-E United Alloys Inc v. Baker, et al

Filing 326

SECOND AMENDED FINDINGS OF FACT AND CONCLUSIONS OF LAW signed by Judge Consuelo B. Marshall. The parties are jointly and severally liable for the contamination at the Property pursuant to Section 107 of CERCLA; While Flask is liable for the contam ination at the Property under the HSAA, CERCLA preempts United Alloys' right to recover response costs under the HSAA in addition to CERCLA; Flask is entitled to contribution from United Alloys pursuant to Section 113 of CERCLA, such that U nited Alloys shall be responsible for one-third of all recoverable response costs and Flask shall be responsible for two-thirds of all recoverable response costs; United Alloys has incurred NCP-compliant response costs in the amount of $431 ,418.64; Flask is entitled to a credit of $340,000 for settlements paid to United Alloys by third party defendants, which reduces United Alloys' recoverable response costs to $91,418.64; As to the $91,418.64, United Alloys sha ll pay one-third of these response costs, or $30,442.41, and Flask shall pay two-thirds of these response costs, or $60,976.23; Flask shall also pay to United Alloys $17,024.19, which represents two-thirds of the prejudgment intere st on United Alloys' recoverable response costs; Declaratory relief shall be entered as to the apportionment of liability and allocation of costs for future NCP-compliant response costs; The Court retains jurisdiction to address the recover ability of future response costs that cannot be resolved by the parties; and To the extent that any findings of fact constitute conclusions of law, they are adopted as such, and to the extent that the conclusions of law constitute findings of fact, they are adopted as such. (lom)

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

CENTRAL DISTRICT OF CALIFORNIA

10
11
12
13
14
15
16
17
18

UNITED ALLOYS, INC.,
Plaintiff,
v.
HAROLD A. BAKER, et al.,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)
)

No. CV 93-4722 CBM (Ex)
SECOND AMENDED FINDINGS OF
FACT AND CONCLUSIONS OF LAW

The matter before the Court, the Honorable Consuelo B. Marshall, United

19

States District Judge presiding, is the bench trial held on Plaintiff and Counter-

20

defendant United Alloys, Inc.’s (“United Alloys”) claims for cost recovery and

21

declaratory relief against Defendant and Counter-claimant Flask Chemical

22

Corporation (“Flask”), and Flask’s counterclaims for contribution against United

23

Alloys, due to the contamination at United Alloys’ property located at 900 East

24

Slauson Avenue in Los Angeles, California. Upon consideration of the testimony

25

and evidence received, and the Court’s evaluation of the demeanor and credibility

26

of the witnesses, the Court makes the following findings of fact and conclusions of

27
28
1

1

law pursuant to Federal Rule of Civil Procedure 52(a).1

2

JURISDICTION

3
4

The Court has jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1367, and 42
U.S.C. §§ 9607 and 9613(b).

5
6

FINDINGS OF FACT
A.

PROCEDURAL POSTURE OF THIS ACTION

7

1.

8

pursuant to the Comprehensive Environmental Response, Compensation,

9

and Liability Act of 1980 (“CERCLA”), 42 U.S.C. § 9601 et seq., the

10

Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901 et

11

seq., and various state laws. (Final Pretrial Conference Order at ¶ 40.)

12

2.

13

counterclaims for contribution and declaratory relief pursuant to 42 U.S.C.

14

§ 9613, equitable indemnity, and negligence against United Alloys. (Id. at ¶

15

41.)

16

3.

17

the mandatory litigation stay imposed by Flask’s bankruptcy, United Alloys

18

and the bankruptcy trustee stipulated that United Alloys would release Flask

19

from liability if United Alloys stipulated that it would limit any recovery to

20

what might be obtained from claims against Flask’s insurance carriers,

21

Fireman’s Fund Insurance Company (“Fireman’s Fund”) and Chubb

22

Insurance Company (“Chubb”). (Id. at ¶ 44.)

23

4.

24

Investment Company (“Siskin”), Harold A. Baker (“Baker”), and Harold A.

25

Baker Metal Supply Company, Inc. (Id. at ¶ 46.) These settlements totaled

On August 6, 1993, United Alloys filed the Complaint in this action

On October 20, 1993, Flask answered the Complaint and filed

In 1994, Flask filed bankruptcy. (Id. at ¶ 43.) In 1995, in order to lift

On January 13, 1997, the Court approved the settlements of Siskin

26
27
28

1

The Court’s factual findings reflect facts that were proven at trial by a preponderance of the evidence.
Although the Court cites to evidence to support each factual finding, these citations are not necessarily exhaustive.
In numerous instances, additional portions of the record, which have not been cited by the Court, further
corroborate the factual findings.

2

1

$290,000. (Flask Chemical Corp.’s Post-Trial Findings of Fact and

2

Conclusions of Law at 50 [Doc. No. 301].) As part of the Order

3

Confirming Good Faith Settlement, United Alloys was ordered to place all

4

settlement proceeds in a separate, segregated account for the purpose of

5

funding environmental remediation at the Property. (Final Pretrial

6

Conference Order at ¶ 47.)

7

5.

8

in which it named Southern Pacific Transportation Company (“SPTC”) as a

9

defendant in the action. [Doc. No. 105.]

United Alloys filed a Second Amended Complaint on June 2, 1998,

10

6.

11

Complaint, in which it named BNSF Railway Company (“BNSF”) as a

12

defendant. [Doc. No. 125.] The Third Amended Complaint also named

13

Union Pacific Railroad Company (“Union Pacific”) as a defendant, and

14

alleged that Union Pacific is the successor-in-interest to SPTC. [Doc. No.

15

125.]

16

7.

17

relief under the Resource Conservation and Recovery Act of 1976, 42

18

U.S.C. § 6901 et seq., for lack of subject matter jurisdiction. [Doc. No.

19

255.]

20

8.

21

BNSF and Union Pacific (collectively, “the Railroads”) in the amount of

22

$50,000 and a settlement with Chubb in the amount of $300,000. (4/21/10

23

2 Trial Tr. at 35.)

24

9.

25

action, with the exception of its Carpenter-Presley-Tanner Hazardous

26

Substance Account Act claim. [Doc. No. 262.] Flask also voluntarily

27

dismissed its claims for equitable indemnity and negligence. [Doc. No.

28

261.]

On April 11, 2001, United Alloys filed its Third Amended

On March 26, 2010, the Court dismissed United Alloys’ claim for

The parties stipulated that United Alloys entered a settlement with

United Alloys thereafter voluntarily dismissed its state law causes of

3

1

10.

2

and scope of the parties’ liability for and contribution to contamination at

3

United Alloys’ property located at 900 East Slauson Avenue, Los Angeles,

4

California. Thus, the Court must determine the liability of each party with

5

respect to the contamination, the appropriate allocation of past costs

6

incurred by United Alloys for site investigation and characterization, and

7

whether declaratory relief is appropriate.

8

11.

9

three (63) facts, all of which are incorporated into the Court’s Second

10

Amended Findings of Fact and Conclusions of Law. [Doc. No. 291.]

11

12.

12

(3) expert witnesses. Mr. Timothy Wood (“Wood”), who testified as an

13

expert witness on behalf of United Alloys, rendered opinions regarding the

14

source and nature of the contamination at the Property, the impact of the

15

contamination on soil and groundwater beneath the Property, the need for

16

remediation, and the proper apportionment of liability. Mr. Ulf Lindmark

17

(“Lindmark”), an expert witness on behalf of Flask, testified as to the

18

source and extent of subsurface contamination of volatile organic

19

compounds (“VOCs”). Mr. James T. Wells (“Wells”), who also testified as

20

an expert witness on behalf of Flask, served as a rebuttal expert witness to

21

Wood. The Court also received into evidence the deposition testimony of

22

three (3) lay witnesses and hundreds of exhibits.

23

B.

At trial, the parties sought a judicial determination as to the extent

In the Final Pretrial Conference Order, the parties stipulated to sixty-

The Court heard live testimony from three (3) lay witnesses and three

BACKGROUND OF THE OWNERSHIP OF THE PROPERTY

24

13.

25

Avenue, Los Angeles, California (“the Property”). (Final Pretrial

26

Conference Order at ¶ 1.2) The Property is three hundred sixty-seven (367)

27
28

The dispute concerns real property located at 900 East Slauson

2

The numbers referenced in this Court’s Second Amended Findings of Fact and Conclusions of Law refer
to the stipulated facts which begin on page three (3) and end on page ten (10) of the Final Pretrial Conference
Order. [Doc. No. 291.]

4

1

feet long and two hundred (200) feet wide. (Id. at ¶ 2.) A building (“the

2

Main Building”) occupies approximately half of the Property, which is

3

located in a heavy industrial and commercial manufacturing area. (Exs.

4

205, 4063.)

5

14.

6

1928. (Final Pretrial Conference Order at ¶ 1.)

7

15.

8

the Pacific Electric Railway Company entered into a contract for industry

9

track enabling them to operate in what became the railroad right-of-way on

10

the southern border of the Property. (Id. at ¶ 3.) The railroad right-of-way

11

was a forty-six (46) foot wide easement, half of which occupied the

12

southernmost twenty-three (23) feet of the Property. (Id. at ¶ 4.)

13

16.

14

including Siskin, from 1929 to 1970. (Id. at ¶ 5.)

15

17.

16

chemical distribution facility at the Property in 1969. (Id. at ¶ 6.)

17

18.

Baker purchased the Property from Siskin in 1970. (Id. at ¶ 7.)

18

19.

In November 1972, Flask assumed Reese’s lease and operated a

19

chemical distribution facility at the Property until January 1979. (Id. at ¶ 8;

20

Ex. 418.) By January 1979, Flask had ceased operations at the Property.

21

(Final Pretrial Conference Order at ¶ 21.)

22

20.

23

¶ 20; 4/20/10 Trial Tr. (Donn, R.) at 38; Ex. 420.)

24

21.

25

filed a Certificate of Abandonment for the tracks in the railroad right-of-

26

way. (Final Pretrial Conference Order at ¶ 45.) Since that time, United

The Property was owned by Goodyear Tire and Rubber from 1920 to
In 1924, the Atchison Topeka and Santa Fe Railway Company and

The Property was owned by several different investment companies,
Reese Chemical Company (“Reese”) began leasing and operating a

On January 3, 1979, Baker sold the Property to United Alloys. (Id. at
In 1995, the Railroads and/or their corporate successors-in-interest

27
28

3

Exhibit 406 and Exhibit 201 are both the Green Environmental Phase I site assessment but Exhibit 406
includes appendices.

5

1

Alloys has maintained an exclusive possessory right in the former railroad

2

right-of-way. (Id.)

3

22.

4

(“Cronimet”) along with all of the equipment on the Property owned by

5

United Alloys. (Id. at ¶ 50.) United Alloys continues to own the Property

6

but leases it to Cronimet. (Id. at ¶¶ 51, 62; 4/20/10 Trial Tr. (Donn, R.) at

7

35, 38.) The business has remained essentially the same, but the name was

8

changed to United Alloys and Metals, Inc. (Final Pretrial Conference Order

9

at ¶ 52.) United Alloys and Metals, Inc. continues to operate at the

10
11

In 2002, United Alloys was purchased by Cronimet Corporation

Property. (Id. at ¶ 61.)
C.

FLASK’S OPERATIONS AT THE PROPERTY: 1972 TO 1979

12

23.

13

storage, processing, sales, and distribution at the Property. (Id. at ¶¶ 8, 9.)

14

Beginning in 1972, Robert Heisler (“Heisler”) served as Flask’s operations

15

manager. (Id. at ¶ 15.)

16

24.

17

building, was situated on the eastern half of the Property during Flask’s

18

tenancy. (Exs. 310, 445.)

19

25.

20

(10,000) gallon gasoline tank. (Ex. 310.)

21

26.

22

ground storage tanks (“AST(s)”) to store chlorinated solvents, including

23

perchlorethylene (“PCE”) and trichloroethene (“TCE”). (Final Pretrial

24

Conference Order at ¶ 10; Exs. 310, 445.) Three (3) of these ASTs held

25

twenty thousand (20,000) gallons and one (1) AST held ten thousand

26

(10,000) gallons. (Final Pretrial Conference Order at ¶ 10; Ex. 310.)

27

27.

28

and a retaining wall. (4/23/10 Trial Tr. (Wood, T.) at 160.) The concrete

During its operations from 1972 to 1979, Flask conducted chemical

The Main Building, which was used as a warehouse and operations

In the northwestern area of the Property, Flask used a ten-thousand
In the southwestern area of the Property, Flask used four (4) above-

The ASTs were situated on concrete pads, and surrounded by gravel

6

1

pad served as a support structure for the ASTs, the gravel allowed for

2

infiltration of spills, and the retaining wall enabled spills to be restricted to a

3

predetermined area. (Id. at 160-61.)

4

28.

5

(5,000) gallon underground storage tanks (“UST(s)”) to store flammable

6

material including alcohol, acetone, naptha, and methyl ethyl ketone. (Final

7

Pretrial Conference Order at ¶ 11; Deposition of Robert Heisler (“Heisler

8

Dep.”) at 23; Ex. 310.) The UST area of the Property was approximately

9

two thousand four hundred seventy-five (2,475) square feet. (Final Pretrial

To the north of the AST area, Flask used eighteen (18), five thousand

10

Conference Order at ¶ 12.)

