California Department of Toxic Substances Control et al v. Jim Dobbas, Inc. et al

Filing 43

ORDER signed by Senior Judge William B. Shubb on 9/16/14 DENYING 27 Motion to Dismiss and GRANTING in part and DENYING in part 27 Motion to Strike. Jim Dobbas, Inc. has 20 days to file an amended answer if it can do so consistent with this order. (Manzer, C)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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----oo0oo----

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CALIFORNIA DEPARTMENT OF
TOXIC SUBSTANCES CONTROL and
the TOXIC SUBSTANCES CONTROL
ACCOUNT,
Plaintiffs,

CIV. NO. 2:14-595 WBS EFB
MEMORANDUM AND ORDER RE: MOTION
TO DISMISS COUNTERCLAIMS AND
MOTION TO STRIKE

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v.
JIM DOBBAS, INC., a
California corporation;
CONTINENTAL RAIL, INC., a
Delaware corporation; DAVID
VAN OVER, individually;
PACIFIC WOOD PRESERVING, a
dissolved California
corporation; and WEST COAST
WOOD PRESERVING, LLC, a
Nevada limited liability
company,
Defendants,
AND RELATED COUNTERCLAIMS AND
CROSS-CLAIMS.
----oo0oo---Plaintiffs California Department of Toxic Substances
Control (“DTSC”) and the Toxic Substances Control Account
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(“TSCA”) brought this action under the Comprehensive

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Environmental Response, Compensation, and Liability Act of 1980

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(“CERCLA”), 42 U.S.C. §§ 9601 et seq., to recover cleanup costs

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from defendants Jim Dobbas, Inc. (“Dobbas”), Continental Rail,

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Inc., Pacific Wood Preserving, West Coast Wood Preserving, LLC

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(“WCWP”), and David van Over.

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answered the Complaint.

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alleging that plaintiffs are liable to it for mismanaging the

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cleanup.

Dobbas, van Over, and WCWP

Dobbas’s Answer includes counterclaims

Plaintiffs now move to dismiss Dobbas’s counterclaims

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pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure

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to state a claim on which relief can be granted and to strike

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several portions of the Answer filed by Dobbas pursuant to Rule

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12(f).

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I.

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Factual and Procedural History
In 1972, Pacific Wood Preserving began conducting wood

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preserving operations at a facility in Elmira, California (the

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“Elmira facility”).

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Preserving dissolved and was allegedly succeeded by WCWP, which

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relocated its wood preserving operations to Bakersfield,

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California.

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Company (“CAPCO”), a successor to the Wickes Corporation,

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conducted wood preserving operations at the Elmira facility.

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(Id. ¶ 15.)

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and Continental Rail, which in turn sold it to van Over in 2011

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for two dollars.

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(Id.)

(Compl. ¶¶ 13-14.)

In 1979, Pacific Wood

From 1979 to 1982, Collins & Aikman Products

In 1997, CAPCO sold the Elmira facility to Dobbas

(Id. ¶¶ 19, 26.)

Plaintiffs allege that the operators of the Elmira

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facility released numerous hazardous substances, including

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arsenic, chromium, copper, and other constituents of wood
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preserving chemicals.

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took a number of remedial actions under the oversight of DTSC,

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including excavating soil, installing an asphalt cap over

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contaminated soils, constructing a drainage system over

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contaminated areas of the site, monitoring groundwater, and

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installing a groundwater extraction and treatment system.

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¶ 17.)

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efforts.

(Id. ¶ 16.)

Between 1980 and 2005, CAPCO

(Id.

In 2005, CAPCO declared bankruptcy and ceased remediation

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(Id. ¶ 21.)
In 2006, DTSC allegedly requested that Dobbas and

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Continental Rail resume remediation efforts at the Elmira

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facility.

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agreed to perform certain remedial actions, both Dobbas and

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Continental Rail “failed and refused to perform most of the

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actions formerly conducted by [CAPCO] to address contamination

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at, around, and/or beneath the site.”

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and Continental Rail sold the Elmira facility to van Over in

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2011, DTSC issued an Imminent or Substantial Endangerment

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Determination Order and Remedial Action Order requiring Dobbas,

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Continental Rail, and van Over to conduct additional remediation

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activities.

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failed to comply with these orders.

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plaintiffs have taken “response” actions from November 2005 to

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present at the Elmira facility, including efforts to repair and

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restart the groundwater extraction and treatment system,

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groundwater monitoring, investigation of soils, and

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implementation of the Removal Action Workplan.

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Plaintiffs allege they have incurred over $2.2 million in

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response costs as a result of defendants’ failure to comply with

(Id. ¶ 22.)

Plaintiffs allege that, while Dobbas

(Id. ¶ 27.)

(Id. ¶ 23.)

After Dobbas

All three of those defendants allegedly

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(Id. ¶ 28.)

As a result,

(Id. ¶ 29.)

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their orders.

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(Id. ¶¶ 29-31.)

Plaintiffs brought this action seeking cost recovery

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under CERCLA, 42 U.S.C. § 9607, declaratory relief under CERCLA,

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42 U.S.C. § 9613(g), and damages, injunctive relief, and civil

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penalties under the Hazardous Substance Account Act (“HSAA”),

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Cal. Health & Safety Code §§ 25300 et seq.

