Ameripride Svc Inc v. Valley Industrial, et al

Filing 912

ORDER signed by Judge Lawrence K. Karlton on 4/4/12 ORDERING the Defendant shall pay to the plaintiff $7,754,456.18; The parties SHALL file a stipulation with the court within fourteen (14) days of the issuance of this order as to the interest payable by defendant by virtue of plaintiff's past expended costs, for which Defendant shall be liable; Defendant SHALL be responsible for one half of all future cleanup costs. (Becknal, R)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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AMERIPRIDE SERVICES, INC.,
A Delaware corporation,
NO. CIV. S-00-113 LKK/JFM

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Plaintiff,
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v.
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VALLEY INDUSTRIAL SERVICE, INC.,
a former California corporation,
et al.,

O R D E R

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Defendants.
/

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AND CONSOLIDATED ACTION AND
CROSS- AND COUNTER-CLAIMS.
/

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Pending before the court is resolution of the trial of this

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case.

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of trial, both the facts and the law are difficult.

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As the court has stated at various times during the course

Nonetheless, to begin with the obvious, the court adopts the

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undisputed facts contained in the pretrial order.

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Pretrial Conf. Order, ECF No. 854. Unfortunately, those are about

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the only obvious matters which can be resolved after trial.
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See Final

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The court is faced with a trial which the parties have

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tendered as one requiring resolution of contested expert opinion

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testimony.

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appear to be reasonable people, who have come to contradictory

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results. The court wishes to be clear as to its opinion that this

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is not a case involving hired guns who will say anything someone

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pays them to say.

The experts who have testified are well qualified and

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The testimony of the experts are not opinions in fields of

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exact science, but rather applied science. That fact helps account

10

for at least some of the divergent opinions that have been received

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by the court.

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lies not only in the nature of the field but also in human nature.

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Central to some of the experts’ testimony is the application

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of various formulas, which in turn are dependent upon assumptions

15

which

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employed.

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by the expert, may, however innocently, be influenced by the trial

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needs of the expert’s sponsor.1

provide

The reason for those divergent opinions, however,

the

integers

to

be

resolved

by

the

equations

In that regard, the “reasonable” assumptions employed

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Moreover, and perhaps more to the point, the applied science

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being contested was developed for purposes quite distinct from the

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questions asked in trial.

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at issue seeks to determine where cleanups are necessary and how

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to proceed with the cleanup.

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essence, agreed with the court when asked whether the use of

In the real world, the applied science

In that regard, a defense expert, in

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1

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All of the assumptions employed were supported by other
expert writing, EPA guidance documents or the like.
2

1

inexact, but experience-based, assumptions was sufficient for the

2

purpose of cleanup.

3

sufficient to carry the burden of proof at trial, since quite

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different questions are being asked.

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that burden is no more than the preponderance of the evidence.

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7

ultimate factual determinations.
The court concludes as follows:

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1)

PCE is listed as a hazardous substance under the act.

42

U.S.C. § 9601(14), 40 C.F.R. § 302.4.

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12

That is true even though

Nonetheless, the court is able to make a sufficient number of

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Such applications, however, may not be

2) The plaintiff’s claims relative to the spill of DNAPL PCE
are supported by the evidence.2

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3) The defendant’s assertion that, by virtue of leaks in the

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waste water system used by plaintiff, the plaintiff spilled waste

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water into the vadose zone, is supported by the evidence.
4) During defendants’ operation on the property the waste

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water system also leaked.

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cleaning and the laundering of contaminated shop towels and other

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such

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contributed to PCE being deposited in the soil.

items

which

Moreover, defendant engaged in both dry

contained

PCE.

Both

of

these

activities

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5) At various times after plaintiff acquired the property,

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plaintiff added washing machines which increased the volume of

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waste water being leaked.
6) Although plaintiff did not engage in dry cleaning, for

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2

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DNAPL PCE is dense nonaqueous phase liquid PCE. The parties
agree it is pure PCE.
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1

some period of time it also laundered PCE-laden shop towels and

2

like items.

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refused to launder items which were thought to contain PCE, and,

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accordingly, thereafter the amount of PCE in the waste water was

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reduced.

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7
8
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After the danger of PCE became apparent, plaintiff

7) The waste water flow of both plaintiff and defendant
touching the DNAPL carried the PCE to the ground water.
8)

Vapor

emanating

from

the

deposited

DNAPL

PCE

also

contributed to the PCE in the ground water.

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9) The contaminated ground water eventually reached property

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down stream, which caused the relevant governmental agencies to

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order plaintiff to undertake the cleanup of the site.

