In Re: Methyl Tertiary Butyl Ether ("MTBE") Products Liability Litigation

Filing 3648

REPLY MEMORANDUM OF LAW in Support re: (3607 in 1:00-cv-01898-SAS-DCF, 146 in 1:04-cv-04973-SAS) MOTION for Summary Judgment. Based on the Statute of Limitations or, Alternatively, For Lack of Injury. Document filed by Chevron USA Inc.. Filed In Associated Cases: 1:00-cv-01898-SAS-DCF, 1:04-cv-04973-SAS(Anderson, Jeremiah)

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UNITED STATES DISTRlCT COURT SOUTHERN DISTRICT OF NEW YORK In Re: Methyl Tertiary Butyl Et her ("MTBE"') MDL 1358 (SAS) Products Liability Litigation This Document Relates To: City oj Fresno v. Chevron US.A. Inc" 04 Civ. 04973 el af. REPLY IN SUPPORT OF DEIFENDANTS' MOTION FOR PARTIAL SUMMARY ,JUDGMENT BASElD ON THE STATUTE OF LIMITATIONS OR. AL n:RNATIVELY, FOR LACK OF INJURY TABLE OF CO NTENTS I. Introduction .......................................................................................................... ................ 1 II. Summary Judgment Should Be Granted at the Five Sites with Groundwater Detections Above Five PPB Before October 22, 2000 Based on OCWD .... ....... .............. .3 HI. The City's Alternative Accrual Test Is a Sleight of Hand .................... ..... .............. __ ...... _ 6 .. m. "Jbe City's Claims Arc Either Time-Barred Or Non-Existent at Sites that Have. Never Had an MTBE Groundwater Detection ................................................................ ..... 8 IV. Thc Court Has Already Rejected the City's Claim that CERCLA Applies ......... .......... ..... 9 V. The City Mischaracterizes Defendants' Arguments on Accrual .................................. ,.... ! I VI. Summary Judgment on the City's Entire Nuisance Claim Is Appropriate ........................ 12 TARLE OF AUTHORITIES Pagels) CASES Aas v. Superior COllrl, 24 Cal. 4th 627 (2000) .............. .... ... .... ... ........ .... ... ........................................ ... .... ....... .... t 1. 12 California v. Kinder Morgan Energy Parmers, L. P.. 20 13 WL 314825 (S. D. Cal. Jan. 25, 2013) ................................ ...... ............ ................. 3, 13-15 City of Vis/a v. Rohert Thomas Securities, Inc. 84 Cal. App. 4th 882 (2000) ......... .. ... ... ..... ............... .... ... .............. ... ....... ....... ............... ............ 7 Counly a/Santa Clara v. Atlantic Richfield Co .. J3 7 Cal. App. 4th 292 (2006) ......................... ............................. ...................................... ...... 11 In re MTBE. Prod\', Liab. Litig., 475 F. Supp. 2d 286 (S.D.N.Y. 2006) ...... ......... ...... ...... ... .... .. .............................. ...................... 9 In re MTBE Prods. Uab. Lirig., 2008 WL 2676278 (S.D.N. Y. July 8, 2008) ......................................................... .... ............... 11 In re MTBE Prods. Liab. Litig.. 676 F. Supp. 2d 139 (S.D.N.Y. 2009) ............................ .... ............... ........................... .... passim in re lvfl'BE Prods. Liab. LiUg., 2009 WL 4496736 (S.D.N. Y. Dec. 2, 2009) ..................................................................... 10, II STATUTES Cal. Pub. Res. Code §§ 21000 eI seq . . .... ... ........ .... .............................. .. .... ..................... ........... .... .4 11 l. Introd uction The Cityl is playing 3 she ll g~lmc, claiming on one hand that accrual did not occur until it detected MTBE in Monitoring Well 318. while on the other hand not seeking damages for that event or for any MTBE in its dri nking watcr wells, because there is none. Instead, the City seeks damages for an entirely separate alleged injury-MTBE reported in the shallow grOtmdwater at the Sites- which it argues has nothing 10 do with accrual. This argument makes no scnse. Accrual occurs when a plaintiO' suffers the injury for which it seeks to rccover damages. Because the City is seeking futu re damages for future investigation at the Sites based so lely on the alleged groundwater and soil detec tion s at them, those detections must be the accrual trigger. These detections occurred and were reported before October 22. 2000. the undisputed lim itations deadlinc. Therefore, the City's claims are barred by the statute of limitations as a matter of law. The Court has already held as much with respect to Sites with groundwater detections.:! In Orange County Water Dis/ricl v. Unoc:al Corp., el 01 .• the Court held that a claim for MTBE impact accrues when " MTBE [is] detected in moni toring wclls at levels at or above five ppb.'