California Sportfishing Protection Alliance et al v. Shamrock Materials, Inc. et al

Filing 22

ORDER by Judge Maria-Elena James denying 18 Motion to Dismiss (cdnS, COURT STAFF) (Filed on 11/2/2011)

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1 2 3 4 5 UNITED STATES DISTRICT COURT 6 Northern District of California 7 8 CALIFORNIA SPORTFISHING PROTECTION ALLIANCE, et al., No. C11-2565 MEJ 9 ORDER DENYING DEFENDANTS’ MOTION TO DISMISS Plaintiffs, 10 v. SHAMROCK MATERIALS, INC., et al., 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 (Docket No. 18) Defendants. _____________________________________/ 13 14 15 I. INTRODUCTION Plaintiffs California Sportfishing Protection Alliance and Petaluma River Council 16 (collectively, “Plaintiffs”) bring this action under the citizen suit enforcement provisions of the 17 Federal Water Pollution Control Act, 33 U.S.C. §§ 1251-1376 (“the Clean Water Act” or “the Act”). 18 Defendants Shamrock Materials, Inc., Corto Meno Sand and Gravel, LLC, and Corto Meno Sand 19 and Gravel II, LLC (collectively, “Defendants”) have now moved to dismiss Plaintiffs’ Complaint 20 for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(1) 21 and for failure to state a claim pursuant to Rule 12(b)(6). Dkt. No. 18. Because the Court finds this 22 matter suitable for resolution based on the parties’ written submissions, the Court VACATES the 23 hearing set for November 3, 2011. See Civil L.R. 7-1(b). After careful consideration of the parties’ 24 arguments, the Court DENIES Defendants’ motion for the reasons set forth below. 25 II. BACKGROUND 26 Plaintiff California Sportfishing Protection Alliance is a 501(c)(3) non-profit public benefit 27 corporation dedicated to the preservation, protection, and defense of the environment, wildlife, and 28 natural resources of the San Francisco Bay and other California waters, including the Petaluma 1 River. Compl. at 3, Dkt. No. 1. Plaintiff Petaluma River Council is an unincorporated organization 2 of citizens who reside in and around Petaluma and are committed to protecting and improving the 3 health and character of the Petaluma River and the San Francisco Bay. Id. 4 Defendants operate a facility located at 210-222 Landing Way, Petaluma, California (“the sand at the Facility. Id. at 4. Sand, gravel, and aggregate materials at the Facility are unloaded from 7 barges along the Petaluma River and subsequently stored in large, uncovered piles in two areas, and 8 then loaded and distributed via diesel-fueled trucks. Id. The sand, gravel, and aggregate materials 9 are transported from the Facility and delivered off-site to several ready mix concrete plants operated 10 by Defendants throughout the areas of Petaluma, Novato, Napa, and San Rafael, California. Id. at 6. 11 The Facility primarily provides support services to these ready-mix concrete plants. Id. at 6-7. 12 For the Northern District of California Facility”), and are engaged in off-loading, storage, distribution, and transportation of gravel and 6 UNITED STATES DISTRICT COURT 5 A. 13 Statutory Background The Clean Water Act is intended to “restore and maintain the chemical, physical, and 14 biological integrity of the Nation’s waters.” 33 U.S.C. § 1251(a). In pursuit of this goal, section 15 301(a) of the Act prohibits the “discharge of any pollutant” into navigable waters from any “point 16 source” without a permit. 33 U.S.C. § 1311(a) (except as otherwise provided in the Act, the 17 discharge of any pollutant by any person shall by unlawful). “Discharge of a pollutant” is defined 18 broadly to include “any addition of any pollutant to navigable waters from any point source.” Id. § 19 1362(12)(A); Rapanos v. United States, 547 U.S. 715, 723 (2006). And “navigable waters” means 20 “Waters of the United States.” 33 U.S.C. § 1362(7). “The phrase ‘the waters of the United States’ 21 includes only those relatively permanent, standing or continuously flowing bodies of water ‘forming 22 geographic features’ that are described in ordinary parlance as ‘streams[,] . . . oceans, rivers, [and] 23 lakes.’” Rapanos, 547 U.S. at 739. 