Northern California River Watch v. Ecodyne Corportation

Filing 288

Order by Hon. William H. Orrick regarding 261 Motion for Clarification. (jmdS, COURT STAFF) (Filed on 10/14/2015)

1
2
3
4

UNITED STATES DISTRICT COURT

5

NORTHERN DISTRICT OF CALIFORNIA

6
7

CALIFORNIA RIVER WATCH,

Case No. 10-cv-05105-WHO

Plaintiffs,
8

ORDER REGARDING MOTION FOR
CLARIFICATION

v.
9
10

FLUOR CORPORATION,

Re: Dkt. No. 261

Defendant.

United States District Court
Northern District of California

11
INTRODUCTION

12
13

On August 7, 2015, I granted Fluor Corporation’s motion for partial summary judgment

14

that The Shiloh Group, LLC (“TSG”) is a liable person under the Comprehensive Environmental

15

Response Compensation and Liability Act (“CERCLA”) section 107(b) and that several of TSG’s

16

affirmative defenses were meritless. Dkt. No. 260. TSG then asked that I clarify whether its

17

statute of limitations defense, which Fluor did not originally address in its motion but which I

18

discussed in my Order after TSG raised it in opposition to the motion, was also barred. To insure

19

a complete record, I allowed both sides to brief the issue. Further oral argument is unnecessary

20

and I VACATE the hearing set for October 14, 2015. I have reviewed the respective briefing and

21

GRANT Fluor’s motion that TSG’s affirmative defense regarding the statute of limitations is

22

meritless.

23
24

BACKGROUND
The material facts in the case are not in dispute. TSG is the owner of the industrial and

25

commercial property at 930 Shiloh Road in Windsor, California that has a history of

26

environmental contamination. Dkt. 232 at 1. Fluor owned and conducted industrial operations on

27

that property from approximately 1952 to 1969, when it sold the property to Encodyne.

28

The California Department of Toxic Substances Control (“DTSC”) became aware of the

1

contamination of part of the property (“the Pond Site”) in or about 1985. A layer of shale was

2

spread over the contaminated soil and asphalt was laid on top of that. In 1989, the DTSC issued a

3

Consent Order that directs Fluor to prepare a “complete remedial investigation and feasibility

4

study” in order to identify and evaluate the contamination, evaluate an appropriate response, and

5

gather the information necessary to prepare a remedial action plan (“RAP”). Dkt. No. 273-1

6

[Consent Order]1. In 1997, Fluor began drilling injection wells and soil vapor extraction point in

7

order to inject ozone into the soil and reduce the levels of contaminants. The treatment continued

8

for years and resulted in the material diminution of the contaminants.
TSG was formed and acquired the property at issue in 1999.

9

In 2011, DTSC approved a remedial action plan for the Pond Site that set soil cleanup

10

United States District Court
Northern District of California

11

goals. Subsequently, DTSC requested that Fluor develop and submit a modified RAP in 2014.

12

DTSC approved Fluor’s amended RAP on September 8, 2015, which calls for the excavation of

13

the contaminated soil.

14

DISCUSSION

15

At the heart of the disagreement between the parties is whether the present action is a

16

removal action, which must be brought “within three years after completion of the removal

17

action,” or a remedial action, which must be brought “within 6 years after initiation of physical on-

18

site construction of the remedial action.” 42 U.S.C. § 9613(g)(2). It is undisputed that any

19

removal action is not complete. Dk. No. 260 at 7. Therefore, the three-year statute of limitations

20

for removal actions has not yet started, much less expired.
TSG argues that Fluor’s response has always been a remedial action and that the operative

21
22

date for the commencement of the statute of limitations is 1997, at the latest. Brief at 4-7 [Dkt.