· In re MTBE Prods. [.iab. Lilig. r OCWD" ), 676 F. Supp. 2d 139, 154 (S.D.N.Y. 2009). The City claims that this decision docs not apply to it so lely because of the allegedly unique characteristics of the Orange County Water District (the "District') It argues that the District. unlike the City. is charged with prot(;cting groundwater in its tcrritory, and on this basis alone the Court set the five ppb injury standard. This argument misrepresents both the City' s responsibilities with respect to the groundwater and the Court's holding. As detailed herein. Unless otherwise noted, capilalized terms have the same meaning assigned to tbem in the Motion for Summary Judgment based on the Statute of Limilalions or, Alternatively, for Lack of Causation (the ·'Motion"). 2 ( I) Chevron #9-4374, 11 60 Fresno St.; (2) Gilbert ' s Exxon, 4142 East Church; (3) Chevron #9-9093, 3996 N. Parkway Dr. ; (4) Tasca #39118, 1605 N. Cedar; and (5) 7-Elcven # 13917,3645 Olive Ave. among other things, the City: has a statutory duty to protect the groundwater; has a stated objective to prevent groundwater degradation; participates in groundwater protection organizations and presentations; pemJits the construction and destruction or wells; routinely tests its wells for environmental impact: and purportedly filed suit here to protect the growldwater. Purthennorc, the District' s common law claims are predicated on its alleged usufructary rights, so even if the City ' S argument that it is not charged with protecting the groundwater were credible, the OCWD opinion wou ld still apply to the City1s claims. With respect to the remaining, three Sites at issue in the Motion ,) the OCWD opinion is distinguishable. There, discovery was ongoing, and the Court held that there was a fact issue as to whether an event aner the limitations deadl ine alerted the District that MTBE in the soil may have reached groundwater. The City cannot credibly point to any such event here. Wh il e it relics on the Well 318 detection, it fajlcd to retain a modeling expert, unlike the District; thus. the 4 City cannot tie the MTBE detected in Well 318 to any of the Sites. Nor did the City bring fonh any other evidence that MTBE has impacted grOlmdwater at these Sites. The City's claim for further investigation and potentially remediation damages rests solely on the soil detections. which were reported in public records before October 22, 200.0. If these detections give. rise to a claim. then it is time barred. lithey do not, then there is no injury or viable claims at these Sites. TIle City also argues that it is asserting a continuing nuisance claim, which is not subject to a three· year statute of limitations. But to show a nuisance is continuing, a plaintiff must put forth site· specific expert opinions that the environmental impact at isslic is reasonably abatable. 3 (I) Tosco #30587. 1610 N. Palm; (2) Beacon-Arco #615, 1625 Chestnut; and (3 ) Valley Gas, 2139 South Elm S1. The City agreed to dismiss its elaims at Unocal #6363,1418 E. Shaw. 4 Should this litigation proceed to the merits. Defendants reserve the right to dispute the validity ofMTBE detections in City wells and at any Sites, but for purposes of the present Motion, they arc assumcd to be true. 2 or satisfy the. othe.r two tests used in California. See California v. Kinder Morgan Energy Partners. L.P., 2013 WL 31 4825 (S.D. Cal. Jan. 25, 2013). The Cily railed 10 do Ihis. Instead. il cites to the clean-up costs for gasoline releases generally, but this generic evidence has nothing to do with the Sites at issue and is not specific to MTBE. The City also claims that Defendants conceded abatability in a footnote in the Motion, but cven a cursory reading of the footnote shows this is not true. Summary judgment on the entire nuisance claim is therefore warranted. II. Summary Judgment Should Be Granted at the Five Sites with G.roundwater ]}etections Above Five PIlB Before October 22, 2000 Based on OCWD. Summary judgment is warranted at the five Sites with groundwater detections above the secondary MeL before October 22, 2000 based on a straightforward application of OCWD. To distinguish OCWD. the City argues that the District and it "have very different interests" and "are making very different claims." Opp. at 9. It also quotes the Court's prior recitation in OCWD of several of the District's purported unique characteristics and notes that the City serves water and is not in the day·to·day business of monitoring well s. Id. at 10·11. These alleged differences. however. are immaterial to the key holding in OCWD: OCWD incurred appreciable harm when groundwater within its territory was sufficiently contaminated with MTBE that a government agency charged with protecting the quality oft/lUI water reasonably should have responded to that contamination. OCWD, 676 F. Supp. 2d al 147-48 (emphasis added). Thus. Ihe question is nol whelher Ihe District and the City are identical (as the City seems to suggest); the question is whether the City is "charged with protecting the quality of 0 water." The answer to this question is clearly yes. Predictably. the City is charged with protecting the groundwater it serves the public, as the City has repeatedl y acknowledged. The statutory requirements and duties arc numerous: • As an "urban water supplier.'