24 Under the Act, the United States Environmental Protection Agency (“EPA”) is required to 25 regulate storm water discharges “to protect water quality.” 33 U.S.C. § 1342(p)(6). The 26 Administrator of the EPA has promulgated regulations defining the term “storm water discharge 27 associated with industrial activity,” which includes “the discharge from any conveyance which is 28 2 1 used for collecting and conveying storm water and which is directly related to manufacturing, 2 processing or raw materials storage areas at an industrial plant.” 40 C.F.R. § 122.26(b)(14). 3 Section 402 of the Act provides for the issuance of a permit under the National Pollutant 4 Discharge Elimination System (“NPDES”). 33 U.S.C § 1342(a). A NPDES permit allows the 5 holder to discharge pollutants notwithstanding the general prohibition imposed by § 301(a). Id. The 6 NPDES permitting program is the “centerpiece” of the CWA and the primary method for enforcing 7 the effluent and water-quality standards established by the EPA and state governments. Natural 8 Res. Def. Council, Inc. v. Cnty. of Los Angeles, 636 F.3d 1235, 1245 (9th Cir. 2011) (citations 9 omitted). NPDES permits may be issued by the EPA or by state agencies that have been duly by the State Water Resources Control Board (“the State Board”). Cal. Water Code § 13267(b)(1); 12 For the Northern District of California authorized by the EPA. 33 U.S.C. § 1342(a)-(b). In California, the NPDES program is administered 11 UNITED STATES DISTRICT COURT 10 Pl.’s Req. for Judicial Notice (“Pl.’s RJN”) Ex. B, Dkt. No. 20. 13 In 1991, the State Board elected to issue a statewide General Permit for industrial discharges, 14 which was subsequently modified in 1992 and reissued in 1997. Compl. at 5; Pl.’s RJN, Ex. C. In 15 order to discharge storm water lawfully in California, industrial discharges must comply with the 16 terms of the General Permit or have obtained and complied with an individual NPDES permit. 33 17 U.S.C. § 1311(a). 18 Sections 505(a)(1) and 505(f) of the Act provide for citizen enforcement actions against any 19 “person,” including individuals, corporations, or partnerships, for violations of the NPDES permit 20 requirements and for un-permitted discharges of pollutants. 33 U.S.C. §§ 1365(a)(1) & (f), § 21 1362(5). As membership organizations, Plaintiffs have standing to bring suit on behalf of their 22 members when they “would otherwise have standing to sue in their own right, the interests at stake 23 are germane to the organization’s purpose, and neither the claim asserted nor the relief requested 24 requires the participation of individual members in the lawsuit.” Friends of the Earth v. Laidlaw 25 Envtl. Serv. (TOC), Inc., 528 U.S. 167, 181 (2000) (citing Hunt v. Washington State Apple Adver. 26 Comm’n, 432 U.S. 333, 343 (1977)). Defendants have not contested Plaintiffs’ general standing to 27 bring suit on behalf of their members. 28 3 1 B. Plaintiffs’ Allegations 2 In their Complaint, Plaintiffs allege that storm water falling on the Facility percolates 3 through and flows over the sand, gravel, and aggregate materials and runs freely over the surfaces of 4 the sand and gravel storage and processing areas. Compl. at 7. Plaintiffs allege that the storm water 5 picks up sediments, oil and grease, fine materials, and other pollutants, and has its pH, specific 6 conductivity, and clarity altered by the materials with which it comes into contact at the Facility. Id. 7 Plaintiffs further allege that numerous activities at the Facility take place outside and are exposed to 8 rainfall, including the storage and movement of aggregate materials, vehicles and other machines, 9 maintenance and repair work on vehicles and machines, and vehicle fueling. Id. Plaintiffs allege freeze, and hydraulic fluids which are exposed to storm water flows. Id. Plaintiffs maintain that the 12 For the Northern District of California that the machinery and other equipment leak contaminants such as oil, grease, diesel fuel, anti- 11 UNITED STATES DISTRICT COURT 10 management practices at the Facility are wholly inadequate to prevent these sources of 13 contamination from causing the discharge of pollutants to waters of the United States. Id at 8. As 14 the