USA v. Sterling Centrecorp Inc. et al

Filing 154

MEMORANDUM and ORDER signed by Judge Morrison C. England, Jr on 12/21/2011.Plaintiffs' 110 Motion for Partial Summary Judgment as to CERCLA liability of defendant Sterling Centrecorp, Inc. is DENIED. Plaintiffs' 112 Motion for Partial S ummary Judgment on Sterling Centrecorp's affirmative defenses to CERCLA liability is DENIED in part and GRANTED in part. It is DENIED with respect to First Affirmative Defense, but GRANTED as to Second, Third, Fourth, Fifth, Sixth, Eleventh, Thirteenth and Fourteenth Defenses. (Marciel, M)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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UNITED STATES OF AMERICA,
and CALIFORNIA DEPARTMENT
OF TOXIC SUBSTANCES CONTROL,

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No. 2:08-cv–02556-MCE-JFM

Plaintiffs,
v.

MEMORANDUM AND ORDER

STERLING CENTRECORP INC.,
STEPHEN P. ELDER and ELDER
DEVELOPMENT, INC.,
Defendants.

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----oo0oo----

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Both the United States and the California Department of

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Toxic Substances (hereinafter collectively referred to as

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“Plaintiffs” or “government” unless otherwise specified) have

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designated the former Lava Cap Mine, located in Nevada County,

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California, as a Superfund site polluted by elevated levels of

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arsenic that were disseminated through tailings and waste

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materials generated by mine operations.

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undertaken cleanup efforts designed to remediate that arsenic

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contamination.
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Plaintiffs have

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The present action seeks contribution for the costs of those

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activities both from former owners of the site and operators

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responsible for its mining.

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Motions for Partial Summary Judgment as to the CERCLA liability

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of Defendant Sterling Centrecorp, Inc. (“Sterling”).

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first motion (as to Sterling’s liability) argues that the

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prerequisites for the recovery of response costs under CERCLA as

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against Defendant Sterling, and in particular Elder’s status as a

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“covered person” under the terms of the statute, have been

Presently before the Court are two

Plaintiffs’

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established as a matter of law.

Plaintiffs’ second motion seek a

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determination rejecting, as a matter of law, any affirmative

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defenses asserted on Sterling’s behalf.

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Plaintiffs’ liability motion will be denied; the motion as to

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availability of affirmative defenses will be granted in part and

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denied in part.1

As set forth below,

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BACKGROUND

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Mining operations at the Lava Cap Mine commenced in 1861.

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Between 1934 and 1943, mining was conducted at the site by the

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Lava Cap Gold Mining Corporation (“LCGMC”).

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period, the Lava Cap Mine was one of the leading gold and silver

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producers in California, and among the top twenty-five gold

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producers in the nation.

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Fact (“SUF”) No. 4.

During that time

Plaintiffs’ Statement of Undisputed

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Because oral argument was not of material assistance, the
Court ordered this matter submitted on the briefs. E.D. Cal.
Local Rule 230(h).
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In 1938, LCGMC built a tailings dam on Greenhorn Creek (now known

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as Lost Lake Dam) to stop mine tailings from polluting the waters

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of the Bear River.

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within the mine-generated tailings contained elevated

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concentrations of naturally occurring arsenic, a hazardous

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substance pursuant to the Comprehensive Environmental Response,

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Compensation and Liability Act of 1980, 42 U.S.C. § 9601, et seq.

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(“CERCLA”).

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SUF Nos. 9, 10.

Waste products included

SUF No. 80-81.

No active mining occurred at Lava Cap after 1943, when its

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operations were shut down by the United States government during

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the Second World War.

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sell, lease, or exchange all the property and assets of the

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company.

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transaction between LCGMC and New Goldvue Mines Limited, a

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Canadian company developing a gold mine in Quebec and looking to

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upgrade its equipment.

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subsequently executed between the two companies.