~ the City must develop and implement a water management plan "to protect both the people of the state and their water resources," including identifying and qmmtifying the existing and planned sources of water and developing J plans to replace a source or implement water demand management measures where environmental or water quality factors interfere with usage. (Rule 56.1 St. ~ 86.) • The City is required to undertake "such activities so that major consideration is given to preventing environmental damage." Cal. Pub. Res . Code §§ 21000 et seq. (Califomia Environmental Quality Act) (West 20 12); 21 OOO(g). • In 1992, the City co-authored the Fresno/Clovis Metropolitan Water Resources Management Plan (Phase I), which states that the City's objectives include to " protect groundwater qual ity from further degradation," " provide safe, adequate, and dependable watcr supplies to mcet the future needs of the metropolitan area," undertake further analysis of hydrogeologic conditions in the basin. and detennine "the best location for additional basin recharge facilities." (Rule 56.1 St. ~ 88.) • The City's current Urban Walter Management Plan reiterates the City's responsibility to "preserve and enhance the ex:isting quality of the area's groundwater" and "manage groundwater resources to the extent necessary to ensure reasonable, benelicial, and continued use of the resource ." (Rule 56.1 St. ~ 89 (City of fresno 20 I 0 Urban Water Management Plan Chapter (noting that "the October 2005 Memorandum of Understanding between the participating agencies makes it clear that each participating agency [including the City of Fresno] retains authority and responsibility for groundwater management within its own jurisdiction"»).) • One of the City'S well permitting responsibili ties is to assess analytical results from release sites "to ensure the quality of growldwater is protected." (Rule 56. I St. ~ 29.) • Broc.k Buche, the City's corporate representati ve, testified that the City ' s "higher calling is to protect and preserve the groundwater supply'-' (Rule 56.1 S1. 90.) The City's responsibility for protecting the groundwater cannot reasonably be in doubt. The City, however, tries to skjrt these statutory and other duties to avoid summary judgment. It makes the remarkab le claims that "Fresno is not charged with managing a groundwater basin" and "Fresno does not have the same special statutory responsibility to protect groundwater as the District." Opp. at II . Not surprisingly, there is no statutory or evidentiary cile for these misleading statements. As the statutes and evidence cited above show, the City is in fact charged with prote(;ling the groundwater. Furthennore, the City ' s own actions belie its litigation position. Prior to the limitations date the City; ( I) prepared and implemented water management plans that address. water quality, threats of contamination, and lise and 4 management of the groundwater basin; (2) participated in conferences and work groups relating to groundwater contamination; (3) cn:atcd a procedure that gave the City oversight responsibility for permitting all groundwater monitoring wells in its jurisdiction. including monitoring wells at the Sites; (4) tested ler groundwater quality in its jurisdiction and issued an annual report on water quality; (5) received in its capacity as a '''water purveyor" a list ofMTBE discharge sites in the Fresno area from the California Regional Water Quality Control Board; and (6) recei ved a Icttcr from the California Department of Health Services advising that the City should "immediately monitor sources located in areas vulnerable to point source contamination by MTBE" and obtain "'intermation regarding any leaking underground storage tanks in your area:' See Mot. at 5-8. And the City purportedl y filed this lawsuit to protect the groundwater. The foregoing leaves no doubt that the City is "a government agency charged with protecting the quality of [] water." and therefore it incurred "appreciable hann when groundwater within its territory was sufliciently contaminated with MTBE that a government agency charged with protecting the quality of that water reasonably should have responded to that contamination." OCWD. 676 F. Supp. 2d at 147-48 (emphasis added). The Court has already determined that a reasonable government agency would respond when MTBE is detected in groundwater at a site at or above five ppb. Id. at 148. Here, it is undisputed that such detections were publicly reported at the Sites listed in footnote 2 before October 22, 2000. Accordingly, the Court should grant summary judgment as to these Sites. Additionally, the District's common law claims in OCWD were based on its alleged usufructuary rights. OCWD. 676 F. Supp. 2d at 146 n.40. Therefore, even if the City's distinctions had any merit, which they do not, summary judgment is still warranted because the City too bases its claims on its usufructuary rights. See Mot. at 13. 