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timely answered the Complaint, demanded a jury trial and

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attorney’s fees, and asserted numerous affirmative defenses.

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(Docket Nos. 23, 24.)

Dobbas and van Over

In addition, Dobbas filed a counterclaim

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against DTSC alleging that it mismanaged cleanup efforts at the

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Elmira facility and seeking cost recovery and contribution under

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CERCLA, contribution and indemnity under HSAA, and declaratory

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relief under CERCLA and the Declaratory Judgment Act, 28 U.S.C.

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§ 2201.

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Dobbas’s counterclaim pursuant to Rule 12(b)(6) for failure to

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state a claim on which relief can be granted and to strike

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portions of Dobbas’s Answer pursuant to Rule 12(f).

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27.)

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II.

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(Docket No. 23.)

Plaintiffs now move to dismiss

(Docket No.

Motion to Dismiss
When considering a motion to dismiss a counterclaim

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under Rule 12(b)(6), the court uses an identical standard as that

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for dismissal of a claim.

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in the claim as true and draw all reasonable inferences in favor

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of the claimant.

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(1974), overruled on other grounds by Davis v. Scherer, 468 U.S.

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183 (1984); Cruz v. Beto, 405 U.S. 319, 322 (1972).

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motion to dismiss, a claimant must plead “only enough facts to

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state a claim to relief that is plausible on its face.”

The court must accept the allegations

See Scheuer v. Rhodes, 416 U.S. 232, 236

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To survive a

Bell

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Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

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“plausibility standard,” however, “asks for more than a sheer

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possibility that a defendant has acted unlawfully,” and where a

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counterclaim pleads facts that are “merely consistent with a

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defendant’s liability,” it “stops short of the line between

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possibility and plausibility.”

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678 (2009) (quoting Twombly, 550 U.S. at 557).

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A.

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This

Ashcroft v. Iqbal, 556 U.S. 662,

Dobbas’s CERCLA Counterclaims
Dobbas’s first and second counterclaims seek cost

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recovery and contribution from DTSC pursuant to §§ 9607 and 9613

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of CERCLA.

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that DTSC was (1) “the owner and operator of a vessel or a

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facility,” (2) a “person who at the time of disposal owned or

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operated any facility at which such hazardous substances were

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disposed of,” (3) a “person who . . . arranged for disposal or

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treatment . . . of hazardous substances,” or (4) a “person who

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accepts or accepted any hazardous substances for transport

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. . . .”

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on the theory that DTSC mismanaged cleanup efforts at the

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remediation sites and is therefore liable as an “operator” under

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§ 9607(a)(2).

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In order to assert such a claim, Dobbas must allege

42 U.S.C. § 9607(a).

Dobbas asserts its counterclaims

(Dobbas’s Countercl. at 2-4.)

In light of the tautological definition provided by

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Congress,1 the Supreme Court gave CERCLA’s use of the term

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“operator” an expansive meaning: “someone who directs the

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workings of, manages, or conducts the affairs of a facility.”

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The phrase “owner or operator” is defined as “any
person owning or operating” a facility. 42 U.S.C.
§ 9601(20)(A)(ii).
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United States v. Bestfoods, 524 U.S. 51, 66 (1998).

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context of CERCLA, the Court stated that “an operator must

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manage, direct, or conduct operations specifically related to

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pollution, that is, operations having to do with the leakage or

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disposal of hazardous waste, or decisions about compliance with

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environmental regulations.”

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government entities may fall within the scope of this language.

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See United States v. Township of Brighton, 153 F.3d 307, 315 (6th

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Cir. 1998) (“[A] government entity, by regulating the operation

Id.

In the

Several courts have found that

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of a facility actively and extensively enough, can itself become

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an operator.”); FMC Corp. v. United States Dep't of Commerce, 29

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F.3d 833, 840 (3rd Cir. 1994) (en banc) (“[T]he government can be

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liable when it engages in regulatory activities extensive enough

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to make it an operator of a facility . . . .”).

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Whether a government entity’s involvement in

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remediation efforts subsequent to the emission of hazardous

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substances at a facility renders it an “operator” of the facility

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thus depends on whether it managed, directed, or conducted

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operations there.2

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control necessary to support operator liability, some settling on

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a narrower “actual control” standard, see Brighton, 153 F.3d at

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313-14 (requiring “affirmative acts” from a purported operator),

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while others have adopted a broader “authority to control”

Courts have struggled with the level of

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DTSC suggests in passing that it enjoys sovereign
immunity from Dobbas’s CERCLA counterclaims because it is an
agency of the State of California. As the Ninth Circuit has made
clear, however, CERCLA includes a “waiver of sovereign immunity
[that] is coextensive with the scope of liability imposed by 42
U.S.C. § 9607.” United States v. Shell Oil Co., 294 F.3d 1045,
1053 (9th Cir. 2002).
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standard, see Nurad Inc. v. William E. Hooper & Sons Co., 966

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F.2d 837, 842 (4th Cir. 1992) (requiring only the existence of

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authority to act).

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scope of post-Bestfoods operator liability, but it has noted the

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expansive reach of the term.

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Pedro Boat Works, 635 F.3d 440, 444 (9th Cir. 2011).

