City of Seattle v. Monsanto Company et al

Filing 90

ORDER granting Defendants' 76 Motion for Leave to Amend Answer and Counterclaims. Monsanto's proposed "First Amended Answer to Plaintiff's First Amended Complaint and Counterclaims," attached as Exhibit A, Dkt. # 76 -2, is hereby entered and incorporated into the record of this matter. Signed by Judge Robert S. Lasnik. (TH)

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 9 10 11 12 CITY OF SEATTLE, a municipal corporation located in the County of King, State of Washington, Plaintiff, 13 14 v. MONSANTO COMPANY, et al., 15 Case No. C16-107RSL ORDER GRANTING DEFENDANTS’ MOTION FOR LEAVE TO AMEND ANSWER AND COUNTERCLAIMS Defendant. 16 17 18 19 20 21 This matter comes before the Court on Monsanto’s motion for leave to file an amended answer and counterclaims. Dkt. #76. The City of Seattle opposes the motion based on two aspects of Monsanto’s proposed amended pleading. Dkt. # 79. For the reasons set forth below, the Court GRANTS Monsanto leave to file an amended answer and counterclaim. 22 23 24 I. BACKGROUND The Court has set forth this case’s background with greater detail in prior orders. 25 See Dkt. # 60. To summarize, however, defendants (collectively “Monsanto”) are three 26 successor companies that, until the late 1990s, comprised different divisions of the food 27 and chemical conglomerate Monsanto. For decades, Monsanto made and sold 28 polychlorinated biphenyls (“PCBs”), which are industrial compounds now regulated as ORDER GRANTING LEAVE TO AMEND - 1 City of Seattle v. Monsanto Co., C16-107RSL 1 toxic chemicals by numerous state and federal laws. The City of Seattle alleges Monsanto 2 manufactured PCBs that now contaminate south Seattle’s East and Lower Duwamish 3 Waterways. Seattle seeks compensation for costly cleanup efforts the City must 4 undertake pursuant to several federal and state administrative actions. Those costs include 5 construction of a stormwater treatment plant on the Duwamish and investigation and 6 remediation expenses based on the waterways’ designation as a Superfund Site under the 7 Comprehensive Environmental Response, Compensation, and Liability Act 8 (“CERCLA”), 42 U.S.C. § 9601 et seq. Seattle alleges Monsanto is liable for those and 9 other costs because Monsanto produced and sold PCB compounds that it knew to be toxic 10 and that now contaminate Seattle’s waterways. 11 In March of this year, Monsanto filed an answer and counterclaims that included 12 eighty-nine affirmative defenses and two counterclaims. Dkt. # 63. That pleading asserts 13 Seattle is actually at fault because the City’s poorly maintained drainage infrastructure 14 led to the waterways’ contamination. Monsanto also alleges it incurred response costs as 15 part of the EPA’s investigation of contamination in the Duwamish. Its original 16 counterclaims assert that, under CERCLA, Seattle’s fault for the contamination entitles 17 Monsanto to recover its response costs and to obtain a declaratory judgment to that effect. 18 Dkt. # 63 ¶¶ 145–73. Monsanto’s original answer and counterclaims also explained it 19 would eventually seek to amend the pleading to assert other federal and state claims, but 20 would wait so as to avoid running afoul of certain notice and claim-presentment 21 requirements. Dkt. # 63 ¶¶ 25–28. 22 On May 22, Monsanto filed this motion for leave to amend its original pleading. 23 Dkt. # 76. It proposes three notable additions: more factual allegations of response costs 24 Monsanto incurred; the affirmative defense that the City lacks standing; and new 25 counterclaims based on the Clean Water Act and state-law actions of negligence, unjust 26 enrichment, and contribution. Dkt. # 76-2. The City opposes Monsanto’s addition of the 27 unjust enrichment claim and supplementary response-cost allegations. Dkt. # 79. 28 ORDER GRANTING LEAVE TO AMEND - 2 City of Seattle v. Monsanto Co., C16-107RSL 1 2 II. DISCUSSION Courts “should freely give leave [to amend pleadings] when justice so requires.” 