11

29.

12

approximately thirty-five (35) feet long. (Id. at ¶ 13.) The concrete apron

13

contained a two thousand (2,000) gallon blending tank, a filling machine for

14

small containers, pumps, a scale, and a conveyor. (Id. at ¶ 14; 4/23/10 Trial

15

Tr. (Wells, J.) at 25; Ex. 310.)

16

30.

17

the USTs. (Final Pretrial Conference Order at ¶ 22; 4/22/10 Trial Tr.

18

(Lindmark, U.) at 113.) The clarifier is a multi-compartment concrete

19

structure designed to separate oil from water. (4/22/10 Trial Tr. (Lindmark,

20

U.) at 22-23.) It served as a treatment method for wastewater. (Id. at 23.)

21

Flask used the clarifier for a neutralization system for acids that were

22

discharged into the sewer, not for chlorinated solvents. (4/23/10 Trial Tr.

23

(Lindmark, U.) at 84.)

24

31.

25

areas between the ASTs and USTs and north of the USTs. (4/22/10 Trial

26

Tr. (Lindmark, U.) at 113; 4/23/10 Trial Tr. (Wells, J.) at 14-15, 23-24; Ex.

27

310.) At this location, it also used pumps to fill the tanks or tanker trucks

28

that arrived with deliveries. (4/22/10 Trial Tr. (Lindmark, U.) at 113;

The ASTs and the USTs were separated by a concrete apron,

There was also a clarifier located in the area between the ASTs and

Flask mixed, blended, and containerized chlorinated solvents in the

7

1

4/23/10 Trial Tr. (Wells, J.) at 14-15, 23-24; Ex. 310.)

2

32.

3

solvent shipments from railcars via the railroad spur. (Final Pretrial

4

Conference Order at ¶ 16; Exs. 310, 445.) Railcars delivered chlorinated

5

solvents, such as PCE, TCE, and methylene chloride. (Heisler Dep. at 25,

6

60, 65-66, 71-74.) The metal rails were situated on railroad ties. (Id. at 54-

7

55.) Dirt covered the area under and around the metal rails. (Id. at 55.)

8

33.

9

the railcars on the railroad spur and transporting the chemicals onto the

10

Property. (Final Pretrial Conference Order at ¶ 18; Heisler Dep. at 22.)

11

Neither Heisler nor other Flask employees had specific instructions,

12

knowledge, or training as to how to unload the chemicals from these

13

railcars. (Heisler Dep. at 104-05.)

14

34.

15

solvent shipments delivered to the Property by tanker trucks. (Final Pretrial

16

Conference Order at ¶ 16; Heisler Dep. at 22-23.) Occasionally, chemicals

17

were put into drums directly from the trucks because Flask did not have

18

sufficient storage to accommodate the deliveries. (Heisler Dep. at 23; Ex.

19

445.) The drums were stored along the western side of the Main Building.

20

(Ex. 445.)

21

35.

22

spills. (Final Pretrial Conference Order at ¶ 17.)

23

36.

24

to the Property by railcars. (Id. at ¶ 19; Heisler Dep. at 60, 65-66, 71-74.)

25

In the first incident, approximately two (2) to five (5) gallons of PCE spilled

26

when Flask’s employees tried to open the railcar to transfer the PCE onto

27

the Property. (Heisler Dep. at 60.) In two (2) other incidents, Flask’s

28

employees caused approximately five (5) to ten (10) gallons of PCE to be

On the southern border of the Property, Flask received chemical and

Flask’s employees were responsible for offloading chemicals from

Flask’s employees were also responsible for unloading chemical and

During Flask’s operations on the Property, there were accidental
Specifically, there were four accidental spills of chemicals delivered

8

1

spilled during the disconnection of a hose attached between a pump and the

2

railcar. (Id. at 65-66, 73-74.) In the final incident, Flask employees caused

3

approximately five (5) to ten (10) gallons of methylene chloride to be

4

spilled while disconnecting the hose attached between a pump and the

5

railcar. (Id. at 71-73.) During these incidents, the chemicals spilled onto

6

unpaved ground and Flask made no effort to clean up the spills. (Id. at 63,

7

66-67, 72.) These incidents were also not reported to any agency or entity.

8

(Id. at 63, 67, 73-74.)

9

37.

There were also chlorinated solvent spills during the period in which

10

Flask employees were learning how to transfer chemicals from the tanker

11

trucks to Flask’s chemical containers. (Id. at 59-60.)

12

38.

13

spills of approximately twenty (20) gallons of chemicals on each occasion

14

inside of the facility. (Id. at 56-57.)

15

39.

16

containing PCE that resulted in a spill of five hundred (500) gallons. (Id. at

17

79-80.)

18

40.

19

Pretrial Conference Order at ¶ 21.) In or around January 1979, it removed

20

the ASTs from the Property and took them to its next place of business. (Id.

21

at ¶ 25.)

22

D.

23

On other occasions, forklifts punctured drums of chemicals causing

Finally, on another occasion, a vandal opened the valves on an AST

By January 1979, Flask had ceased operations at the Property. (Final

PRESENT

UNITED ALLOYS OPERATIONS AT THE PROPERTY: 1979 TO

24

41.

25

¶ 20; 4/20/10 Trial Tr. (Donn, R.) at 38; Ex. 420.) In 1980, United Alloys

26

was owned by Mr. Ron Donn (“Donn”), Mr. Allan Sacks, and Mr. Arthur

27

Sacks. (Final Pretrial Conference Order at ¶ 27; 4/20/10 Trial Tr. (Donn,

28

R.) at 55.)

On January 3, 1979, Baker sold the Property to United Alloys. (Id. at

9

1

42.

2

refurbishing business. (Final Pretrial Conference Order at ¶ 26.) Site

3

activities included receiving, sorting, stripping, crushing, processing, and

4

re-selling high-grade alloy metals, such as zirconium, nickel, titanium,

5

cobalt, and copper. (Exs. 2074, 6715.)

6

43.

7

the Property consisted of the Main Building and a work yard (“the Yard”)

8

occupying the western half of the Property. (Final Pretrial Conference

9

Order at ¶ 24.)

United Alloys used the Property for a scrap metal recycling and

At the time of the sale of the Property from Baker to United Alloys,

10

44.

11

portion of the Property between the AST area and UST area. (Id. at ¶ 22;

12

Ex. 312.) The southern clarifier is connected to the sewer main running

13

under the former railroad right-of-way. (Final Pretrial Conference Order at

14

¶ 23.)

15

45.

16

made numerous changes to the Property, including the removal, in 1980, of

17

the eighteen (18) USTs used by Flask during its tenancy. (Id. at ¶ 28;

18

6/2/10 Trial Tr. (Wood, T.) at 6; Ex. 410.) During the excavation of the

19

USTs, there were no indications of soil saturation or vapors emanating from

20

the soil. (Deposition of Darron H. Evans (“Evans Dep.”) at 27-28, 30, 46.)

21

However, the native soil was not tested for the presence or absence of

22

contaminants. (Id. at 42; 4/22/10 Trial Tr. (Lindmark, U.) at 142; 6/2/10

23

Trial Tr. (Lindmark, U.) at 171.) Likewise, the import fill did not emit any

24

strange odors but no samples were taken of the import soil used in

25

connection with the soil excavation. (Evans Dep. at 36-37; 4/23/10 Trial

26

Tr. (Wells, J.) at 38; 6/2/10 Trial Tr. (Lindmark, U.) at 171-72.)

There was also one clarifier, which was located in the southern

Following United Alloys’ purchase of the Property, United Alloys

27
28

4
5

Exhibit 207 and Exhibit 449 are the Remedial Action Plan but Exhibit 449 includes appendices.
Exhibit 671 and Exhibit 226 are the identical Voluntary Cleanup Agreement.

10

1

46.

2

Building. (Final Pretrial Conference Order at ¶ 29; Ex. 312.) A one

3

thousand (1,000) gallon PCE storage tank was connected to the degreasing

4

system. (Final Pretrial Conference Order at ¶ 30; Ex. 312.) From 1980 to

5

1997, PCE was used to clean certain metals and strip off any impurities that

6

had formed on the metal. (Final Pretrial Conference Order at ¶ 31; Exs.

7

439, 671.) There was a spill in the degreasing room. (4/21/10 2 Trial Tr.

8

(Lindmark, U.) at 48; 4/22/10 Trial Tr. (Lindmark, U.) at 114-15, 118.)

9

47.

In 1980, a degreasing system was installed inside of the Main

The purchasing records from 1982 through 1984 demonstrate that

10

United Alloys purchased between two thousand seven hundred (2,700)

11

gallons and approximately seven thousand seven hundred (7,700) gallons of

12

PCE. (6/2/10 Trial Tr. (Wood, T.) at 32; Ex. 438.) United Alloys’ permit

13

with the South Coast Air Quality Management District limited emissions of

14

PCE to eight thousand (8,000) gallons of use per year. (6/2/10 Trial Tr.

15

(Wood, T.) at 32-33.)

16

48.

17

attempted to deliver TCE to United Alloys. (4/21/10 2 Trial Tr. (Lindmark,

18

U.) at 54; Ex. 250.) A 55-gallon drum of TCE spilled into the storm drain

19

catch basin on Slauson Avenue. (4/23/10 Trial Tr. (Wood, T.) at 163-65;

20

Ex. 250.) The catch basin, which was clogged, prevented any waste from

21

reaching the flood control channel. (4/23/10 Trial Tr. (Wood, T.) at 165;

22

Ex. 250.)

23

49.

24

underground tank to store gasoline for its trucks. (Final Pretrial Conference

25

Order at ¶ 32.) The gasoline tank was located in the northern area of the

26

Property, roughly thirty-five (35) feet from the northern property line. (Id.

27

at ¶ 33.) United Alloys removed this gasoline tank in 1990. (Id. at ¶ 34;

28

Ex. 409.) There was no evidence of leakage or spillage during the removal.

On April 13, 1984, there was a spill at the Property when a third party

Until 1990, United Alloys used a ten thousand (10,000) gallon

11

1

(Ex. 409.)

2

50.

3

the Property as part of a storm water system. (Final Pretrial Conference

4

Order at ¶ 35; Ex. 312.) It is located approximately twenty (20) feet from

5

the northern border of the Property. (Final Pretrial Conference Order at ¶

6

35.)

7

51.

8

clarifiers and the degreaser. (Deposition of Arthur Castellanos

9

(“Castellanos Dep.”) at 18-19; 4/23/10 Trial Tr. (Wells, J.) at 68; 6/2/10

10

Trial Tr. (Wood, T.) at 16.) Sludge is the viscous mixture of grease and

11

PCE, and perhaps even metal filings, left behind due to the cleaning of

12

metal parts, which are often oily or greasy. (4/23/10 Trial Tr. (Wells, J.) at

13

69; 6/2/10 Trial Tr. (Wood, T.) at 35.)

14

52.

15

gallon drums and stored on the Property outside of the Main Building, and

16

south of the degreasing room. (Castellanos Dep. at 50-51, Ex. 9.) The

17

sludge was removed, tested, and manifested for offsite disposal every ninety

18

(90) days as required by law. (4/23/10 Trial Tr. (Simpson, T.) at 113-14;

19

6/2/10 Trial Tr. (Wood, T.) at 16-17.) Laboratory reports from 1991 to

20

1992 indicated that PCE was found in the clarifiers and the degreaser.

21

(Castellanos Dep. at 12, 16-19, 28, 34, 51-54, 56-57; 4/22/10 Trial Tr.

22

(Lindmark, U.) at 9-18; Exs. 242-47.)

23

53.

24

five hundred twelve (108,512) pounds per year of PCE into the atmosphere

25

through the degreaser. (4/23/10 Trial Tr. (Wells, J.) at 67-68; Ex. 3016.)

26

Another four thousand two hundred (4,200) pounds per year of PCE were

In 1990, United Alloys installed a clarifier in the northern portion of

United Alloys’ operations caused sludge waste to collect in the

Sludge from the clarifiers and the degreaser was packed into 55-

United Alloys emitted approximately one hundred eight thousand

27
28

6

Exhibit 301 and Exhibit 239 are excerpts from a longer Simon Health Risk Assessment report. Portions of
Exhibit 239, however, are highlighted. Exhibit 411 is the full Simon Health Risk Assessment report.

12

1

lost to adsorption onto the metal shavings cleaned through the degreasing

2

process. (4/23/10 Trial Tr. (Wells, J.) at 68-69; Ex. 301.)

3

54.

4

PCE per year until 1997. (Final Pretrial Conference Order at ¶ 31; 4/22/10

5

Trial Tr. (Wells, J.) at 172-73.)

6

55.

7

adsorber were approved by the South Coast Air Quality Management

8

District. (4/23/10 Trial Tr. (Wells, J.) at 14; Ex. 439.)

9
10

E.

United Alloys used no more than eight thousand (8,000) gallons of

Vapor emissions of PCE from the storage tank, degreaser, and

ENVIRONMENTAL SITE INVESTIGATION AND REGULATORY

OVERSIGHT AT THE PROPERTY

11

56.

12

the Property may be contaminated after attending institute meetings

13

concerning the possible contamination of sites operated by chemical

14

companies. (4/20/10 Trial Tr. (Donn, R.) at 35, 38.)

15

57.