Facility is located adjacent to the Petaluma River, Plaintiffs allege that storm water from the 15 Facility is discharged from the site into channels or other conveyances and subsequently discharged 16 into the Petaluma River. Id. 17 Based on these allegations, Plaintiffs bring one cause of action - Discharges of Pollutants or 18 Storm Water Associated with Industrial Activity Without a NPDES Permit in violation of 33 U.S.C. 19 § 1311(a). Id. at 9-10. Specifically, Plaintiffs allege that Defendants discharge storm water 20 associated with industrial activity from one or more point sources at the Facility to the Petaluma 21 River, that Defendants have not obtained a NPDES permit for these discharges, and that the 22 discharges from the Facility are therefore unlawful discharges of pollutants or storm water 23 associated with industrial activity from point sources into waters of the United States. Id. Plaintiffs 24 request that the Court declare Defendants to have violated and to be in violation of the Act, enjoin 25 Defendants from discharging pollutants from the Facility, order Defendants to take appropriate 26 actions to restore the quality of navigable waters impaired by their activities, and to award civil 27 penalties, attorney’s fees and costs as authorized under the Act. Id. at 10. 28 4 On October 10, 2011, Defendants filed the present Motion to Dismiss. Dkt. No. 18. 1 2 Defendants seeks dismissal for lack of jurisdiction pursuant to Rule 12(b)(1) and for failure to state a 3 claim pursuant to Rule 12(b)(6). Id. 4 III. DISCUSSION 5 In their motion, Defendants argue that subject matter jurisdiction is absent because the Clean 6 Water Act does not include facilities with the Standard Industrial Classification code of the type they 7 operate. Defs.’ Mot. at 2, Dkt. No. 18. Defendants further argue that Plaintiffs’ cause of action for 8 violations of 33 U.S.C. § 1311(a) fails to state a claim for relief because the Act does not require a 9 permit for the alleged storm water discharges. Id. at 2. 10 A. Requests for Judicial Notice As a preliminary matter, both parties have filed Requests for Judicial Notice. Dkt. Nos. 18-1 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 (Defs.’s RJN); Dkt. No. 20 (Pl.’s RJN). Defendants request that the Court take judicial notice of the 13 following documents: (1) United States Department of Labor, Occupational Safety & Health 14 Administration (“OSHA”) Standard Industrial Codes (“SIC”) Division D: Manufacturing, Industry 15 Group 3273 - Ready Mix Concrete; and (2) United States Department of Labor, OSHA SIC Division 16 F: Wholesale Trade, Industry Group 5032 Brick, Stone and Related Construction Materials. Defs.’ 17 RJN, Exs. A-B. 18 Plaintiffs request that the Court take judicial notice of the following documents: (1) 19 selections from the Standard Industrial Classification Manual, produced by the Office of 20 Management and Budget, 1987, published by JIST Works, Inc.; (2) 71 Federal Register, ¶. 21 32464-32478, from June 6, 2006; (3) selections from the State Water Resources Control Board 22 Water Quality Order No. 97-03-DWQ NPDES General Permit No. CAS000001; (4) a Memorandum 23 dated October 18, 1994, prepared by the EPA’s Office of Wastewater Management and Office of 24 Regulatory Enforcement entitled “Policy for End of Moratorium for Storm Water Permitting – 25 October 1, 1994”; and (5) 60 Federal Register, ¶. 40230-40235, from August 7, 1995. Pl.’s RJN, 26 Exs. A-E. 27 Federal Rule of Evidence (“FRE”) 201(b) provides the criteria for judicially noticed facts: 28 5 1 “A judicially noticed fact must be one not subject to reasonable dispute in that it is either (1) 2 generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and 3 ready determination by resort to sources whose accuracy cannot reasonably be questioned.” It is 4 well established that records, reports, and other documents on file with administrative agencies – 5 such as the State Water Resources Control Board – are judicially noticeable. Lee v. City of Los 6 Angeles, 250 F.3d 668, 689-90 (9th Cir. 2001); see also al-Kidd v. Ashcroft, 580 F.3d 949, 954 fn. 6 7 (9th Cir. 2009); Marsh v. San Diego Cnty., 432 F. Supp. 2d 1035, 1043-45 (S.D. Cal. 2006). City 8 ordinances are also proper subjects for judicial notice. Santa Monica Food Not Bombs v. City of 9 Santa Monica, 450 F.3d 1022, 1025 fn. 2 (9th Cir. 2006). 