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10) The evidence does not permit a rational allocation of
fault between plaintiff and defendant.3
The suit tests liability under CERLA.

I now briefly sketch

16

the court’s understanding of the pertinent provisions of that

17

statute.4

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serious

19

pollution.”

20

United States, 556 U.S. 599, –-, 129 S.Ct. 1870, 1874 (2009). “The

21

Act was designed to promote the timely cleanup of hazardous waste

22

sites and to ensure that the costs of such cleanup efforts were

Congress enacted CERCLA in 1980 “in response to the
environmental

and

health

risks

posed

by

industrial

Burlington Northern & Santa Fe Railway Company v.

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3

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25
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This conclusion will be somewhat elaborated later in this
opinion.
4

The court here draws on its previous explanation of the
statute during resolution of a motion for summary judgement entered
May 12,2011. See Order, ECF No. 735.
4

1

borne by those responsible for the contamination.”

2

Id. (internal

citations omitted).

3

Under CERCLA section 107(a), 42 U.S.C. § 9607(a), the federal

4

government, state governments, and private parties may all initiate

5

cleanup of toxic areas, and each such entity may sue potentially

6

responsible parties for reimbursement of response costs.

7

Carson Harbor v. County of Los Angeles, 433 F.3d 1260, 1265 (9th

8

Cir. 2006) (Carson Harbor II) (quoting Ascon Properties, Inc. v.

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Mobil Oil Co., 866 F.2d 1149, 1152 (9th Cir. 1989)).

10

Circuit

has

identified

four

elements

necessary

11

to

See

The Ninth
a

private

plaintiff’s prima facie case under section 107(a):
(1) the site on which the hazardous substances
are contained is a “facility” under CERCLA’s
definition of that term, Section 101(9), 42
U.S.C. § 9601(9);

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(2) a “release” or “threatened release” of any
“hazardous substance” from the facility has
occurred, 42 U.S.C. § 9607(a)(4);

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(3) such “release” or “threatened release” has
caused the plaintiff to incur response costs
that were “necessary” and “consistent with the
national contingency plan,” 42 U.S.C. §§
9607(a)(4) and (a)(4)(B); and

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(4) the defendant is within one of four
classes of persons subject to the liability
provisions of Section 107(a).

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22

City of Colton v. American Promotional Events, Inc.-West, 614 F.3d

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998, 1002-03 (9th Cir. 2010) (quoting Carson Harbor Village, Ltd.

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v. Unocal Corp., 270 F.3d 863, 870-71 (9th Cir. 2001) (en banc)

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(Carson Harbor I)).

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includes

“any

A “release” for purposes of this section

spilling,

leaking,
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pumping,

pouring,

emitting,

1

emptying, discharging, injecting, escaping, leaching, dumping, or

2

disposing into the environment.”

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classes

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“potentially responsible parties,” include, as is relevant to this

5

case, “(1) the owner and operator of . . . a facility,” and “(2)

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any person who at the time of disposal of any hazardous substance

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owned or operated any facility at which such hazardous substances

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were disposed of.”

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section 113(g)(2), a party who prevails on a section 107 claim may

of

seek

persons

a

subject

42 U.S.C. § 9601(22).
to

liability,”

also

42 U.S.C. § 9607(a)(1)-(2).

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also

declaratory

judgment

that

it

is

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reimbursement for future response costs as well.

12

The “four
known

as

Under CERCLA

entitled

to

Colton, 614 F.3d at 1008.

See City of

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Absent from the four elements of a prima facie case is any

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requirement that the plaintiff be innocent with regard to the

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contamination at issue. United States v. Atlantic Research Corp.,

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551 U.S. 128, 139 (2007).

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party remediates the damage and incurs response costs, that party

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may seek to recover those costs from another.

Thus, where one potentially responsible

Id.

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With regard to allocating responsibility among potentially

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responsible parties, CERCLA provides overlapping and somewhat

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convoluted mechanisms.

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potentially responsible parties.

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at 1879, 1881.

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several. Adobe Lumber, Inc. v. Hellman, 658 F. Supp. 2d 1188, 1192

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(E.D. Cal. 2009).

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entire response cost has two options under CERCLA.

Section 107 imposes strict liability on
Burlington Northern, 129 S.Ct.

Liability under section 107 is generally joint and

A defendant seeking to avoid liability for the

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Under section

1

107, a defendant may avoid joint and several liability by proving

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that “a reasonable basis for apportionment exists.”

3

Northern, 129 S.Ct. at 1881 (citing United States v. Chem-Dyne

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Corp., 572 F. Supp. 802, 810 (S.D. Ohio 1983)).