5 The City's Alternative Accrual Test Is a Sleight of Hand. III. The Court should reject the City's attempt to overrule or severely limit OCWD because, among other reasons, there is absolutely no evidentiary relationship between these Sites and any alleged detection in Monitoring Well 318 or any other City well. The heart or the City's argument is that its injury for purposes of accrual can be totally unrelated to the injury for which it seeks to recover damages. See Opp. at 7-8. It claims that the detection in Monitoring Well 3] 8 in November 2001 is the accmal trigger, yet it admits that it is not seeking to recover for this supposed injury. !d. at 8. Rather, while investigating the detection in Well 318. the City allegedly "gained knowledge of other MTBE releases and the sources of those releases." Id. It is these releases for which the City seeks damages. The Court in OCWD already detcnnined that the detections at the stations trigger accrual, aJld as explained above. OCWD controls hcre. Further, the City'S altcmative accrual test has a gaping hole in logic. Critically missing is any connection between the detection in Well 318 and any MTBE releases at the Sites. There is none. The City admits as mueh (Opp. at 8), as it must because there is no expert testimony tying the MTBE allegedly found in Well 318 to any oflhe Sites. As a result, the City cannot claim injury from these Sites based on a detection in Well 318, nor is it sceking to recover damages for that or any other alleged detection in the City's wells. 5 Rather. the City is seeking to perform further investigation at the Sites based only on the groundwater and soil detections at the Sites~ therefore, those detections are the accrual event. While the City contends that its claims are "for contamination of the deeper aquifer," it cites no discovery responses, 30(b)(6) witness testimony, or expert testimony that indicate it is seeking damages for injury to the aquifer. Opp. at 13. Instead, the City relies only on its Complaint, which is not evidence. Opp. at 13-14. The undisputed evidence shows there has been no MTBE in the City's wells for years, so it cannot be secking to recover for impact to the deeper aquifer. The City'S damages relate only to the alleged MTBE at the Sites. 3" 6 The cases cited by the City confinn that it is the detection at the Sites that matter. For example, the City quotes City 0/ Vista v. Roberl Thomas Securities, Inc.: "When damages are an element of a cause of action. the cause of action does not 'acerue' until the damages have been sustained:' 84 Cal. App. 4th 882, 886 (2000); Opp. at 5. This is exactly Defendants' point. The damages for which the City seeks to recover were sustained when MTBE was detected at the Sites above five ppb, which occurred prior to October 22, 2000. The City also asserts that its damages arc " mitigation" actions and not the basis for accrual. Opp. at 12.13 .6 This is nonsense. While its expert testified that it would be cheaper theoretically to clean lip release sites than to treat MTBE at the wellhead (id.), there is no proof here that MTBE from any of the Sites has or will impact a City well. There is simply no proof of anything to mitigate. Instead, the City is really claiming injury solely based on MTBE reportedly in the shallow grOlmdwater underneath the Sites, and the City's claims accrued when MTBE exceed Jiveppb in that water. Because the detections at the Sites trigger accrual, and because the City docs not dispute that MTBE was detected at the Sites above five ppb and reported publicly before October 22. 2000, the City'S claims arc barred by the statute of limitations at each of the Sites. 