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that agreement, New Goldvue, having “been advised as to

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the...assets and liabilities of [LCGMC], agreed to purchase “all

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the assets of [LCGMC], subject to the liabilities of [LCGMC],

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which liabilities [New Goldvue] agreed to assume and cause to be

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paid promptly.”

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specified that LCGMC’s assets would be transferred to Keystone

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Copper Corporation (“Keystone”), a wholly-owned subsidiary of

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LCGMC, before Keystone was itself conveyed to New Goldvue.

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SUF No. 12.

In 1950, LCGMC decided to

In 1952, LCGMC’s directors recommended a sales

A purchase and sale agreement was

SUF No. 19.

Pursuant to

The sales agreement further

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Keystone, which had previously operated a copper mine while a

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LCGMC subsidiary, thus became a wholly-owned subsidiary of New

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Goldvue.2

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See SUF No. 33.

The sales transaction between New Goldvue and LCGMC was

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financed by a transfer of New Goldvue stock.

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the LCGMC purchase was consummated, New Goldvue expanded its

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board from five to seven and appointed two individuals previously

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associated with LCGMC to the New Goldvue Board of Directors.

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SUF No. 20.

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LCGMC was subsequently dissolved.

SUF No. 19.

After

See

SUF No. 35.

New Goldvue, which was originally incorporated in Ontario,

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Canada as Goldvue Mines Limited in 1944, changed its name several

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times over the years before becoming Sterling in 2001.3

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1985, the company now known as Sterling was primarily a natural

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resources company with investments in mining and oil and gas

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production.

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Lava Cap Mine for some 37 years (aside from a brief, ultimately

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unsuccessful attempt to transfer ownership to another company).

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No mining occurred during that period.

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Until

Sterling, through its subsidiary Keystone, owned the

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Keystone was a California corporation and remained a
Sterling subsidiary until it became inactive after selling the
Lava Cap Mine in 1989 (Keystone was ultimately suspended by the
California Secretary of State in 1991).
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New Goldvue changed its name several times over the years
before becoming Sterling Centrecorp Inc. in 2001. New Goldvue
and the subsequent names by which the corporation was known will
be simply referred to as “Sterling” throughout the remainder of
this Memorandum and Order unless otherwise noted.
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In 1979, a partial log dam collapse led to a release of mine

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tailings which, in turn, caused downstream neighbors to complain

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about pollution from the resulting silt.

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complaints, the California Regional Water Quality Control Board

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issued a Cleanup and Abatement Order to Keystone on October 25,

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1979.

In response to those

See SUF No. 82.

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Following an ultimately unsuccessful attempt to sell the

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Lava Cap Mine to another company, Keystone sold, in 1989, the

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property to Banner Mountain Properties, Ltd., an entity

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controlled by Defendant Stephen Elder, who currently owns four of

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the seven parcels comprising the former mine site.

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120-23.

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business interest, Defendant Elder Development, Inc.

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an engineering firm prepare a Preacquisition Site Assessment

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before his purchase of the mine site that revealed hazardous

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substance contamination, primarily arsenic.

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SUF Nos. 77,

The remaining three parcels are owned by another Elder
Elder had

SUF No. 127.

The United States Environmental Protection Agency (“EPA”)

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completed a Preliminary Assessment on the mine site in April of

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1993, after Banner Mountain’s purchase of the mine site.

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No. 86.

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concentrations of both arsenic and lead.

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See SUF

Sediment and soil samples revealed elevated

Heavy rainstorms in 1993 washed mine wastes downstream into

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Little Clipper Creek and a former mine tailings pond now known as

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Lost Lake.

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1997 and the site was officially designed a Superfund site in

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January of 1999.

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removal and relocation of tailings, reinforcement of the log dam,

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and diversion of Little Clipper Creek around the tailings pile.

SUF No. 88.

The EPA began cleanup operations in late

SUF Nos. 89-90.

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Those operations included the

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Id.

Future remedial work contemplated by the EPA for the site

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will include actions to address the polluted groundwater.

