US EX REL. DEPT. OF FISH AND GAME v. Montrose, CV 90-3122-AAH.

• Decision Date: 31 March 1992
• Docket Number: No. CV 90-3122-AAH.,CV 90-3122-AAH.
• Citation: 788 F. Supp. 1485
• Parties: UNITED STATES of America, State of California, ex rel., Department of Fish and Game, State Lands Commission, and Department of Parks and Recreation, Plaintiffs, v. MONTROSE CHEMICAL CORPORATION OF CALIFORNIA, Rhone-Poulenc Basic Chemicals Company, Atkemix Thirty-Seven, Inc., Stauffer Management Company, ICI American Holdings, Inc., Chris-Craft Industries, Inc., Westinghouse Electric Corporation, Potlatch Corporation, Simpson Paper Company, and County Sanitation District No. 2 of Los Angeles, Defendants. Montrose Chemical Corporation of California, Rhone-Poulenc Basic Chemicals Company, Atkemix Thirty-Seven, Inc., Stauffer Management Company, ICI American Holdings, Inc., Chris-Craft Industries, Inc., Westinghouse Electric Corporation, Potlatch Corporation, Simpson Paper Company, and County Sanitation District No. 2 of Los Angeles, Counterclaimants, United States of America, State of California, and South Coast Air Quality Management District, Counterdefendants.
• Court: U.S. District Court — Central District of California

788 F. Supp. 1485

UNITED STATES of America, State of California, ex rel., Department of Fish and Game, State Lands Commission, and Department of Parks and Recreation, Plaintiffs, v. MONTROSE CHEMICAL CORPORATION OF CALIFORNIA, Rhone-Poulenc Basic Chemicals Company, Atkemix Thirty-Seven, Inc., Stauffer Management Company, ICI American Holdings, Inc., Chris-Craft Industries, Inc., Westinghouse Electric Corporation, Potlatch Corporation, Simpson Paper Company, and County Sanitation District No. 2 of Los Angeles, Defendants Montrose Chemical Corporation of California, Rhone-Poulenc Basic Chemicals Company, Atkemix Thirty-Seven, Inc., Stauffer Management Company, ICI American Holdings, Inc., Chris-Craft Industries, Inc., Westinghouse Electric Corporation, Potlatch Corporation, Simpson Paper Company, and County Sanitation District No. 2 of Los Angeles, Counterclaimants United States of America, State of California, and South Coast Air Quality Management District, Counterdefendants.

No. CV 90-3122-AAH.

United States District Court, C.D. California.

March 31, 1992.

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Gerald F. George, Dept. of Justice, Environmental Enforcement Section, Environment and Natural Resources Div., United States Dept. of Justice, San Francisco, Cal., Adam M. Kushner, Scott A. Schachter, Christina M. Humway, Dept. of Justice, Environmental Enforcement Section, Environment and Natural Resources Div., United States Dept. of Justice, Washington D.C., for U.S.

Peter Hsiao, Asst. U.S. Atty., Civil Div., U.S. Attys. Office, C.D. Cal., John A. Saurenman, Barbara Noble, Deputy Atty. Gen., Los Angeles, Cal., for State of Cal.

Mark I. Weinberger, Shute, Mihaly & Weinberger, San Francisco, Cal., Robert Kwong, Senior Deputy, Deputy District Counsel, South Coast Air Quality Management Dist., Diamond Bar, Cal., for South Coast Air Management Dist.

Paul B. Galvani, Ropes & Gray, Boston, Mass., Christopher J. McNevin, Pillsbury Madison & Sutro, Los Angeles, Cal., for Rhone-Poulenc Basic Chemicals Co., Atkemix Thirty-Seven, Inc., Stauffer Mgmt. Co., and ICI Holdings, Inc.

Jose R. Allen, Peter Simshauser, Skadden, Arps, Slate, Meagher & Flom, San Francisco, Cal., for Chris-Craft Industries, Inc.

Robert M. Dell, Kimberly M. McCormick, Latham & Watkins, San Francisco, Cal., for Montrose Chemical Corp. of California.

Charles B. Cohler, Lasky, Haas, Cohler & Munter, San Francisco, Cal., for Westinghouse Elec. Corp.

DECISION AND ORDER RE: MOTIONS TO DISMISS COUNTERCLAIMS

HAUK, Senior District Judge.

These are actions by the United States of America and the State of California against Defendants under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. § 9601 et seq. (1982), as amended by Superfund Amendments And Reauthorization Act of 1986 ("SARA"), Pub.L. No. 99-499, 100 Stat. 1613 (1986). Both the United States and the State of California seek to recover natural resource damages and response costs pursuant to CERCLA sections 107(f), 42 U.S.C. § 9607(f) and 107(a)(4)(C), 42 U.S.C. § 9607(a)(4)(C) from all ten defendants for the alleged contamination of the "San Pedro Channel Areas," including the Palos Verdes Shelf, the Los Angeles-Long Beach Harbors and the environs of Santa Catalina Island and the Channel Islands, and destruction of wildlife and other natural resources therein. In addition, the United States seeks to recover response costs pursuant to CERCLA section 107(a)(4)(A), 42 U.S.C. § 9607(a)(4)(A) from Montrose, Rhone-Poulenc, Atkemix, Stauffer, ICI and Chris-Craft ("DDT Defendants") for the cleanup of a commercial site allegedly contaminated with hazardous substances.

