United States v. HVI Cat Canyon, Inc.

• Decision Date: 20 May 2018
• Docket Number: Case No. CV 11–5097 FMO (SSx)
• Citation: 314 F.Supp.3d 1049
• Court: U.S. District Court — Central District of California
• Parties: UNITED STATES of America, People of the State of California, ex rel. California Department of Fish and Wildlife, et al., Plaintiffs, v. HVI CAT CANYON, INC., f/k/a Greka Oil & Gas, Inc., Defendant.

314 F.Supp.3d 1049

UNITED STATES of America, People of the State of California, ex rel. California Department of Fish and Wildlife, et al., Plaintiffs,

v.HVI CAT CANYON, INC., f/k/a Greka Oil & Gas, Inc., Defendant.

Case No. CV 11–5097 FMO (SSx)

United States District Court, C.D. California.

Signed May 20, 2018

Richard M. Gladstein, Angela Mo, Stefan J. Bachman, US Department of Justice Environmental Enforcement Section, Washington, DC, Davis H. Forsythe, United States Department of Justice, Denver, CO, Michael T. Zarro, Gary E. Tavetian, Ross H. Hirsch, Shanaira F. Udwadia, CAAG—California Attorney Generals Office, Los Angeles, CA, for Plaintiffs.

Robert C. O'Brien, Stephen Gerard Larson, Larson O'Brien LLP, Steven E. Bledsoe. Arent Fox LLP, Los Angeles, CA, for Defendants.

ORDER Re: PENDING MOTION

Fernando M. Olguin, United States District Judge

Having reviewed and considered all the briefing filed with respect the Motion for Partial Summary Judgment, (Dkt. 252, "Motion"), filed by plaintiff United States of America (the "government"), the court finds that oral argument is not necessary to resolve the Motion, see Fed. R. Civ. P. 78 ; Local Rule 7–15; Willis v. Pac. Mar. Ass'n, 244 F.3d 675, 684 n. 2 (9th Cir. 2001), and concludes as follows.

INTRODUCTION ¹

On February 28, 2013, plaintiffs United States of America, the State of California, ex rel. California Department of Fish and Wildlife and the California Central Coast Regional Water Quality Control Board, (collectively, "plaintiffs") filed the operative First Amended Complaint ("FAC") against HVI Cat Canyon, Inc., formerly known as Greka Oil & Gas, Inc. ("defendant" or "HVI"), asserting claims for: (1) violations of § 311 of the Clean Water Act (the "CWA"), 33 U.S.C. § 1321(b) ; (2) violations of § 301 of the CWA, 33 U.S.C. § 1311(a) ; (3) failure to prepare and implement and/or maintain an Oil Pollution and Prevention program required under 40 C.F.R. Part 112; (4) failure to prepare and submit facility response plans in accordance with 40 C.F.R. § 112.20 ; (5) recovery of removal costs under § 1002(a) of the Oil Pollution Act of 1990 ("OPA"), 33 U.S.C. § 2702(a) ; (6) violations of California Water Code § 13350 ; (7) violations of California Water Code § 13385 ; (8) violations of California Fish and Game Code § 5650 ; (9) recovery of natural resource damages pursuant to California Fish and Game Code § 12016 ; and (10) recovery of costs pursuant to California Fish and Game Code § 13013(c). (See Dkt. 56, FAC).

Defendant filed a Motion for Partial Summary Judgment, (Dkt. 92), which the court largely denied on September 30, 2016. See United States v. HVI Cat Canyon, Inc., 213 F.Supp.3d 1249 (C.D. Cal. 2016). The government now moves for summary judgment on defendant's liability: (1) under § 311(b) of the CWA, 33 U.S.C. § 1321, for 12 spills alleged in the FAC (collectively, "the 12 spills"); (2) for the 12 spills under § 301(a) of the CWA, 33 U.S.C. § 1311(a) ; (3) for the government's removal costs in connection with six spills or threatened spills under § 1002(a) of the OPA, 33 U.S.C. § 2702(a) ; and (4) for removal costs in the amount of $2,486,884.77 plus interest.² (See Dkt. 252–1, Joint Brief ("Jt. Br.") at 1–2).

STATEMENT OF FACTS ³

I. DISCHARGES FROM THE DAVIS FACILITY INTO ZACA TRIBUTARY.

Defendant owned and operated an oil production facility located in Los Olivos, California ("Davis Facility"). (See Dkt. 252–2, SUF at P2–P3). On December 7, 2005, and January 5, 2008, oil spilled from the Davis Facility reached a creek the government refers to as "Zaca Tributary." (See id. at P57–P58). Zaca Tributary is a tributary to Zaca Creek, which in turn is a tributary to the Santa Ynez River. (See id. at P61–P62). The Santa Ynez River is a tributary to the Santa Ynez River Estuary, a traditional navigable water ("TNW") flowing into the Pacific Ocean. (See id. at P63–P65).