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EPA estimates that it spent at least $20 million in response

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costs at the site as of April 30, 2008.

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of California Department of Toxic Substances alleges that its own

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response costs as of December 2010 are another $1,0000,000.

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There is no dispute that the release of hazardous substances at

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the mine site is responsible for the response costs that have

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been incurred by Plaintiffs.

SUF No. 100.

The

The State

See SUF No. 102.

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As indicated above, Plaintiffs now seek partial summary

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judgment with respect to Defendant Stephen P. Elder’s liability.4

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Aside from responding to the Statement of Undisputed Facts filed

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by Plaintiffs with respect to all four of their concurrently

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filed summary judgment requests, Defendant Elder has otherwise

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filed no opposition to the instant motion.

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STANDARD

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The Federal Rules of Civil Procedure provide for summary

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judgment when “the pleadings, depositions, answers to

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interrogatories, and admissions on file, together with

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affidavits, if any, show that there is no genuine issue as to any

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material fact and that the moving party is entitled to a judgment

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as a matter of law.”

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Catrett, 477 U.S. 317, 322 (1986).

Fed. R. Civ. P. 56(c); Celotex Corp. v.

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A default judgment against Defendant Elder’s company,
Defendant Elder Development, Inc., has already been granted by
Order filed September 20,2011 (ECF No. 149).
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One of the principal purposes of Rule 56 is to dispose of

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factually unsupported claims or defenses.

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Catrett, 477 U.S. at 325.

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Celotex Corp. v.

Rule 56 also allows a court to grant summary adjudication on

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part of a claim or defense.

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may move for summary judgment, identifying...the part of each

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claim or defense...on which summary judgment is sought.”); see

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also Allstate Ins. Co. v. Madan, 889 F. Supp. 374, 378-79 (C.D.

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Cal. 1995); France Stone Co., Inc. v. Charter Twp. of Monroe,

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See Fed. R. Civ. P. 56(a) (“A party

790 F. Supp. 707, 710 (E.D. Mich. 1992).

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The standard that applies to a motion for summary

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adjudication is the same as that which applies to a motion for

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summary judgment.

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ChemTronics, 16 F. Supp. 2d. 1192, 1200 (S.D. Cal. 1998).

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See Fed. R. Civ. P. 56(a), 56(c); Mora v.

Under summary judgment practice, the moving party
always bears the initial responsibility of informing
the district court of the basis for its motion, and
identifying those portions of ‘the pleadings,
depositions, answers to interrogatories, and admissions
on file together with the affidavits, if any,’ which it
believes demonstrate the absence of a genuine issue of
material fact.

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Celotex Corp., 477 U.S. at 323 (quoting Fed. R. Civ. P. 56(c)).

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If the moving party meets its initial responsibility, the

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burden then shifts to the opposing party to establish that a

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genuine issue as to any material fact actually does exist.

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Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,

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585-87 (1986); First Nat’l Bank v. Cities Serv. Co., 391 U.S.

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253, 288-89 (1968).

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In attempting to establish the existence of this factual

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dispute, the opposing party must tender evidence of specific

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facts in the form of affidavits, and/or admissible discovery

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material, in support of its contention that the dispute exists.

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Fed. R. Civ. P. 56(e).

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the fact in contention is material, i.e., a fact that might

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affect the outcome of the suit under the governing law, and that

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the dispute is genuine, i.e., the evidence is such that a

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reasonable jury could return a verdict for the nonmoving party.

The opposing party must demonstrate that

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Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 251-52

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(1986); Owens v. Local No. 169, Assoc. of W. Pulp and Paper

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Workers, 971 F.2d 347, 355 (9th Cir. 1987).

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“before the evidence is left to the jury, there is a preliminary

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question for the judge, not whether there is literally no

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evidence, but whether there is any upon which a jury could

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properly proceed to find a verdict for the party producing it,

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upon whom the onus of proof is imposed.”

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251 (quoting Improvement Co. v. Munson, 81 U.S. 442, 448 (1871)).