3 Fed. R. Civ. P. 15(a)(2). Based on “the strong policy permitting amendment,” Bowles v. 4 Reade, 198 F.3d 752, 757 (9th Cir. 1999), courts deny leave to amend “only if there is 5 strong evidence of undue delay, bad faith or dilatory motive on the part of the movant, 6 repeated failure to cure deficiencies by amendments previously allowed, undue prejudice 7 to the opposing party by virtue of allowance of the amendment, or futility of 8 amendment,” Sonoma Cty. Ass’n of Retired Emps. v. Sonoma County, 708 F.3d 1109, 9 1117 (9th Cir. 2013) (citation, internal quotation marks, and alterations omitted). 10 Seattle contends Monsanto’s unjust enrichment counterclaim is “asserted for an 11 improper purpose and is futile.” Dkt. # 79 at 2. The City offers no legal authority why the 12 counterclaim is asserted for an improper purpose, and the Court finds no indication 13 Monsanto brings the counterclaim in bad faith. Seattle maintains “the [counter]claim is 14 futile because Monsanto cannot recover on it.” Dkt. # 79 at 5. Seattle’s contention closely 15 resembles an argument that the counterclaim fails to state a claim upon which relief can 16 be granted. See Fed. R. Civ. P. 12(b)(6). Indeed, there appears to be some overlap 17 between a failure-to-state-a-claim defense and the contention that an amendment is futile, 18 see Missouri ex rel. Koster v. Harris, 847 F.3d 646, 656 (9th Cir. 2017), cert. denied, 137 19 S. Ct. 2188 (2017), though denying leave to amend requires “strong evidence” of futility, 20 Sonoma Cty. Ass’n of Retired Emps., 708 F.3d at 1117. The City will have ample 21 opportunity to raise its attack on this counterclaim in a motion to dismiss, but the City’s 22 limited briefing at this stage does not present “strong evidence” the claim is futile. 23 The Court is aware of the proceedings in City of Spokane v. Monsanto Co., Case 24 No. 2:15-cv-201, before the Honorable Salvador Mendoza of the United States District 25 Court for the Eastern District of Washington. In those proceedings, the City of Spokane 26 has instituted a similar PCB-related lawsuit against the same Monsanto corporate 27 descendants that are defendants in this case. Judge Mendoza granted Monsanto leave to 28 amend its answer and counterclaims at the same procedural stage we face on this motion. ORDER GRANTING LEAVE TO AMEND - 3 City of Seattle v. Monsanto Co., C16-107RSL 1 Order Grant’g Defs.’ Mot. for Leave to File First Am. Answer and Countercls., City of 2 Spokane v. Monsanto Co., Case No. 2:15-cv-201, Dkt. # 150 (E.D. Wash. Apr. 25, 2017). 3 Judge Mendoza also recently dismissed with prejudice Monsanto’s counterclaims, 4 including its unjust enrichment claim under state law. Order Grant’g Pl.’s Mot. to 5 Dismiss Am. Countercls., City of Spokane v. Monsanto Co., Case No. 2:15-cv-201, Dkt. 6 # 167 (E.D. Wash. Jul. 10, 2017). Monsanto cites the first order as persuasive authority 7 for granting the motion before the Court. For its part, Seattle submits the latter order as 8 persuasive authority that Monsanto’s unjust enrichment counterclaim is futile. Given the 9 strong policy in favor of allowing amendment, the Court will not deny Monsanto leave to 10 amend and the opportunity to respond to the City’s inevitable motion to dismiss. 11 Seattle also objects to Monsanto supplementing its factual allegations of response 12 costs it incurred. Seattle argues Monsanto should not be allowed to add these factual 13 allegations because they could have been included in Monsanto’s original answer. The 14 Court finds that argument unpersuasive given the liberal approach with which courts treat 15 pleading amendments, in particular a party’s first effort to amend. Seattle also argues the 16 Court should deny Monsanto leave to amend because Monsanto is simply adding factual 17 allegations to avoid an adverse ruling on Seattle’s stayed motion to dismiss. This 18 argument is likewise unpersuasive given that the Civil Rules contemplate amending 19 pleadings for that very reason. See Fed. R. Civ. P. 15(a)(1)(B). 20 21 22 23 24 25 26 III. CONCLUSION For the foregoing reasons, the Court GRANTS Monsanto’s motion to amend its answer and counterclaims. Monsanto’s proposed “First Amended Answer to Plaintiff’s First Amended Complaint and Counterclaims,” attached as Exhibit A, Dkt. # 76-2, is hereby entered and incorporated into the record of this matter. DATED this 6th day of September, 2017. A Robert S. Lasnik 27 28 United States District Judge ORDER GRANTING LEAVE TO AMEND - 4 City of Seattle v. Monsanto Co., C16-107RSL

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