Us Ecology, Inc. v. State of California

• Citation: 111 Cal.Rptr.2d 689,92 Cal.App.4th 113
• Decision Date: 05 September 2001
• Docket Number: No. D036933.,D036933.
• Parties: US ECOLOGY, INC., Plaintiff and Appellant, v. STATE OF CALIFORNIA et al., Defendants and Respondents, Committee to Bridge the Gap et al., Movants and Respondents.
• Court: California Court of Appeals

111 Cal.Rptr.2d 689

92 Cal.App.4th 113

US ECOLOGY, INC., Plaintiff and Appellant, v. STATE OF CALIFORNIA et al., Defendants and Respondents, Committee to Bridge the Gap et al., Movants and Respondents.

No. D036933.

Court of Appeal, Fourth District, Division 1.

September 5, 2001.

Review Denied November 28, 2001.^*

Latham & Watkins, Costa Mesa, and Karl S. Lytz, Darius Ogloza, Kristen M. Cain, and Ellen Brown, San Francisco, for Plaintiff and Appellant.

Bill Lockyer, Attorney General, Charlton G. Holland, III, Senior Assistant Attorney General, Frank S. Furtek, Supervising Deputy Attorney General and Paul Reynaga, Deputy Attorney General for Defendants and Respondents.

California Environmental Law Project and Laurens H. Silver for Movants and Respondents The Committee to Bridge the Gap, the Los Angeles Chapter of Physicians for Social Responsibility, and the Southern California Federation of Scientists.

HALLER, Acting P.J.

This action arises from "one of our Nation's newest problems of public policy": the question of where to dispose of low level radioactive waste (LLRW). (New York v. United States (1992) 505 U.S. 144, 149, 112 S.Ct. 2408, 120 L.Ed.2d 120.) In 1985, the State Department of Health Services (Department) selected plaintiff U.S. Ecology, Inc. (Ecology) to develop and operate California's first LLRW storage facility. Ecology and state officials thereafter identified a location for the facility, known as Ward Valley, and completed favorable environmental reviews for that site. But the facility has yet to be built.

Ecology places the blame on the state's failure to acquire the Ward Valley site from the federal government. Claiming that it spent millions of dollars in development costs in reliance on the state's promise to use its best efforts to acquire the Ward Valley site, Ecology sued the state, the Department, the Department's director, Diana M. Bonta, and Governor Gray Davis, alleging breach of contract and promissory estoppel causes of action, and seeking a writ of mandate directing the state to take the necessary steps to acquire the Ward Valley site. The trial court sustained defendants' demurrer without leave to amend. We conclude Ecology has alleged a promissory estoppel claim, and reverse the judgment as to that cause of action and the related declaratory relief claim. We affirm the judgment in all other respects.¹

FACTS

Because this appeal follows the sustaining of a demurrer, we draw our facts from those pleaded in the complaint and those of which we may take judicial notice. (Moore v. Conliffe (1994) 7 Cal.4th 634, 638, 29 Cal.Rptr.2d 152, 871 P.2d 204.) We additionally rely on several federal and state court decisions that have extensively discussed the factual and legal background relating to the present dispute. (See Fort Mojave Indian Tribe v. Department of Health Services (1995) 38 Cal.App.4th 1574, 45 Cal.Rptr.2d 822; California Radioactive Materials Management Forum v. Department of Health Services (1993) 15 Cal.App.4th 841, 19 Cal.Rptr.2d 357, disapproved on other grounds in Carmel Valley Fire Protection Dist. v. State of California (2001) 25 Cal.4th 287, 305, fn. 5, 105 Cal. Rptr.2d 636, 20 P.3d 533; US Ecology, Inc. v. United States Department of the Interior (D.C.Cir.2000) 231 F.3d 20; California Department of Health Services v. Babbitt (D.D.C.1999) 46 F.Supp.2d 13.)

Our society increasingly generates LLRW from numerous sources, including hospitals, research institutions, and consumer industries. (New York v. United States, supra, 505 U.S. at p. 149, 112 S.Ct. 2408.) Because this waste "must be isolated from humans for long periods of time, often for hundreds of years," most states would understandably prefer that a storage facility be placed outside their geographic borders. (Id. at pp. 149-150, 112 S.Ct. 2408.) In the late 1970's, there were only three LLRW storage facilities in the country (Washington, Nevada and South Carolina) and those facilities were in the process of closing or were threatening to close. (Id. at p. 150,112 S.Ct. 2408.)