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As the Supreme Court explained, “[w]hen the moving party has

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carried its burden under Rule 56(c), its opponent must do more

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than simply show that there is some metaphysical doubt as to the

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material facts.... Where the record taken as a whole could not

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lead a rational trier of fact to find for the nonmoving party,

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there is no ‘genuine issue for trial.’”

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586-87.

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Stated another way,

Anderson, 477 U.S. at

Matsushita, 475 U.S. at

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In resolving a summary judgment motion, the evidence of the

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opposing party is to be believed, and all reasonable inferences

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that may be drawn from the facts placed before the court must be

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drawn in favor of the opposing party.

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Nevertheless, inferences are not drawn out of the air, and it is

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the opposing party’s obligation to produce a factual predicate

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from which the inference may be drawn.

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Freight Lines, 602 F. Supp. 1224, 1244-45 (E.D. Cal. 1985),

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aff’d, 810 F.2d 898 (9th Cir. 1987).

Anderson, 477 U.S. at 255.

Richards v. Nielsen

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ANALYSIS

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A.

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Plaintiffs’ Liability Motion as to Sterling

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In order to establish Sterling’s liability for response

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costs under Section 107(a) of CERCLA, 42 U.S.C. § 9607(a),

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Plaintiffs must make a four-part showing.

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prove that the Lava Cap Mine Superfund Site is a “facility” as

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defined by CERCLA.

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“threatened release” of a hazardous substance from the facility

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has occurred.

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the release or threatened release caused Plaintiffs to incur

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response costs.

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Sterling must fall within one of the four classes of covered

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persons described in § 9607(a).

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703-04 (9th Cir. 1993); 3550 Stevens Creek Assocs. v. Barclays

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Bank of California, 915 F.2d 1355, 1358 (9th Cir. 1990).

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First, Plaintiffs must

Second, they must show that a “release” or

Third, Plaintiffs are required to establish that

Fourth and finally, in order to incur liability

Cose v. Getty Oil, 4 F.3d 700,

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If Plaintiffs are successful in establishing these four elements

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of liability, they are entitled to summary judgment unless, as

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discussed in more detail in the following section, Sterling is

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able to invoke one of the limited statutorily-permitted defenses

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to CERCLA liability.

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CERCLA liability provided the requisite showing has been made.

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See, e.g., United States v. Shell Oil Co., 841 F. Supp. 962, 968

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(C.D. Cal. 1993).

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Courts readily grant summary judgment as to

In granting Plaintiffs’ concurrently filed Motion for

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Partial Summary Judgment as to the first three of the above-

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enumerated four requirements for imposition of CERCLA liability,

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this Court has already found that Plaintiffs have established

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that a “release” or “threatened release” of a “hazardous

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substance” occurred from a “facility” as that term is defined

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under CERCLA, and that Plaintiffs incurred response costs as a

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result thereof.

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Plaintiffs now seek to establish by way of this motion that

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Defendant Sterling qualifies as a “covered person” as that term

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is defined in the statute.

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corporate successors should answer for the liabilities of their

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predecessor corporations under CERCLA.

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Corp. v. ASARCO, Inc., 909 F.2d 1260, 1262 (9th Cir. 1990)

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(“Congress did intended successor liability” under CERCLA),

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overruled on other grounds, Atchison, Topeka & Santa Fe Ry. Co.

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v. Brown & Bryant, Inc., 132 F.3d 1295, 1301), amended and

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superseded by 159 F.3d 358, 364 (9th Cir. 1997).

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The Ninth Circuit recognizes that

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See Louisiana-Pacific

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In addition, other courts have uniformly concluded that successor

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corporations are within the meaning of “persons” for purposes of

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CERCLA liability.

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Inc., 980 F.2d 478, 486-87 (8th Cir. 1992); United States v.