23

No. 273]. Thus, under TSG’s interpretation, Fluor’s statute of limitations would have expired in

24
25
26
1

27
28

TSG’s request that I take judicial notice of (1) the 1989 Consent Order, (2) the 1991 amendment
to the Consent Order,(3) the Revised Draft Remedial Action Plan for Ecodyne Pond Site Soil
Remediation and (4) Fluor’s Answer and Counterclaim [Dkt. No. 202] is GRANTED. Dkt. No.
273.
2

1

2003, making its January 2015 claims time barred.2 Brief at 2. Fluor contends that the six year

2

statute of limitations on remedial actions applies and began to run in 2011, when the DTSC first

3

approved the original RAP, and that its response before that time should be characterized as a

4

removal action. Resp. at 1 [Dkt. No. 277].
42 U.S.C. § 9601(23) defines removal as:

5
6

the cleanup or removal of released hazardous substances from the
environment, such actions as may be necessary taken in the event of
the threat of release of hazardous substances into the environment,
such actions as may be necessary to monitor, assess, and
evaluate the release or threat of release of hazardous substances,
the disposal of removed material, or the taking of such other
actions as may be necessary to prevent, minimize, or mitigate
damage to the public health or welfare or to the environment,
which may otherwise result from a release or threat of release.

7
8
9
10

United States District Court
Northern District of California

11

42 U.S.C. § 9601(23) (emphasis added). Removal actions are typically described as “time

12

sensitive responses to public threats.” United States v. W.R. Grace & Co., 429 F.3d 1224, 1228

13

(9th Cir. 2005); see also Advanced Micro Devices, Inc. v. Nat’l Semiconductor Corp., 38 F. Supp.

14

2d 802, 810 (N.D. Cal. 1999) (“Removal refers to short-term action taken to halt the immediate

15

risks posed by hazardous wastes.”) (internal citations omitted).
By contrast, 42 U.S.C. § 9601 defines remedial action as:

16
17

those actions consistent with permanent remedy taken
instead of or in addition to removal actions in the event of a release
or threatened release of a hazardous substance into the environment,
to prevent or minimize the release of hazardous substances so that
they do not migrate to cause substantial danger to present or future
public health or welfare or the environment.

18
19
20

42 U.S.C. § 9601. Unlike removal actions which are generally seen as short term actions,
21

“remedial actions are designed to achieve a permanent remedy.” Carson Harbor Vill., Ltd. v.

22
Unocal Corp., 287 F. Supp. 2d 1118, 1155 (C.D. Cal. 2003); see also Exxon Corp. v. Hunt, 475
23
24

U.S. 355, 360 (1986) (remedial actions under CERCLA are “measures to achieve a ‘permanent
remedy’ to a particular hazardous waste problem”); City of Moses Lake v. United States, 458 F.

25
26
27
28

2

TSG also appears to argue that a previous action, the pouring of asphalt over the contaminated
soil, could also qualify as a permanent solution consistent with remedial action. Brief at 5. TSG
approximates that the paving occurred “in or about 1988” and therefore the statute of limitations
would have expired in 1994. Brief at 7, n. 5. For the purposes of TSG’s position, both
interpretations lead to the same conclusion, that Fluor’s January 2015 claims are time barred.
3

1

Supp. 2d 1198, 1212 (E.D. Wash. 2006) (“The one consistent thread in the decisions dealing with

2

whether an action is remedial or removal in nature is that removal actions generally are immediate

3

or interim responses, and remedial actions generally are permanent responses.”)(internal quotation

4

marks removed). A removal action is generally taken before a remedial action. Advanced Micro

5

Devices, 38 F. Supp. 2d at 810.
TSG argues that because “there was no emergency” and Fluor’s response was deliberate

6

and consistent with the permanent remedy, Fluor’s actions from 1997 and earlier should be

8

characterized as remedial. Brief at 5. TSG focuses on the “initiation of physical on-site

9

construction” language in CERCLA’s statute of limitations and offers two triggering dates: (1) in

10

approximately 1985, when the layer of shale and asphalt was spread over the contaminated soil or

11
United States District Court
Northern District of California

7

(2) in 1997, when Fluor constructed wells to inject ozone into the soil to diminish the

12

contaminants. Brief at 5, 7. In choosing these dates, TSG appears to take a literal interpretation of

13

the statute language by focusing on the facts that the selected actions were (1) physical

14

construction (2) on the disputed site. For example, TSG supports its selection of the 1997 action

15

by describing that “the ozone injection system obviously had to be constructed, and was on site.

16

[W]ells have to be drilled to install/construct such a system[,] [t]he evidence therefore shows that

17

there was physical on-site construction of the remedial action on the Pond Site in 1997.” Brief at

18

7.