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this basis looks solely to whether the defendant can “establish[]

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a fixed amount of damage for which [it] is liable,” and not to any

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equitable

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Alternatively, CERCLA section 113(f)(1) authorizes claims for

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contribution “from any other person who is liable or potentially

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liable under section 9607(a) of this title, during or following any

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civil action under section 9606 of this title or under section

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9607(a) of this title.”

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does allow for consideration of equitable factors.

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resolving contribution claims, the court may allocate response

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costs among liable parties using such equitable factors as the

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court determines are appropriate.”), Burlington Northern, 129 S.Ct.

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at 1882 n.9.

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It

concerns.

is

clear

Id.

that

at

1882

n.9

Apportionment on

(quotation

42 U.S.C. § 9613(f)(1).

plaintiff

has

Burlington

omitted).

Section 113(f)

established

Id. (“In

defendant’s

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liability under § 107.

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the meaning of the statute, there were releases from that facility,

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the releases caused plaintiff to incur response costs consistent

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with

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responsible for the release of DNAPL PCE and for its discharge of

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waste water, which, together with the plaintiff’s waste water,

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mobilized the DNAPL and resulted in contamination of the ground

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water. Moreover, as noted above, vapor transport also affected the

the

national

Simply put, the site is a facility within

contingency

7

plan,

and

the

defendant

is

1

ground water.

Given that the court concluded above that defendant

2

cannot “establish[] a fixed amount of damage for which [it is]

3

liable,” Burlington Northern, 129 S.Ct at 1882 n.9, defendant is

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relegated to seeking equitable apportionment under

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Before addressing the issue of equitable apportionment, the court

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must first address the question of damages.

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into a written stipulation as follows:

§ 113(f)(1).

The parties entered

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1. AmerPride has directly incurred $7,570,921 in

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investigation and remediation costs though August

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2010.

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2. AmeriPride has directly incurred $474,730 in

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regulatory oversight costs through September 2010.

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3. AmerPride paid $8,250,000 to Huhtamaki to

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settle all claims Huhtamaki had against AmeriPride.

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4. AmeriPride paid $2,000,000 to Cal-Am Water

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Co. to settle all claims Cal-Water Co. had against

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Ameripride.

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Stipulation, ECF No. 861.

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It is also undisputed that Ameripride received $ 500,000 in

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settlement

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See

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(Undisputed Fact).

23

issue in the instant case.

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defendants are entitled to a credit for those sums.

25
26

Final

from

Chromalloy

Pretrial

Conf.

and
Order,

$2,750,000
ECF

No.

from
854,

Petrolane.
at

13,

¶

93

Both settlements related to the pollution at
This court has previously held that

There is no question that items 1 and 2 are sums subject to
equitable apportionment.

Defendant, however, contests whether it
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1

should be considered responsible for any of the sums paid in

2

settlement of the claims of Huhtamaki and Cal-Water.

3

that it can only be responsible for “response costs,” and since it

4

cannot be said that those sums are exclusively response sums,

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plaintiff’s claim must fail.

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summary

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settlement payments under § 107.

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Nonetheless the court held there, and continues to believe, that

9

it could and should consider those payments under §113.

judgment

order,

It asserts

For reasons explained in the court’s

plaintiff

cannot

recover

for

those

See Order, ECF No. 735, at 40.

See id.

10

Defendant argues, nevertheless, that those payments should not be

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considered because the settlements resolved all claims, including

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various state law claims, not only those which would be considered

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response costs if incurred in supplying settling plaintiffs with

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alternate sources of water. The court simply cannot agree.

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Whether the settled claims were under the federal statute or

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pled as state claims, the gravamen of all those claims was the

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contamination of the ground water, the very claims at issue in the

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suit under CERCLA.

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any authority addressing the question of how the court should

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account for AmeriPride’s settlement with Cal-Am Water Co. and

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Huhtamaki, when that settlement involved multiple claims,

22

surprisingly, has the court’s own research found any established

23

guidance thereon.

The parties have not supplied the court with

nor,

24

While CERCLA § 9613 has provisions addressing contributions

25

after settlement with a governmental party, there is no proviso

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directly dealing with settlements with nongovernmental parties.
9

1

See 42 U.S.C. § 9613(f)(3)(B) (“A person who has resolved its

2

liability to the United States or a State for some or all of a

3

response action ... in an administrative or judicially approved

4

settlement may seek contribution from any person who is not party

5

to a settlement ....”); see also City of Detroit v. Simon, 247 F.3d

6

619, 628 (6th Cir. 2001) (there is no contribution protection for

7

a party that entered into a settlement with Detroit because the

8

city cannot be equated with the United States or a state, as the

9

language of CERCLA requires); Akzo Coatings, Inc. v. Aigner Corp.,

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30 F.3d 761, 771 (7th Cir. 1994) (noting that Ҥ 113(f)(2) says .