16

performed a Phase I site assessment of the Property. (Id. at 40; Final

17

Pretrial Conference Order at ¶ 36; Ex. 406.) Green Environmental’s

18

investigation found PCE and TCE contamination in the soil at multiple

19

locations throughout the Property. (Final Pretrial Conference Order at ¶ 37;

20

Ex. 406.) Green Environmental identified the onsite handling of metals, the

21

previous onsite storage and control of hydrocarbons, and hazardous material

22

problems in the immediate vicinity as causes for concern. (Ex. 406.) Green

23

Environmental recommended that an additional investigation be conducted

24

at the Property. (Final Pretrial Conference Order at ¶ 38.)

25

58.

26

Company (“WEECO”) performed a Phase II investigation at the Property,

27

taking numerous soil samples under the Main Building and in the Yard. (Id.

In 1992, Donn, the then-owner of United Alloys, came to suspect that

That same year, Green Environmental, Inc. (“Green Environmental”)

The following year, in 1993, Western Environmental Engineering

28
13

1

at ¶ 39; 4/20/10 Trial Tr. (Donn, R.) at 41-42; Ex. 4077.) WEECO drilled

2

twenty-two (22) exploratory borings to depths between ten (10) and twenty-

3

two (22) feet below ground surface. (Ex. 407.) WEECO concluded that the

4

contamination of PCE and TCE was from a common source. (Id.) WEECO

5

further concluded that there appeared to have been a release of solvents in

6

the southwestern corner of the Property, which served as the AST area and

7

UST area during Flask’s tenancy. (Id.; see Findings of Fact Nos. 26, 28)

8

WEECO recommended that further exploration be performed at the

9

Property through the installation, sampling, and analysis of additional

10

borings. (Ex. 407)

11

59.

12

was notified of the contamination at the Property. (4/23/10 Trial Tr.

13

(Simpson, T.) at 108, 119.)

14

60.

15

investigate the vertical and lateral extent of contamination at the Property

16

and whether groundwater had been impacted. (Final Pretrial Conference

17

Order at ¶ 42; 4/20/10 Trial Tr. (Donn, R.) at 43; 4/20/10 Trial Tr.

18

(Simpson, T.) at 155; 4/23/10 Trial Tr. (Simpson, T.) at 107.) Mr. Timothy

19

Simpson (“Simpson”) has been the principal in charge of the United Alloys

20

project since 1994. (4/20/10 Trial Tr. (Simpson, T.) at 155.)

21

61.

22

analysis to better understand site conditions and the source of the

23

contamination. (Id. at 156.)

24

62.

25

Report to the California Regional Water Quality Control Board (“Regional

26

Board”). (Id.; Final Pretrial Conference Order at ¶ 48; Ex. 569.) The report

27

presented the findings from exploratory drilling, soil sampling, soil gas

28

7

Shortly after the WEECO report was published, the fire department

In 1994, AMEC Geomatrix, Inc. (“Geomatrix”) was hired to

Geomatrix conducted additional soil and soil gas sampling and

On October 1, 1999, Geomatrix submitted its Subsurface Assessment

Exhibit 407 and Exhibit 202 are the WEECO Phase II investigation but Exhibit 407 includes appendices.

14

1

sampling, monitoring well installation, and groundwater sampling. (Ex.

2

569.) PCE and TCE were detected in soil, soil gas, and groundwater

3

samples. (Id.)

4

63.

5

Regional Board’s Spills, Leaks, Investigations and Cleanups (“SLIC”)

6

Program, wherein the Regional Board appointed a project manager and

7

United Alloys was required to pay oversight fees through a fee-for-service

8

agreement. (4/20/10 Trial Tr. (Donn, R.) at 44-45; 4/20/10 Trial Tr.

9

(Simpson, T.) at 157-58; Exs. 206, 432.)

As a result of the 1999 report, United Alloys became part of the

10

64.

11

the Property. (Ex. 203.) Groundwater monitoring wells are necessary for

12

several reasons, such as determining whether: (1) the site is affecting

13

groundwater; (2) there is a regional contamination issue; and (3) certain

14

remedies are effective. (4/22/10 Trial Tr. (Lindmark, U.) at 96-97.)

15

65.

16

soil borings. (Ex. 203.)

17

66.

18

Work Plan to the Regional Board which explained that there were

19

significant releases of chlorinated solvents in the southwestern corner of the

20

Property, the location of the ASTs and USTs during Flask’s tenancy.

21

(4/20/10 Trial Tr. (Simpson, T.) at 158-59.)

22

67.

23

downgradient wells to the north of the Property. (Id. at 160, 163.) The

24

2004 Offsite Monitoring Well Installation Report described the analysis of

25

offsite monitoring wells installed to delineate the extent of the groundwater

26

plume underneath the Property. (Id. at 159-61; Ex. 575.)

27

68.

28

monitoring wells and report the results to the Regional Board on a quarterly

Additional groundwater monitoring wells were installed throughout

The Regional Board also instructed Geomatrix to install additional
Geomatrix submitted a 2002 Data Transmittal Summary Assessment

Thereafter, the Regional Board directed Geomatrix to install

The Regional Board required that Geomatrix collect samples from all

15

1

basis. (4/20/10 Trial Tr. (Simpson, T.) at 160-61.) In the 2005 First

2

Quarter Groundwater Monitoring Report, in particular, Geomatrix found

3

that groundwater moved from south to north, almost perpendicular to

4

Slauson Avenue. (Id. at 162.) It also found that groundwater moved rather

5

slowly and that VOCs in groundwater were moving offsite. (Id.)

6

69.

7

upgradient monitoring wells. (Id. at 162-63.) Geomatrix concluded that the

8

first two upgradient wells, which were installed in the southern portion on

9

the Property, were too close to the southwestern corner, the location of the

10

ASTs and USTs during Flask’s tenancy. (Id. at 163.) Geomatrix therefore

11

installed an additional upgradient monitoring well on an adjacent

12

landowner’s property. (Id.) The first analysis of samples taken from this

13

monitoring well indicated fairly low concentrations of PCE and TCE. (Id.

14

at 164.) However, Geomatrix collected only one groundwater sample from

15

this monitoring well, on November 15, 2000, because United Alloys lost

16

access to the well due to a dispute with the property owner. (4/21/10 1 Trial

17

Tr. (Simpson, T.) at 32-33.) There was an increase in both PCE and TCE in

18

a sample collected on December 21, 2009. (Id. at 44-45, 49; Ex. 216.)

19

Thus, the upgradient monitoring well reflected higher concentrations of

20

contamination than the downgradient monitoring wells that Geomatrix

21

tested at the same depth. (Id. at 46-47.)

22

70.

23

Action Work Plan, which addressed groundwater quality and soil

24

remediation, to the Regional Board. (Final Pretrial Conference Order at ¶

25

53; Ex. 2058.) Site groundwater was predominantly impacted by PCE and

26

TCE with lower concentrations of VOCs also present in groundwater

The Regional Board thereafter required that Geomatrix install

On June 2, 2005, Geomatrix submitted its Conceptual Remedial

27
28

8

Exhibit 205 and Exhibit 448 are the Conceptual Remedial Action Work Plan but Exhibit 448 includes
attachments.

16

1

samples collected from onsite monitoring wells. (Ex. 205.) Attenuation of

2

PCE and TCE appeared to be occurring with distance but significant

3

biodegradation of PCE and TCE was not occurring in the groundwater at

4

the Property. (Id.) Geomatrix proposed the use of the bio-augmentation

5

method, which consisted of the addition of a carbon substrate and nutrient

6

amendments, to remediate groundwater containing VOCs after performing a

7

bench-scale study followed by a pilot-scale study. (Id.)

8

71.

9

soil vapor extraction method, the United States Environmental Protection

With respect to soil remediation, Geomatrix proposed the use of the

10

Agency’s presumptive remedy. (Id.) Soil vapor extraction “is implemented

11

by applying a vacuum using a vacuum blower to extraction wells screened

12

in the vadose (or unsaturated) zone where VOCs are present in soil and soil

13

vapor. The vacuum causes VOCs in soil to be volatilized from soil and the

14

VOC-laden vapor to be drawn to the extraction wells, where the vapors are

15

collected and conveyed to the surface by the vacuum blower. The VOC-

16

laden vapor is then treated to remove the VOCs prior to venting the treated

17

vapor to the atmosphere.” (Id.)

18

72.

19

an estimate regarding the cleanup of the site, including soil and

20

groundwater remediation, and eliminate a very expensive pump-and-treat

21

system as a potential remedy. (4/20/10 Trial Tr. (Simpson, T.) at 164-65.)

22

The Regional Board suggested that Geomatrix investigate the bio-

23

augmentation approach identified in the Conceptual Remedial Action Plan.

24

(4/21/10 1 Trial Tr. (Simpson, T.) at 16.)

25

73.

26

stating that it concurred with the Conceptual Remedial Action Work Plan

27

and that a subsequent Remedial Action Plan must be submitted to the

28

Regional Board staff for approval. (Ex. 206.) It also instructed United

The purpose of the Conceptual Remedial Action Plan was to provide

On July 19, 2005, the Regional Board sent a letter to United Alloys

17

1

Alloys to refrain from initiating any field work until the Regional Board

2

approved the complete Remedial Action Plan for the Property. (Id.)

3

74.

4

(“RAP”) for the Property to the Regional Board. (Final Pretrial Conference

5

Order at ¶ 54; Ex. 207.) The predominant VOCs detected in soil gas, soil,

6

and groundwater samples were PCE and TCE. (Ex. 207.) The RAP

7

proposed a two-fold approach for remediation of VOCs at the Property: (1)

8

removal of source area VOCs from the vadose zone using soil vapor

9

extraction; and (2) degradation of VOC mass in the groundwater using bio-

On September 20, 2005, Geomatrix sent its Remedial Action Plan

10

augmentation. (Id.) The RAP also provided that a soil vapor extraction

11

pilot study and bio-augmentation studies were to be conducted at the

12

Property. (Id.) Geomatrix did not include any data from the 1993 report

13

conducted by WEECO because it did not reflect a comprehensive

14

investigation. (4/21/10 1 Trial Tr. (Simpson, T.) at 25.) Upon request, it

15

disclosed the WEECO data to the requesting public agency, either the

16

Regional Board or the DTSC. (Id. at 25-26.)

17

75.

18

Action Work Plan Review Letter and Site Assessment Work Plan to the

19

Regional Board. (Final Pretrial Conference Order at ¶ 55; Ex. 208.) The

20

letter provided Geomatrix’s responses to the Regional Board staff’s

21

comments and questions. (Ex. 208.) Among other things, the Regional

22

Board sought further information regarding soil gas and soil samples, a

23

comprehensive groundwater investigation to determine the extent of the

24

contaminant plume beneath the Property, and additional information

25

regarding the soil vapor extraction pilot study. (Id.) The Regional Board

26

also approved the bio-augmentation pilot study for groundwater beneath the

27

Property. (Id.)

28

76.

On August 16, 2006, Geomatrix sent its Responses to Remedial

On October 19, 2006, regulatory oversight was transferred from the
18

1

Regional Board to the California Department of Toxic Substance Control

2

(“DTSC”). (Final Pretrial Conference Order at ¶ 56; 4/20/10 Trial Tr.

3

(Krug, R.) at 114.)

4

77.

5

DTSC, is the project manager for the Property. (4/20/10 Trial Tr. at (Krug,

6

R.) at 113-14.)

7

78.

8

(4/20/10 Trial Tr. at (Krug, R.) at 115, Ex. 671.) The DTSC needed to

9

review previous reports to make an evaluation and determination as to the

10

characterization of the contamination at the Property. (4/20/10 Trial Tr. at

11

(Krug, R.) at 120.)

12

79.

13

which were reviewed by Krug. (Id. at 119-20; 4/20/10 Trial Tr. (Simpson,

14

T.) at 168-69.)

15

80.

16

Agreement (“VCA”) with the DTSC. (Final Pretrial Conference Order at ¶

17

57; 4/20/10 Trial Tr. at (Krug, R.) at 114; Ex. 671.) The VCA explained

18

that reports indicated that the soil and groundwater at the Property were

19

contaminated with hazardous substances, including PCE and TCE. (Ex.

20

671.) The VCA set forth the following objectives: (1) United Alloys must

21

implement the RAP under the oversight of the DTSC; (2) the DTSC must

22

determine what additional work, if any, would be required to complete the

23

investigation of the Property; and (3) the DTSC must obtain reimbursement

24

from United Alloys for the DTSC’s oversight costs. (Id.) The VCA further

25

provided that the DTSC shall review and oversee the response activities

26

conducted by United Alloys and all work shall be performed consistent with

27

Health and Safety Code Section 25300 et seq., the national contingency

28

plan, the United States Environmental Protection Agency and the DTSC

Robert Krug (“Krug”), a Hazardous Substances Scientist for the

The DTSC’s role is to oversee site investigation and remediation.

Therefore, Geomatrix resubmitted its prior reports to the DTSC,

In January 2007, United Alloys entered into a Voluntary Cleanup

19

1

Superfund guidance documents regarding site investigation and

2

remediation. (Id.)

3

81.

4

Ron Hayes from Compliance Administrators and Project Services

5

(“CAPS”), who provides technical guidance and assistance with respect to

6

the site investigation of the Property. (4/20/10 Trial Tr. (Donn, R.) at 50.)

7

82.