7 The City also contends that the MTBE reported in shallow monitoring wells at the Sites does not constitute an immediate threat to the deeper water supply aquifer. Opp. at II and 14· 15. If the Court accepts this argument or the City'S claim that it does not suffer injury unless and Wltil there arc impacts to the deeper aquifer. then Defendants respectfully request pennission to The City improperly uses Mr~ I-Iabennan's expert report to support this argument. Defendants have objected to its use and moved to strike it. 7 The City's claim that expert testimony is required to establish appreciable haml is easily dismissed. Opp. at 8. The bright line standard announced in OCWD can easily be applied at the Sites with a cursory review of the envirorunentaJ rcpons. (Notab ly. the City did not submit an expert declaration to support its latest accrual test.) 6 7 brief a summary judgment motion on lack of injury. Therc is no evidence that MTBE from these Sites has ever or will ever impact the deeper aquifer. Further, the City's testing data show that there has not bcen any MTBE in the C ity's wells for more than two years. [f detections in the shallow groundwater at the Siles do not const itute injury, then the City has no evjdence of injury at any of the Sites. Defendants are entitled to summary judgment on that basis. Ill. T he City' s Claims Are Eith lCr Time-Ba r red Or Non-Existent at Sites that Have -Never H ad a n MTB E G roullldwater Detection. At the remaining three Sites, which only have soi l detections, either: (a) those detections constitute evidence of injury which occurred outside limitations. thereby entitling Defendants to summary judgment on the City's claims; or (b) they are not suffic ient evidence of injury to sustain the City's claims: and the Court should dismiss all claims at these Sites. 111C City ignored the material differcnce between OCWD and this case with respect to Sites with only soil detections. Discovery was ongoing when the motlon was decided in OCWD, but it is complete here. The District could have, and later did, designate a modeling expert that purports to tie MT13E in the drinking water wells to particular stations. As a result, the Court fou nd that the detections in production weHs associaledwith the soi l detect ion sites co uld be the accrual event because they may have indicated that MTBE from the soil had impacted groundwater. The Court thereforc found a triable issue of fact as to whether the District should have realized its water was adversely· affected before the production well detections. OCWD. 676 F. Supp. 2d at 150 n.59. The City relics on this finding and the Court 's statement that "not every release of MTBE harms groundwater" to argue that the soil dctcctions here did not alert it that MTBE at these three Sites may have affected or impacted groundwater. Opp. at 22. The City, however. completely fails to identifY what event after the lim itations cutoff did alert it that MTBE from 8 these three Sites had in fact impacted groundwater. In OCWD, that event was the detection of MTBE in a well associated with the soil detection only sites. Here, there is no evidence tying the MTBE in Well 318 (or any other City well) with the soil detection only Sites. The City fail ed to designate a modeling expert. so there wil! be no opinion testimony or other evidence that MTI3E from a particular Site has impacted or will impact any of the City's wells. Consequently, the City cannot claim that a detection in Monitoring Well 318 put it on notice that MTBE from these three Sites has impacted groundwater. And importantly. there will be no other proof of whether MTBE at these stations ever reached groundwater. The only possible accrual trigger must therefore be the soil detections, all of which were publicly reported outside the limitations period. If they are sufficient for a jury to conclude that the City is more likely than not injured-i.e., that MTBE reached groundwater at an appreciable ievc\ to create harm-then they are sufticient for accrual. See Mot. at18. Alternatively, if these soil detections are insufficient to establish injury for purposes of accrual, then the City either has no viable claim or there is not sufficient injury or ha1111 to prevent swnmary j udgment. s See id. The City's citation to Richard Haberman's generaJ statement regarding the supposed cost em~'cliveness of mitigation measures to address a plume before it water supply wells is irrelevant, as this opinion has nothing to do with any oflhe Sites or soil detections generally. Regardless of the reasoning, the Sites listed in footnote 3 shou ld not be part of this case. IV. The Court Has Already Rc} jectcd the City's Claim that CERCLA Applies. The City wastcs seven and a baJfpages regurgitating cases that generally discuss the statute of limitations and discovery rule. Opp. at 2-9. The Court already examined these cases 8 "The mere release of MTBE-b lended gasoline does not cause r 1appreciable harm. Rather, it is only when a gasoline plume travels from the release point through the soil and [J enters the aquifer that appreciable ha.n11 could occur. Thus, there is no appreciable harm until MTBE is present in the groundwater." In re MTBE, 475 F. Supp. 2d 286, 293 (S.D.N.Y. 2006). 