11

. . [n]othing . . . about resolving liability to private parties”).

12

However, although the text of CERCLA is silent regarding the right

13

of contribution protection for private party settlements, to

14

facilitate settlement, a number of federal courts have interpreted

15

CERCLA's language to include private parties.

16

Citizens Communications Co., 532 F.3d 70, 90 fn.7 (1st Cir. 2008)

17

(citing 2 A.J. Topol & R. Snow, Superfund Law and Procedure, §

18

7:91, at 181 (2007 ed.)); K.C.1986 L.P. v. Reade Mfg., 472 F.3d

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1009, 1017 (8th Cir.2007) (“Although § 9613(f)(2) governs only the

20

effect of settlements with the government, not private parties,

21

general equitable principles remain in play.”).

City of Bangor v.

22

Because the very purpose of § 113 is to do equity, such a

23

purpose is clearly served by recognizing payments made to private

24

claimants in settlement of state claims arising out of CERLA-

25

focused suits.

26

subject

to

Accordingly, the court finds that the total amount

equitable

apportionment
10

is

$18,295,651.00,

less

1

$3,250,000 for a total of $15,045,651.00.

2

consultant and other costs of $446,656.84 paid for investigation

3

and remediation at the AmeriPride site since August 2010, and the

4

$16,604.52 paid for regulatory oversight of the AmeriPride site

5

since

6

apportionment is $15,508,912.36.

January

2011,

the

total

amount

After including the

subject

to

equitable

7

Section 223(f) gives the trial court broad discretion to

8

consider whatever equitable factors it deems appropriate under the

9

circumstances of the case.

42 U.S.C. § 9613(f)(1) (“In resolving

10

contribution claims, the court may allocate response costs among

11

liable parties using such equitable factors as the court determines

12

are

13

apportionments use what are called the “Gore factors,” named after

14

a rejected attempt by then-Congressman Albert Gore to amend CERCLA

15

that would have listed those factors as a basis for allocating

16

liability.

17

74 (1st Cir. 1999); Centerior Serv. Co. v. Acme Scrap Iron & Metal

18

Corp., 153 F.3d 344, 354 (6th Cir. 1998); United States v. Colorado

19

& Eastern R.R. Co., 50 F.3d 1530, 1536 n.5 (10th Cir. 1995); Kerr-

20

McGee Chem. Corp. v. Lefton Iron & Metal Co., 14 F.3d 321, 326 (7th

21

Cir. 1994); In re Bell Petroleum Servs., Inc., 3 F.3d 889, 899-900

22

(5th Cir. 1993).

23

appropriate.”)5

Some

courts,

in

making

equitable

See, e.g., Acushnet Co. v. Mohasco Corp., 191 F.3d 69,

The “Gore factors” are as follows: (I) The ability of the

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5

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26

A district court’s equitable apportionment determinations
are subject to an abuse of discretion standard of review on appeal.
In re Dant & Russell, 951 F.2d 246, 249 (9th Cir. 1991).
11

1

parties to demonstrate that their contribution to a discharge,

2

release or disposal of a hazardous waste can be distinguished; (ii)

3

The amount of the hazardous waste involved; (iii) The degree of

4

toxicity of the hazardous waste involved; (iv) The degree of

5

involvement by the parties in the generation, transportation,

6

treatment, storage, or disposal of the hazardous waste; (v) The

7

degree of care exercised by the parties with respect to the

8

hazardous waste concerned, taking into account the characteristics

9

of such waste; and (vi) The degree of cooperation by the parties

10

with Federal, State, or local officials to prevent any harm to the

11

public health or the environment.

12

United States v. A & F Materials, Co., 578 F.Supp. 1249 (S.D. Ill.

13

1984).6

14

Bell Petroleum, 3 F.3d 899-900;

Another district court when applying the Gore Factors added

15

“critical factors” for courts to take into account in making CERCLA

16

contribution allocations, to wit: the financial resources of the

17

liable parties; the extent of the benefit that the parties received

18

from the hazardous waste disposal practices; the extent of the

19

parties’ knowledge and awareness of the environmental contamination

20

of the site; and the efforts made, if any, to prevent environmental

21

harm and the efforts made to settle the case.