8

Plan to the DTSC enumerating the activities proposed in the original Site

9

Assessment Work Plan dated August 16, 2006, and revisions in accordance

10

with comments provided by the DTSC, which were required for approval of

11

the activities proposed in the original Site Assessment Work Plan. (Final

12

Pretrial Conference Order at ¶ 58; Ex. 455.)

13

83.

14

Engineering Geologist of DTSC, sent a memorandum to Krug regarding the

15

July 6, 2007 Revised Site Assessment Work Plan. (4/20 Trial. Tr. (Donn,

16

R.) at 89-90; Ex. 2099.) Campbell concluded that (1) the soil gas, soil

17

matrix, and groundwater data had features indicating at least two different

18

sources of contamination in soil and groundwater; (2) some VOC

19

contamination in groundwater may be part of a larger local or regional

20

plume; and (3) the proposed Work Plan was acceptable provided that

21

Geomatrix respond to the comments addressed in the memorandum. (Ex.

22

209.)

23

84.

24

Work Plan and provided comments to be addressed prior to the initiation of

25

the soil vapor extraction pilot study. (Ex. 210.)

26

85.

Since approximately 2005, United Alloys has also worked with Mr.

On July 6, 2007, Geomatrix sent its Revised Site Assessment Work

On September 21, 2007, Alice Campbell (“Campbell”), Senior

On September 21, 2007, the DTSC approved the Site Assessment

On March 31, 2008, Geomatrix sent its Revised Site Assessment

27
28

9

Exhibit 209 and Exhibit 294 are the same memorandum from Campbell. Portions of Exhibit 294,
however, are highlighted and Exhibit 209 has an additional page.

20

1

Work Plan to the DTSC. (Final Pretrial Conference Order at ¶ 59; Ex. 456.)

2

The Revised Site Assessment Work Plan was based on the July 6, 2007 Site

3

Assessment Work Plan, which was updated in accordance with the DTSC’s

4

comments and Geomatrix’s responses. (Ex. 456.)

5

86.

6

and Extended Soil Vapor Extraction Pilot Study Report to the DTSC.

7

(Final Pretrial Conference Order at ¶ 60; Ex. 442.) The report summarized

8

the data collection efforts of the extended pilot study. (4/20/10 Trial Tr.

9

(Simpson, T.) at 171-73; Ex. 442.) It demonstrated that soil vapor

On February 22, 2010, Geomatrix sent its Additional Site Assessment

10

extraction was a feasible remedy for the Property. (4/20/10 Trial Tr.

11

(Simpson, T.) at 172.)

12

87.

13

the direction of the Regional Board and the DTSC. (Id. at 173.) The DTSC

14

relied on reports conducted prior to the involvement of these public

15

agencies to characterize the site contamination. (4/20/10 Trial Tr. (Krug,

16

R.) at 120.)

17

88.

18

national contingency plan. (Id. at 120-21; 4/20/10 Trial Tr. (Simpson, T.) at

19

174.)

20

89.

21

following cleanup actions: (1) additional site investigation, including

22

installation of additional groundwater wells; (2) remediation. The soil

23

vapor extraction system is a presumptive remedy; (3) continued quarterly

24

groundwater monitoring to evaluate the effectiveness of the soil vapor

25

extraction remedy.” (6/3/10 Trial Tr. at 49-50.)

26

F.

The work performed by Geomatrix at the Property was conducted at

The work performed on the Property has been compliant with the

The parties stipulated that “the DTSC will, for certain, require the

RESPONSE COSTS INCURRED TO DATE

27

90.

28

in connection with the Phase I site assessment of the Property. (4/20/10

United Alloys paid Green Environmental $4,075 for work performed

21

1

Trial Tr. (Donn, J.) at 40-41; Exs. 408, 426.)

2

91.

3

connection with the Phase II investigation at the Property. (4/20/10 Trial

4

Tr. (Donn, R.) at 42; Exs. 426-29.)

5

92.

6

Property through 2002. (4/20/10 Trial Tr. (Donn, R.) at 43; Ex. 430; Post

7

Trial Brief of Plaintiff and Counter-defendant United Alloys, Inc. Re:

8

Prejudgment Interest (“United Alloys Br. Re: Prejudgment Interest”) at 7

9

[Doc. No. 322]; Declaration of Paul D. Rasmussen in Support of Post Trial

United Alloys paid WEECO $24,100 for work performed in

United Alloys paid Geomatrix $240,373.51 for work conducted at the

10

Brief of Plaintiff and Counter-defendant United Alloys, Inc. Re:

11

Prejudgment Interest (“Rasmussen Decl.”) at ¶ 14 [Doc. No. 322-1]; Post

12

Trial Brief of Flask Chemical Corporation in Response to United Alloys,

13

Inc.’s Brief Regarding Prejudgment Interest (“Flask’s Br. Re: Prejudgment

14

Interest”) at 3 [Doc. No. 325].)

15

93.

16

Insurance Company and Chubb Insurance Company, assumed responsibility

17

for payment for Geomatrix’s services.10 (4/20/10 Trial Tr. (Donn, R.) at 43-

18

44; Ex. 430.) United Alloys’ insurers paid $1,283,722.81 directly to

19

Geomatrix for its services. (4/20/10 Trial Tr. (Donn, R.) at 43-44; Ex. 430;

20

United Alloys, Inc. Trial Br. at 14-15 [Doc. No. 271].)

21

94.

22

oversight of the Property for the period from 2000 to 2007. (4/20/10 Trial

23

Tr. (Donn, R.) at 45-47; Ex. 432.) Due to a dispute with the Regional

24

Board, certain outstanding invoices have not been paid. (4/20/10 Trial Tr.

25

(Donn, R.) at 47.) United Alloys owes the Regional Board an additional

26

$21,414.58 for its regulatory oversight of the Property. (Ex. 432.)

In 2002 and thereafter, United Alloys’ insurers, Fireman’s Fund

United Alloys paid the Regional Board $6,376.34 for its regulatory

27
28

10

Each party had its own insurance policies with Fireman’s Fund Insurance Company and Chubb Insurance
Company.

22

1

95.

2

$25,695.00, to the DTSC for its regulatory oversight of the Property.

3

(4/20/10 Trial Tr. (Donn, R.) at 48-49; Ex. 671.)

4

96.

5

$54,631.79. (Ex. 433.) United Alloys has at least one outstanding invoice

6

owed to the DTSC. (4/20/10 Trial Tr. (Donn, R.) at 49.) The DTSC

7

continues to incur oversight costs in connection with this matter. (4/20/10

8

Trial Tr. (Krug, R.) at 117.)

9

97.

United Alloys paid a fifty percent (50%) deposit, which amounted to

The total amount of the invoices from the DTSC to United Alloys is

United Alloys paid CAPS $101,862.00 for its consultant work. (Ex.

10

431; United Alloys Br. Re: Prejudgment Interest at 7; Rasmussen Decl. at ¶

11

13; Flask’s Br. Re: Prejudgment Interest at 3.)

12

G.

SUBSURFACE LITHOLOGY OF THE PROPERTY

13

98.

14

vertical migration of contaminants. (4/20/10 Trial Tr. (Krug, R.) at 137-38;

15

4/23/10 Trial Tr. (Simpson, T.) at 133; Exs. 205, 212, 326.) The thickness

16

of the fine grain layer varies across the Property. (4/22/10 Trial Tr.

17

(Lindmark, U.) at 32; Exs. 212, 326.) In the northern portion of the

18

Property, the thickness of the fine grain layer is approximately twenty (20)

19

feet whereas in the southern portion of the Property, it is less than ten (10)

20

feet. (4/22/10 Trial Tr. (Lindmark, U.) at 32; Exs. 212, 326.)

21

99.

22

(4/22/10 Trial Tr. (Lindmark, U.) at 33.) Contaminants generally travel

23

vertically, not laterally, through the sandy soils. (Id.; 4/22/10 Trial Tr.

24

(Wells, J.) at 178.) Because the fine grain layer has a much greater density,

25

it prevents contaminants from continuing to migrate vertically in the same

26

way that such contaminants migrate through sandy soils. (4/22/10 Trial Tr.

27

(Lindmark, U.) at 65; 4/22/10 Trial Tr. (Wells, J.) at 178; 6/2/10 Trial Tr.

28

(Wood, T.) at 74.)

There is a 35- to 40-foot lens -- the fine grain layer -- impeding the

The soils above this fine grain layer typically consist of sandy soils.

23

1

100. Therefore, the chlorinated solvents travel vertically until they reach

2

the fine grain layer. (4/22/10 Trial Tr. (Lindmark, U.) at 33; 4/22/10 Trial

3

Tr. (Wells, J.) at 178; 4/23/10 Trial Tr. (Wells, J.) at 48.) At that point, the

4

fine grain layer acts as a sponge and absorbs the contaminants. (4/23/10

5

Trial Tr. (Wells, J.) at 50.) In the fine grain layer, contaminants disperse in

6

all directions, particularly in the direction of the fine grain layer slope, if

7

one exists. (4/22/10 Trial Tr. (Lindmark, U.) at 33, 65; 4/23/10 Trial Tr.

8

(Wells, J.) at 48-49; 6/2/10 Trial Tr. (Wood, T.) at 74.) Over time, the

9

contaminants can extend through the fine grain layer which causes a very

10

high concentration of the contaminants in the fine grain layer. (4/22/10

11

Trial Tr. (Lindmark, U.) at 65.) The fine grain layer, however, may not

12

retard all of the contaminants from continuing to migrate vertically into

13

deeper soil. (Id.) The migration of contaminants is an extremely slow

14

process that takes a significant amount of time to occur. (4/23/10 Trial Tr.

15

(Wells, J.) at 54.)

16

101. The shallowest groundwater beneath the Property occurs at a depth of

17

approximately one hundred forty (140) to one hundred forty-five (145) feet

18

below ground surface. (Exs. 205, 207.) Groundwater generally flows from

19

south to north below the Property. (Final Pretrial Conference Order at ¶ 49;

20

4/20/10 Trial Tr. (Simpson, T.) at 162; 4/22/10 Trial Tr. (Wells, J.) at 158,

21

Ex. 207.) There is not a significant gradient; therefore, the groundwater is

22

moving relatively slowly. (4/20/10 Trial Tr. (Simpson, T.) at 162.)

23

H.

CURRENT CONDITIONS AT THE PROPERTY

24

102. As part of the site investigation, the entire site, which is relatively

25

small, has been peppered with boring locations. (4/21/10 1 Trial Tr.

26

(Simpson, T.) at 52; Exs. 313-14.) Geomatrix has installed soil borings

27

(“GMX” or “B”), vapor monitoring probes (“VP” or “vapor probes”), soil

28

vapor extraction wells (“VEW” or “vapor extraction wells”), and
24

1

groundwater monitoring wells (“MW”) to determine the extent of the

2

contamination at the Property. (Ex. 214.)

3

103. Soil, soil gas, and groundwater samples have been taken from these

4

locations and analyzed by Geomatrix. (4/20/10 Trial Tr. (Simpson, T.) at

5

156, 160-61; 4/21/10 1 Trial Tr. (Simpson, T.) at 52; Exs. 203, 205.)

6

104. The chemicals of concern at the Property are mostly VOCs,

7

specifically PCE and TCE, which have been detected in soil and

8

groundwater. (4/20/10 Trial Tr. (Krug, R.) at 118-119, 141-42; 4/22/10

9

Trial Tr. (Lindmark, U.) at 86; Ex. 207.) It is possible that at least some

10

portion of the increase in TCE concentration at the Property is attributable

11

to the degradation of PCE to TCE. (4/22/10 Trial Tr. (Lindmark, U.) at 11.)

12

105. Geomatrix and the DTSC have investigated potential upgradient

13

sources of contamination but no such sources have been identified as

14

contributing to the contamination at the Property. (4/21/10 1 Trial Tr.

15

(Simpson, T.) at 24, 31; 4/22/10 Trial Tr. (Lindmark, U.) at 138; 4/23/10

16

Trial Tr. (Simpson, T.) at 118; Exs. 507, 523, 558, 636, 641-42.)

17

Geomatrix, which had limited funding and required authorization from

18

United Alloys’ insurers to conduct its work, determined that it was more

19

cost-effective to use the available funds to investigate site conditions and

20

initiate a pilot study rather than divert resources to explore potential

21

upgradient sources. (4/21/10 1 Trial Tr. (Simpson, T.) at 33-34.)

22

106. Nonetheless, the site has not yet been fully investigated or

23

characterized. (4/20/10 Trial Tr. (Krug, R.) at 124.) The DTSC is focused

24

on soil vapor extraction and has tabled the issue of groundwater

25

investigation for future discussions. (Id. at 141; 4/21/10 1 Trial Tr.

26

(Simpson, T.) at 40.) Additional groundwater monitoring wells are

27

necessary to determine the extent to which groundwater is impacted.

28

(4/20/10 Trial Tr. (Krug, R.) at 142.) Thus, dilution is currently the only
25

1

form of contaminant level reduction with respect to groundwater. (4/21/10

2

1 Trial Tr. (Simpson, T.) at 43.)

3

107. Although the entire Property is contaminated, (id. at 26; 4/20/10 Trial

4

Tr. (Krug, R.) at 118), the highest concentration of soil and soil vapor

5

contamination is in the southwestern corner of the Property, the location

6

where the ASTs and USTs were located. (4/22/10 Trial Tr. (Lindmark, U.)