In turn, the Defendants have counterclaimed against the United States, the State of California and South Coast Air Quality Management District ("South Coast") under both CERCLA and tort law, seeking indemnity, recoupment, injunctive relief, declaratory relief, attorney's fees and costs. The thrust of Defendants' counterclaims is that if in fact hazardous conditions have been created and natural resources have been damaged, and if Defendants are held liable for response costs and damages, then the United States and the State of California should be required to make contribution under CERCLA section 113(f)(1), 42 U.S.C. § 9613(f)(1), and/or indemnify¹ Defendants under tort law. In this way, Defendants seek to deflect potential liability onto the United States and California, whom Defendants claim are the entities entirely or primarily responsible, in whole or in part, for the damage to the environment.

The case came on for hearing before the Court on March 16, 1992 on Counterdefendants United States, State of California and South Coast's Motions for Dismissal of Defendants'/Counterclaimants' (Montrose, Rhone-Poulenc, Atkemix, Stauffer, ICI, and Chris-Craft, and Westinghouse) counterclaims. The Court has considered the motions and supporting papers, the opposition thereto, the moving parties' replies, together with all the files and records herein, and the legal arguments asserted by the parties at the hearing. In considering the motions to dismiss made under Federal Rule of Civil Procedure 12(b), the Court follows the rule that all facts are to be construed in the light most favorable to the counterclaimants, with dismissal to be ordered only if counterclaimants could prove no set of facts in support of their counterclaims which would entitle them to relief. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974).

I. UNITED STATES' MOTION TO DISMISS

Plaintiff United States moves to dismiss DDT Defendants' tort based counterclaims seeking recoupment and indemnity pursuant to Federal Rule of Civil Procedure 12(b)(1).

a. Tort Counterclaims

1. Sovereign Immunity

The Government first argues that the Court lacks jurisdiction over the counterclaims because of the United States' sovereign immunity. If the Court were persuaded by this argument, the result would be to allow the United States to hale the Defendants into court and avail itself of this forum's powers, while barring the Defendants from seeking full recourse against the United States. This result would be manifestly unjust and is not supported by the law.

The United States waived its sovereign immunity, as to Defendants' counterclaims seeking recoupment, by filing its complaint with the Court. See United States v. 2,116 Boxes of Boned Beef, 726 F.2d 1481, 1490 (10th Cir.1984) ("although the sovereign waives immunity as to claims of the defendant which are asserted in recoupment, it does not waive immunity as to claims of a different form or nature than that sought by it."), cert. denied, 469 U.S. 825, 105 S.Ct. 105, 83 L.Ed.2d 49 (1984).

Furthermore, the Federal Tort Claims Act, 28 U.S.C. § 1346(b), 2671 et seq. (1965, 1976, and 1991 Supp.) ("F.T.C.A.") waives the United States' immunity as to claims seeking indemnity.² United States v. Yellow Cab Co., 340 U.S. 543, 554, 71 S.Ct. 399, 406, 95 L.Ed. 523 (1951). However, the United States contends, and the Defendants dispute, that indemnity may be obtained under California law only from concurrent tortfeasors. The Court need not decide this question, however, as it appears clearly from the allegations of the counterclaims that the Defendants may be able to prove facts which would establish that the United States and the Defendants are concurrent tortfeasors.

Having determined that the United States has waived its sovereign immunity as to the tort counterclaims seeking recoupment and indemnity, the Court must determine whether the counterclaims fall within the scope of the waiver. The substantive requirements of the F.T.C.A. set forth the scope of the United States' waiver of immunity. Even counterclaims seeking equitable recoupment are subject to these requirements. See FDIC v. Carter, 701 F.Supp. 730, 733-34 (C.D.Cal.1987) ("It is perhaps more accurate to say that the institution of the action by the FDIC waives the procedural requirements of the FTCA.... However, the waiver of sovereign immunity implied from the FDIC's decision to bring this suit should not be understood as a waiver of the substantive, non-procedural exclusions from liability contained in the FTCA.... To grant a litigant additional substantive rights against the Government as a defendant over those rights the litigant would have as a plaintiff would result in an unacceptable anomaly."). The substantive provisions of the FTCA provide, in pertinent part, that the District Court has jurisdiction over suits against the United States,

for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.

28 U.S.C. § 1346(b). These requirements have been satisfied by the counterclaims before the Court. In particular, as required by the preceding language, all Defendants have suffered an "injury" as a result of being singled out by the Government for potential CERCLA liability. See discussion infra section II.a.1.

Accordingly, this Court has jurisdiction over both Defendants' "defensive" claims for recoupment seeking relief of the same form and nature as that sought by the United States, 2,116 Boxes of Boned Beef, 726 F.2d at 1490, and Defendants' derivative claims for indemnity.³

2. Failure to State Claim

The United States next argues that even if it has waived its immunity, the Defendants fail to adequately state claims under the F.T.C.A. for negligence per se, dangerous condition, and nuisance. Accordingly, the Government argues that the Court lacks subject matter jurisdiction over these claims.

First, with respect to the counterclaim...