CA Dept Toxic Sub v. Brighton Oil Co, et al
Filing
1236
ORDER signed by Judge Garland E. Burrell, Jr. on 07/20/2011 ORDERING that the Sullivan Consent Decree is APPROVED. (Michel, G)
1
2
3
4
IN THE UNITED STATES DISTRICT COURT
5
FOR THE EASTERN DISTRICT OF CALIFORNIA
6
7
CALIFORNIA DEPARTMENT OF TOXIC
SUBSTANCES CONTROL,
8
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
Plaintiff,
9
v.
10
CHARLES V. KESTER, ET AL.,
11
Defendants.
________________________________
12
13
14
AND RELATED CROSS-CLAIMS,
COUNTERCLAIMS, and THIRD-PARTY
ACTIONS
________________________________
15
16
17
18
19
20
21
22
23
24
25
26
27
2:02-cv-00018-GEB-GGH
ORDER APPROVING CONSENT
DECREE, BARRING CONTRIBUTION
CLAIMS, AND FINDING CONSENT
DECREE WAS REACHED IN GOOD
FAITH
Plaintiff California Department of Toxic Substances Control
(the “Department”) moves for approval of the proposed Consent Decree
(the “Sullivan Consent Decree”) into which it entered with John L.
Sullivan Chevrolet, Inc. (“Sullivan”), Gordon Turner Motors (“Turner”),
the California Department of Transportation, the California Department
of General Services, the California Department of Fish and Game, the
California National Guard, and the California Department of Forestry and
Fire Protection (the “State Agencies). (ECF No. 1215.) The Sullivan
Consent Decree was filed on May 4, 2011 as Docket Number 1219. Sullivan,
Turner, and the State Agencies (collectively, the “settling parties”)
also
seek
a
judicial
declaration
under
California
Code
of
Civil
Procedure section 877.6 that the Sullivan Consent Decree is made in good
faith, and an order issued under 42 U.S.C. § 9613(f) which would bar
28
1
1
contribution or indemnity claims against the settling parties for the
2
“matters addressed” in the Sullivan Consent Decree. (ECF No. 1214.)
3
I. BACKGROUND
4
This is a cost recovery action brought by the Department under
5
the Comprehensive Environmental Response, Compensation and Liability Act
6
(“CERCLA”), prescribed in 42 U.S.C. §§ 9601 et seq.. The Department
7
seeks to recover the response costs it has incurred and will incur
8
monitoring, assessing, and evaluating the alleged release and threatened
9
release of hazardous substances from a tract of land located at the
10
intersection
11
California (the “Site”). The Department also seeks to recover the costs
12
it has incurred and will incur removing, remediating, and overseeing the
13
removal and remediation of hazardous substances at the Site.
14
of
White
Following
a
Rock
and
Kilgore
settlement
Roads
conference
in
with
Rancho
United
Cordova,
States
15
Magistrate Judge Hollows on May 29, 2009, the Department and twenty nine
16
parties reached a settlement and entered into a proposed consent decree
17
which the district court subsequently approved (the “2010 Consent
18
Decree”). (ECF Nos. 1102, 1120.) The Department then filed a Fourth
19
Amended Complaint (the “Complaint”), naming as defendants Sullivan,
20
Turner, and other parties who were not a party to the 2010 Consent
21
Decree. (Complaint ¶¶ 63-67, ECF No. 1145.) Sullivan and Turner each
22
filed a counterclaim against the State Agencies, who are signatories to
23
the Sullivan Consent Decree. (ECF Nos. 1163-64.) This pending litigation
24
was referred to the Voluntary Dispute Resolution Program for mediation
25
on October 27, 2010. (ECF No. 1178.) “On March 3, 2011 the parties to
26
this Consent Decree participated in a mediation through the Court’s
27
Voluntary Dispute Resolution Program, and reached a settlement in
28
2
1
principle.” (Decl. of Fiering ¶ 4, ECF No. 1217.) The Sullivan Consent
2
Decree “memorializes that settlement agreement.” Id.
3
II. MOTION FOR APPROVAL OF SULLIVAN CONSENT DECREE
4
Here, the decision whether the Sullivan Consent Decree is
5
approved requires the “court [to] be satisfied that [the Sullivan
6
Consent
7
reasonable.” U.S. v. State of Oregon, 913 F.2d 576, 580 (9th Cir. 1990).