10 As neither party has raised any objections to the requests for judicial notice, and the requests are not subject to reasonable dispute in that they are capable of accurate and ready determination, the 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 Court GRANTS the parties requests for judicial notice. 13 B. 14 Rule 12(b)(1) In their motion, Defendants argue that subject matter jurisdiction is absent because the Clean 15 Water Act does not include facilities with the SIC code of the type they operate. Defs.’ Mot. at 2. 16 Specifically, Defendants argue that the Facility is not an industrial facility under the Act; rather, it is 17 a distribution facility that simply stockpiles processed materials for a short period of time until they 18 can be distributed to various Shamrock concrete batch plants or sold to a third party. Id. at 9-10. 19 Thus, because the materials arrive on the site already processed, Defendants argue that citizen-suit 20 jurisdiction under 33 U.S.C. § 1365(a) is improper because none of the stored materials are raw 21 material subject to industrial storm water permitting under the Act. Id. at 10. 22 In their Opposition, Plaintiffs respond that the Complaint properly alleges that Defendants 23 are discharging storm water associated with industrial activity, and that the Facility falls within the 24 EPA’s definition of a facility that conducts industrial activity. Pls.’s Opp’n at 1, Dkt. No. 19. 25 Plaintiffs argue that, even if the storm water discharged from the Facility is associated with non- 26 industrial activity, the Act does not exempt these discharges. Id. 27 28 6 1 1. Legal Standard 2 Federal courts are courts of limited jurisdiction, possessing only that power authorized by Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541 (1986). Thus, federal courts have no 5 power to consider claims for which they lack subject matter jurisdiction. Chen–Cheng Wang ex rel. 6 United States v. FMC Corp., 975 F.2d 1412, 1415 (9th Cir. 1992). The Court is under a continuing 7 duty to dismiss an action whenever it appears that it lacks jurisdiction. Id.; see also Spencer Enters., 8 Inc. v. United States, 345 F.3d 683, 687 (9th Cir. 2003). The burden of establishing that a cause lies 9 within this limited jurisdiction rests upon the party asserting jurisdiction. Kokkonen v. Guardian 10 Life Ins. Co. of America, 511 U.S. 375, 377 (1994). Thus, in the present action, Plaintiffs bear the 11 burden of demonstrating that subject matter jurisdiction exists over their Complaint. Tosco Corp. v. 12 For the Northern District of California Article III of the United States Constitution and statutes enacted by Congress pursuant thereto. 4 UNITED STATES DISTRICT COURT 3 Communities for a Better Env’t, 236 F.3d 495, 499 (9th Cir. 2001). 13 On a motion to dismiss pursuant to Rule 12(b)(1), the applicable standard turns on the nature 14 of the jurisdictional challenge. A Rule 12(b)(1) jurisdictional attack may be “facial” or “factual.” 15 White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000) (citation omitted). In evaluating a facial attack on 16 jurisdiction, the Court must accept the factual allegations in Plaintiffs’ complaint as true and draw 17 all reasonable inferences in their favor. Doe v. Holy See, 557 F.3d 1066, 1073 (9th Cir. 2009). As 18 part of its ruling on such a motion, the Court may also consider additional facts that “are contained 19 in materials of which the court may take judicial notice.” McCarthy v. United States, 850 F.2d 558, 20 560 (9th Cir. 1988). 