United States v. Sierra Pacific Indus.

• Decision Date: 22 May 2012
• Docket Number: NO. CIV S-09-2445 KJM-EFB,CIV S-09-2445 KJM-EFB
• Parties: UNITED STATES OF AMERICA, Plaintiff, v. SIERRA PACIFIC INDUSTRIES; et al., Defendants.
• Court: U.S. District Court — Eastern District of California

UNITED STATES OF AMERICA, Plaintiff,

v.SIERRA PACIFIC INDUSTRIES; et al., Defendants.

NO. CIV S-09-2445 KJM-EFB

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

DATED: May 22, 2012

ORDER

This matter comes before the court on defendantW.M. Beaty and Associates' ("Beaty")motion for partial summary judgment.(ECF 380.)It is decided without hearing.For the following reasons, Beaty's motion is denied as moot as to plaintiff's negligent hiring claim and denied as to capping property damage at the pre-fire fair market value.

I.FACTS¹ AND PROCEDURAL HISTORY

The Moonlight Fire ignited on September 3, 2007.(Beaty's Reply to Plaintiff's Response to Beaty's Statement of Undisputed Facts¶ 5, ECF 413-1(hereinafter "ECF 413-1-A").)It burned 46,000 acres of land in the Lassen and Plumas National Forests.(Beaty'sResponse to Plaintiff's Statement of Undisputed Facts¶ 2, ECF 413-1(hereinafter "ECF 413-1-B").)

Plaintiff filed its original complaint on August 31, 2009.(ECF 1.)On May 26, 2010, plaintiff filed the operative second amended complaint against defendants Sierra Pacific Industries ("SPI"); Beaty; Eunice E. Howell individually and doing business as Howell's Forest Harvesting Company(together, "Howell"); and a set of defendants identified here as the "landowner defendants."²(ECF 53 ¶¶ 5-8.)The second amended complaint alleges seven (7) causes of action: 1) negligence against all defendants; 2) liability under the Fire Liability Law, California Health & Safety Code §§ 13007-13009.1andCivil Code §§ 3287 & 3288 against all defendants; 3) negligence and negligence per se under 14 Cal. Code Regs. § 938.8 and the Fire Protection Plan against all defendants; 4) trespass by fire against all defendants; 5) negligent supervision against SPI, Beaty, landowners, and Eunice Howell; 6) negligent hiring against SPI, Beaty, and landowners; and 7) interest and penalties against all defendants.(Id.)Plaintiff claims approximately $662,480,066 in damages, consisting of the following: $22,535,051 for fire suppression costs; $50,984,757 for lost timber value; $68,261,085 for reforestation costs; $1,525,093 for burned area emergency rehabilitation; $1,000,000 for environmental andecological damages; $77,663,271/$87,934,047 in interest; and $331,240,033 in double damages.(ECF 413-1-A ¶ 11.)

Beaty and the landowner defendants filed their answers to the second amended complaint on June 10, 2010(ECF 54 & 55 respectively); Howell and SPI filed their answers to the second amended complaint on June 15, 2010(ECF 56 & 57 respectively).

Beaty filed the present motion for partial summary judgment on plaintiff's negligent hiring claim and to cap property damage on January 27, 2012.(ECF 380.)SPI and Howell joined in Beaty's motion to cap property damage on January 27, 2012.(ECF 386.)Plaintiff filed its opposition on February 10, 2012.(ECF 405.)³Beaty filed its reply on February 17, 2012.(ECF 413.)

II.ANALYSIS

A.Standard

A court will grant summary judgment "if . . . there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."FED. R. CIV. P. 56(a).The "threshold inquiry" is whether "there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party."Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250(1986).⁴

The moving party bears the initial burden of showing the district court"that there is an absence of evidence to support the nonmoving party's case."Celotex Corp. v. Catrett, 477 U.S. 317, 325(1986).The burden then shifts to the nonmoving party, which "must establish that there is a genuine issue of material fact . . . ."Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,475 U.S. 574, 585(1986).In carrying their burdens, both parties must "[cite] to particular parts of materials in the record [or show] that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support that fact."FED. R. CIV. P. 56(c)(1);see alsoMatsushita, 475 U.S. at 586("[the nonmoving party] must do more than simply show that there is some metaphysical doubt as to the material facts").Moreover, "the requirement is that there be no genuine issue of material fact . . . .Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment."Anderson, 477 U.S. at 247-48.