8
“[F]airness in the CERCLA settlement context has both procedural and
9
substantive components. To measure procedural fairness, a court should
10
ordinarily look to the negotiation process and attempt to gauge its
11
candor, openness, and bargaining balance.” U.S. v. Cannons Eng’g Corp.,
12
899 F.2d 79, 86 (1st Cir. 1990) (citation omitted) (relied on by U.S. v.
13
Montrose Chem. Corp. of California, 50 F.3d 741, 746-48 (9th Cir.
14
1995)). “Substantive fairness introduces into the equation concepts of
15
corrective justice and accountability: a party should bear the cost of
16
the harm for which it is legally responsible.” Id. at 87. In determining
17
whether a settlement is reasonable, courts look to whether the proposed
18
settlement will be effective in ensuring a cleanup of the property,
19
whether it satisfactorily compensates the public for the costs of
20
cleanup, and whether the settlement reflects the relative strengths of
21
the parties’ bargaining positions. Id. at 89-90. Finally, determining
22
the fairness and reasonableness of the Sullivan Consent Decree requires
23
consideration of the extent to which it is consistent with the purposes
24
of CERCLA, two of which are: (1) to create a prompt and effective
25
response to hazardous waste problems; and (2) to ensure that the cost of
26
remedying the hazardous waste problem is paid for by those who caused
27
the problem. Id. at 90-91.
28
///
Decree]
is
at
least
fundamentally
3
fair,
adequate
and
1
Here, the parties have made the required showing that the
2
Sullivan
3
reasonable, and consistent with the purposes of CERCLA. The Sullivan
4
Consent Decree provides that “Turner and Sullivan shall each pay Fifty
5
Thousand Dollars ($50,000) to the Department, and the State Agencies
6
shall collectively pay a total of Ten Thousand Dollars ($10,000) to the
7
Department[.]” (Sullivan Consent Decree ¶ 7.1, ECF No. 1219.) “[T]he
8
total estimated response costs in the matter are: $2,500,000 future
9
remedial action costs, $764,603 past oversight costs and $126,000 future
10
oversight costs, which total approximately $3,390,603.” (Mot. 9:16-18,
11
ECF No. 1216; Fiering Decl. Exs. B-C, ECF No. 1217.) The Sullivan
12
Consent Decree, along with the Maita Consent Decree which was filed on
13
July 20, 2011, and the 2010 Consent Decree, “will provide recovery of
14
over 84 [percent] of the total estimated response costs.” (Mot. 9:18-20,
15
ECF No. 1216; ECF Nos. 1102, 1208.) Although this payment does not fully
16
compensate the Department for its oversight costs, the Department has
17
the ability to seek these costs from other non-settling parties and to
18
apply any unused funds obtained in the consent decrees to cover these
19
costs. Therefore, the Sullivan Consent Decree reflects a “reasonable
20
method of weighing comparative fault[.]” Id. at 88. Further, since the
21
Sullivan Consent Decree was the result of mediation through the Court’s
22
Voluntary Dispute Resolution Program, it is procedurally fair. The
23
Sullivan Consent Decree also promptly and effectively responds to the
24
hazardous waste problem and ensures that the cost of remedying the
25
hazardous waste problem is paid for by those who caused it. Therefore,
26
the
27
substantively fair, reasonable, and consistent with the purposes of
28
CERCLA.
Consent
Sullivan
Decree
Consent
is
procedurally
Decree
is
4
and
approved
substantively
as
procedurally
fair,
and
1
III. MOTION FOR ORDER BARRING CONTRIBUTION CLAIMS AND
2
DECLARATION OF GOOD FAITH
3
The settling parties also seek an order barring contribution
4
and indemnity claims for the “matters addressed” in the Sullivan Consent
5
Decree. (Mot. 11:1-17, ECF No. 1214-1.) CERCLA section 113(f) provides:
6
10
A person who has resolved liability to the United
States or a State in an administrative or
judicially approved settlement shall not be liable
for claims for contribution regarding matters
addressed in the settlement. Such settlement does
not discharge any of the other potentially liable
persons unless its terms so provide, but it reduces
the potential liability of the others by the amount
of the settlement.