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Carolina Transformer Co., 978 F.2d 832, 837 (4th Cir. 1992);

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Anspec Co., Inc. v. Johnson Controls, Inc., 922 F.2d 1240, 1245-

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48 (6th Cir. 1991); Smith Land & Improvement Corp. v. Celotex

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Corp., 851 F.2d 86, 91-92 (3d Cir. 1988), cert. denied, 488 U.S.

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1029 (1989).

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See United States v. Mexico Feed and Seed Co.,

Under both Ninth Circuit precedent and California law,

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successor liability does not arise from an asset purchase like

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that between Sterling and LCGMC “unless (1) the purchasing

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corporation expressly or impliedly agrees to assume the

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liability; (2) the transaction amounts to a ‘de-facto’

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consolidation or merger; (3) the purchasing corporation is merely

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a continuation of the selling corporation; or (4) the transaction

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was fraudulently entered into in order to escape liability.”

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Atchison, Topeka and Santa Fe Railway Co. v. Brown & Bryant,

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Inc., 159 F.3d 358, 361 (9th Cir. 1997); Ray v. Alad Corp.,

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19 Cal. 3d 22, 28 (1977).

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successor liability can rest on any one of those four variants.

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Here, Plaintiffs argue that Sterling qualifies as the successor

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to LCGMC either because Sterling assumed the liabilities of LCGMC

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when it acquired the company, or because a de facto merger or

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consolidation between the two companies incurred upon which

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successor liability may also be premised.

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successor liability will now be addressed.

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As the quoted language makes clear,

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Both those bases for

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1.

Assumption of Liability.

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Plaintiffs’ quest for summary judgment as to successor

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liability fails because there are triable issues as to whether

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Sterling either expressly or impliedly agreed to assume all of

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LCGMC’s liabilities, whether financial, environmental, or

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otherwise, in the course of the purchase transaction.

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Although the Ninth Circuit has not squarely addressed

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whether state law governs in determining successor liability

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under CERCLA, examination of cases in the CERCLA arena leave

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little doubt as to that conclusion.

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159 F.3d at 362-64 (stepping back from a prior unequivocal

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announcement as to the applicability of state law, but only on

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grounds that the court “need not determine” whether state law is

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dispositive since both state law and federal common law yield the

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same result); Mardan Corp. v. C.G.C. Music Ltd., 804 F.2d 1454,

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1457-1460 (9th Cir. 1986) (noting that a federal rule for CERCLA

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liability based on contractual assumption of liability would

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disrupt and undermine commercial contractual relationships

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premised on state law).

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See, e.g., Atchison,

Here, of course, any liability based on CERCLA and premised

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on the purchase agreement between Sterling and LCGMC is

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intrinsically problematic since that 1952 agreement was entered

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some 28 years before CERCLA was enacted into law in 1980.

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Nonetheless, under California law, laws enacted after a contract

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was formed can still become part of an assumption of liabilities

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if there is “clear and distinct” evidence that a broad assumption

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was in fact contemplated by the parties.
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Swenson v. File, 3 Cal. 3d 389, 394-95 (1970).

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agreement is sufficiently clear, that general proposition has

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been held to apply to CERCLA liability on the basis of a pre-

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CERCLA agreement.

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Control v. Cal-Fresno Inv. Co., 2007 U.S. Dist. LEXIS 37314 at

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*13 (E.D. Cal. 2007)).

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As long as the

See, e.g., Cal. Dep’t of Toxic Substances

Sterling opposes Plaintiffs’ argument that any such “clear

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and distinct” evidence to assume liability was contemplated in

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the LCGMC purchase.

Sterling points to the language of the

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purchase agreement itself, which indicates that Sterling, having

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“been advised as to the... assets and liabilities of [LCGMC],

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agreed to purchase “all the assets of [LCGMC], subject to the

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liabilities of [LCGMC], which liabilities [New Goldvue] agreed to

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assume and cause to be paid promptly.”

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Sterling, while “assets” is modified by the qualifier “all”, no

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similar use of “all” with respect to liabilities is employed.