22

Davis, 31 F.Supp.2d 45, 63 (D.R.I. 1998), aff’d, 261 F.3d 1 (1st

23

Cir. 2001).

United States v.

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This court must confess some unwillingness to apply
factors rejected by Congress.
12

1

Yet

another

district

court

has

further

considered:

(1)

2

economic benefits received by a party as a result of its cleanup

3

actions; (2) a party’s efforts to conduct source control at its

4

facility; (3) windfalls from settlements a party made with other

5

PRPs; and (4) a party’s decision to release some PRPs from

6

liability.

7

Liquidating Trust, 306 F.Supp.2d 1040, 1101 (D.Kan. 2003).

City of Wichita, Kansas v. Trustees of APCO Oil

orp.

8

None of these lists is intended to be exhaustive or exclusive,

9

and “in any given case, a court may consider several factors, a few

10

factors, or only one determining factor . . . depending on the

11

totality of the circumstances presented to the court.”

12

States v. Consolidated Coal Co., 345 F.3d 409, 413-14 (6th Cir.

13

2003) (quoting Environmental Trans. Sys., Inc. v. ENSCO, Inc., 969

14

F.2d 503, 509 (7th Cir. 1992).

United

It is this court’s view that, in many ways, the factors noted

15
16

above will not fairly measure apportionment.

First, it is hardly

17

insignificant that, until the decision of the Delaware

18

Court, the defendants were defunct corporations who had no capacity

19

to respond to cleanup orders.

20

way of clearly allocating responsibility for the contamination of

21

either the vadose zone or the ground water.

22

evidence is that, but for the DNAPL PCE deposits of the defendant,

23

the ground water would not have been affected; however, it appears

24

equally true that, but for the leaks in waste water system, the

25

////

26

////

Supreme

Second, as noted above, the is no

13

The best view of the

1

ground water might well not have been effected.7

2

it is certainly true that plaintiffs spilled more waste water

3

because it increased the number of machines and processed laundry

4

over a longer period, it is also true that during defendant’s

5

period of possession of the facility, the waste water it spilled

6

contained more PCE and that it also engaged in dry cleaning using

7

PCE as a solvent.8

8

appreciated during defendant’s operation of the facility, or in the

9

earlier years of plaintiff’s operation.

Moreover, while

Moreover, PCE’s environmental danger was not

Given the facts as the court has found them, it concludes

10
11

that the fairest apportionment is to divide responsibility equally.

12

This would result in each party being responsible for $7,754,456.18

13

in costs expended so far. This number, however, fails to recognize

14

that plaintiff has borne all of these costs for the many years

15

since the first cleanup order.

16

court

17

calculated in accordance with 42 U.S.C. § 9607 (incorporating the

18

interest rate calculation provided in 26 U.S.C. § 9507(d)(3)(C)).9

will

order

defendant

To roughly address this fact, the
to

also

pay

interest

in

amounts

19
7

20
21
22
23
24
25
26

It appears to be uncertain whether a cleanup order would
have been issued if there had been no contamination of the ground
water and the property continued to be used for commercial
purposes.
8

The extent of defendant’s spill is not known because records
were apparently not kept of its use of water, the extent of waste
water, or contents of waste water.
9

“Interest on advances made to the Superfund shall be at a
rate determined by the Secretary of the Treasury (as of the close
of the calendar month preceding the month in which the advance is
made) to be equal to the current average market yield on
outstanding marketable obligations of the United States with
14

1

The parties SHALL submit a stipulation within fourteen (14) days

2

of the issuance of this order as to this interest rate as applied

3

to plaintiff’s past expended costs.

4

declaratory judgment as to future cleanup costs.

5

explained above, the defendant shall be responsible for one half

6

of all future costs.10

Finally, plaintiff seeks
For the reasons

7

Accordingly the court order as follows:

8

1) Defendant shall pay to the plaintiff $7,754,456.18.

9

2) The parties SHALL file a stipulation with the court within

10

fourteen (14) days of the issuance of this order as to the interest

11

payable by defendant by virtue of plaintiff’s past expended costs,

12

for which Defendant shall be liable.

13
14

3) Defendant SHALL be responsible for one half of all future
cleanup costs.

15

IT IS SO ORDERED.

16

DATED: April 4, 2012.

17
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19
20
21
22
23
24
25
26

remaining periods to maturity comparable to the anticipated period
during which the advance will be outstanding and shall be
compounded annually.” 26 U.S.C. § 9507(d)(3)(C).
10

Defendants liability may be limited by the amount of
insurance available. The court has received no evidence concerning
such limitation, and thus makes no finding as to that question.
15