Waste Manage. of Alameda v. East Bay Regional Park

• Decision Date: 20 March 2001
• Docket Number: No. C98-0433 TEH.,C98-0433 TEH.
• Citation: 135 F.Supp.2d 1071
• Parties: WASTE MANAGEMENT OF ALAMEDA COUNTY, INC., Plaintiff, v. EAST BAY REGIONAL PARK DISTRICT, Defendant.
• Court: U.S. District Court — Northern District of California

135 F.Supp.2d 1071

WASTE MANAGEMENT OF ALAMEDA COUNTY, INC., Plaintiff, v. EAST BAY REGIONAL PARK DISTRICT, Defendant.

No. C98-0433 TEH.

United States District Court, N.D. California.

March 20, 2001.

COPYRIGHT MATERIAL OMITTED

Richard A. Holderness, Mitchell H. Segal, Seyfarth Shaw, San Francisco, CA, Patricia B. Walker, John D. Fognani, Jonathan M. Fingeret, Zevnik Horton Guibord McGovern Palmer & Fognani, Denver, CO, Clark J. Davis, Brown Davis & Roberts, Gig Harbor, WA, Jeffrey S. Raskin, Zevnik Horton Palmer LLP, San Francisco, CA, for plaintiff.

Ted C. Radosevich, East Bay Regional Park District, Oakland, CA, Barry S. Sandals, Brooks M. Beard, Morrison & Foerster LLP, San Francisco, CA, for defendant.

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND JUDGMENT

HENDERSON, District Judge.

The focus of this action is Oyster Bay Regional Park which comprises 194 acres of property fronting the San Francisco Bay in San Leandro, California. Originally used as a municipal landfill for 38 years, the site was covered and transferred to the East Bay Regional Park District ("Park District") for development into a shoreline park. Thereafter, the property became contaminated with leachate, a hazardous waste that develops when water interacts with waste. The amount of leachate at the landfill has, and will continue to, require substantial remedial efforts, which to date, have been largely borne by plaintiff, Waste Management of Alameda County, Inc. ("WMAC"), the prior owner of the site.

In 1998, WMAC brought this action against the Park District for contribution and declaratory relief pursuant to the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), as amended, 42 U.S.C. §§ 9607, 9613, the analogous California Hazardous Substance Account Act ("HSAA"), Cal. Health & Safety Code §§ 25300 et seq., and the Declaratory Relief Act, 28 U.S.C. §§ 2201, 2202. The complaint also asserted a variety of state law claims that were dismissed without prejudice on April 24, 1998. In response, the Park District filed a counterclaim under CERCLA, HSAA, and the Declaratory Relief Act seeking comparable relief.

The action was tried before the Court between November 30, 1999 and January 14, 2000. Both parties contend that the evidence demonstrates that the other should be held primarily or entirely responsible for the cost of remedying the leachate contamination at the site. The parties also dispute the recoverability of costs already incurred and whether WMAC's remedial action plan for leachate control is necessary and consistent with the National Contingency Plan. Having carefully considered the testimony presented, along with the voluminous evidentiary record, and the comprehensive post-trial briefs and other submissions, the Court makes the following findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a).

I. BACKGROUND FACTS

A. Developments Leading Up to Transfer of the Landfill to the East Bay Regional Park District

Beginning in 1942, WMAC's predecessor — Oakland Scavenger Company ("OSC") — operated a 247-acre landfill at the western end of Davis Street in San Leandro, California, known as the Davis Street Landfill ("the Landfill"). The property lies on the eastern side of San Francisco Bay, approximately ¾ mile southeast of the Oakland International Airport. Most of the site is reclaimed tidal flat lands. Starting in 1949, the original landfill area was expanded by construction of a perimeter levee. The area enclosed by the levee was dewatered, and waste was placed directly on the tidal mud flats.

During its 38 years of operation — until 1980 — OSC disposed of approximately 13 million cubic yards of waste at the site, weighing approximately 6 million tons. OSC acquired the waste by providing garbage collection services for approximately 75 % of the residential and commercial population of Alameda County, California, through franchise agreements. Some industrial wastes are also deposited at the site. In 1986, WMAC acquired OSC, valued at the time at $85,400,000, and assumed all of its liabilities, including all liabilities associated with the former Davis Street Landfill.