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The Ninth Circuit has yet to crystalize the

See City of Los Angeles v. San

DTSC points to several cases employing a narrow

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definition of “operator,” including Long Beach Unified Sch. Dist.

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V. Dorothy B. Godwin Cal. Living Trust, 32 F.3d 1364, 1367 (9th

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Cir. 1994) (requiring an operator to “play an active role in

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running the facility, typically involving hands-on, day-to-day

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participation”) and United States v. Dart Indus., Inc., 847 F.2d

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144, 146 (4th Cir. 1988) (requiring “hands-on” activities).

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These stricter constructions would help DTSC’s contention that it

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falls outside the scope of operator liability.

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these cases predate the Supreme Court’s more-recent formulation

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in Bestfoods--the formulation this court must follow.

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However, all

Several courts have dismissed claims against state

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agencies when there were no allegations that the state agency had

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any involvement with the facility other than remedial cleanup

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efforts.

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Almy Bros., 782 F. Supp. 731, 736 (N.D.N.Y. 1992); United States

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v. W. Processing Co., 761 F. Supp. 725, 731 (W.D. Wash. 1991).

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But, again, these cases rest on the pre-Bestfoods understanding

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of the term “operator.”

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(requiring “hands on” activities that contributed to the release

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of hazardous waste); Stilloe, 782 F. Supp. at 735-36 (relying on

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pre-Bestfoods cases); W. Processing Co., 761 F. Supp. at 730-31

See, e.g., Dart Indus., 847 F.2d at 146; Stilloe v.

See Dart Indus., 847 F.2d at 146

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(relying on pre-Bestfoods cases).

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persuasive force here.

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Accordingly, these cases lack

Dobbas alleges sufficient facts to survive a motion to

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dismiss under Bestfoods.

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agency, the California Department of Health Services (“DHS”),

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have been involved in cleanup efforts at the Elmira facility for

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over three decades.

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states that DTSC and DHS issued multiple remedial action plans

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that selected and implemented response actions at the Elmira

It claims that DTSC and its predecessor

(Countercl. ¶ 6.)

During that time, Dobbas

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facility.

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constitute management or direction of operations there.

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(Countercl. ¶¶ 7, 9.)

Such actions could plausibly

Dobbas supports this contention with two exhibits,

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(Countercl. Exs. A-B), attached to its counterclaim and

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incorporated by reference.

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Warriors, 266 F.3d 979, 988 (9th Cir. 2001) (holding that courts

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may consider documents attached to a complaint in resolving a

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motion to dismiss).

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agreement between the DHS and Wickes Forest Industries dated

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February 26, 1984.

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remedial obligations to be implemented by Wickes with respect to

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cleanup at the Elmira facility, and it specifically includes

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DHS’s approval of plans for “stormwater management, the ground

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water treatment and contaminated soils removal and containment

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elements of the Plan.”

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an Operation and Maintenance Agreement between DTSC and the

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Collins and Aikman Products Company (“CAPCO”) dated March 12,

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1996.

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involvement in remedial action, including reviewing and approving

See Sprewell v. Golden State

The first exhibit consists of a settlement

(Docket No. 23-2.)

(See id.)

(Docket No. 23-3.)

It sets forth various

The second exhibit consists of

That exhibit details some of DTSC’s

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“Sampling Analysis Procedures,” “Health & Safety Protections,”

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“Removal/Disposal Procedures,” and a “Remedial Action Plan.”

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(Id.)

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“actually perform the Remedial Action,” (id.), this does not

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preclude the document from supporting Dobbas’s counterclaim.

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Bestfoods does not require an operator to play an active role.

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It requires only that an entity “manage, direct, or conduct . . .

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operations having to do with the leakage or disposal of hazardous

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waste, or decisions about compliance with environmental

While the second exhibit also states that DTSC did not

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regulations.”

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rise to a plausible claim that DTSC’s actions meet this standard,

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and Dobbas should have an opportunity to develop it further.

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Bestfoods, 524 U.S. at 66.

These documents give

In its supporting memorandum, Dobbas also points to

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portions of DTSC’s Complaint suggesting that, from November 2005

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to the present, DTSC has performed “response actions” at the

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facility, including “efforts to repair and restart the

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groundwater extraction and treatment system, completion of a

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remedial investigation for site soils, preparation of the Removal

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Action Workplan, implementation of the Removal Action Workplan in

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October and November 2011, groundwater monitoring, and other

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tasks.”

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an inference that DTSC acted as an “operator” under § 9607(a)(2).

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Dobbas similarly supports its allegations of negligence, gross

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negligence, and/or intentional misconduct, (Countercl. ¶¶ 17,

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26), and cognizable response costs, (Countercl. ¶¶ 21-22), with

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factual allegations from DTSC’s complaint.

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11-13.)

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(See Compl. ¶¶ 21-29.)

These factual allegations raise

(Dobbas’s Opp’n at

Taken as a whole, the pleadings contain sufficient
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facts to support Dobbas’s counterclaims.

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at 570 (requiring that a party plead “only enough facts to state

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a claim to relief that is plausible on its face”).

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must therefore deny DTSC’s motion to dismiss Dobbas’s first two

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counterclaims.

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B.

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See Twombly, 550 U.S.