In deciding a motion for summary judgment, the court draws all inferences and views all evidence in the light most favorable to the nonmoving party.Matsushita, 475 U.S. at 587-88;Whitman v. Mineta, 541 F.3d 929, 931(9th Cir.2008)."Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no 'genuine issue for trial.'"Matsushita, 475 U.S. at 587(quotingFirst Nat'l Bank of Arizona v. Cities Serv. Co., 391 U.S. 253, 289(1968)).

B.Application

1.Negligent Hiring

Plaintiff has abandoned its negligent hiring claim against Beaty.(SeePl.'s Opp'n at 1:21-24, ECF 400;Pl.'s Response to Beaty's Statement of Material Factsat 2, ECF 400-1.)Accordingly, Beaty's motion for partial summary judgment as to plaintiff's negligent hiring claim is denied as moot.Because the motion is not directed to any negligent retention claim, the court does not reach any such claim here.

2.Property Damage Calculation

Beaty contends plaintiff's claim for property damages should be capped at the pre-fire fair market value of the property.(Mot.at 8;Replyat 2.)Specifically, Beaty contends that the Moonlight Fire burned "typical timberland" and the assessment of damages should be consistent with this fact.(Mot.at 9.)It states that common law tort principles require that thetotal property damage not exceed the pre-injury fair market value.(Id. at 10.)It further maintains that the concepts of "full compensation" and "any and all damages""work hand-in-hand with the basic principle of not awarding more than what a Plaintiff possessed before an injury."(Replyat 3.)Plaintiff contends it should be compensated for all damages suffered without regard to market value.(Opp'nat 6.)

California law applies to plaintiff's claims for damages.United States v. Union Pacific R.R. Co., 565 F. Supp. 2d 1136, 1142(E.D. Cal.2008)(citingUnited States v. California, 655 F.2d 914, 917-20(9th Cir.1980)).California Health and Safety Code § 13007 provides: "Any person who personally or through another willfully, negligently, or in violation of law, sets fire to, allows fire to be set to, or allows a fire kindled or attended by him to escape to, the property of another, whether privately or publicly owned, is liable to the owner of such property for any damages to the property caused by the fire."The measure of damages "is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not."CAL. CIV. CODE § 3333.

"For tortious injury to real property, the general rule is that the plaintiff may recover the lesser of (1) the diminution in the property's fair market value, as measured immediately before and immediately after the damage; or (2) the cost to repair the damage and restore the property to its pretrespass condition, plus the value of any lost use.The practical effect of this rule is to limit damages to property to the fair market value of the property prior to the damage."Kelly v. CB&I Constructors, Inc., 179 Cal. App. 4th 442, 450(2009).However, "[t]here is no fixed, inflexible rule for determining the measure of damages for injury to, or destruction of, property . . . ."Heninger v. Dunn, 101 Cal. App. 3d 858, 862(1980)(internal quotation omitted);see alsoSanta Barbara Pistachio Ranch v. Chowchilla Water Dist., 88 Cal. App. 4th 439, 446-47(2001)("The measure [of damages] that most appropriately compensates the injured party for the loss sustained should be adopted.")."[I]f a plaintiff has a personal reason to restore the property to its former condition, he or she may recover the restoration costseven if such costs exceed the diminution in value."Kelly, 179 Cal. App. 4th at 450-51(also holding that restoration costs must still be reasonable, as determined by the trier of fact);see alsoOrndorff v. Christiana Cmty. Builders, 217 Cal. App. 3d 683, 688(1990).Moreover, damages may be "measured by the value of the trees on the premises in their growing state" and "costs of replacing the trees or restoring the property to its condition prior to the injury."Santa Barbara Pistachio Ranch, 88 Cal. App. 4th at 447.

The theory used to measure damages must "fit the particular circumstances of a case."Id. at 447;see alsoGivens v. Markall, 51 Cal. App. 2d 374, 379(1942)("There is no fixed rule with respect to the measure of damages for the wrongful injury or destruction of property.Each case must be determined on its particular facts.")."[T]his court must consider, as many courts have, the unique character of the land at issue."Union Pacific, 565 F. Supp. 2d at 1143.Beaty does not dispute that the burned land included spotted owl Protected Activity Centers, large and mature trees, Northern goshawk Protected Activity Centers, and American marten habitat.(See, e.g., ECF 413-1-B ¶¶ 14-23.)Moreover, Beaty does not dispute the fact that the burned lands had been held and preserved for public benefit, "open space, habitat, animal species, recreation, and use and enjoyment by future generations."(Id.¶ 30.)In addition to timber value, plaintiff seeks compensation for "the loss of pre-merchantable trees, reforestation costs, [and] interim environmental or ecological degradation during the century required for a forest to return to its pre-fire state."(Opp'nat 17.)Whether or not a national timberland market exists within which National Forest...