7

at 88; 4/23/10 Trial Tr. (Wells, J.) at 47-48; 4/23/10 Trial Tr. (Simpson, T.)

8

at 137; Exs. 319-21.)

9

108. The highest detection of PCE at the Property is at VP-05, at fifteen

10

(15) feet, which is directly in the AST area and near where Flask blended

11

and containerized chlorinated solvents. (4/23/10 Trial Tr. (Wells, J.) at 46-

12

47; Ex. 214.) There are also high detections of PCE in the fine grain layer

13

at VEW-16, VEW-17, and VEW-18. (4/23/10 Trial Tr. (Wells, J.) at 47;

14

Exs. 214, 319.)

15

109. In addition, substantial chlorinated solvent contamination occurred in

16

the top fifteen (15) feet of soil and in the fine grain layer in and around the

17

former UST area. (Exs. 214, 317, 319.) For instance, GMX-5, which is

18

located slightly north of the AST area, evidenced the highest concentration

19

of PCE in the fine grain layer but also a substantial level of PCE at six and

20

one-half (6.5) feet. (4/22/10 Trial Tr. (Wells, J.) at 165; 4/23/10 Trial Tr.

21

(Wells, J.) at 40-41; Exs. 213-14, 317, 326.) Sampling at GMX-5 also

22

revealed PCE and TCE as deep as one hundred fifty and one-half (150.5)

23

feet. (4/22/10 Trial Tr. (Lindmark, U.) at 98-99; Exs. 213-14, 317.)

24

Significant concentrations of PCE and TCE occurred in the fine grain layer

25

at GMX-2, GMX-4, VP-04, VEW-11, VEW-12, VEW-14, and VEW-15.

26

(Exs. 213-14, 317, 319.)

27

110. Similarly, there are elevated levels of PCE in the top fifteen (15) feet

28

at VP-03, VP-04, VEW-11, VEW-12, VEW-14, VEW-15, and VEW-18.
26

1

(4/22/10 Trial Tr. (Lindmark, U.) at 37-40; Exs. 214, 319.) TCE is also

2

present in high levels in the shallow soil vapor at VEW-14 and VEW-15.

3

(Exs. 214, 319.) This data is indicative of a proximal release, not an AST

4

release. (6/2/10 Trial Tr. (Wood, T.) at 79-81.) In other words, the shallow

5

contamination in and around the former UST area at VEW-11, VEW-14,

6

VEW-15, and VEW-18 was not caused by a spill in the AST area during

7

Flask’s tenancy. (Id.)

8

111. The 2008-09 data revealed higher contamination in and around the

9

former UST area than the 1993-94 data and 1997 data. (4/22/10 Trial Tr.

10

(Lindmark, U.) at 42-44; 4/22/10 Trial Tr. (Wells, J.) at 158-62; Exs. 320,

11

321, 323-25.)

12

112. In 1993-94, the conventional sampling method, which was used by

13

WEECO at the Property, was to collect a sample in a brass tube, transfer it

14

to a Ziploc bag, store it in an icebox, and send it to a laboratory. (4/22/10

15

Trial Tr. (Lindmark, U.) at 143; Ex. 407.) This procedure caused greater

16

volatilization of samples, which, in turn, resulted in lower concentrations of

17

volatiles reported in samples and more variability among samples. (4/22/10

18

Trial Tr. (Lindmark, U.) at 143-44.) In addition, in the 1993 soil samples,

19

WEECO took and analyzed only one (1) or two (2) depth discrete samples

20

from each boring location. (4/23/10 Trial Tr. (Wells, J.) at 37-38; Ex. 316.)

21

113. In 2008-09, samples were collected using vapor extraction wells and

22

vapor probes. (4/22/10 Trial Tr. (Lindmark, U.) at 144.) The vapor

23

extraction wells have screens of approximately thirty (30) feet whereas the

24

vapor probes have screens of roughly three (3) to nine (9) inches. (Id. at

25

144-45.) The vapor probes consequently provide more depth discrete data.

26

(Id. at 146; 4/22/10 Trial Tr. (Wells, J.) at 192.)

27

114. The vapor extraction wells, unlike earlier borings, intersect with the

28

fine grain layer. (4/23/10 Trial Tr. (Simpson, T.) at 135-36.) Thus, some of
27

1

the increased contamination can be attributed to more recent sampling of

2

contaminants in the fine grain layer. (Id. at 136.)

3

115. The increased contamination levels in soil samples, however, cannot

4

solely be attributed to improvements in sampling techniques, particularly

5

due to a similar pattern of increased contamination in soil gas sampling.

6

(4/22/10 Trial Tr. (Wells, J.) at 160-62; 6/2/10 Trial Tr. (Lindmark, U.) at

7

156-57; Ex. 320.)

8

116. The 1993-94 data also showed the presence of TCE in the soil

9

beneath the degreasing room area. (4/22/10 Trial Tr. (Lindmark, U.) at 45;

10

Ex. 320.) The contamination in the shallow soil at B-2 did not come from a

11

release in the AST area. (6/2/10 Trial Tr. (Wood, T.) at 59; Ex. 316.)

12

117. Notwithstanding, samples taken from 1994 to 1997 show decreases in

13

contamination outside of the building. (Exs. 213-14.) For example, GMX-

14

3, a soil boring located outside of the building to the west of the degreaser

15

area, showed a lower concentration of PCE. (4/23/10 Trial Tr. (Wells, J.) at

16

40; Exs. 213-14, 317.)

17

118. There is also a high concentration of PCE in a discrete portion of the

18

northwestern area of the Property. (Exs. 214, 320.) MW-5, which is

19

located approximately fifteen (15) to thirty (30) feet from the northern

20

clarifier, reflected a considerable concentration of PCE and TCE in the fine

21

grain layer. (4/22/10 Trial Tr. (Lindmark, U.) at 67-68, 135; 4/23/10 Trial

22

Tr. (Wells, J.) at 39-40; Exs. 213-14, 317, 326.) MW-5 is located more than

23

two hundred (200) feet from the northern edge of the former AST area.

24

(4/22/10 Trial Tr. (Lindmark, U.) at 28; 4/22/10 Trial Tr. (Wells, J.) at 175;

25

Exs. 213-14, 313.) The contamination at MW-5 did not come from a

26

release in the former AST area. (4/22/10 Trial Tr. (Lindmark, U.) at 28-29;

27

4/22/10 Trial Tr. (Wells, J.) at 174-77; 6/2/10 Trial Tr. (Wood, T.) at 85-86;

28

Exs. 213-14, 313.)
28

1

119. VP-01 and VEW-01, which are also located near the northern

2

clarifier, likewise reflected an increased level of PCE and TCE in or slightly

3

above the fine grain layer. (4/23/10 Trial Tr. (Wells, J.) at 42-43; Exs. 214,

4

318.) This contamination at VP-01 and VEW-01 did not come from a

5

release in the AST area. (6/2/10 Trial Tr. (Wood, T.) at 84.)

6

120. There are thirteen (13) samples throughout the Property containing

7

levels of PCE higher than 500 μg/kg at a depth of 1.5 feet: VP-02, VP-03,

8

VP-04, VEW-09, VEW-11, VEW-12, VEW-13, VEW-14, VEW-15, VEW-

9

16, VEW-18, VEW-19, and VEW-20. (Exs. 214, 318-19.)

10

121. In sum, the data indicates that there are at least two sources of

11

contamination. (Ex. 209.) The contamination in the shallow soil is from a

12

different source than the contamination in the deeper soil.

13

122. Flask admits that, based on the chemical and soil gas VOC

14

concentrations, soil remediation is necessary. (Pretrial Conference Order at

15

¶ 63.) Flask also concedes that groundwater monitoring wells installed by

16

Geomatrix are necessary. (4/22/10 Trial Tr. (Lindmark, U.) at 97.)

17

CONCLUSIONS OF LAW

18

A.

19

PURSUANT TO 42 U.S.C. § 9607

FLASK IS LIABLE FOR CONTAMINATION AT THE PROPERTY

20

123. In 1980, Congress enacted CERCLA “in response to the serious

21

environmental and health risks posed by industrial pollution.” Burlington

22

N. & Santa Fe Ry. Co. v. United States, __ U.S. __, 129 S. Ct. 1870, 1874

23

(2009). It “was designed to promote the ‘“timely cleanup of hazardous

24

waste sites”’ and to ensure that the costs of such cleanup efforts were borne

25

by those responsible for the contamination.” Id. (quoting Consol. Edison

26

Co. of N.Y., Inc. v. UGI Utils., Inc., 423 F.3d 90, 94 (2d. Cir. 2005)).

27

124. Under Section 107(a) of CERCLA, a private party may recover

28

cleanup costs from those persons who contributed to the release of
29

1

hazardous waste at the site. Carson Harbor Vill., Ltd. v. County of Los

2

Angeles, 433 F.3d 1260, 1265 (9th Cir. 2006) (“Carson Harbor Vill. II”).11

3

125. To establish a prima facie case, a plaintiff must demonstrate that: (1)

4

the property at issue is a “facility”; (2) a “release” or “threatened release” of

5

a “hazardous substance” from the facility has occurred; (3) the “release” or

6

“threatened release” caused the plaintiff to incur response costs that were

7

“necessary” and “consistent with the national contingency plan”; and (4) the

8

defendant is among the potentially responsible parties (“PRP(s)”) subject to

9

liability under Section 9607(a). Carson Harbor Vill. II, 433 F.3d at 1265.

10

126. A PRP may be compelled to clean up a contaminated area or

11

reimburse a third party for its past and future response costs and/or

12

damages. See Burlington, 129 S. Ct. at 1878.12

13

127. The Court previously granted summary judgment in favor of United

14

Alloys on the following issues: (1) Flask is a PRP as an operator of the

15

facility during Flask’s tenancy, (Order Granting in Part and Denying in Part

16

Plaintiff United Alloys, Inc.’s Motion for Partial Summary Judgment

17

Against Defendant Flask Chemical Corp. at 16 [Doc. No. 254]); (2) the

18

Property was a facility during Flask’s tenancy, (id.); and (3) a release of

19

hazardous substances occurred at the facility during Flask’s tenancy. (Id.)

20

128. The only remaining issue with respect to United Alloys’ Section 107

21

claim is whether the response costs are necessary and consistent with the

22
23
24
25
26
27
28

11

United Alloys initially asserted both a Section 107 claim and a Section 113 claim because, at the time of
the filing of the Complaint, there was ambiguity as to the appropriate avenue for relief for a party in its position.
However, “[t]he Supreme Court has made it clear that a [potentially responsible party] who has not been subject to
a § 106 or a § 107 action, like [United Alloys], is not entitled to seek contribution under § 113. Instead [it] should
proceed under § 107 for cost recovery.” Kotrous v. Goss-Jewett Co. of N. Cal., 523 F.3d 924, 934 (9th Cir. 2008).
Therefore, the Court finds that United Alloys is not entitled to contribution pursuant to Section 113.
12
Under CERCLA, a PRP shall be liable for: “(A) all costs of removal or remedial action incurred by the
United States Government or a State or an Indian tribe not inconsistent with the national contingency plan; (B) any
other necessary costs of response incurred by any other person consistent with the national contingency plan; (C)
damages for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such
injury, destruction, or loss resulting from such a release; and (D) the costs of any health assessment or health effects
study carried out under section 104(i).” 42 U.S.C. § 9607(a)(4).

30

1

national contingency plan (“NCP”). The NCP “specifies procedures for

2

preparing and responding to contaminations and was promulgated by the

3

Environmental Protection Agency (EPA) pursuant to CERCLA § 105.”

4

City of Colton v. Am. Promotional Events, Inc.-West, 614 F.3d 998, 1003

5

(9th Cir. 2010) (quoting Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S.

6

157, 161 n.2 (2004)).

7

129. The NCP “is ‘designed to make the party seeking response costs

8

choose a cost-effective course of action to protect public health and the

9

environment.’” Carson Harbor Vill. II, 433 F.3d at 1265 (quoting

10

Washington State Dep’t of Transp. v. Washington Natural Gas Co., 59 F.3d

11

793, 802 (9th Cir. 1995)). The term “response” means removal and

12

remedial actions, including enforcement activities related to such actions.13

13

42 U.S.C. § 9601(25). The terms “remove” or “removal,” in turn, include

14

actions that are necessary to monitor, assess, and evaluate the release of

15

hazardous substances. 42 U.S.C. § 9601(23).

16

130. A private party’s response action is considered “necessary” when “an

17

actual and real threat to human health or the environment exist before

18

initiating a response action.” Carson Harbor Vill., Ltd. v. Unocal Corp.,

19

270 F.3d 863, 871 (9th Cir. 2001) (en banc). It is “considered ‘consistent

20

with the NCP’ if the action, when evaluated as a whole, is in substantial

21

compliance with the applicable requirements of [40 C.F.R. § 300.700(c)(5)-

22

(6)] and results in a CERCLA-quality clean up.” 40 C.F.R. §

23

300.700(c)(3)(i) (emphasis added). Immaterial or insubstantial deviations

24

from the NCP do not preclude recovery in a cost recovery action. 40 C.F.R.

25

§ 300.700 (c)(4).