The court

Dobbas’s HSAA Counterclaim
The HSAA provides that “[a]ny person who has incurred

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removal or remedial action costs in accordance with this chapter

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or [CERCLA] may seek contribution or indemnity from any person

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who is liable pursuant to this chapter . . . .”

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Safety Code § 25363(e).

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“liable person” refers to those individuals who are liable for

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cleanup costs under 42 U.S.C. § 9607(a).

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see also Coppola v. Smith, 935 F. Supp. 2d 993, 1011 (E.D. Cal.

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2013) (Ishii, J.) (“Although the HSAA is not identical to CERCLA,

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the HSAA expressly incorporates the same liability standards,

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defenses, and classes of responsible persons as those set forth

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in CERCLA.” (citations omitted)); Castaic Lake Water Agency v.

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Whittaker Corp., 272 F. Supp. 2d 1053, 1084 n.40 (C.D. Cal. 2003)

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(“HSAA creates a scheme that is identical to CERCLA with respect

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to who is liable.” (citations and internal quotation marks

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omitted)).

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CERCLA.

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the court must also deny DTSC’s motion to dismiss Dobbas’s HSAA

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counterclaim.

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C.

Cal. Health &

Under the HSAA, a “responsible party” or

Id. § 25323.5(a)(1);

As explained above, Dobbas has stated a claim under

Because the HSAA mirrors CERCLA’s scope of liability,

Dobbas’s Claim for Declaratory Relief
Dobbas seeks declaratory relief under CERCLA’s

declaratory judgment provision, 42 U.S.C. § 9613(g)(2)--a
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provision that is entirely derivative of its claim under § 9607

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for response costs.

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----, Civ. No. 1:11-1257 AWI BAM, 2014 WL 1922400, at *11 (E.D.

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Cal. May 14, 2014) (“A claim for declaratory relief under . . .

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§ 9613(g) is dependent upon a valid § 9607 claim.”).

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Dobbas has stated a claim for cost recovery against DTSC under

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§ 9607, it may also seek declaratory relief under CERCLA.

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See Coppola v. Smith, --- F. Supp. 2d ----,

Because

Dobbas likewise seeks declaratory relief under the
Declaratory Judgment Act (“DJA”) with respect to its § 9613(f)

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claim for contribution.3

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availability of declaratory relief for a contribution claim, see

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42 U.S.C. § 9613(g), but the Ninth Circuit permits such relief in

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order to support the policy considerations animating it.

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Boeing Co. v. Cascade Corp., 207 F.3d 1177, 1191 (9th Cir. 2000)

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(allowing declaratory relief on a contribution claim as

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“consistent with the broader purposes of CERCLA”).

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authorizes a court to grant declaratory relief where there is “a

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CERCLA does not address the

See

The DJA

DTSC argues that all declaratory relief under CERCLA
must be funneled through § 9613(g), not the DJA. (Pls.’s Mem. at
10-11.) The court does not find this argument persuasive. DTSC
fails to support its proposition with a case addressing
declaratory relief on a contribution claim under § 9613(f). The
case it cites addresses only cost recovery claims under §9607(a).
See City of Colton v. Am. Promotional Events, Inc.-W., 614 F.3d
998, 1007 (9th Cir. 2010) (holding that declaratory relief for
cost recovery under CERLCA § 107(a) must be asserted through
CERCLA’s “more detailed declaratory judgment provision”).
Moreover, the Ninth Circuit appears to have analyzed declaratory
judgment relating to a contribution claim under the standard of
the DJA before. See Boeing Co. v. Cascade Corp., 207 F.3d 1177,
1192 (9th Cir. 2000) (using the “substantial controversy”
language of DJA analysis). Other circuits have also permitted
declaratory relief under the DJA for a CERCLA contribution claim.
See, e.g., New York v. Solvent Chem. Co., 664 F.3d 22, 25 (2d
Cir. 2011).
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case of actual controversy within its jurisdiction,” subject to

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certain exceptions.

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the rights and other legal relations of any interested party

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seeking such declaration, whether or not further relief is or

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could be sought.”

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contribution under § 9613(f), it may pursue declaratory relief

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allocating future contribution.

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Accordingly, the court must deny DTSC’s motion to dismiss these

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counterclaims.

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28 U.S.C. § 2201(a).

Id.

The court may “declare

Because Dobbas has stated a claim for

See Boeing, 207 F.3d at 1191-92.

III. Motion to Strike

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Rule 12(f) authorizes the court to “strike from a

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pleading an insufficient defense or any redundant, immaterial,

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impertinent, or scandalous matter.”

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“[T]he function of a [Rule] 12(f) motion to strike is to avoid

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the expenditure of time and money that must arise from litigating

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spurious issues by dispensing with those issues prior to trial.”

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Sidney-Vinstein v. A.H. Robins Co., 697 F.2d 880, 885 (9th Cir.

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1983).

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A.

Fed. R. Civ. P. 12(f).

Dobbas’s Jury Trial Demand
DTSC asks the court to strike Dobbas’s demand for a

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jury trial.

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trial in all “[s]uits at common law” in which the amount in

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controversy exceeds twenty dollars, U.S. Const. amend. VII, but

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does not require a jury trial for claims that are exclusively

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equitable in nature, see Tull v. United States, 481 U.S. 412,

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417-18 (1987).