21 By contrast, in a factual attack, the challenger disputes the truth of the allegations that, by 22 themselves, would otherwise invoke federal jurisdiction. Safe Air for Everyone v. Meyer, 373 F.3d 23 1035, 1039 (9th Cir. 2004). In such a case, “[n]o presumptive truthfulness attaches to plaintiff’s 24 allegations, and the existence of disputed material facts will not preclude the trial court from 25 evaluating for itself the merits of jurisdictional claims.” Thornhill Publ’g v. Gen. Tel. & Elec. 26 Corp., 594 F.2d 730, 733 (9th Cir. 1979). “In resolving a factual attack on jurisdiction, the district 27 court may review evidence beyond the complaint without converting the motion to dismiss into a 28 7 jurisdictional finding of genuinely disputed facts is inappropriate when the jurisdictional issue and 3 substantive issues are so intertwined that the question of jurisdiction is dependent on the resolution 4 of factual issues going to the merits of the action.” Id. “The question of jurisdiction and the merits 5 of an action are intertwined where ‘a statute provides the basis for both the subject matter 6 jurisdiction of the federal court and the plaintiff’s substantive claim for relief.’” Id. “Dismissal is 7 then appropriate ‘where it appears beyond doubt that the plaintiff can prove no set of facts in support 8 of his claim which would entitle him to relief.’” Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th 9 Cir. 1987) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). “This standard, often cited in 10 Rule 12(b)(6) motions, . . . is equally applicable in motions challenging subject matter jurisdiction 11 when such jurisdiction may be contingent upon factual matters in dispute.” Id. (internal quotations 12 For the Northern District of California motion for summary judgment.” Safe Air, 373 F.3d at 1039 (citation omitted). However, “[a] 2 UNITED STATES DISTRICT COURT 1 and citation omitted). “The Ninth Circuit has held that, where the jurisdictional issue is intertwined 13 with the merits, a court cannot determine the jurisdictional issue until the merits of the case are 14 appropriately resolved.” Chie v. Reed Elsevier, Inc., 2011 WL 3879495, at *3 (N.D. Cal. Sep. 02, 15 2011) (citing Roberts, 812 F.2d at 1177). 16 2. 17 Here, because the Clean Water Act provides the basis for both the Court’s subject matter Application to the Case at Bar 18 jurisdiction and Plaintiffs’ substantive claim for relief, the question of jurisdiction and the merits of 19 this action are intertwined. 33 U.S.C. §§ 1365(a) & (f) (providing for any citizen to bring a civil 20 action against any person alleged to be in violation of an effluent standard or limitation, including 21 any unlawful act under 33 U.S.C. § 1311(a)); 33 U.S.C. § 1311(a) (“Except in compliance with . . . 22 section[] . . . 1342 . . . of this title, the discharge of any pollutant by any person shall be unlawful.”). 23 Thus, dismissal is only appropriate if it appears beyond doubt that Plaintiffs can prove no set of facts 24 in support of their claim which would entitle them to relief. Roberts, 812 F.2d at 1177. 25 Accordingly, the Court’s analysis shall focus on Defendants’ Rule 12(b)(6) argument. 26 C. 27 Rule 12(b)(6) Defendants next argue that Plaintiffs’ cause of action for violations of 33 U.S.C. § 1311(a) 28 8 1 fails to state a claim for relief because the Act does not require a permit for the alleged storm water 2 discharges. Defs.’ Mot. at 2. Specifically, Defendants argue that Plaintiffs cannot allege any facts 3 showing that Defendants, as a matter of law, are subject to the Act and the NPDES program because 4 the activities at the Facility are not directly related to the manufacturing, processing, or storage of 5 raw material. Id. at 15-16. 6 1. 7 A motion to dismiss a complaint under Rule 12(b)(6) tests the legal sufficiency of the claims Legal Standard 8 asserted in the complaint. Navarro v. Black, 250 F.3d 729, 732 (9th Cir. 2001). Rule 8(a)(2) 9 requires that a pleading stating a claim for relief contain “a short and plain statement of the claim the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. 