II. DISCHARGES FROM THE BELL FACILITY INTO PALMER ROAD CREEK, CAT CANYON CREEK AND SPRING CANYON TRIBUTARY.

Defendant also owned and operated an oil production facility in Santa Maria, California ("Bell Facility"). (See id. at P4). Oil discharged from the Bell Facility reached the "Palmer Road Creek" on June 8, 2005, July 13, 2005, July 16, 2007, December 7, 2007, January 29, 2008, October 14, 2010, and December 21, 2010.⁴ (See id. at P31–P37). Palmer Road Creek is a tributary to the "Sisquoc Creek," a tributary of the Cat Canyon Creek which itself is a tributary to the Sisquoc River. (See Dkt. 252–2, SUF at P41–P43). Sisquoc River is a tributary of the Santa Maria River, which is a tributary to the Santa Maria River Estuary, a TNW flowing into the Pacific Ocean. (See id. at P44–P47).

In addition, oil spilled from the Bell Facility on August 11, 2005, reached the "Cat Canyon Creek." (See id. at P48). Following spills from the Bell Facility on December 27, 2008, and May 1, 2009, oil also reached the "Spring Canyon Tributary." (See id. at P51–P52).

III. WILLIAM B FACILITY TANK FARM AND BELL FACILITY GATO PONDS.

Defendant also owned a tank farm located at what the parties call the Williams B Facility. (See Dkt. 252–2, SUF at P140 & P142). On March 12, 2008, the Environmental Protection Agency ("EPA") visited the tank farm and found that "eight 10,000 gallon tanks in the facility containing crude oil, produced water, and sludge were corroded and actively leaking[,]" "the ground around the tanks was heavily saturated with oil[,]" and the tank farm did not have a secondary containment. (Id. at P144–P146). The EPA ordered the removal of the tanks. (See id. at P168).

In addition, the Bell Facility contained "surface impoundments" called Gato Ponds "located approximately 100 feet south and upgradient of Sisquoc Creek." (Dkt. 252–2, SUF at P147–P148). On April 15, 2008, the EPA visited the Gato Ponds and found that crude oil and produced water from the Blochman Injection Pond was draining into the Gato Ponds threatening an overflow. (Id. at P150). The EPA then directed the removal of the Gato Ponds. (See id. at P169–P170).

IV. GOVERNMENT'S CLEANUP COSTS.

Following the January 5, 2008, Davis Facility spill, the EPA and the United States Coast Guard ("Coast Guard") incurred $423,616.09 in removal costs while overseeing defendant's spill response. (See Dkt. 252–2, SUF at P162). The EPA and Coast Guard incurred $1,802,436.17 in oversight and removal costs following the January 29, 2008, Bell Facility spill. (See id. at P164). In April 2008, the EPA took over the removal action because defendant continued to utilize a contractor who did not possess the necessary health and safety training to perform hazardous waste cleanup. (See id. at P165). The EPA incurred $5,763.35 in removal costs while directing, monitoring and evaluating defendant's removal of the tank farm at the Williams B Facility. (See id. at P167). The EPA and Coast Guard incurred $50,538.92 in removal costs in directing, monitoring and evaluating defendant's removal of the Gato Ponds. (See id. at P169).

Following the December 27, 2008, Bell Facility spill, the EPA and the Coast Guard incurred $192,656.07 in removal costs. (See Dkt. 252–2, SUF at P171). In addition, the EPA incurred another $11,871.17 in removal costs after the December 21, 2010, Bell Facility spill. (See id. at P173). In total, the Coast Guard's National Pollution Funds Center paid removal costs totaling $2,486,881.77 out of the Oil Spill Liability Trust Fund. (See id. at P174). Defendant has not reimbursed the Oil Spill Liability Trust Fund for any removal costs associated with these spills and removal actions. (See id. at P173–P186).

LEGAL STANDARD

Rule 56(a) of the Federal Rules of Civil Procedure authorizes the granting of summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." The standard for granting a motion for summary judgment is essentially the same as for granting a directed verdict. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). Judgment must be entered "if, under the governing law, there can be but one reasonable conclusion as to the verdict." Id.

The moving party has the initial burden of identifying relevant portions of the record that demonstrate the absence of a fact or facts necessary for one or more essential elements of each cause of action upon which the moving party seeks judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). If the moving party fails to carry its initial burden of production, "the nonmoving party has no obligation to produce anything." Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Cos., Inc., 210 F.3d 1099, 1102–03 (9th Cir. 2000).

If the moving party has sustained its burden, the burden then shifts to the nonmovant to identify specific facts, drawn from materials in the file, that demonstrate that there is a dispute as to material facts on the elements that the moving party has contested. See Celotex, 477 U.S. at 324, 106 S.Ct. at 2553 ; Anderson, 477 U.S. at 256, 106 S.Ct. at 2514 (A party opposing a properly supported motion for summary judgment "must set forth specific facts showing that there is a genuine issue for trial.").⁵ A factual dispute is material only if it affects the outcome of the litigation and requires a trial to resolve the parties' differing versions of the truth. See SEC v. Seaboard Corp., 677 F.2d 1301, 1306 (9th Cir. 1982). Summary judgment must be granted for the moving party if the nonmoving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322, 106 S.Ct. at 2552 ; see Anderson, 477 U.S. at 252, 106 S.Ct. at 2512 (parties bear the same substantive burden of proof as would apply at a trial on the merits).

In determining whether a triable issue of material fact exists, the evidence...