19

However, both of those dates precede the adoption of either the 2011 or 2015 RAP. The

20

Ninth Circuit has explicitly interpreted 42 U.S.C. § 9613 to hold that “the initiation of physical on-

21

site construction of the remedial action can only occur after the final remedial action plan is

22

adopted.” California ex rel. California Dep’t of Toxic Substances Control v. Neville Chem. Co.,

23

358 F.3d 661, 667 (9th Cir. 2004)(internal quotation marks omitted). In Neville, the court

24

explained that in order for an action to be remedial action, and therefore be consistent with

25

permanent remedy, a plan for a permanent remedy must already have been adopted. Id. Because

26

neither party can ever know for sure if an action is remedial until a permanent remedy is

27

determined, “[i]n this case, as in most cases, the permanent remedy was selected when the final

28

RAP was approved.” Id.
4

1

TSG argues that Neville limited its holding to suits involving governmental oversight.

2

Brief at 8. However, the Ninth Circuit explicitly addressed cases involving non-governmental

3

parties, finding that when “non-governmental parties conduct the clean-up of a site without

4

governmental or agency oversight and then pursue response costs under CERCLA, there will most

5

likely still be a remedial action plan in place.” Id. at 667, n.3. Although Neville declined to

6

address the statute of limitation in cases involving only private parties, here, Fluor’s response has

7

been under a Consent Order issued by DTSC, it has been supervised by DTSC, and DTSC

8

approved a RAP in both 2011 and 2015. Under Neville, the statute of limitations would not begin

9

until 2011 at the earliest.

10

The two cases TSG cites to support its interpretation of Neville, City of Moses Lake and

United States District Court
Northern District of California

11

W.R. Grace & Co, actually support Fluor’s argument. City of Moses involved a dispute between

12

the City of Moses Lake and the United States over contaminates in the city’s water supply that

13

were potentially due to manufacturing at the location by a United States’ contractor. 458 F. Supp.

14

2d at 1205-06. It addressed the issue left open in Neville – when the statue of limitations

15

commences in cases involving private parties. Id. at 1211. The court ultimately decided that the

16

statute began running when the City of Moses adopted its own private report and action plan,

17

which constituted “Moses Lake’s ‘remedial action plan.’” Id. at 1214. City of Moses Lake

18

declined to adopt the earlier date the defendants offered as the “physical on-site construction” date

19

because the city’s “remedial action plan” had not been issued at that time. Id. Although

20

inapplicable in this case because DTSC has approved a RAP for Fluor’s response action, City of

21

Moses Lake reaffirms Neville’s basic holding that the statute of limitations does not begin until a

22

final remedy is approved.

23

In W.R. Grace & Co, the court found that cases that addressed the interplay between

24

removal and remedial actions under CERCLA were of “limited use” because of the unique facts at

25

issue in its case. 429 F.3d at 1236 n. 17. Nonetheless, it reiterated that Neville concluded “that for

26

the purposes of the onset of the limitations period for recovery of remedial action costs under

27

CERCLA, no action can be remedial until adoption of a final remedial action plan.” Id.

28

TSG also attempted to distinguish Advanced Micro Devices, where the court held that no
5

1

remedial action could take place until a final remedy design was issued. 38 F. Supp. 2d at 813.

2

TSG asserts that Advanced Micro Devices is inapplicable based on differences between the

3

duration and size of the clean up actions. Brief at 9. But Advanced Micro Devices did not hinge

4

its opinion on the complexity of the response; instead, the court considered “several factors [that]

5

assist in the characterization of an action as ‘removal’ or ‘remedial’: (1) proximity to disclosure of

6

the final remedial design, which may occur prior to approval of the final remedial plan; (2)

7

whether RI/FS monitoring and testing are ongoing at the time of the action; (3) whether the action

8

falls within the statutory definition of “removal” (or “remedial”); and (4) the action's role in the

9

implementation of the permanent remedy.” 38 F. Supp. 2d at 812. Notably, in considering the
fourth factor, the court stated that “the design of the final remedy had not been developed or

11
United States District Court
Northern District of California

10

disclosed when the extraction wells were installed at the Site in 1986, and there is no evidence that

12

they were disclosed before September 1991 [the date of RAP issuance]. The fact that the

13

extraction activities ultimately did not turn out to be ‘short-term,’ because they were implemented

14

in the final remedy four years later, cannot now be considered in hindsight.” Id. at 813. This

15

directly addresses and contradicts TSG’s argument that because the ozone injections involved

16

physical construction, they should trigger the statute of limitation for remedial actions. That an

17

action involves physical construction on the disputed site, even if it coincides with subsequent

18

permanent remedy, is insufficient to trigger the statute of limitations for remedial actions. In this

19

case, the wells are not even consistent with the final remedy, as the final RAP calls for the

20

decommissioning and removal of the wells so that the soil evacuation can take place. Resp. at 8.