12 For the Northern District of California showing that the pleader is entitled to relief.” The function of this pleading requirement is to “give 11 UNITED STATES DISTRICT COURT 10 Corp. v. Twombly, 550 U.S. 544, 555 (2007). “While a complaint attacked by a Rule 12(b)(6) 13 motion to dismiss does not need detailed factual allegations, a plaintiff’s obligation to provide the 14 ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic 15 recitation of the elements of a cause of action will not do. Factual allegations must be enough to 16 raise a right to relief above the speculative level.” Id. at 555 (internal citations and parentheticals 17 omitted). In considering a 12(b)(6) motion, “[a]ll allegations of material fact are taken as true and 18 construed in the light most favorable to plaintiff. “However, conclusory allegations of law and 19 unwarranted inferences are insufficient to defeat a motion to dismiss for failure to state a claim.” 20 Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996); see also Twombly, 550 U.S. at 21 555. The court “may generally consider only allegations contained in the pleadings, exhibits 22 attached to the complaint, and matters properly subject to judicial notice.” Williston Basin Interstate 23 Pipeline Co. v. An Exclusive Gas Storage Leasehold and Easement in the Cloverly Subterranean, 24 Geological Formation, 524 F.3d 1090, 1096 (9th Cir. 2008) (citation omitted); United States v. 25 Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). 26 27 If the court dismisses the complaint, it should grant leave to amend even if no request to amend is made “unless it determines that the pleading could not possibly be cured by the allegation 28 9 1 of other facts.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (quoting Cook, Perkiss and 2 Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 F.2d 242, 247 (9th Cir. 1990)). 3 2. Application to the Case at Bar 4 Here, there is no dispute that any “discharge associated with industrial activity” is required to 5 have a NPDES permit. 33 U.S.C. § 1342(p)(2)(B). However, Defendants argue that there are no 6 allegations of a discharge of storm water associated with any industrial activity at their properties 7 and, therefore, they have no duty to obtain a permit. Defs.’ Mot. at 7. 8 9 Federal Regulations define “storm water discharge associated with industrial activity” to mean: “The discharge from any conveyance that is used for collecting and conveying storm water industrial plant.” 40 C.F.R. § 122.26(b)(14). The Ninth Circuit has observed that “[t]he language 12 For the Northern District of California and that is directly related to manufacturing, processing or raw materials storage areas at an 11 UNITED STATES DISTRICT COURT 10 ‘discharges associated with industrial activity’ is very broad.” NRDC v. EPA, 966 F.2d 1292, 1304 13 (9th Cir. 1992). “The operative word is ‘associated.’ It is not necessary that storm water be 14 contaminated or come into direct contact with pollutants; only association with any type of industrial 15 activity is necessary.” Id. Section 122.26 further provides that, “facilities are considered to be 16 engaging in ‘industrial activity’” if they are “classified as” any one of a number of specified SICs. 17 40 C.F.R. § 122.26(b)(14). Accordingly, the primary question here is whether Defendants’ Facility 18 is properly “classified as” any of the SICs listed in 40 C.F.R. § 122.26(b)(14). 19 In their Complaint, Plaintiffs allege that the Facility is an industrial facility. Compl. at 6. 20 The Complaint alleges the facility “is located in an area zoned by the County of Sonoma for heavy 21 industrial use as a M2 Heavy Industrial District.” Id. The Complaint alleges that “[i]ndustrial 22 operations at the site include the unloading of barges, conveying sand, gravel, and aggregate 23 materials to large, uncovered piles, loading of materials using electric-powered or diesel-powered 24 front-end loaders, queuing of trucks awaiting loading, and transporting materials from the site on 25 unpaved or gravel surfaces.” Id. The Complaint further alleges that the sand, gravel, and aggregate 26 materials are transported from the site via trucks owned by Defendant to concrete plants, and that 27 storm water discharged from the Facility includes storm water “that has come into contact with raw 28 10 1 materials that ultimately are used at these ready-mix concrete plants.” Id. In addition, the 2 Complaint alleges that the following activities also occur at the Facility: “the use and storage of 3 lubrication products, including hazardous substances, which are used to conduct repairs and 4 maintenance of equipment”; mobile fueling of loading equipment; and “[i]ndustrial machinery and 5 heavy equipment, including trucks, are operated and stored at the Facility in areas exposed to storm 6 water flows. Id. at 7-8 7 Beyond the Facility, Plaintiffs contend that Defendants’ numerous concrete manufacturing 8 facilities and the Facility at issue here constitute a single enterprise. Pls.’ Opp’n at 11. Plaintiffs 9 allege that the Facility is an auxiliary establishment, performing support services for Defendants’ 10 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 13 concrete manufacturing facilities. Compl. at 6-7. The SIC Manual (1987) is published by the Office of Management and Budget. Pl.’s RJN, Ex. A. Its introduction explains that: 16 The [SIC] was developed for use in the classifications of establishments by type of activity in which they are engaged; for purposes of facilitating the collection, tabulation, presentation, and analysis of data relating to establishments; and for promoting uniformity and comparability in the presentation of statistical data collected by various agencies of the United States Government, State agencies, trade associations and private research organizations. 17 Id. at 11. The Manual defines “establishment” as “an economic unit, generally at a single physical 18 location, where business is conducted or where services are performed.” Id. at 12. The term 19 “establishment” is distinguished from “enterprise (company),” which “may consist of one or more 20 establishments.” Id. Each “establishment is assigned an industry code on the basis of its primary 21 activity, which is determined by its principal product or group of products produced or distributed, 22 or services rendered.” Id. at 15. 14 15 23 Here, Shamrock owns and operates several ready-mix concrete industrial establishments in 24 separate physical locations in Petaluma, Novato, Napa, Santa Rosa, and San Rafael, each of which is 25 categorized as SIC Code 3273 and subject to a NPDES permit which is in place. Compl. at 6-7; 26 Defs.’ Mot. at 12. SIC Code 3273 is defined as: “Establishments primarily engaged in 27 manufacturing portland cement concrete manufactured and delivered to a purchaser in a plastic and 28 11 1 unhardened state. This includes production and sale of central-mixed concrete, shrink mixed 2 concrete, and truck mixed concrete.” Defs.’ RJN, Ex. 1. SIC Code 3273 falls within the SIC Codes 3 listed by the EPA at 40 C.F.R. § 122.26(b)(14). Defendants’ plants perform cement concrete 4 manufacturing operations - concrete is made by mixing together water, cement, sand, and rock, and 5 then loaded into trucks and distributed to various job locations. Defs.’ Mot. at 12. Defendants 6 contend that it is this processing of aggregate material into ready-mix concrete outside the Facility 7 that subjects them to the Clean Water Act. Id. 8 9 The Manual further explains that “auxiliaries” are establishments that primarily provide management or support services for other establishments that are part of the same enterprise. establishment(s) served and are treated as separate establishments. Pl.s’ RJN, Ex. A at 13. Here, 12 For the Northern District of California Auxiliaries that perform auxiliary functions and are located physically separate from the 11 UNITED STATES DISTRICT COURT 10 Defendants contend that the Facility is a distinct and separate establishment that is to be categorized 13 based upon its own operations. Mot. at 13. Defendants suggest that “it should be categorized under 14 SIC Code 5032.” Id. SIC Code 5032 is defined as: “Establishments primarily engaged in the 15 wholesale distribution of stone, cement, lime, construction sand, and gravel; brick (except 16 refractory); asphalt and concrete mixtures; and concrete, stone and structural clay products (other 17 than refractories).” Defs.’ RJN, Ex. 2. 18 Auxiliaries that are not treated as separate establishments are assigned SIC codes, “on the 19 basis of the primary activity of the operating establishments they serve.” Pl.s’ RJN, Ex. A at 16. 