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jury trial on a particular claim, a court must determine whether

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the claim resembles one historically tried to juries before the

The Seventh Amendment entitles a party to a jury

In determining whether a party is entitled to a

12

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merger of law and equity and, more importantly, whether the

2

relief sought is equitable or legal in nature.

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also Chauffeurs, Teamsters, & Helpers, Local No. 391 v. Terry,

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494 U.S. 558, 565 (2002) (noting that “[t]he second inquiry is

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the more important in our analysis” (citation omitted)).

6

close cases, a court should err on the side of preserving the

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right to a jury trial.”

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Teamsters, 649 F.3d 1067, 1069 (9th Cir. 2011) (citation

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omitted).

10

Id. at 418; see

“In

Granite Rock Co. v. Int’l Bhd. of

Plaintiffs’ first two claims seek cost recovery and

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declaratory relief under CERCLA.

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the conclusion that CERCLA cost recovery actions are equitable in

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nature and thus that no jury trial is available.”

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Toxic Substances Control v. Alco Pac., Inc., 217 F. Supp. 2d

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1028, 1046 (C.D. Cal. 2002) (citing cases).

16

dispute this, although some question has arisen over the

17

soundness of this assumption.

18

Town of Babylon, 584 F.3d 436, 452 (2d Cir. 2009) (citing Great–

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W. Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 212 (2002))

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(explaining that, “in light of [Great–West], it is by no means

21

clear that the restitution provided by § 9607(a) is equitable,

22

rather than legal, in nature”).4

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28

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“Substantial case law supports

Cal. Dep’t of

Dobbas does not

See AMW Materials Testing, Inc. v.

Instead, Dobbas points to its

Because § 9607(a) cost-recovery actions seek to restore
parties who incur cleanup costs to the position they previously
occupied, “courts have characterized CERCLA claims as
‘restitution’ and have viewed them as actions in equity.” Wehner
v. Syntex Corp., 682 F. Supp. 39, 40 (N.D. Cal. 1987). In AMW,
however, the Second Circuit rejected the hard-and-fast conclusion
that, because § 9607(a) provides “restitution,” it must be
considered equitable for Seventh Amendment purposes. AMW, 584
F.3d at 451-52. The court pointed to the Supreme Court’s
13

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§ 9613(f) contribution counterclaim and the “split” among courts

2

as to whether a right to jury trial exists for such claims.

3

Hatco Corp. v. W.R. Grace & Co. Conn., 59 F.3d 400, 412 n.9 (3d

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Cir. 1995) (collecting cases).

5

whether the right to a jury exists under CERCLA, and the need to

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err on the side of preserving that right, see Granite Rock, 649

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F.3d at 1069, the court finds disposal of Dobbas’s jury demand

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for these claims inappropriate on a motion to strike.

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See

In light of the uncertainty over

Plaintiffs also assert a claim under the HSAA, which

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includes a request for civil penalties.

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claim requires a jury trial turns on whether civil penalties

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under the HSAA are legal or equitable in nature.

13

the Supreme Court has held that civil penalties under the Clean

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Water Act (“CWA”) require a jury trial because those penalties

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were traditionally only available in actions at law and were

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designed to punish and deter pollution, rather than to force them

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to disgorge their profits or to make victims of pollution whole.

18

Tull, 481 U.S. at 422-24.

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under other statutes do not require a jury trial because those

20

penalties constitute equitable relief that is incidental to the

21

enforcement of the statutory scheme at issue.

22

v. Bondo Corp., 153 Cal. App. 4th 150, 182-84 (1st Dist. 2007)

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(no right to jury trial in action seeking civil penalties under

Whether or not this

For instance,

By contrast, civil penalties available

See, e.g., DiPirro

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discussion of restitution in Great-West, in which it cautioned
that “not all relief falling under the rubric of restitution is
equity.” 532 U.S. at 212. Ultimately, the AMW court eschewed
adopting a legal, rather than equitable, conception of cost
recovery because the court concluded that the plaintiff was
entitled to judgment as a matter of law, rendering the issue
moot. AMW, 584 F.3d at 452.
14

1

Proposition 65); Shabaz v. Polo Ralph Lauren Corp., 586 F. Supp.

2

2d 1205, 1211-12 (C.D. Cal. 2008) (no right to jury trial in

3

action seeking civil penalties under Song-Beverly Credit Card

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Act).

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As in Tull, the civil penalties authorized by HSAA are

6

essentially legal in nature.

7

direct that the ‘civil penalty’ be imposed solely on the basis of

8

equitable determinations.”

9

simply authorizes a maximum penalty of $25,000 per day, Cal.

Like the CWA, the HSAA “does not

Tull, 481 U.S. at 422.

Instead, it

10

Health & Safety Code § 25359.2, which suggests that the penalty

11

is of a legal character, see Tull, 481 U.S. at 422 (holding civil

12

penalty was legal in part because the CWA “simply imposes a

13

maximum penalty of $10,000 per day of violation”).

14

The civil penalties available under the HSAA are also

15

legal in nature because they go beyond restitution; instead, they

16

serve as “penalty provisions designed to coerce cooperation and

17

compliance.”

18

65 Cal. Rptr. 2d 127, 132 (2d Dist. 1997), rev’d on other

19

grounds, 18 Cal. 4th 857 (1998).