11
42 U.S.C. § 9613(f)(2). Under this section, “[c]ontribution protection
12
is conferred on the settling parties at the time the settling parties
13
enter into the agreement.” U.S. v. Colorado & E. R.R. Co., 50 F.3d 1530,
14
1538 (10th Cir. 1995). Therefore, the settling parties’ request for an
15
order
16
addressed” in the Sullivan Consent Decree is granted.
7
8
9
barring
contribution
and
indemnity
claims
for
the
“matters
17
The settling parties also seek a judicial declaration that the
18
Sullivan Consent Decree constitutes a good faith settlement under
19
California Code of Civil Procedure section 877.6, which precludes claims
20
for contribution and indemnity. (Mot. 6:20-9:3, ECF No. 1214-1.) Section
21
877.6 of the California Code of Civil Procedure prescribes:
22
25
A determination by the court that the settlement
was made in good faith shall bar any other joint
tortfeasor from any further claims against the
settling tortfeasor or co-obligor for equitable
comparative contribution, or partial or comparative
indemnity, based on comparative negligence or
comparative fault.
26
Cal. Code Civ. P. § 877.6(c). Whether a settlement is made in “good
27
faith” within the meaning of section 877.6 is determined based on the
28
factors identified by the California Supreme Court in Tech-Bilt, Inc. v.
23
24
5
1
Woodward-Clyde & Assoc., 38 Cal. 3d 488 (1985), including: (i) a rough
2
approximation
3
proportionate liability; (ii) the amount paid in settlement; (iii) the
4
allocation of settlement proceeds among plaintiffs; (iv) a recognition
5
that the settlor should pay less in settlement than he would if he were
6
found liable after trial; (v) the financial conditions and insurance
7
policy
8
collusion, fraud, or tortious conduct aimed to injure the interests of
9
non-settling defendants. Id. at 499.
limits
of
of
plaintiff’s
settling
total
defendants;
recovery
and
and
(vi)
the
the
settlor’s
existence
of
10
Based on the Tech-Bilt factors, the Sullivan Consent Decree
11
qualifies as a good faith settlement within the meaning of section
12
877.6. “The first factor, an approximation of recovery and potential
13
liability, is the most important.” AmeriPride Serv., Inc. v. Valley
14
Indust. Serv., Inc., Nos. CIV. S-00-113-LKK JFM, S-04-1494-LKK/JFM, 2007
15
WL 1946635, at *3 (E.D. Cal. July 2, 2007). “The settlement amount need
16
only be ‘in the ballpark’ [to satisfy this factor], with any party
17
challenging a settlement having the burden of establishing that it is so
18
far out of the ballpark that the equitable objectives of section 877 are
19
not satisfied.” Id. Here, the Sullivan Consent Decree is within the
20
“ballpark” of a “rough approximation” of the Department’s total recovery
21
and the settling parties’ proportionate liability. Further, there is no
22
evidence that the settling parties engaged in collusion, fraud, or other
23
conduct seeking to impose an undue share of liability on the non-
24
settling parties. Accordingly, the Sullivan Consent Decree was reached
25
in good faith. Therefore, any claim against the settling parties “for
26
equitable comparative contribution, or partial or comparative indemnity,
27
based on comparative indemnity, based on comparative negligence, or
28
6
1
comparative fault” is barred by California Code of Civil Procedure
2
section 877.6.
3
III. CONCLUSION
4
5
For the stated reasons, it is ORDERED:
1.
The
Sullivan
Consent
Decree
is
approved
as
procedurally
and
6
substantively fair, reasonable, and consistent with the purposes of
7
CERCLA.
8
2.
9
parties for the “matters addressed” in the Sullivan Consent Decree
10
11
Any claim for contribution or indemnity against the settling
is barred by 42 U.S.C. § 9613(f).
3.
The Sullivan Consent Decree was entered into in good faith within
12
the meaning of California Code of Civil Procedure section 877.6,
13
and any claim against the settling parties for contribution or
14
indemnity is barred by section 877.6.
15
Dated:
July 20, 2011
16
17
18
GARLAND E. BURRELL, JR.
United States District Judge
19
20
21
22
23
24
25
26
27
28
7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?