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Sterling further maintains that by explaining that “liabilities”

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will be “paid promptly”, the purchase agreement necessarily

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refers to liabilities in a limited financial sense, rather than

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encompassing any expansive definition extending to contingent and

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as-yet-unknown environmental liability.

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contends that the requisite clear intent to assume all

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liabilities is simply not present.

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SUF No. 43.

According to

Sterling consequently

According to Sterling, all cases where assumption of unknown

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liabilities have been recognized entail an agreement to assume

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“all liabilities”, a contingency absent from the instant purchase

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agreement according to Sterling.

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1

See, e.g., Olin Corp. v. Consolidated Aluminum Corp., 5 F.3d 10,

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15-16 (2nd Cir. 1993) (language stating that purchase agreed to

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be responsible for “all liabilities... as they exist on the

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Closing Date or arise thereafter” evidenced the parties’ “clear

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and unmistakable intent” to encompass future unknown CERCLA

6

liability).

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Plaintiffs, on the other hand, in moving for summary

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judgment on this issue, point to evidence demonstrating that, in

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their view, the sales transaction between Sterling and LCGMC does

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supply the requisite intent to assume all future liabilities

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attributable to LCGMC’s mine activities.

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Plaintiffs cite case law suggesting that the general rule of

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Swenson v. File, supra, (limiting assumption of later-created

14

liability unless “clear and distinct” evidence of an intent to do

15

so) may not apply to CERCLA cases (see, e.g., United States v.

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Iron Mountain Mines, Inc., 987 F. Supp. 1233, 1240 (E.D. Cal.

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1997) (refusing to extend the rule articulated by Swenson to

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CERCLA cases), Plaintiffs maintain that the requirements of

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Swenson are satisfied in any event.

Consequently, although

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In arguing that Sterling’s intent to assume all future

21

liabilities was in fact unmistakable, Plaintiffs point to parole

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evidence that, in their view, removes any lingering uncertainty

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about whether Sterling in fact intended to assume “all”

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liability.

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circumstances surrounding a transaction in order to determine the

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meaning intended and understood by the parties.

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Parole evidence is admissible to show all

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1

See Brookes v. Adolph’s Ltd., 170 Cal. App. 2d 740, 746 (Cal.

2

App. 1959); see also Cal. Civ. Code § 1647 (“a contact may be

3

explained by reference to the circumstances under which it was

4

made, and the matter to which it relates”).

5

First, Plaintiffs point to a letter from Sterling’s

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President to the company’s shareholders dated September 22, 1952

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which described the sales agreement entered into some seventeen

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days previously as follows:

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By agreement dated September 5, 1952, the Company has
agreed to acquire all the assets of Lava Cap Gold Mines
Limited [sic], a Delaware corporation, subject to its
liabilities, in consideration of the issue of one share
of the capital stock of our Company for every 6 issued
shares of Lava Cap.

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13
14

SUF No. 44.
Second, an October 24, 1952 letter from LCGMC’s President to

15

LCGMC shareholders appears to express a corresponding

16

understanding of the sales transaction as entailing an assumption

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of all LCGMC liabilities by Sterling:

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19
20

Your Board of Directors on September 5, 1952, sold all
the properties and assets of Lava Cap, subject to its
liabilities, for sufficient fully paid and nonassessable shares of the capital stock of
[Sterling].... [Sterling] assumes all liabilities and
expenses of Lava Cap.

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22

SUF No. 41.

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Third, correspondence from Sterling in 1956 to Chase

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Manhattan Bank describing the 1952 sales transaction reiterates

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Sterling’s apparent assumption of liabilties:

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27
28

In 1952, [Sterling] purchased all of the assets and
liabilities of Lava Cap gold Mining Corporation and the
latter corporation has surrendered its charter.
SUF No. 45.
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1

The Court concludes that the above-enumerated evidence, at

2

the very least, creates triable issues of fact as to whether the

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parties did agree that Sterling would assume all liabilities of

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LCGMC.

