Asarco LLC v. Nustar Energy LP et al

Filing 84

ORDER GRANTING DEFENDANT UNION PACIFIC'S MOTION TO DISMISS AND VACATING HEARING by Judge William Alsup [granting 69 Motion to Dismiss]. (whasec, COURT STAFF) (Filed on 12/13/2011)

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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 ASARCO LLC, a Delaware corporation, 11 For the Northern District of California United States District Court 10 12 13 14 15 16 17 18 19 20 Plaintiff, No. C 11-01384 WHA v. SHORE TERMINALS LLC, a Delaware corporation; KINDER MORGAN ENERGY PARTNERS LP, a Delaware limited partnership; CELANESE CHEMICAL COMPANY, a Delaware corporation; UNION PACIFIC RAILROAD COMPANY, a Utah corporation; and Does 1–50, inclusive, ORDER GRANTING DEFENDANT UNION PACIFIC’S MOTION TO DISMISS AND VACATING HEARING Defendants. / INTRODUCTION In this contribution action under the Comprehensive Environmental Response, 21 Compensation, and Liability Act, defendant Union Pacific Railroad Company has moved to 22 dismiss for failure to state a claim. For the following reasons, defendant’s motion is GRANTED. 23 STATEMENT 24 Plaintiff Asarco LLC is the owner of the Selby Site, approximately 66 acres of upland 25 and former tideland in Contra Costa County bordered by San Pablo Bay to the north and by a 26 Union Pacific Railroad line to the south. The site was originally the location of a the Selby 27 Smelting and Lead Company, which was built in 1884. In 1905, one of plaintiff’s corporate 28 predecessors gained control of operations at the site and continued operations through 1970. 1 After operations ceased in 1970, Virginia Chemicals leased a portion of the site and installed 2 and operated a sulfur dioxide facility from 1971 to 1976. The plant heavily used sulfuric acid 3 and spills of acid occurred as well as escape of fugitive sulfuric dioxide gas. Virginia Chemicals 4 was succeeded in interest by defendant Celanese Chemical Company. In 1977, Wickland Oil 5 Company purchased a portion of the site and constructed a petroleum products transfer facility, 6 which was completed in 1982. C.S. Land, Inc., a subsidiary of ConocoPhillips, acquired the 7 property in 2000 and assumed Wickland’s cleanup liabilities (First Amd. Compl. ¶¶ 11–14). remediation and enforcement actions under CERCLA — since 1976, when a Cleanup and 10 Abatement Order was issued by the Regional Water Quality Control Board. Pursuant to a 11 For the Northern District of California The site has been the subject of various environmental investigations — including 9 United States District Court 8 Consent Judgment dated March 1989, plaintiff, Wickland, and the California State Lands 12 Commission agreed to a phased remediation of the site, with each party assuming one-third 13 of the responsibility. Remediation work proceeded, and numerous hazardous substances were 14 detected (id. at ¶¶ 18–20). 15 In 2005, plaintiff filed a voluntary petition for relief under chapter 11 of the United States 16 Bankruptcy Code in the Bankruptcy Court for the Southern District of Texas. In 2008, plaintiff 17 filed a motion for approval of a settlement pursuant to CERCLA whereby plaintiff would 18 pay environmental regulators over $33 million to resolve its CERCLA liabilities at the site. 19 This settlement was approved and was to be funded upon court approval of a plan of 20 reorganization. In 2009, plaintiff’s plan for reorganization became effective, and funds 21 for the environmental settlement were distributed (id. at ¶¶ 21–22, 24). 22 Plaintiff commenced the present action in March 2011, seeking contribution under 23 CERCLA from defendants as potentially responsible parties liable for their equitable share 24 of overpayment by plaintiff. Defendant Union Pacific was not originally a party to the present 25 action. In September 2011, plaintiff filed a first amended complaint that added Union Pacific 26 as a defendant (Dkt. No. 60). Plaintiff’s first amended complaint states three claims for relief: 27 (1) contribution under Section 113(f) of CERCLA; (2) declaratory judgment; and (3) common 28 2 1 law contribution. Defendant Union Pacific now moves to dismiss for failure to state a claim. 2 This order follows full briefing. 3 ANALYSIS 4 To survive a motion to dismiss, a complaint must contain sufficient factual matter, 556 U.S. 662, 129 S.Ct. 1937, 1949 (2009). A claim is facially plausible when there are 7 sufficient factual allegations to draw a reasonable inference that a defendant is liable for the 8 misconduct alleged. While a court “must take all of the factual allegations in the complaint 9 as true,” it is “not bound to accept as true a legal conclusion couched as a factual allegation.” 10 Id. at 1949–50 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). “[C]onclusory 11 For the Northern District of California accepted as true, to state a claim for relief that is plausible on its face. Ashcroft v. Iqbal, 6 United States District Court 5 allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss for 12 failure to state a claim.” Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996) 13 (citation omitted). 14 1. 15 The purpose of CERCLA is to promote the “timely cleanup of hazardous waste sites” CONTRIBUTION UNDER SECTION 113(f) OF CERCLA. 