In 1980, the United States Congress responded to this crisis by enacting the Low-Level Radioactive Waste Policy Act, authorizing states to enter into regional compacts that may restrict their disposal facilities to waste generated within member states. (Pub. L. No. 96-573, § 2 (Dec. 22, 1980)94 Stat. 3347; 42 U.S.C. § 2021b et seq.; New York v. United States, supra, 505 U.S. at pp. 150-151, 112 S.Ct. 2408.) By 1985, only three approved regional compacts had operational disposal facilities, leaving the 31 states that had not entered into one of these compacts with no assured outlet for their LLRW. (New York v. United States, supra, 505 U.S. at p. 151, 112 S.Ct. 2408.) To deal with this problem, Congress enacted supplemental legislation requiring the three existing disposal sites to continue accepting out-of-state LLRW through 1992, but permitting approved regional compacts to exclude the waste generated outside each region after 1992. (Ibid.)

In 1982, the California Legislature first responded to the federal mandate by enacting urgency legislation directing the Department to develop an LLRW management plan that would include plans for short-term storage, the establishment of siting criteria, and the reduction of the amount and toxicity of waste produced. (Stats.1982, ch. 95 § 3; see Health & Saf. Code, § 115005.)² The legislation authorized the Department to establish and opered or contract for the establishment and operation of, interim LLRW storage facilities. (Stats.1982, ch. 95, § 3.)

The next year, the Legislature added to the statutory scheme by addressing longterm storage needs. This new legislation required the Department to first promulgate regulations for the selection of a private company that would serve as a licensed LLRW operator. (§ 115010.) Within three months of the adoption of those regulations, interested parties must file a "statement of capabilities and notice of intention to file an application for a license to receive radioactive materials (§ 115020, subd. (a).) Within 45 days, the Department's director was required to select one of the applicants to serve as a license-designee. (§ 115020, subd. (b).) If there were no qualified applicants, the State Resources Agency was required to directly assume the costs and responsibility for establishing and operating the state's LLRW disposal facility. (§ 115025.) If the Department selected a license-designee, the Department was authorized to charge an annual fee and to require the applicant to "post a bond of up to one million dollars . . . to guarantee that the person will carry out the ` activities connected with completing the license application and obtaining the license." (§ 115020, subd. (f).) By enacting this legislation, the Legislature sought to assure the safe management of LLRW and "permit and encourage the expeditious establishment and operation by the private sector of a [LLRW disposal facility]. . . ." (Stats.1983, ch. 1177, § 1.)

April 1984, the Department promulgated the required regulations. (Cal. Code Regs., tit. 17, § 30470 et seq.) In 1985, the Department selected Ecology as the license-designee. Ecology formally accepted the designation in December 1985, and agreed to be responsible for developing the LLRW facility under the Department's oversight. (California Department of Health Services v. Babbitt, supra, 46 F.Supp.2d at p. 16.) Ecology thereafter posted the required $1 million in securities to guarantee performance of its duties, and agreed to pay the required annual fee of $250,000. (Cal.Code Regs., tit. 17, § 30485.) Ecology paid that fee each year between 1985 and 1999. The Department used these fees to perform supporting technical studies and to monitor expenses incurred by Ecology.

In 1987, California entered into a regional compact with Arizona, North Dakota, and South Dakota for the construction and operation of an LLRW disposal facility (Southwestern Compact). (Fort Mojave Indian Tribe v. Department of Health Services, supra, 38 Cal.App.4th at pp. 1582-1583, 45 Cal.Rptr.2d 822.) The California Legislature and the United States Congress ratified this compact; the terms of the compact are part of the Health and Safety Code. (§§ 115250, 115255; 42 U.S.C. § 2021d(a)(2).) The Southwestern Compact obligates the "host state" to "[c]ause a regional disposal facility to be developed on a timely basis [and][f][e]nsure . . . the protection and preservation of public health and safety in the siting, design, development, licensing, . . . and longterm care" of the facility. (§ 115255, art. 4, subd. (E)(1) & (2).) California agreed to be the host state for the first 30 years of the Southwestern Compact's existence. (§ 115255, art. 4, subd. (C)(1).)

Ecology thereafter engaged in an "intensive and costly" search for an environmentally suitable LLRW disposal facility site. By March 1988, Ecology had identified two sites. The primary site was located on federally-owned land in the Mojave desert known as Ward Valley. The secondary site was also located on federally-owned land known as Silurian Valley. The Department which was extensively involved in the site selection process, concurred in the designation of both sites. (See California Radioactive Materials Management Forum v. Department of Health Services, supra, 15 Cal.App.4th at p. 853, 19 Cal.Rptr.2d 357.) Because state law requires the facility to be located on either federal or state land, and federal policy requires the facility to be on state-owned land, the California State Lands Commission (Lands Commission) submitted an application to the federal government, seeking to preserve the Ward Valley and/or Silurian Valley sites for the state's acquisition.

Ecology then began collecting detailed environmental information about the Ward Valley site for the license application and related environmental studies under the California Environmental Quality Act and the National Environmental...