20

HSAA contains a separate provision that allows DTSC to recover up

21

to three times the amount of any costs it incurs “as a result of

22

the failure to take proper action,” Cal. Health & Safety Code

23

§ 25359(a), suggesting that its civil penalty provision is

24

designed to provide an additional measure of retribution and

25

deterrence and is not itself an equitable remedy.

26

U.S. at 425 (holding that the civil penalty provision authorized

27

legal relief because it was a “separate and distinct statutory

28

provision” from those authorizing equitable relief).

Foster-Gardner, Inc. v. Nat’l Union Fire Ins. Co.,

15

In fact, the structure of the

See Tull, 481

1

Accordingly, because the relief plaintiffs seek under

2

the HSAA is legal in nature, see id. at 418, the court must also

3

deny plaintiffs’ motion to strike Dobbas’s jury demand with

4

respect to the HSAA claim.

5

B.

6

Prayer for Attorney’s Fees
CERCLA “does not provide for the award of private

7

litigants’ attorney’s fees associated with bringing a cost

8

recovery action.”

9

809, 819 (1994); see also Alco, 217 F. Supp. 2d at 1046 (noting

Key Tronic Corp. v. United States, 511 U.S.

10

that CERCLA does not “permit an award of attorney’s fees by a

11

prevailing defendant in a CERCLA cost recovery action” and

12

striking prayer for attorney’s fees).

13

for an award of attorney’s fees to a prevailing defendant or

14

otherwise displace the longstanding rule that, “[i]n the absence

15

of some special agreement, statutory provision, or exceptional

16

circumstances, attorney’s fees are to be paid by the party

17

employing the attorney.”

18

59 Cal. 2d 618, 620 (1963) (citations omitted).

19

court must grant plaintiffs’ motion to strike defendants’ prayers

20

for attorney’s fees.

21
22

C.

Nor does the HSAA provide

Prentice v. N. Am. Title Guar. Corp.,
Accordingly, the

Dobbas’s Affirmative Defenses
Affirmative defenses can be challenged as a matter of

23

pleading or as a matter of law.

24

Restaurants Acquisition Co. II, LLC, 289 F.R.D. 595, 603 (E.D.

25

Cal. 2013) (Karlton, J.).

26

matter of pleading if it does not give “fair notice of what the

27

[affirmative defense] is and the grounds upon which it rests.”

See Dodson v. Strategic

An affirmative defense fails as a

28
16

1

Id. (quoting Twombly, 550 U.S. at 555).5

2

fails as a matter of law if it “lacks merit under any set of

3

facts the defendant might allege.”

4

marks omitted).

5

question of law, an early adjudication of that question of law

6

will expedite the litigation and facilitate the administration of

7

justice . . . .”

8

Dist., 526 F. Supp. 276, 281 (E.D. Cal. 1981) (Ramirez, J.).

An affirmative defense

Id. (citation and quotation

“[W]hen the affirmative defense is purely a

Grason Elec. Co. v. Sacramento Mun. Utility

9

Plaintiffs assert three causes of action: (1) recovery

10

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

11

(2) declaratory relief under § 113(g)(2) of CERCLA, 42 U.S.C.

12

§ 9613(g)(2), and (3) failure to comply with imminent or

13

substantial determination order and remedial action order under

14

HSAA, Cal. Health & Safety Code §§ 25355.5, 25358.3, 25359,

15

25359.2, 25367.

16

affirmative defenses.

17

now concedes that many of its affirmative defenses are

18

inappropriate, but it argues that nine of them6 should not be

19
20
21
22
23
24
25
26
27
28

5

Dobbas initially responded with forty-four
(See Dobbas’s Answer at 10-18.)

Dobbas

The court acknowledges the disagreement among district
courts in the Ninth Circuit--including between different judges
within this district--over whether affirmative defenses must meet
the plausibility pleading standard of Bell Atlantic Corporation
v. Twombly, 550 U.S. 554 (2007), and Ashcroft v. Iqbal, 556 U.S.
662 (2009). The court need not reach this question here, as DTSC
contests only the legal sufficiency of Dobbas’s defenses. (Pls.’
Mem. at 13-21.) And in any case, affirmative defenses that are
insufficiently pled would fail to satisfy either standard.
6
These defenses include Dobbas’s third (“PLAINTIFFS are
Responsible Parties”), sixth (“Acts or Omissions of PLAINTIFFS”),
sixteenth (“Failure to Mitigate”), seventeenth (“Lack of
Causation”), twenty-seventh (“Aggravation of Harm”), twenty-ninth
(“No Liability for Others’ Releases”), thirty-sixth (“Reliance”),
thirty-seventh (“Independent, Intervening, and/or Superseding
Claims”), and thirty-ninth (“Undue Delay”) affirmative defenses.
17

1

stricken because either (1) plaintiff asserts claims outside of

2

§ 9607(b)’s constraints--and thus, Dobbas’s may raise additional

3

defenses to these claims--or (2) Dobbas’s defenses fit within the

4

constraints of § 9607(b).

5
6

1.

(Dobbas’s Opp’n at 17.)

Subsection 9607(b)’s Restrictions Apply to All

Plaintiffs’ Claims

7

Subsection 9607(b) governs defenses to liability in

8

cost recovery actions under CERCLA.