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for partial summary judgment, made on grounds that Sterling

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qualifies as a “covered person” under CERCLA by virtue on

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successor liability grounds, fails.

Given those triable issues of fact, Plaintiffs’ motion

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2.

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De Facto Merger or Consolidation.

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Even aside from the issue of whether Sterling assumed the

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liabilities of LCGMC, and hence qualified for successor liability

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on that basis, Plaintiffs also point to both pre and post-

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acquisition correspondence suggesting that the 1952 sales

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transaction amounted to a merger between the two companies.

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Pls.’ SUF Nos. 46, 47.

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amounts to a merger, successor liability may also apply.

18

The correspondence at issue, which intimates that a

See

As indicated above, if the transaction

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reorganization of the two companies occurred at least for

20

purposes of tax law, is not determinative.

21

state and federal authority governing whether a corporate merger

22

will be deemed to have occurred, a continuity of enterprise is

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required.

24

App. 3d 1429, 1436 (Cal. App. 1986); Cal. Dept. of Toxic

25

Substances Control v. California-Fresno Inv. Co., 2007 WL 1345580

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at *6 (E.D. Cal. 2007).

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Instead, under both

See Marks v. Minnesota Mining and Mfg. Co., 187 Cal.

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1

While other factors must also be considered in assessing a

2

merger, in this particular matter the continuity requirement is

3

the prerequisite disputed by the parties, and if continuity is

4

not present here as a matter of law summary judgment cannot be

5

granted as to whether Sterling has assumed successor liability by

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virtue of a de facto merger.

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Determining whether there is a continuity of enterprise is a

8

fact intensive inquiry necessary to ensure that “solvent

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corporations, going concerns, should not be permitted to

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discharge their liabilities to injured persons simply by

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shuffling paper and manipulating corporate entities.”

Marks,

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187 Cal. App. 3d at 1437 (internal citation omitted).

The Court

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believes that the evidence, viewed in the manner most favorable

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to the non-moving party (Sterling), is at best conflicting as to

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whether a continuity of operation occurred after the LCGMC

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purchase by Sterling.

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did not alter its corporate structure and management team, and

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aside from two new board members, one of which had been a

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director of Lava Cap Mining, there was no difference in

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Sterling’s operation after it purchased Lava Cap.

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evidence that Sterling ever used the name Lava Cap Mining or held

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itself out as a continuation of Lava Cap Mining.

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contrary, the evidence suggests that Sterling bought LCGMC not to

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continue its operation but instead to utilize its equipment and

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movable assets for its Canadian operations.

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As Sterling points out, the acquisition

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There is no

To the

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Although the Lava Cap mine had been inactive since being closed

2

by the government during World War II, LCGMC was a mining company

3

and the undisputed evidence simply does not show that Sterling

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intended to operate the mine as a going concern as LCMGC had

5

beforehand.

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merger or consolidation as the basis for imposing successor

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liability on Sterling is no more persuasive, for purposes of

8

granting summary judgment, than its assumption of liabilities

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argument enumerated above.

It follows that Plaintiffs’ reliance on a de facto

Either way, summary judgment in

10

Plaintiffs’ favor is not indicated, and the requested declaratory

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judgment as to Sterling’s liability for future costs cannot be

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had.

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B.

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Viability of Sterling’s Affirmative Defenses to
Liability

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17

Plaintiffs also request, by way of their second motion for

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summary judgment pending before this Court, a finding that none

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of the affirmative defenses to CERCLA liability pled by Sterling

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are available given the facts of this case.

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disputing Sterling’s claim (by way of its First Affirmative

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Defense) that this court lacks personal jurisdiction over it,

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Plaintiffs also contest the viability of the three enumerated

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defenses specifically recognized by CERCLA, and pled by Sterling

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in its Fourth Affirmative Defense.

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///

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In addition to

1

With respect to the fourteen other affirmative defenses included

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within Sterling’s answer, Plaintiffs claim either that they

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cannot be supported by any set of facts, or that they are

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appropriate only in the damages portion of this trial as relating

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to the amount of response costs owed by Sterling.