21

TSG cites a string of cases that it argues have analogous facts and support the conclusion

22

that Fluor’s conduct should be treated as a remedial action. Brief at 6. However, many of these

23

cases either pre-date Neville or follow Second Circuit precedent that adopts a different rule than

24

the Ninth Circuit. For example, in Schaefer v. Town of Victor, 457 F.3d 188, 207 (2d Cir. 2006),

25

the Second Circuit explicitly refuses to adopt the bright line rule “that approval of a final remedial

26

action plan is the sine qua non for the initiation of remedial action,” as adopted in Neville. See

27

also Douglas Autotech Corp. v. The Scott Fetzer Co., No. 07-cv-1062, 2008 WL 205217 (W.D.

28

Mich. Jan. 23, 2008) (following the precedent established in Schaefer); Yankee Gas Servs. Co. v.
6

1

UGI Utilities, Inc., 616 F. Supp. 2d 228 (D. Conn. 2009) (same). In so far as the Second Circuit

2

may have disagreed with the Ninth Circuit, I am bound to follow Neville.

3

Similarly unpersuasive is TSG’s citation to State of California on Behalf of California

4

Department of Toxic Substances Control v. Hyampom Lumber Co., 903 F. Supp. 1389 (E.D. Cal.

5

1995). Hyampom rejected the proposition that remedial activity could not begin prior to the

6

approval of permanent remedy. Id. at 1392; see also Am. Premier Underwriters Inc. v. Gen. Elec.

7

Co., 866 F. Supp. 2d 883, 892 (S.D. Ohio 2012) (relying on Hyampom for the proposition that

8

remedial action can be taken before a final plan is adopted). However, Hyampon is a district court

9

case that was decided pre-Neville and is inconsistent with it. I follow Neville.

10

As Fluor argues, its actions leading up to the RAP are more properly considered removal

United States District Court
Northern District of California

11

actions, which can be used to evaluate and assess potential longer term clean up options. 42

12

U.S.C. § 9601(23); see also Advanced Micro Devices, 38 F. Supp. 2d at 810 (“During the removal

13

action phase, a site posing a risk of hazardous waste release is studied and various cleanup options

14

considered.”) In this case, that is exactly what the 1988 Consent Order dictates: it specifies that a

15

“temporary asphalt” cover should be laid over the contaminated area. Consent Order at 29. This

16

temporary measure is consistent with categorizing the asphalt placement as a short-term removal

17

action. The Consent Order also directs the implementation of a “Remedial Investigation” and

18

“Feasibility Study” intended to determine the nature and extent of the contamination and to

19

identify and evaluate any appropriate responses. Id. at 30-31. It is undisputed that the purpose of

20

ozone injections was to demonstrate the feasibility of the in-situ ozonation as a possible

21

component of the final remedy. Resp. at 7. Simply because the injections required physical on-

22

site construction does not trigger the statute of limitations. No final RAP or remedy was in place

23

at the time. The action is more appropriately categorized as an interim removal action intended to

24

evaluate the effectiveness of such a measure.

25
26
27

CONCLUSION
TSG does not have a valid affirmative defense that the statute of limitation bars Fluor’s

28
7

1

causes of action. Fluor’s motion for summary judgment on this issue is GRANTED. 3
IT IS SO ORDERED.

2
3

Dated: October 14, 2015
______________________________________
WILLIAM H. ORRICK
United States District Judge

4
5
6
7
8
9
10

United States District Court
Northern District of California

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

3

Fluor’s requests that I strike: (1) the Declaration of Bill Wiggins and its attached Exhibit 1 [Dkt.
Nos. 271-2 and 272-2]; (2) certain portions of the Declaration of Brian Carter [Dkt. No. 273]; (3)
Exhibit D of Declaration of Brian Carter [Dkt. No. 273-4]; and (4) the facts asserted in the
Consent Order [Dkt. No.273-1] are MOOT because I did not rely any of those documents, or
identified portions therein, in deciding this order. Brief at 9.
8