9

that no liability attaches if the release or threatened release

That subsection provides

10

of a hazardous substance was caused solely by: (1) “an act of

11

God,” (2) “an act of war,” (3) “an act or omission of a third

12

party other than an employee or agent of the defendant” if the

13

defendant sufficiently establishes that “(a) he exercised due

14

care . . . and (b) he took precautions against foreseeable acts

15

or omissions of any such third party.”

16

42 U.S.C. § 9607(b).

The Ninth Circuit has emphasized that these “statutory

17

defenses are exclusive” and “that the three statutory defenses

18

are the only ones available” in cost recovery actions under

19

CERCLA.

20

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

21

Levin Metals Corp. v. Parr-Richmond Terminal Co., 799 F.2d 1312,

22

1317 (9th Cir. 1986) (“[I]n order to state a claim for a

23

declaration of nonliability [under CERCLA], the declaratory

24

judgment plaintiff must base its claim of nonliability on one or

25

more of the statutory affirmative defenses.”).

26

of these defenses reflects the unique nature of CERCLA’s

27

statutory scheme, under which “[l]iability is strict, without

28

regard to fault, and is imposed jointly and severally unless a

Cal. ex rel. Cal. Dep’t of Toxic Substances Control v.

18

The exclusivity

1

defendant can demonstrate that the harm is ‘divisible.’”

2

Pacific, 217 F. Supp. 2d at 1034.

3

Alco

To be clear, the court in Neville concluded that this

4

limitation did not extend to suits for contribution under

5

§ 133(f) of CERCLA, 42 U.S.C. § 9613(f)(1), because that

6

provision explicitly states that “[i]n resolving contribution

7

claims, the court may allocate response costs among liable

8

parties using such equitable factors as the court determines are

9

appropriate.”

Neville, 358 F.3d at 672 (quoting 42 U.S.C.

10

§ 9613(f)(1) (quotation marks omitted)).

11

asserted a contribution claim under § 113(f).

12

only two CERCLA causes of action: a cost recovery action under

13

§ 107(a) and a claim for declaratory relief under § 113(g).

14

Because declaratory relief claims are derivative of cost

15

recovery, the Neville court treated them identically.

16

672 (“The provisions of CERCLA governing suits for recovery of

17

costs, 42 U.S.C. §§ 9607(a) and 9613(g)(2), make no such

18

reference to equitable factors.”).

19

§ 9607(b) prevent Dobbas from asserting any affirmative defense

20

not listed within that section against plaintiffs’ first two

21

claims.

22

But plaintiffs have not
Plaintiffs assert

See id. at

According, the limitations of

Dobbas nonetheless argues that it may assert additional

23

affirmative defenses against plaintiffs’ third cause of action

24

for civil penalties under the HSAA, (See Compl. at 9-11), because

25

§ 9607(b) does not apply to the HSAA.

26

identical to CERCLA, “California’s HSAA . . . expressly

27

incorporates CERCLA’s liability standards and defenses.”

28

Lumber, Inc. v. Hellman, 658 F. Supp. 2d 1188, 1192 (E.D. Cal.
19

Although the HSAA is not

Adobe

1

2009); see also Coppola, 935 F. Supp. 2d at 1011 (“[T]he HSAA

2

expressly incorporates the same liability standards, defenses,

3

and classes of responsible persons as those set forth in

4

CERCLA.”) (emphasis added).

5

additional defenses here contradicts HSAA’s statutory language,

6

which explicitly restricts available defenses to those available

7

under CERCLA, 42 U.S.C. § 9607(b).

8

§ 25323.5(b) (“For purposes of this chapter, the defenses

9

available to a responsible party or liable person shall be those

10

defenses specified in Sections 101(35) and 107(b) of the federal

11

act (42 U.S.C. Secs. 9601(35) and 9607(b)).”).

12

makes no reference to a distinction between cost recovery claims

13

and any other kind of claims.

14

§ 9607(b), regardless of the claim.

15

assert defenses to the HSAA that it cannot assert under § 107(a)

16

of CERCLA.

Dobbas’s attempt to assert

See Cal. Health & Safety Code

This provision

It mandates the restrictions of
Accordingly, Dobbas cannot

17

2.

18

Dobbas argues that several of its challenged

Affirmative Defenses Fitting Within § 9607(b)

19

affirmative defenses fit within the scope of § 9607(b).

20

Dobbas’s Opp’n at 17-18.)

21

Dobbas asserts several defenses related to causation: (1) that

22

none of its acts or omissions “is the cause in fact or proximate

23

cause of any costs or damages alleged in the Complaint,”

24

(Dobbas’s Answer at 13), (2) that it “is not liable for any costs

25

that were not incurred as a direct result of [its] hazardous

26

substance releases,” (id. at 15), and (3) that any of plaintiffs’

27

injuries “were the result of independent, intervening, or

28

superseding forces and/or actions or omissions of third parties

(See

For some defenses, this may be true.

20

1

over which [it] had no control . . . ,” (id. at 17).

2

Although these defenses do not precisely track the

3

statutory defenses set forth in § 9607(b), this court has

4

previously suggested that defenses of this nature are applicable

5

in CERCLA cost recovery actions because they relate to whether

6

the release of hazardous substances was “caused solely” by the

7

act or omission of a third party under § 9607(b)(3).