9 when the District cited them in OCWD, and the Court held that a plaintitTis "apprec.iably hanned as a matter of law when MTI3E was detected in monitoring wells at or above the California Maximum Contaminant Level," which is five ppb. OCWD. 676 F. Supp. 2d at 141-42. The Court has already determined the test for accrual in this type of case, and there is no reason to revisit the issue now. The City nevertheless once again argues that CERCLA extends the Califomia discovery rule, a claim this Court has already dismissed. Opp_ at 6-8. In OCWD, the District requested rehearing on the Court ' s final statute of limitations opinion based solely on this issue. The Court rejected the argument then. and it should reject the argument again now. 9 In re lVlTBE Prod~·. Uah. Ufig.• 2009 WL 4496736. at *2 (S.D.N. Y. Dec. 2. 2009). The Court held that O'Connol' ". Boeing North American- the case on which the City almost exclusively relies- is not controlling and does not hold that CERCLA preempts state law in cases like this. Id. Thc Court went on to hold that in OC WD "the CERCLA standard outl ined by the Ninth Circuit in o ·Connor would lead to the identical result as would using the Cal i romia state standard." The Court noted that while the court in 0 'Connor stated that a reasonable jury could !tl d~terminc that "[a]n average plaintiff alleging a, connection between latent disease and exposure to hazardous substances does not have the means to conduct the type of comprehensive epidemiological study necessary to bridge the causation gap," the District had made no showing that it lacked the sophistication to review publicly available remediation files to determine its injury. !d. Nor has the City made this showing here. To the contrary, the undisputed evidence shows that the City could have casily interpreted the publicly avail able files. 0 'Connor is therefore inapplicable here too) and CERCLA does not extend the discovery rule or otherwise , Notably, the City failed to cite to the Court -s opinion that alrcady rejected this argument. 10 preempt the California statute of limitations, as the Cuurt has already held. Id. Furthemlore, CERCLA is inapplicable because it does not apply to releases of gasoline containing MTBE, and the City is asserting claims based only on gasoline releases. See In re AtrrBE Prods. Uab. Litig., 2008 WL 2676278, at '3-4 (S.D.N.Y. July 8, 2008) (discussing CERCLA exclusion). v. The City Mischaractcrizcs Defendants' Arguments on Accrual. To be clear, Defendants contend that the City' s claims accrued at each Site when there was a groundwater detection at the Site in excess of five ppb or, for a Site without any groundwater detections, when MTBE was detected in the soil. The Motion set forth on a site-bysite basis when the claims accrued at each Site. See. e.g., Mot. at J0 (listing the first detections on a site.-by-sitc basis). Thus, the City is wrong when it claims that Defendants are arguing that "the statute of limitations accrued when MTBE contamination was detected at levels in excess of 5 ppb in groundwater monitoring wells anywhere within the City of Fresno." Opp. at 15, 21. Similarly, the City misstates that Defendants contend tllat the City's claims accrued when the conduct. occurred that gives rise to the asserted causes of action. Opp. at 17-21 . Defendants have never argued that accrual should be based on conduct, and the City failed to cite where Defendants urged this standard. The City cites Aas v. Superior Court, 24 Cal. 4th 627 (2000). when presenting its lengthy straw man argument. Opp. at 19-20. Aas, however, supports Defendants' position that the City'S claims accrued when its property int-erest was tirst injured, i.e. , when environmental impact of the groundwater at the Sites first occurred. See id. at 646; County a/Santa Clara v. AI/(mtic Richfield Co., 137 Cal. App. 4th 292 , 320 (2006) ("ADS rejected the homeowners' argument that property damage should not be requiredL.],,); see also OCWD, 676 F. Supp. 2d at 146 ("OCWD was appreciably hanned when the property in which it had an interest was appreci ably harmed."). As explained in the Motion and above, the property at issue here is the groundwater II beneath the site. Mot. at 16. It is the groundwater at the Sites lhat the City seeks to investigate and potentially rcmediate. All of its alleged damages are based on the historical groundwater detections at the Sites, not on the historical trace detections in the City'S wclls. IO When groundwater a1 the Sites was injured, the City'S claims accrued. See Aas, 24 Cat. 4th at 646. The City again asserts that Defendants cannot argue that the City's claims arc time-barred while also claiming that Defendants have not injured the City. Opp. at 16. But it is the City that is asserting a claim in this action. Defendants-without admitting to the validity of the claimare entitled to argue that even irfhe claim were otherwise valid, it is barred by limitations. 