26
27
28

13

A removal action is a “short-term action[] taken to halt the immediate risks posed by hazardous wastes”
whereas a remedial action is an action taken to implement a permanent remedy. Carson Harbor Vill., Ltd. v.
Unocal Corp., 287 F. Supp. 2d 1118, 1155 (C.D. Cal. 2003) (Morrow, J.) (quoting Advanced Micro Devices, Inc. v.
Nat’l Semiconductor Corp., 38 F. Supp. 2d 802, 810 (N.D. Cal. 1999) (Whyte, J.)).

31

1

131. The private party seeking reimbursement for response costs bears the

2

burden of demonstrating that its actions are consistent with the NCP.

3

Carson Harbor Vill. II, 433 F.3d at 1265; see also Ameripride Servs. v.

4

Valley Indus. Serv., 2011 U.S. Dist. LEXIS 55634, *40 (E.D. Cal. May 12,

5

2011) (Karlton, J.).

6

132. United Alloys presented evidence of invoices enumerating costs for,

7

inter alia, conducting site investigations, installing and monitoring soil

8

borings and wells, extracting soil, soil vapor, and groundwater samples, and

9

paying consultant fees. (Final Pretrial Conference Order at ¶¶ 36, 39, 42;

10

4/20/10 Trial Tr. (Donn, R.) at 40-42, 45-51; Exs. 407, 426.) To date,

11

United Alloys has expended $431,418.64 in connection with such work.14

12

(4/20/10 Trial Tr. (Donn, R.) at 40-42, 45-51; Exs. 408, 426, 430-33, 671.)

13

United Alloys’ liability insurers have spent $1,283,722.81 for Geomatrix’s

14

services. (4/20/10 Trial Tr. (Donn, R.) at 43-44; Ex. 430; United Alloys,

15

Inc. Trial Br. at 14-15[Doc. No. 271].) United Alloys owes the Regional

16

Board an additional $21,414.58. (Ex. 432.)

17

133. These costs are necessary because PCE and TCE, which are listed as

18

hazardous substances under CERCLA, pose an actual and real threat to

19

public health and the environment. See 42 U.S.C. § 9601(14); see also 40

20

C.F.R. § 302.4. There is no dispute that PCE and TCE are present in the

21

soil at multiple locations throughout the Property. (See Pretrial Conference

22

Order at ¶¶ 37, 63.) Flask concedes that the chemical and soil gas VOC

23

concentrations require remediation with respect to soil. (Id. at ¶ 63.) The

24

parties also stipulated that DTSC will require: (1) additional site

25
26
27
28

14

United Alloys incurred the following expenses in connection with the site investigation of the Property:
(1) $4,075 paid to Green Environmental; (2) $24,100 paid to WEECO; (3) $240,373.51 paid to Geomatrix; (4)
$6,376.34 paid to the Water Board; and (5) $101,862.00 paid to CAPS. (4/20/10 (Donn, R.) at 40-42, 45-51; Exs.
408, 426, 430-32, 671; United Alloys Br. Re: Prejudgment Interest at 7; Rasmussen Decl. at ¶¶ 13-14; Flask’s Br.
Re: Prejudgment Interest at 3.) The total amount of all invoices from the DTSC is $54,631.79 but United Alloys
has at least one outstanding invoice. (4/20/10 Donn, R. at 49; Ex. 433.)

32

1

investigation; (2) remediation; and (3) continued quarterly groundwater

2

monitoring to evaluate the effectiveness of the soil vapor extraction remedy.

3

(6/3/10 Trial Tr. at 49-50.)

4

134. These costs are likewise consistent with the NCP because they are

5

essential to assessing, evaluating, monitoring, and identifying a remedy for

6

the release of PCE and TCE at the Property.

7

135. Simpson, who has served as the project manager for Geomatrix, and

8

Krug, who has served as the project manager for DTSC, both testified that

9

the work performed to date at the Property has complied with the NCP.

10

(4/20/10 Trial Tr. (Krug, R.) at 120-21; 4/20/10 Trial Tr. (Simpson, T.) at

11

174.)

12

136. Flask’s contention at trial was that Geomatrix improperly focused on

13

the existence of groundwater contamination at the Property to trigger

14

coverage by Flask’s insurance carriers while ignoring potential sources

15

caused by United Alloys. It was also Flask’s assertion that Geomatrix’s

16

work was not cost-effective due to the length of the site investigation and

17

the failure to implement a remedy. In addition, Flask contended that

18

Geomatrix purposefully excluded data collected by WEECO in Geomatrix’s

19

reports to the Regional Board and/or the DTSC.

20

137. The record, however, demonstrates that the costs incurred by United

21

Alloys are NCP-compliant and Flask’s contentions are not supported by the

22

evidence. Geomatrix has collected and analyzed samples from locations

23

throughout the Property, including areas in which United Alloys used PCE,

24

and concluded that the entire Property is contaminated. (4/20/10 Trial Tr.

25

(Simpson, T.) at 156, 160-61; 4/21/10 1 Trial Tr. (Simpson, T.) at 26, 52;

26

Ex. 214.) Geomatrix and the DTSC have also investigated potential

27

upgradient sources of contamination and concluded that such sources are

28

not contributing to the contamination at the Property. (4/20/10 Trial Tr.
33

1

(Simpson, T.) at 159-64; 4/21/10 1 Trial Tr. (Simpson, T.) at 24, 31;

2

4/22/10 Trial Tr. (Lindmark, U.) at 138; 4/23/10 Trial Tr. (Simpson, T.) at

3

118; Exs. 507, 523, 558, 636, 641-42.)

4

138. Indeed, there has been substantial participation and oversight from

5

public agencies during the site investigation of the Property, which further

6

supports the Court’s conclusion that the investigation methods and activities

7

are legitimate. Specifically, a public agency -- either the Regional Board or

8

the DTSC -- has been involved in the regulatory oversight of the Property

9

since 2000. (Final Pretrial Conference Order at ¶¶ 48, 56; 4/20/10 Trial Tr.

10

(Donn, R.) at 44-45, 47-48; 4/20/10 Trial Tr. (Krug, R.) at 114; Ex. 432.)

11

The Regional Board and the DTSC have also repeatedly required

12

Geomatrix to conduct additional investigation activities and compile

13

supplementary data and Geomatrix has consistently complied with such

14

requests. (Final Pretrial Conference Order at ¶¶ 48, 53-55, 57-60; 4/20/10

15

Trial Tr. (Simpson, T.) at 158-74; Exs. 203, 208, 210, 442, 455-56, 575.)

16

Moreover, the VCA expressly requires that all work shall be performed

17

consistent with the NCP. (Ex. 671.)

18

139. There is also no credible evidence that the work was not cost-

19

effective, even with the delay. Rather, the record reflects that Geomatrix

20

attempted to eliminate the expensive pump-and-treat system for

21

groundwater by submitting a Conceptual Remedial Action Plan to the

22

Regional Board. (4/20/10 Trial Tr. (Simpson, T.) at 164-65.) With respect

23

to groundwater contamination, both the Regional Board and the DTSC have

24

recognized that, at the very least, further groundwater monitoring is

25

necessary. (4/20/10 Trial Tr. (Krug, R.) at 119, 141-42; 4/20/10 Trial Tr.

26

(Simpson, T.) at 188-89; 4/21/10 1 Trial Tr. (Simpson, T.) at 43; 6/3/10

27

Trial Tr. at 49-50.)

28

140. Finally, the evidence establishes that Geomatrix decided not to
34

1

include WEECO data because Geomatrix concluded that WEECO

2

conducted a preliminary, not a comprehensive, investigation of the

3

Property. (4/21/10 1 Trial Tr. (Simpson, T.) at 25.) In particular, WEECO

4

installed borings and collected only one (1) or two (2) samples for analysis.

5

(4/21/10 1 Trial Tr. (Simpson, T.) at 25.) When the data was requested by

6

the Regional Board and/or the DTSC, Geomatrix provided it. (Id. at 25-26.)

7

The Court concludes that there is no basis for finding that Geomatrix’s

8

efforts have not been cost-effective or legitimate.

9

141. Because CERCLA expressly permits the recovery of response costs,

10

United Alloys does not need to show that it cleaned up the Property before

11

it can recover investigation costs. See Wickland Oil Terminals v. Asarco,

12

Inc., 792 F.2d 887, 892 (9th Cir. 1986) (concluding that a private party may

13

obtain reimbursement for response costs prior to lead agency approval of a

14

cleanup program); see also Hinds Invs., L.P. v. Ryan, 2009 U.S. Dist.

15

LEXIS 35053, *8 (C.D. Cal. Apr. 6, 2009) (Guilford, J.) (finding that the

16

plaintiffs incurred response costs where they provided evidence of the costs

17

of an investigation conducted by environmental consultants).

18

142. There is a nexus between the NCP-compliant costs incurred by

19

United Alloys and the cleanup that will inevitably occur because both

20

parties agree that -- at the very least -- the DTSC will require soil

21

remediation at the Property. See Vill. of Milford v. K-H Holding Corp., 390

22

F.3d 926, 933 (6th Cir. 2004) (“Monitoring and evaluation costs may be

23

recovered as ‘removal’ costs under CERCLA if they were reasonable, and

24

the activities were not scientifically deficient or unduly costly.”); see also

25

Johnson v. James Langley Operating Co., 226 F.3d 957, 963-64 (8th Cir.

26

2000).

27

143. Contrary to Flask’s assertion, (Flask Chemical Corp.’s Mem. of

28

Contentions of Law and Fact at 3 [Doc. No. 261]), public participation is
35

1

not a prerequisite to the recovery of investigatory costs. “Denying private

2

claimants recovery of [response] costs would discourage voluntary cleanup

3

activities because such claimants would need to incur much more

4

substantial costs before knowing for certain whether they are entitled to

5

reimbursement. Such a result is incompatible with Congress’s desire to

6

promote prompt cleanup of contaminated sites.” Vine St., LLC v. Keeling,

7

460 F. Supp. 2d 728, 760 (E.D. Tex. 2006) (Davis, J.) (concluding that a

8

private party may recover investigatory and monitoring costs prior to the

9

initiation of an actual cleanup). Moreover, the VCA requires that the

10

proposed remedial action will be subject to public comment. (Ex. 671.)

11

144. Therefore, United Alloys has demonstrated that it incurred response

12

costs that were necessary and consistent with the NCP.

13

145. Accordingly, Flask is liable for contamination of the Property

14

pursuant to Section 107 of CERCLA and United Alloys has expended

15

$431,418.64 in NCP-compliant response costs.

16

B.

17

COSTS PURSUANT TO 42 U.S.C. § 9607

FLASK IS JOINTLY AND SEVERALLY LIABLE FOR RESPONSE

18

146. CERCLA is a strict liability statute; therefore, there is a presumption

19

of joint and several liability, unless the harm is divisible. Burlington, 129 S.

20

Ct. at 1880-81. “[W]hen two or more persons acting independently caused

21

a distinct or single harm for which there is a reasonable basis for division

22

according to the contribution of each, each is subject to liability only for the

23

portion of the total harm that he has himself caused . . . But where two or

24

more persons cause a single and indivisible harm, each is subject to liability

25

for the entire harm.” United States v. Chem-Dyne Corp., 572 F. Supp. 802,

26

810 (S.D. Ohio 1983) (Rubin, J.) (citations omitted).

27

147. To avoid joint and several liability, a defendant must show that the

28

harm is capable of apportionment. Burlington, 129 S. Ct. at 1881. In
36

1

making this determination, courts may not rely on equitable considerations.

2

Id. at 1882 n.9.

3

148. As explained below, United Alloys is a PRP because it released a

4

hazardous substance, PCE, at the Property, which the Court has already

5

determined was a facility, during its ownership of the Property. See Carson

6

Harbor Vill. II, 433 F.3d at 1265.

7

149. Based on a spatial analysis of the Property, Flask contended at trial

8

that it should only be responsible for eighteen percent (18%) to twenty

9

percent (20%) of response costs. (4/22/10 Trial Tr. (Wells, J.) at 176-77.)

10

These percentages correspond with the approximate size of the AST area in

11

relation to the entire Property. (Id. at 177.)

12

150. The Court finds that Flask has not met its burden of demonstrating

13

that there is a meaningful basis for apportioning liability. See Burlington,

14

129 S. Ct. at 1881 (“When two or more causes produce a single, indivisible

15

harm, ‘courts have refused to make an arbitrary apportionment for its own

16

sake, and each of the causes is charged with responsibility for the entire

17

harm.’”) (citations omitted).

18

151. The Court concludes that the entire Property, which is relatively

19

small, is contaminated. (4/20/10 Trial Tr. (Krug, R.) at 118; 4/21/10 1 Trial

20

Tr. (Simpson, T.) at 26.) Moreover, the majority of the contamination has

21

been traced to the southwestern corner of the Property, the site in which the

22

ASTs were located during Flask’s tenancy. Therefore, eighteen percent

23

(18%) to twenty percent (20%) is not representative of the impact of that

24

area on the overall contamination of the Property.

25

152. Furthermore, neither Flask nor United Alloys presented credible

26

evidence as to which party was responsible for the contamination in the area

27

to the north of the former AST area, in which the USTs were located. There

28

are no percipient witnesses or contemporaneous records identifying the
37

1

procedure for filling the excavation area and none of the expert witnesses’

2

opinions provided a reliable explanation as to how the native soil and the

3

import soil were returned to the excavation area. Because both parties

4

conducted operations in this area and the area corresponds to a significant

5

amount of the contamination at the Property, the Court concludes that the

6

harm to the Property is not capable of apportionment.