8

Lumber, 658 F. Supp. 2d at 1204 (“If the defendant’s release was

9

not foreseeable, and if its conduct--including acts as well as

10

omissions--was ‘so indirect and insubstantial’ in the chain of

11

events leading to the release, then the defendant’s conduct was

12

not the proximate cause of the release and the third party

13

defense may be available . . . .”); Whittaker Corp., 272 F. Supp.

14

2d at 1082 (quoting Lincoln Props., Ltd. v. Higgins, 823 F. Supp.

15

1528, 1542 (E.D. Cal. 1992) (Levi, J.) (noting that CERCLA’s

16

statutory defenses “incorporate[] the concept of proximate or

17

legal cause”)).

18

whether Dobbas’s conduct was the proximate cause of any release

19

of hazardous substances, the court will deny plaintiffs’ motion

20

to strike these affirmative defenses.

21

See Adobe

Accordingly, because these defenses relate to

The remaining defenses go beyond the scope of

22

§ 9607(b).

23

Dobbas asserts two defenses that are essentially equitable in

24

nature: (1) that it acted in reliance on DTSC’s directions,

25

(Dobbas’s Answer at 17), and (2) that any relief would be

26

“inappropriate and inequitable” in light of DTSC’s delay in

27

initiating remedial actions, (id.).

28

made clear, “traditional equitable defenses” of the sort Dobbas

They can be dealt with in three groups.

21

First,

But as numerous courts have

1

asserts are unavailable under CERCLA.

2

see also Pakootas v. Teck Cominco Metals, Ltd., 452 F.3d 1066,

3

1078 n.18 (9th Cir. 2006); Alco Pacific, 217 F. Supp. 2d at 1040

4

(“[T]raditional equitable defenses to liability are not available

5

to defendants in CERCLA cost recovery actions under § 9607.”).

6

The court will therefore grant plaintiffs’ motion to strike these

7

defenses.

8
9

Neville, 358 F.3d at 672;

Second, Dobbas raises a failure-to-mitigate defense.
(Dobbas’s Answer at 13.)

But because CERCLA does not permit

10

defendants to avoid liability by “challeng[ing] . . . the

11

reasonableness of the government’s clean-up activities,” CERCLA

12

does not authorize a failure-to-mitigate defense.

13

217 F. Supp. 2d at 1041.

14

States v. Iron Mountain Mines, Inc. in support of the proposition

15

that such a defense is available, the court actually held the

16

exact opposite: that this defense is unavailable because “CERCLA

17

does not impose a duty upon the government to mitigate response

18

costs.’”

19

(quoting United States v. Kramer, 757 F. Supp. 397, 407 (D.N.J.

20

1991)).

21

this defense.

22

Alco Pacific,

Moreover, while Dobbas cites United

812 F. Supp. 1528, 1543 (E.D. Cal. 1992) (Schwartz, J.)

The court will also grant plaintiffs’ motion to strike

Third, Dobbas asserts that plaintiffs’ claims against

23

Dobbas “are barred or should be reduced in proportion to

24

[plaintiffs’] own liability,” (Dobbas’s Answer at 10), that

25

“[a]ny release or threatened release of a hazardous substance,

26

any damages allegedly resulting therefrom, and any response costs

27

or expenditures allegedly incurred as a result thereof, were

28

caused in whole or in part by acts and/or omissions by
22

1

[plaintiffs],” (id. at 11), and that plaintiffs’ actions “caused”

2

or “aggravated” the release of hazardous substances and that “any

3

recovery . . . under the complaint should be barred or reduced

4

accordingly,” (id. at 14-15).

5

“rejected negligence on the part of the government as a defense

6

to liability in CERCLA actions.”

7

at 1037 (striking contributory fault defense and citing cases);

8

see also United States v. Shell Oil Co., Civ. No. 91-589, 1992 WL

9

144296, at *9 (C.D. Cal. Aug. 9, 1992) (“[C]omparative fault and

But courts have consistently

Alco Pacific, 217 F. Supp. 2d

10

contributory negligence are not defenses to CERCLA actions.”

11

(citations omitted)).

12

prove that damages were “solely caused” by a third party, 42

13

U.S.C. § 9607(b), preventing Dobbas from asserting these kinds of

14

comparative negligence defenses.

15

grant plaintiffs’ motion to strike these affirmative defenses.

Section 9607(b) requires a defendant to

Accordingly, the court will

16

IT IS THEREFORE ORDERED that:

17

(1) DTSC’s motion to dismiss be, and the same hereby

18
19
20
21

is, DENIED;
(2) plaintiffs’ motion to strike the jury demand of
defendant Jim Dobbas, Inc., be, and the same hereby is, DENIED;
(3) plaintiffs’ motion to strike the prayer for

22

attorney’s fees of defendant Jim Dobbas, Inc., be, and the same

23

hereby is, GRANTED;

24

(4) plaintiffs’ motion to strike Jim Dobbas, Inc.’s

25

affirmative defenses is DENIED with respect to the seventeenth,

26

twenty-ninth, and thirty-seventh affirmative defenses and GRANTED

27

in all other respects;

28

Jim Dobbas, Inc., has twenty days from the date this
23

1

Order is signed to file an amended answer or counterclaim, if it

2

can do so consistent with this Order.

3

Dated:

September 16, 2014

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