Res.Code § 4435 (establishing prima facie evidence of negligence). SCE asserts Plaintiff cannot recover attorneys' fees. See Id. and Doc. 29, Opposition # 1, filed Sept. 16, 2003; Doc. 33, Defendant's Reply # 1, filed Sept. 22, 2003; Doc. 34, Opposition # 2, filed Sept. 24, 2003; and Doc. 36, Defendant's Reply # 2, filed October 3, 2003.

III. LEGAL STANDARD
A. STANDARD ON MOTION TO DISMISS, RULE 12(B)(6)

In determining whether a complaint is sufficient to withstand a Rule 12(b)(6) motion to dismiss, "[a]ll allegations of material fact are taken as true and construed in the light most favorable to the nonmoving party." Smith v. Jackson, 84 F.3d 1213, 1217 (9th Cir.1996). See also Miree v. DeKalb County, 433 U.S. 25, 27 n. 2, 97 S.Ct. 2490, 53 L.Ed.2d 557 (1977). A complaint "should not be dismissed unless it appears beyond doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Van Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir.2002) (citations omitted); see also Gilligan v. Jamco Dev. Corp., 108 F.3d 246, 249 (9th Cir.1997) (issue is not whether plaintiff will ultimately prevail, but whether claimant is entitled to offer evidence to support the claim). In deciding a motion to dismiss, the court accepts as true all material allegations in the complaint and construes them in the light most favorable to the plaintiff. See Newman v. Sathyavaglswaran, 287 F.3d 786, 788 (9th Cir.2002).

The court need not accept as true, allegations that contradict facts which may be judicially noticed. See Mullis v. United States Bankruptcy Ct., 828 F.2d 1385, 1388 (9th Cir.1987). For example, matters of public record may be considered, including pleadings, orders, and other papers filed with the court or records of administrative bodies, see Mack v. South Bay Beer Distributors, 798 F.2d 1279, 1282 (9th Cir.1986), while conclusions of law, conclusory allegations, unreasonable inferences, or unwarranted deductions of fact need not be accepted. See Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir.1981); see also Branch v. Tunnell, 14 F.3d 449, 453 (9th Cir.1994) ("[A] document is not `outside' the complaint if the complaint specifically refers to the document and if its authenticity is not questioned."). Allegations in the complaint may be disregarded if contradicted by facts established by exhibits attached to the complaint. See Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir.1987).

A complaint cannot be dismissed on a Fed.R.Civ.P. Rule 12(b)(6) motion for failure to state a claim "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claims which would entitle him to relief." Barnett v. Centoni, 31 F.3d 813, 813 (9th Cir.1994) (citing Buckey v. County of Los Angeles, 957 F.2d 652, 654 (9th Cir.1992)). E.g., Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Parks School Of Business v. Symington, 51 F.3d 1480, 1484 (9th Cir.1995); and Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir.1981).

Even when it appears "on the face of the pleadings that a recovery is very remote and unlikely," a motion to dismiss is inappropriate if sufficient facts are alleged which, if proven, would entitle plaintiff to relief. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). Accord Gilligan v. Jamco Dev. Corp., 108 F.3d 246 at 249 (9th Cir.1997). "The issue is not whether the plaintiff will ultimately prevail but whether the claimant is...

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