111e defendants in OCWD did not concede injury. yet made the same statute of limitations arguments. as have countless other defendants that have obtained summary judgment on limitations. VI. Summary Judgment on the City's Entire Nuisance Claim Is Appropriate. As predicted, the City claims that summary judgment is inappropriate on its entire nuisance claim because it has assened a "continuing nui sance." The Motion explained that the City cannot pursue a continuing nuisance claim because it lacks evidence that the enviromncnlal impact at each Site is reasonably abatable. Mot. at 19-20. In response, the City fails to bring forth site-specific evidence and instead relics only on (I) its expert' s generic statement about the average reimbursement cost at gasoline remediation sites in the California UST Clean-up Fund. and (2) Defendants' alleged admission that MTBE generally can be reasonably abated. Opp. at 23 -25. Thi s all eged support fails to satisfy the City's burden. Recently the Southern District ofCaJifomia granted summary judgment in a markedly similar case because the plaintifTJaeked the same sort of expert evidence the City lacks here. JO The City states that "LPJrior to the limitations period, Fresno was not required to incur any costs to treat MTBE and nothing interfered with fresno 's usc of its drinking water wells.'· Opp. at 16. The same is true today-it has not spent a dime treating drinking water, and its drinking water wells have never been interfered with as a result of MTBE. (Rule 56.1 St. 6.) 12 California v. Kinder Morgan Energy Partners. L.P., 2013 WL 314825 (S.D. Cal. Jan. 25, 2013). In Kinder Morgan, the City of San Diego claimed that releases from Kinder Morgan ' s gasoline tenninal had contaminated adjacent property owned by San Diego. Id. at *1. In order to avoid limitations, San Diego claimed the nui sance was continui ng. See id. at *21. TIle court laid out three tests California courts use to assess whether a nuisance is continuing: (1) Whether the offcns[iv]e activity is currently continuing, which indicates that the nuisance is cont inuing., (2) Whether the impact of the condition will vary over time, indicating a continuing nuisance, or (3) Whether the nuisance can be abated at any time, in a reasonable manner and for reasonable cost. and is feas ible by comparison of the benefits and detriments to be gai ned by abatement. Id. at ·23·24; Opp. at 25 (noting similar three factors). The Court held that 10 satisfy the first test-whether the offensive action was continuing-San Diego was req uired to present evidence that contamination was migrating off of the Kinder Morgan property. Kinder Morgan. 2013 WL 314825 at ·24. The Court found that --because [San DiegoJ has presented no expert evidence of continued migration of contaminants, [San Diego] lacks the abil ity to estab lish that its trespass and nuisance claims arc continuing under the first test:· Id. at ·24·26. Here, the City also failed to present expert evidence (or any evidence for that matter) indicating that MTSE conti nues to m igrate off any Site. In fact, the City's expert testified that more infonnat ion is needed at each site to determine the extent and movement of MTBE in the subsurface. I I (See Rul e 56.1 St. 7.) And if the nuisance is the The City's vague claim that MTBE generally migrates through groundwater cannot be enough to defeat summary judgment on this point. There is no expert evidence specific to a single site. wh ieh is what is required . Nor is the City's claim that '(Me. Nonnan's testimony supports the first [test]" enough. Opp. at 25. It fails to identify testimony suggesting that MTBE is still migrating off these properties: indeed, Mr. Nonnan conceded he does not have enough infonnation to make such a statement. (See Rule 56.1 St. ~ 7.) II 13 impact to the City's drinking water, there have been no MTBE detections for more than two years. The City has therefore failed to satisfy the tirst test. To meet the second test, the Court held that San Diego "'must proffer expert evidence that the condition Kinder Morgan created varied over time based on the complexity of the subject malter. Because [San Diego] has not presented any such expert evidence, [San Diego] cannot satisfy this test at triaJ. " Kinder Morgan, 20t3 WL 314825 at *27. IIere too. the City lacks such expert testimony. While it claims tbat both "Fresno' s and the defense experts agree on the second [test], that the impact ofMTBE releases on Fresno varies over time" (Opp. at 25), ii fails to cite any supporting evidence. Nor does it cite to any evidence of what will happen to the levels ofMTBE in the future. The City has therefore failed to meet this test as well. Finally, the court found that San Diego has not met its burden on reasonable abatability. Kindel' Morgan, 2013 WL 314825 at *27. 