7

153. Under these circumstances, joint and several liability is appropriate.

8

C.

9

ALLOYS PURSUANT TO 42 U.S.C. § 9613(f)(1)

FLASK IS ENTITLED TO CONTRIBUTION FROM UNITED

10

154. “Any person may seek contribution from any other person who is

11

liable or potentially liable under Section 107(a).” 42 U.S.C. § 9613(f)(1).

12

The allocation of costs corresponds to each party’s equitable share of the

13

responsibility. United States v. Atl. Research Corp., 551 U.S. 128, 140

14

(2007). Thus, even when apportionment of liability is not possible, a

15

defendant may seek contribution from a Section 107 plaintiff. Burlington,

16

129 S. Ct. at 1882 n.9. In allocating response costs among PRPs, courts

17

may rely on equitable considerations. See 42 U.S.C. § 9613(f)(1)

18

(providing that“[i]n resolving contribution claims, the court may allocate

19

response costs among liable parties using such equitable factors as the court

20

determines are appropriate.”)

21

155. Although not an exhaustive list, the Ninth Circuit has endorsed the

22

use of the “Gore factors,” equitable factors to be considered in allocating

23

costs pursuant to a Section 113 claim. See Boeing v. Cascade Corp., 207

24

F.3d 1177, 1187 (9th Cir. 2000). The “Gore Factors” include: (1) the ability

25

of the parties to demonstrate that their contribution to a discharge, release,

26

or disposal of a hazardous waste can be distinguished; (2) the amount of the

27

hazardous waste involved; (3) the degree of toxicity of the hazardous waste

28

involved; (4) the degree of involvement by the parties in the generation,
38

1

transportation, treatment, storage, or disposal of the hazardous waste; (5)

2

the degree of care exercised by the parties with respect to the hazardous

3

waste concerned, taking into account the characteristics of such hazardous

4

waste; and (6) the degree of cooperation by the parties with Federal, State,

5

or local officials to prevent any harm to the public health or the

6

environment. Kerr-McGee Chem. Corp. v. Lefton Iron & Metal Co., 14

7

F.3d 321, 326 (7th Cir. 1994). Other equitable factors include whether a

8

party knew or acquiesced to the release of hazardous waste and whether a

9

party benefitted from the contamination. See Adobe Lumber, Inc. v.

10

Hellman, 658 F. Supp. 2d 1188, 1201 n.2 (E.D. Cal. 2009) (Shubb, J.).

11

156. Having considered all of the credible evidence presented at trial, the

12

Court finds that both parties are PRPs that are responsible for releases of

13

hazardous waste at the Property.

14

157. Both parties used PCE, which qualifies as hazardous waste under

15

CERCLA, in their operations at the Property. Flask stored, processed, and

16

sold PCE and TCE at the Property. (Final Pretrial Conference Order at ¶¶

17

8-10.) United Alloys used PCE in its clarifiers and degreaser. (Id. at ¶ 31;

18

Castellanos Dep. at 12, 16-19, 28, 34, 51-54, 56-57; 4/22/10 Trial Tr.

19

(Lindmark, U.) at 9-18; Exs. 242-47, 438-39, 671.) Because both parties

20

used PCE, the degree of toxicity of the hazardous waste is identical.

21

158. Due to the pattern of contamination in the fine grain layer and the

22

shallow soil, the evidence demonstrates that there were at least two different

23

sources of contamination. (See Ex. 209.)

24

159. With respect to Flask, there were numerous documented spills during

25

its tenancy, including spills caused by: (1) the transfer of PCE from railcars

26

onto the Property, (Heisler Dep. at 60, 65-66, 73-74); (2) the transfer of

27

chlorinated solvents from tanker trucks to Flask’s chemical containers, (id.

28

at 59-60); (3) forklifts puncturing drums inside of the facility, (id. at 56-57);
39

1

and (4) an act of vandalism in which five hundred (500) gallons of PCE

2

were released from an AST. (Id. at 79-80.)

3

160. With respect to United Alloys, there is circumstantial evidence that it

4

also contributed to the contamination at the Property. See Franklin Cnty.

5

Convention Facilities Auth. v. Am. Premier Underwriters. Inc., 240 F.3d

6

534, 547 (6th Cir. 2001) (“[T]here is nothing objectionable in basing

7

findings solely on circumstantial evidence, especially where the passage of

8

time has made direct evidence difficult or impossible to obtain.”). In

9

particular, United Alloys used PCE in its northern clarifier and there is

10

significant contamination from PCE in the shallow soil and the fine grain

11

layer in this area. (4/22/10 Trial Tr. (Lindmark, U.) at 67-68, 135; 4/23/10

12

Trial Tr. (Wells, J.) at 39-40; Exs. 213-14, 317, 326.) This contamination

13

did not come from a release in the former AST area. (4/22/10 Trial Tr.

14

(Lindmark, U.) at 28-29; 4/22/10 Trial Tr. (Wells, J.) at 174-77; 6/2/10 Trial

15

Tr. (Wood, T.) at 85-86; Exs. 213-14, 313.) There was also a spill in the

16

degreasing room. (4/21/10 2 Trial Tr. (Lindmark, U.) at 48; 4/22/10 Trial

17

Tr. (Lindmark, U.) at 114-15, 118.)

18

161. The Court concludes that some of the contamination can be

19

distinguished by the parties. Flask is responsible for the contamination in

20

the southwestern corner of the Property, the area in which the ASTs were

21

located during Flask’s tenancy. (See Final Pretrial Conference Order at ¶

22

10; Exs. 214, 310, 445.) United Alloys is responsible for the contamination

23

in the northern portion of the Property, the area in which it installed and

24

used the northern clarifier. (See Final Pretrial Conference Order at ¶ 35;

25

Exs. 214, 312.)

26

162. However, neither Flask nor United Alloys established that their

27

contribution to the release of PCE at the Property can be distinguished from

28

a release by the opposing party in the area to the north of the AST area. In
40

1

particular, the parties failed to present credible evidence as to which party is

2

responsible for the contamination in the top fifteen (15) feet of soil and in

3

the fine grain layer in this area. (Exs. 214, 317, 319.) Flask used USTs, a

4

clarifier, a blending tank, a filling machine, pumps, a scale, and a conveyor

5

in this area to store, mix, blend, and containerize chlorinated solvents.

6

(Final Pretrial Conference Order at ¶¶ 11, 14, 22; 4/22/10 Trial Tr.

7

(Lindmark, U.) at 113; 4/23/10 Trial Tr. (Wells, J.) at 14-15, 23-24; Ex.

8

310.) At this location, Flask also used pumps to fill the tanks or tanker

9

trucks that arrived with deliveries. (4/22/10 Trial Tr. (Lindmark, U.) at 113;

10

4/23/10 Trial Tr. (Wells, J.) at 14-15, 23-24; Ex. 310.) United Alloys,

11

meanwhile, used the southern clarifier and stored waste in the area to the

12

north of the ASTs. (Final Pretrial Conference Order at ¶ 22; Castellanos

13

Dep. at 50-51, Ex. 9; 4/23/10 Trial Tr. (Wells, J.) at 19-21; Ex. 312.)

14

Finally, no witnesses provided credible evidence as to the method used to

15

excavate the USTs and return the soil to the ground. Therefore, the Court is

16

unable to distinguish which party is responsible for the contamination in the

17

area to the north of the ASTs.

18

163. The parties are similarly unable to distinguish contamination that

19

occurred inside of the Main Building because there is evidence that both

20

parties were responsible for spills inside of the facility, either from the

21

degreasing room or from storage drums. (Heisler Dep. at 56-57; 4/21/10 2

22

Trial Tr. (Lindmark, U.) at 48; 4/22/10 Trial Tr. (Lindmark, U.) at 114-15,

23

118.)

24

164. United Alloys used substantially less VOCs than Flask but has

25

occupied the Property significantly longer than Flask. United Alloys, which

26

has owned the Property since January 1979, used no more than 8,000

27

gallons of PCE per year through 1997. (Final Pretrial Conference Order at

28

¶ 31; 4/22/10 Trial Tr. (Wells, J.) at 172-73; Ex. 301.) The Court does not
41

1

find Wood provided a reasonable basis for determining Flask’s hazardous

2

waste usage; however, the Court is satisfied that Flask used exponentially

3

more PCE per year than United Alloys. Although it used more hazardous

4

waste, Flask leased the Property for less than seven years. (Final Pretrial

5

Conference Order at ¶ 8.)

6

165. United Alloys exercised considerably more care with respect to

7

hazardous waste. Flask failed to instruct or train its employees as to how to

8

avoid spillage in the unloading of chemicals from railcars delivering PCE to

9

the Property. (Heisler Dep. at 104-05.) Although there were accidental

10

spills during Flask’s operations at the Property, (Final Pretrial Conference

11

Order at ¶ 17), Flask made no effort to clean up the spills or report such

12

spills to any agency or entity. (Heisler Dep. at 63, 67, 73-74.) United

13

Alloys, on the other hand, reported at least one spill from a 55-gallon drum

14

of TCE into the street near the Property. (Ex. 250.) United Alloys also

15

complied with a 90-day hazardous waste removal policy necessitated by the

16

use of the clarifiers and the degreaser at the Property. (4/23/10 Trial Tr.

17

(Simpson, T.) at 113-14; 6/2/10 Trial Tr. (Wood, T.) at 16-17.)

18

166. Since 1993, United Alloys has cooperated with public agencies,

19

including the Regional Board and the DTSC, to investigate the

20

contamination and clean up the property. (Final Pretrial Conference Order

21

at ¶¶ 48, 53-60; 4/20/10 Trial Tr. (Donn, R.) at 44-45, 47-48; 4/20/10 Trial

22

Tr. (Krug, R.) at 114; Ex. 432.) Flask, on the other hand, has no history of

23

cooperating with Federal, State, or local officials. In fact, during its

24

tenancy, it failed to report any of the numerous accidental spills to the

25

appropriate authorities. (Heisler Dep. at 63, 67, 73-74.)

26

167. United Alloys asserted the following affirmative defenses: (1) act of a

27

third party; (2) no joint and several liability; and (3) contribution. (Final

28

Pretrial Conference Order at 19.) The first two affirmative defenses fail on
42

1

the merits because United Alloys is responsible for a portion of the

2

contamination at the Property. With respect to contribution, United Alloys

3

shall only be allocated costs in accordance with its proportionate share of

4

responsibility.

5

168. Based on these equitable considerations, the Court finds that United

6

Alloys is to be allocated one-third of the past response costs and Flask is to

7

be allocated two-thirds of the past response costs.

8

D.

9

IN THIS ACTION MUST BE DEDUCTED FROM THE OUTSTANDING

10

SETTLEMENT PROCEEDS FROM THIRD PARTY DEFENDANTS

RESPONSE COSTS

11

169. As an additional equitable factor, the Court considers the impact of

12

monies paid to United Alloys by settling defendants. See 42 U.S.C. §

13

9613(f)(1) (providing that the court may consider “such equitable factors as

14

the court determines are appropriate.”); see also Boeing, 207 F.3d at 1189-

15

90 (factoring settlement proceeds into the allocations of costs because

16

preventing double recovery is an appropriate equitable factor to be

17

considered by the district court); see also Goodrich Corp. v. Town of

18

Middlesbury, 311 F.3d 154, 176 (2d Cir. 2002) (affirming district court’s

19

decision to offset a third party defendant’s prior settlement because the

20

district court has broad discretion with respect to equitable factors).

21

170. CERCLA permits offsets to contribution from administrative or

22

judicially approved settlements which resolved liability to the United States

23

or a State. 42 U.S.C. § 9613(f)(2). “Although § 9613(f)(2) governs only

24

the effect of settlements with the government, not private parties, general

25

equitable principles remain in play.” K.C. 1986 L.P. v. Reade Mfg., 472

26

F.3d 1009, 1017 (8th Cir. 2007). One of these equitable principles is the

27

prohibition of double recovery. Id.; see also 42 U.S.C. § 9614(b)

28

(providing that, if a party receives compensation pursuant to CERCLA,
43

1

such party cannot recover compensation for the same costs pursuant to any

2

other State or Federal law).

3

171. This result comports with common sense as the environment is the

4

injured party, not the plaintiff. Basic Mgmt. v. United States, 569 F. Supp.

5

2d 1106, 1124 (D. Nev. 2008) (Jones, J.) “In other words, [a p]laintiff[ has]

6

not been damaged and [is] not ‘entitled’ to money as a damaged party; but

7

rather, [a p]laintiff[] can only receive reimbursement for the costs [it]

8

expended beyond [its] share of actual responsibility for the environmental

9

damage.” Id.

10

172. On January 13, 1997, the Court approved the settlements of Siskin,

11

Baker, and Harold A. Baker Metal Supply Company, Inc. (Final Pretrial

12

Conference Order at ¶ 46.) These settlements totaled $290,000. (Flask

13

Chemical Corp.’s Post-Trial Findings of Fact and Conclusions of Law at 50

14

[Doc. No. 301].) The settlement proceeds have been used for

15

environmental remediation. (4/20/10 Trial Tr. (Donn, R.) at 64-65.)