For the years the Landfill was operational, OSC was required to obtain a use permit from the City of San Leandro ("San Leandro"). In 1970, OSC was advised that there was enough volume left in the Landfill to make it usable for another 10 to 15 years, assuming operational permits were granted. The estimate, however, was later substantially revised when the pace of dumping exceeded expectations. By the mid-70's, OSC knew the Landfill would soon reach capacity, but OSC had no ready alternative location near the Davis Street site. Instead OSC hoped to address this looming concern by building a Transfer Station on the 53 eastern acres of the site. This Station would allow OSC to crush and compact the garbage collected on local routes for transfer to the more distant Altamont landfill, thus saving the "heavy expense" of a longer direct haul of the garbage, see Def.'s Exh. 131 at 5419, with its substantially higher transportation, labor, and other costs. This plan, however, was contingent upon San Leandro agreeing to (1) re-zone the 53 acres, (2) grant a use permit for the Transfer Station, and (3) extend OSC's permit beyond its then expiration-date of 1976 so that it could continue dumping at the Landfill until the Transfer Station was operational.

At the same time, both OSC and San Leandro were aware that the residents of Mulford Gardens, a development just southeast of the site, were strongly opposed to the continued operation of the Landfill because of its odors, attraction of flies, and similar nuisances. The residents argued that the best use of the land would be for recreational purposes, emphasizing that "[h]istory shows that San Leandro's long-range development plans call for a park on that site." Def.'s Exh. 76 at 18381. OSC also knew that San Leandro was considering not extending OSC's permit, thus putting OSC in a "survival mode" according to OSC's then board member, Ronald Proto. Tr. 1654.

In mid-1976, the City of San Leandro proposed that OSC turn over 194 acres of the Landfill to the Park District for development into a shoreline park. OSC understood that such a donation was a prerequisite to San Leandro favorably viewing its plans for the Transfer Station, although the two were never officially linked. As OSC plainly acknowledged in correspondence to the Regional Water Quality Control Board ("Water Board"), "The San Leandro City Council has required, as a condition to granting a Use Permit for the Transfer Station, that Oakland Scavenger Company dedicate the 194-acre parcel for park purposes to East Bay Regional Park District, or some other park agency." Def's Exh. 131 at 5418; see also Proto Tr. 1652-53 (San Leandro "condition[ed]" permission to build Transfer Station upon donation of 194 acres). OSC also understood that, in return, San Leandro would extend OSC's permit to dump at the Landfill beyond 1976, which would alleviate its immediate dilemma. At the same time, OSC's commercial options for the landfill were limited, particularly given the permitting requirements enforced by the Bay Conservation and Development Commission.

Given OSC's predicament and the Park District's interest in making more shoreline publicly accessible, both agreed to pursue San Leandro's proposal, and the two parties jointly submitted, on July 28, 1976, a proposed letter of intent to this effect to San Leandro. The letter stated inter alia that the parties had agreed that OSC would be permitted to use solid waste as fill material to meet surface drainage and contour conditions as might be required by the Water Board and that OSC would cover the site with cover materials consistent with Water Board requirements. Additional fill would also be used to build up contours needed to make the site desirable as a park. As a result of the letter of intent, San Leandro granted OSC multiple permit extensions, enabling it to continue dumping garbage at the Landfill for over four additional years, from September 1976 until December 1980. Nearby residents reluctantly agreed not to oppose the permit extensions with the understanding that the property would ultimately be developed into a park by the Park District. OSC also obtained a use permit for the Transfer Station which continues in operation to this day.

After lengthy negotiations, the Park District and OSC entered into an Option Agreement in April 1979, which provided the framework for transferring ownership of 194 acres of the Landfill to the Park District in three phases over a ten year period. See Pl's Exh. B-1 ("Agreement"). The first phase would transfer Parcels 1 and 1-A, consisting of the outer perimeter of the Site (approximately 67 acres), and the southeast portion of the Site (approximately 21 acres); the second phase would transfer Parcels II and II-A, consisting of the southern, internal portion of the Site (approximately 65.5 acres) and a small area for a service yard on the northern, internal portion of the Site (approximately 2.5 acres); and the final phase would transfer Parcel III, consisting of the northern, internal portion of the Site (approximately 37.4 acres). The Park District was not required to pay OSC any financial consideration for the property. See Agreement ¶ 2.8(a).

The Agreement further provided that OSC would take the necessary measures to cover up and "close" each of these parcels, consistent with requirements of the Water Board. See Agreement ¶ 2.3 ("OSC shall provide ... the `cover materials' required by `the Closure Plan and in the site closure plan finally approved by the Water Board ....'"). The transfer of the parcels was to follow OSC's completion of these closure obligations. See Agreement ¶ 2.8. The Agreement further provided that if the Park District elected to not exercise its right to acquire any of the parcels,...