11 lacked "any evidence of the estimated final costs of abatement" because it had not presented any competent expen testimony regarding how much it would cost to abate this specific property. Id. (emphasis in original). The court went on to state: Further. [San Diego' s1 expert, John Simon, has opined that the true extent of the subsurface contamination is uncertain and that the time required to rcmediatc the site is likewise uncertain. lft.he extent and time required to rcmediate the properly are uncertain. then the cost of abatement is necessarily uncertain as a result. Without evidence of Coosts of abatement, [San Diegol cannot satisfy its burden to show that the nuisance can be abated at retlsonable costs. Moreover. if the extent of contamination is uncertain, [San Diego] crumot prove that it can be abated by reasonable means . ... [San Diego1 bears the burden to establish that the condition under the Property is "reasonably abatable." !d. (internal citation omitted; emphasis in original). Because the City lacks simila.r expert evidence, it fails the third test as well. The City's expert has nearly the same testimony as San Diego·s. namely, that he does not know the extent of environrnc- tal impact, and cannot know it, until he does further investigation. (See Rule 56, I n S1. 7.) Without knowing the cost to cleanup each Site. the City cannot meet the third test. 14 While the City claims that its expert opined on reasonable abatability, he only stated what the average reimbursement costs were for UST Clean-Up Fund sites. Opp. at 24. These costs have nothing to do with the Sites at issue and are not specific to MTBE. Again. with respect to the specific Sites, the City' s expclt testified that he lacked sufficient information to recommend remediation at any of the Sites, and therefore he could not state whether future remediation at any of the sites will be reasonable or what it will cost. His testimony is insufficient to show reasonable abatability. Kinder Morgan. 2013 WL 314825 at *27-29. Footnote 19 in the Motion does not change t.his analysis. This statement is not an admission that MTBE can be reasonably abated at a particular Site, and it docs not absolve the City from meeting its burden. The footnote simply clarified that Defendants believe in some instances MTIJE can be reasonably abated, but that the City has no evidence that the MTBE at these Sites can be reasonably abated. "Reasonably abated" must be viewed in context. Here. most of the Sites have received regulatory closure. (Rule 56.1 S1. ~'141. 43. 50. 54. 59, 65, 71. 76, 78.) Thus, the regulatory agencies have already concluded no more reasonable abatement is needed. Exerting any additional effort is likely unreasonable, especially when the City cannot tie any Site to a past or predicted future detection in a drinking water well. Because the City has failed to satisfy anY,let alone all , oflhe three tests to show continuing nuisance. the alleged nuisance here must be considered permanent; therciore. summary judgment on the entire nuisance claim is proper. 15 Daled : March 22. 2013. Respectfully submitted, KING & SPALDING LLPll Robert E. Meadows Jeremiah J. Anderson 1100 Louisiana, Suite 4000 Houston, Texas 77002 Tel: (713) 751 ·3200 Fax : (713) 75 1·3290 Charles C. Correll Jr. 101 Second Street, Suile 2300 San Francisco, California 94105 Tel: (415) 318· 1200 Fax: (415) 318- 1300 A ttorneys for Defendants Che vron U.S.A. fnc. and Union Oil Company of California The following page contains a list of Defendants who have joined in filing Defendants' Reply in Support or Motion for Summary Judgment based on the Statute of Limitations. 12 16 DEFENDANTS JOINING MOTION CHEVRON U.S.A. [NC. UNION OIL COMPANY OF CALIFORNIA SHELL 011. COMPANY TEXACO REFINING AND MARKETING INC. EQUILON ENTERPRISES LLC EQUIVA SERVICES LLC CITGO PETROLEUM CORPORATION KERN OIL & REFINING CO. NELLA O IL COMPANY LYON DELL CHEMICAL COMPANY, fonncrly known as "ARCO CHEMICAL COMPANY" COASTAL CHEM, INC. TESORO CORPORATION (F/K/A TESORO PETROLEUM CORPORATION) TESORO REFINING and MARKETING COMPANY (ERRONEOUSLY NAMED AS TESORO REFINING AND MARKETING COMPANY. INC.) ULTRAMAR INC. VALERO MARKETING AND SUPPLY COMPANY VALERO REFINING COMPANY-CALIFORNIA Certificate of Service I hereby certify that on the 22nd day of March 2013 , a true, correct, and exact copy of the foregoing document was served on all counsel via LexisNexis Fi le & Serve. / Jeremiah J. Anderson /

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