20 Although the Manual suggests that where an auxiliary is located physically separate from the 21 establishment or establishment served, it is to be treated as a separate establishment, elsewhere it 22 lists examples of auxiliary establishments such as warehouses, automotive repair and storage 23 facilities that likely are quite often located at a geographic distance from the establishments they 24 serve. Id. at 14-15. The Manual also provides for the sub-classification of auxiliaries by an 25 additional one-digit code that follows that of the primary establishment. Id. at 16-17. Accordingly, 26 as the SIC Code for Defendants’s establishments is 3273, Plaintiffs contend that the SIC Code for 27 the Facility is also 3273, and that the Facility should be sub-categorized as 3273-3. Pls.’s Opp’n at 28 12 1 12. Auxiliary Code Number 3 applies to “Storage yards” as “[a]uxiliary establishments primarily 2 engaged in storing raw materials, finished goods, and other products to be used or sold by other 3 establishments of the same enterprise.” Pl.s’ RJN, Ex. A at 17. 4 Based on the parties’ arguments and evidentiary support, the Court finds that it is unable to 5 determine at the Rule 12(b)(6) stage whether the Facility’s SIC Code establishes that it is or is not an 6 industrial facility. First, although there is no dispute that the Facility is geographically separate from 7 Defendants’ concrete-mixing establishments, “it is not entirely clear from the Manual when 8 geographically separate facilities that provide support services to other establishments within the 9 same enterprise should be classified according to the primary activities taking place at those facilities and when they should not.” Ecol. Rights Found. v. PG&E, 2011 WL 445091, at *2 (N.D. 11 Cal. Feb. 4, 2011). 12 For the Northern District of California UNITED STATES DISTRICT COURT 10 Second, “[t]he considerations relevant to deciding whether an auxiliary should be treated 13 separately or not would seem to be highly dependent on the purposes for which the classification is 14 being undertaken. The Manual presents the SIC as a system designed for statistical data collection 15 and analysis by governmental and private entities largely in the economic context[.] Id. at *2, fn.4. 16 “As such, even if the Manual set out the rules more clearly, they might not be well-suited for 17 determining whether or not a particular facility is engaged in ‘industrial activity’ for purposes of the 18 Clean Water Act.” Id. Given the parties’ opposing ideas of the proper SIC classification for the 19 Facility, this appears to be a fact-based determination, and the Court finds that such a determination 20 should be made after the opportunity to conduct discovery and further develop the record. 21 Third, at this juncture, neither party has definitively established that the Facility can be 22 properly classified only under one SIC Code. Furthermore, the implementing regulation, 40 C.F.R. 23 § 122.26(b)(14), provides that plants or facilities “classified as” particular SIC codes are “considered 24 to be engaging in ‘industrial activity,’” but it nowhere sets out any rules governing when, if ever, a 25 particular plant or facility must be assigned the code of a larger entity rather than being given its 26 own. As discussed above, the SIC Manual itself expressly states that geographically separate sites 27 are to be treated as distinct establishments, although it also contains implications to the contrary. 28 13 1 Thus, even to the extent that the EPA’s governing regulations could be deemed to have incorporated 2 the rules in the SIC Manual by reference, neither Section 402(p) nor 40 C.F.R. § 122.26(b)(14), 3 plainly and unambiguously requires that the Facility at issue be classified under a particular SIC 4 Group. Ecol. Rights Found., 2011 WL 445091, at *3. For these reasons, the Court must deny 5 Defendants’ motion. 6 IV. CONCLUSION 7 For the reasons set forth above, the Court DENIES Defendants’ motion to dismiss. 8 IT IS SO ORDERED. 9 10 Dated: November 2, 2011 _______________________________ Maria-Elena James Chief United States Magistrate Judge 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14

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