16

173. The parties stipulated that United Alloys also entered a settlement

17

with the Railroads, who were initially named as defendants in this action, in

18

the amount of $50,000 and a settlement with Chubb in the amount of

19

$300,000. (4/21/10 2 Trial Tr. at 35.)

20

174. Flask is entitled to offset for the monies recovered by United Alloys

21

from settlements with Siskin, Baker, Harold A. Baker Metal Supply

22

Company, Inc., and the Railroads because these parties were PRPs who

23

contributed to funding the remediation of the Property. Otherwise, United

24

Alloys would receive double recovery for its response costs. These

25

settlements totaled $340,000.

26

175. Flask, however, is not entitled to offset for United Alloys’ settlement

27

with Chubb. The settlement funds were expressly intended to fund

28

litigation costs and/or future response costs. (United Alloys, Inc.’s
44

1

Response to Flask Chemical Corp.’s Supplemental Trial Br. at 18. Ex. D

2

[Doc. No. 297].) Because the settlement was not designed to reimburse

3

United Alloys for past response costs, the Court declines to offset these

4

funds. See United States v. Iron Mt. Mines, 724 F. Supp. 2d 1086, 1093

5

(E.D. Cal. 2010) (Mendez, J.) (finding that the defendants were not entitled

6

to a credit for past response costs because the settlement provided that the

7

funds were designated for future cleanup and maintenance costs).

8

176. Accordingly, Flask is entitled to a credit of $340,000 for third party

9

settlements to be applied to the outstanding response costs incurred by

10

United Alloys to date. Based on these deductions, United Alloys’

11

recoverable response costs total $91,418.64.

12

E.

THE COLLATERAL SOURCE RULE IS NOT APPLICABLE

13

177. Based on the collateral source rule, United Alloys seeks to recover

14

$1,283,722.81 paid by its liability insurers for site investigation and

15

remediation. (United Alloys, Inc. Trial Br. at 14-15 [Doc. No. 271]).

16

178. “The ‘collateral source rule’ holds that the payment of compensation

17

from a source wholly independent of the tortfeasor should not be deducted

18

from the damages that the plaintiff is otherwise entitled to collect from the

19

tortfeasor.” Kennedy v. United States, 2009 U.S. Dist. LEXIS 95543, *21-

20

22 (C.D. Cal. Oct. 13, 2009) (Feess, J.).

21

179. The Court has found no case law in which the collateral source rule

22

was extended to CERCLA actions. See Keeling, 460 F. Supp. 2d at 765-66

23

(declining to apply the collateral source rule to CERCLA cases). Indeed,

24

various CERCLA provisions expressly prohibit a claimant from double

25

recovery. See 42 U.S.C. §§ 9612(f) (“Where the President has paid out of

26

the [Hazardous Substance Superfund (“the Fund”)] for any response costs

27

or any costs specified under section 111(c)(1) or (2) . . ., no other claim may

28

be paid out of the Fund for the same costs.”) and 9614(b) (prohibiting
45

1

double recovery). The Court therefore declines to apply the collateral source

2

rule to the recovery of response costs in this action.

3

180. The Court is not persuaded that the result should be any different

4

where the costs were paid by United Alloys’ insurers, rather than the result

5

of a third party settlement.

6

181. In both cases, the funds did not come directly from United Alloys

7

“pockets.” See Basic Mgmt., 569 F. Supp. 2d at 1123 (concluding that the

8

plaintiffs cannot recover response costs paid directly by their insurers

9

because CERCLA bars double recovery). In other words, United Alloys

10

can only recover costs that it has paid that exceed its proportionate share of

11

responsibility for the contamination at the Property.

12

182. Accordingly, the Court finds that Plaintiff is not entitled to recover

13

the $1,283,722.81 paid by United Alloys’ liability insurers to Geomatrix.

14

F.

15

ON ITS RECOVERABLE RESPONSE COSTS

UNITED ALLOYS IS ENTITLED TO PREJUDGMENT INTEREST

16

183. Pursuant to CERCLA, a private party plaintiff is entitled to recover

17

prejudgment interest on recoverable response costs. 42 U.S.C. § 9607(a).

18

Prejudgment interest “shall accrue from the later of (i) the date payment of a

19

specified amount is demanded in writing, or (ii) the date of the expenditure

20

concerned.” Id.

21

184. The rate of interest is determined by reference to the rate specified for

22

interest on investments of the Hazardous Substance Superfund, which is set

23

forth in the Internal Revenue Code. Id.; see also 26 U.S.C. § 9507.

24

185. The Internal Revenue Code provides that the rate of interest is to be

25

established by the Secretary of the Treasury of the United States “to be

26

equal to the current average market yield on outstanding marketable

27

obligations of the United States with remaining periods to maturity

28

comparable to the anticipated period during which the advance will be
46

1

outstanding and shall be compounded annually.” 26 U.S.C. §

2

9507(d)(3)(C). The EPA publishes a table of Superfund Interest Rates from

3

1980 to present. United States Environmental Protection Agency,

4

Superfund Interest Rates,

5

http:www.epa.gov/ocfo/finstatement/superfund/int_rate.htm (last visited

6

Jul. 7, 2011).

7

186. United Alloys submitted, and Flask concurred, that $25,523.52 is the

8

amount of prejudgment interest that has accrued on United Alloys’

9

recoverable response costs.

10

187. Accordingly, Flask is responsible for payment of two-thirds of the

11

prejudgment interest, which amounts to $17,024.19.

12

G.

13

APPROPRIATE IN THIS ACTION

DECLARATORY RELIEF PURSUANT TO 42 U.S.C. § 9613(g)(2) IS

14

188. CERCLA provides for declaratory relief as to future response costs

15

when a plaintiff establishes Section 107 liability. 42 U.S.C. § 9613(g)(2)

16

(providing that “the court shall enter a declaratory judgment on liability for

17

response costs or damages that will be binding on any subsequent action or

18

actions to recover further response costs or damages.”).

19

189. A claim for declaratory relief as to CERCLA liability is ripe “so long

20

as there has been a release of hazardous substances, and the plaintiff spends

21

some money responding to it.” City of Colton v. Am. Promotional Events,

22

Inc.-West, 614 F.3d 998, 1005 (9th Cir. 2010).

23

190. The Ninth Circuit has held that “if a plaintiff successfully establishes

24

liability for the response costs sought in the initial cost-recovery action, it is

25

entitled to a declaratory judgment on present liability that will be binding on

26

future cost-recovery actions.” Id. at 1007.

27

191. Flask argues that United Alloys is not entitled to a declaratory

28

judgment because: (1) United Alloys has delayed in remediating the
47

1

Property, (Flask Chemical Corp.’s Supplemental Trial Br. at 6 [Doc. No.

2

295]); (2) groundwater is not impacted by the soil contamination, (id.); and

3

(3) there is no way for the Court to allocate future response costs without

4

specific evidence as to the nature and amount of such costs. (Id.)

5

192. Flask’s arguments are unavailing. There is no precedent precluding

6

declaratory relief due to a delay in remediation.

7

193. Furthermore, the evidence belies Flask’s contention that the

8

groundwater below the Property is not contaminated. There are VOCs in

9

the groundwater but the Property requires more groundwater monitoring

10

wells to determine the scope of the impact. (4/20/10 Trial Tr. (Krug, R.) at

11

119, 141-42.) Thus, the DTSC will require additional well installation and

12

monitoring. (4/20/10 Trial Tr. (Simpson, T.) at 188-89.) Even Flask

13

concedes that DTSC will require additional site investigation, including

14

installation of additional groundwater wells and continued quarterly

15

groundwater monitoring to evaluate the effectiveness of the soil vapor

16

extraction remedy. (6/3/10 Trial Tr. at 49-50.)

17

194. Finally, it is not necessary to determine the nature and amount of

18

future response costs prior to awarding a declaratory judgment in favor of

19

United Alloys. See Boeing, 207 F.3d at 1191 (“The costs and time involved

20

in relitigating issues as complex as these where new costs are incurred

21

would be massive and wasteful. Declaratory relief allocating future costs is

22

therefore consistent with the broader purposes of CERCLA.”). The purpose

23

of declaratory relief is to promote judicial efficiency by permitting a Court

24

to determine the responsible party’s liability and then requiring such party

25

to bear the responsibility “for the cost of finishing the job.” City of Colton,

26

614 F.3d at 1008 (quoting Dant & Russell, 951 F.2d 246, 249-50 (9th Cir.

27

1991)).

28

195. United Alloys has successfully established liability for the response
48

1

costs incurred to date. Therefore, United Alloys is entitled to a declaratory

2

judgment with respect to future response costs that are consistent with the

3

NCP. City of Colton, 614 F.3d at 1007 (“In section 113(g)(2), Congress

4

specified a mechanism whereby a declaration of liability for costs already

5

incurred has preclusive effect in future proceedings as to costs yet to be

6

incurred.”).

7

196. The Court likewise finds that declaratory relief is appropriate as to

8

the allocation of future NCP-compliant response costs. Thus, United Alloys

9

is responsible for one-third of such response costs and Flask is responsible

10

for two-thirds of such response costs.

11

H.

12

PURSUANT TO THE CARPENTER-PRESLEY-TANNER HAZARDOUS

13

SUBSTANCE ACCOUNT ACT

FLASK IS LIABLE FOR CONTAMINATION AT THE PROPERTY

14

197. The Carpenter-Presley-Tanner Hazardous Substance Account Act

15

(“HSAA”) provides that “[a]ny person who has incurred removal or

16

remedial action costs in accordance with this chapter or the federal act may

17

seek contribution or indemnity from any person who is liable pursuant to

18

this chapter.” Cal. Health & Saf. Code § 25363(e).

19

198. The HSAA is interpreted consistent with CERCLA. See Hellman,

20

658 F. Supp. 2d at 1192-93; see also Ryan, 2009 U.S. Dist. LEXIS 35053 at

21

*9-10. The HSAA expressly incorporates the liability standards and

22

defenses set forth in CERCLA and creates liability for the same classes of

23

persons. See, e.g., Cal. Health & Saf. Code §§ 25310, 25323.3, 25323.5(a),

24

(b). Liability under the HSAA is therefore almost identical to liability

25

under CERCLA.

26

199. However, HSAA does not impose liability for acts that occurred prior

27

to January 1, 1982, if those acts did not violate existing federal laws at the

28

time they occurred. Cal. Health & Saf. Code § 25366(a).
49

1

200. Flask operated its chemical distribution facility at the Property from

2

November 1972 to January 1979. (Final Pretrial Conference Order at ¶ 8.)

3

It was established prior to trial that Flask used PCE and TCE in its

4

operations. (Id. at ¶ 10.) Therefore, it is likely that at least some of the

5

contamination occurred prior to the passage of the HSAA but after the

6

passage of the Resource Conversation and Recovery Act of 1976, 42 U.S.C.

7

§ 6901 et seq. (See Heisler Dep. at 79.)

8

201. Consequently, United Alloys is entitled to contribution from Flask

9

under the HSAA.

10

202. CERCLA, however, precludes double recovery. See Santa Clara

11

Valley Water Dist. v. Olin Corp., 655 F. Supp. 2d 1048, 1055 (N.D. Cal.

12

2009) (Whyte, J.). It provides that “[a]ny person who receives

13

compensation for removal costs or damages or claims pursuant to this Act

14

shall be precluded from receiving compensation for the same removal costs

15

or damages or claims pursuant to any other State or Federal law.” 42

16

U.S.C. § 9614(b).

17

203. Consequently, CERCLA preempts United Alloys’ right to recover

18

costs under the HSAA in addition to CERCLA.

19

I.

CONCLUSION

20

204. The parties are jointly and severally liable for the contamination at

21

the Property pursuant to Section 107 of CERCLA;

22

205. While Flask is liable for the contamination at the Property under the

23

HSAA, CERCLA preempts United Alloys’ right to recover response costs

24

under the HSAA in addition to CERCLA;

25

206. Flask is entitled to contribution from United Alloys pursuant to

26

Section 113 of CERCLA, such that United Alloys shall be responsible for

27

one-third of all recoverable response costs and Flask shall be responsible for

28

two-thirds of all recoverable response costs;
50

1

207. United Alloys has incurred NCP-compliant response costs in the

2

amount of $431,418.64;

3

208. Flask is entitled to a credit of $340,000 for settlements paid to United

4

Alloys by third party defendants, which reduces United Alloys’ recoverable

5

response costs to $91,418.64;

6

209. As to the $91,418.64, United Alloys shall pay one-third of these

7

response costs, or $30,442.41, and Flask shall pay two-thirds of these

8

response costs, or $60,976.23;

9

210. Flask shall also pay to United Alloys $17,024.19, which represents

10

two-thirds of the prejudgment interest on United Alloys’ recoverable

11

response costs;

12

211. Declaratory relief shall be entered as to the apportionment of liability

13

and allocation of costs for future NCP-compliant response costs;

14

212. The Court retains jurisdiction to address the recoverability of future

15

response costs that cannot be resolved by the parties; and

16

213. To the extent that any findings of fact constitute conclusions of law,

17

they are adopted as such, and to the extent that the conclusions of law

18

constitute findings of fact, they are adopted as such.

19
20

IT IS SO ORDERED.

21
22
23
24

DATED: July 14, 2011

By

CONSUELO B. MARSHALL
UNITED STATES DISTRICT JUDGE

25
26
27
28
51