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With respect to personal jurisdiction, as already set forth

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in its Memorandum and Order denying Sterling’s corresponding

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Motion seeking summary judgment on grounds of no personal

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jurisdiction (ECF No. 151), this Court finds that triable issues

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of fact preclude any finding as a matter of law with respect to

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personal jurisdiction under the facts of this case.

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Consequently, as the Court denied Sterling summary judgment on

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that issue, the Court will also deny Plaintiffs’ attempt to

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foreclose through summary judgment the use of an affirmative

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defense to that effect.

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triable issues as to personal jurisdiction on a successor

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liability theory alone, it need not otherwise assess whether

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jurisdiction is absent by virtue of Sterling’s own lack of

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contact with California (pursuant to a specific jurisdiction

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analysis).

Moreover, because the Court finds

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With respect to the affirmative defenses specifically

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available in a CERCLA action, the statute recognizes three

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separate defenses, plus any combination of the three as a fourth.

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Those defenses are as follows:

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war; 3) acts or omissions of certain third parties not in privity

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with the defendant; or 4) any combination of the above three

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defenses.

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cognizable defenses to liability under § 107(g).

1) an act of God; 2) an act of

42 U.S.C. § 9607(b)(1)-(4).

19

These are the only

1

See California ex rel. Calif. Dept. Of Toxic Substances Control

2

v. Neville Chem. Co., 358 F.3d 661, 672 (9th Cir. 2004).

3

Moreover, even these four available defenses should be narrowly

4

construed since CERCLA must be read “consistent with [its] broad

5

remedial purpose.

6

Inc., 792 F.2d 887, 892 (9th Cir. 1986).

7

See, e.g.,

Wickland Oil Terminals v. ASARCO,

Sterling admits that none of the affirmative defenses

8

available under CERCLA are applicable (See Opp’n, 9:4-5).

9

Consequently, summary judgment is granted in Plaintiffs’ favor as

10

to the Sterling’s Fourth Affirmative Defense.

Sterling also does

11

not oppose summary judgment as to its Thirteenth and Fourteenth

12

Affirmative Defenses.

13

liability defenses are recognized as cognizable affirmative

14

defenses in a CERCLA action like the present one, summary

15

judgment is also granted as to the Second, Third, Fifth, Sixth

16

and Eleventh Affirmative Defenses.5

17

the remaining affirmative defenses (the Seventh, Eighth, Ninth,

18

Tenth, Twelfth, Fifteenth and Sixteenth Defenses) are pertinent

19

only to the damages phase of this trial and consequently, their

20

validity as such is not contested.

21

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22

///

23

///

24

///

In addition, since none of the other

Both parties recognize that

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26
27
28

5

These defenses relate to elements of the claim, or the
applicable burden of proof, and, as so-called “negative”
defenses, are properly raised by way of denial as opposed to an
affirmative defense per se. See, e.g., Sanwa Bus. Credit Corp.
v. Harris, 1991 WL 156116 at *1-2 (N.D. Ill. 1991).
20

CONCLUSION

1
2
3

For the reasons set forth above, Plaintiffs’ Motion for

4

Partial Summary Judgment as to the CERCLA liability of Defendant

5

Sterling Centrecorp, Inc. (ECF No. 110) is DENIED.

6

additional Motion for Partial Summary Judgment on Defendant

7

Sterling’s Affirmative Defenses to CERCLA liability (ECF No. 112)

8

is DENIED in part and GRANTED in part.

9

to the First Affirmative Defense, but granted as to the Second,

10

Third, Fourth, Fifth, Sixth, Eleventh, Thirteenth and Fourteenth

11

Defenses.

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13

Plaintiffs’

It is denied with respect

IT IS SO ORDERED.
Dated: December 21, 2011

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_____________________________
MORRISON C. ENGLAND, JR.
UNITED STATES DISTRICT JUDGE

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