16 and to “ensure that the costs of such cleanup efforts [are] borne by those responsible for the 17 contamination.” Burlington Northern and Santa Fe Ry. Co. v. United States, 556 U.S. 559, 18 129 S.Ct. 1870, 1874 (2009). In order to achieve this goal, CERCLA allows those who settle 19 with the government to then seek contribution from other potentially responsible parties who 20 are jointly responsible for the creation of the hazardous waste site. 21 Under Section 113(f) of CERCLA, a liable party can seek contribution from any other 22 liable party, and the court allocates response costs “among liable parties using such equitable 23 factors as the court determines are appropriate.” Section 107(a) of CERCLA defines liable 24 parties as owners and operators of facilities, and any person who arranged for or “accepted 25 any hazardous substances for transport to disposal or treatment facilities.” 26 Plaintiff fails to allege any facts that explain why defendant is liable for a portion of 27 the site cleanup. The only facts plaintiff alleges are that defendant “has owned or operated 28 manufacturing, storage, transport, and/or related operation of or for hazardous substances 3 1 through facilities in or near the Selby Site,” and that defendant “has owned or operated and 2 continues to own and operate a facility at or adjacent to the Site from which known releases of 3 hazardous substances have migrated to the Site” (First Amd. Compl. ¶¶ 8, 17). 4 Plaintiff fails to explain how defendant came to be involved in this contribution action 5 other than noting that the Union Pacific Railroad line is the southern boundary of the site. 6 Plaintiff fails to explain whether or not defendant transported hazardous chemicals to the site, 7 or otherwise how defendant is responsible for hazardous substances migrating to the site. 8 Plaintiff’s complaint is comprised of vague and conclusory statements lifted from 9 Accordingly, defendant’s motion to dismiss this claim is GRANTED. DECLARATORY JUDGMENT. 11 For the Northern District of California United States District Court 10 the CERCLA statutes and fails to state a plausible claim for contribution under Section 113(f). 2. 12 Plaintiff also seeks a declaratory judgment holding defendant liable under Section 113(f) 13 of CERCLA. Under the Declaratory Judgment Act, “[i]n a case of actual controversy within 14 its jurisdiction” a court “may declare the rights and other legal relations of any interested party 15 seeking such declaration.” 28 U.S.C. 2201(a). Plaintiff, however, has failed to sufficiently plead 16 a controversy between the parties, so the declaratory judgment claim must fail. Am. States Ins. 17 Co. v. Kearns, 15 F.3d 142, 143–44 (9th Cir. 1994). Defendant’s motion to dismiss this claim 18 is GRANTED. 19 3. 20 Plaintiff also fails to state a plausible claim for common law contribution. COMMON LAW CONTRIBUTION. 21 Under California law, “a party to a joint, or joint and several obligation, who satisfies 22 more than his share of the claim against all, may require a proportionate contribution from 23 all the parties joined with him.” Cal. Civ. Code § 1432. Plaintiff alleges that “[e]ach of the 24 Defendants is liable in tort for any harm to the Selby Smelter Site that occurred in connection 25 with its operations in or near the Selby Smelter Site” (First Amd. Compl. ¶ 44). Plaintiff’s vague 26 and conclusory allegations offer no explanation of how this particular defendant is liable for the 27 cleanup or what actions defendant took that made it jointly liable. Defendant’s motion to 28 dismiss this claim is therefore GRANTED. 4 1 4. 2 Defendant requests that judicial notice be taken of three items: (1) a fact sheet from the 3 California Department of Toxic Substances Control entitled “Community Update On Activities 4 at the Selby Slag Site;” (2) a motion for approval of plaintiff’s bankruptcy settlement entitled 5 “Motion for Order Approving Compromise and Settlement between Asarco LLC and Various 6 Governmental and Private Parties regarding the Selby Smelter Site;” and (3) a document 7 submitted by plaintiff in support of its motion for bankruptcy settlement entitled “The Proffer 8 of Donald Robbins in Support of Debtor’s Settlement with respect to the Selby Smelter Site.” 9 Because this order need not rely on these documents, defendant’s request for judicial notice is DENIED AS MOOT. 11 For the Northern District of California United States District Court 10 DEFENDANT’S REQUEST FOR JUDICIAL NOTICE. 12 CONCLUSION For the foregoing reasons, defendant’s motion to dismiss for failure to state a claim is 13 GRANTED. Plaintiff may seek leave to amend the complaint and will have TWENTY-ONE 14 CALENDAR DAYS from 15 for leave to file an amended complaint. Plaintiff must append to its motion a proposed amended 16 complaint that clearly explains how the amendments cure the defects identified herein. 17 Defendant’s request for judicial notice is DENIED AS MOOT. The hearing scheduled for 18 December 15 is VACATED. the date of this order to file a motion, noticed on the normal 35-day track, 19 20 IT IS SO ORDERED. 21 22 Dated: December 13, 2011. WILLIAM ALSUP UNITED STATES DISTRICT JUDGE 23 24 25 26 27 28 5

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