Bornstein Seafoods Inc v. City of Bellingham

Opinion

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE

BORNSTEIN SEAFOODS, INC., CASE NO. C21-0022JLR Plaintiff, ORDER DENYING PORT OF v. BELLINGHAM’S MOTION TO CITY OF BELLINGHAM, et al., Defendants.

Before the court is Defendant the Port of Bellingham’s (“Port”) motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1). (Mot. (Dkt. # 18); see also Reply (Dkt. # 30).) Plaintiff Bornstein Seafoods, Inc. (“Bornstein”) opposes the motion and moves to strike portions of the Port’s reply. (Resp. (Dkt. # 27); Surreply (Dkt. # 35).) Defendant the City of Bellingham (“City”) has not responded to the Port’s motion. (See generally Dkt.) The court has considered the motions, all submissions filed in support of and in opposition to the motions, the relevant portions of the record, and the applicable law. Being fully advised,1 the court GRANTS Bornstein’s motion to strike portions of the Port’s reply and DENIES the Port’s motion to dismiss.

This action stems from efforts to clean up environmental contamination at the I & J Waterway Site (the “Site”) in Bellingham Bay, Washington. (See Am. Compl. (Dkt. # 7) ¶¶ 1-2.) Bornstein filed the instant lawsuit against the City on January 7, 2021. (See Compl. (Dkt. # 1).) In its original complaint, Bornstein alleged that the City is liable for the costs of cleanup and remedial action at the Site because the City’s stormwater

system and other City facilities are sources of hazardous substances that have contaminated the Site. (See generally id. ¶¶ 1-7.) Bornstein asserted claims against the City under the federal Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) §§ 107 and 113, 42 U.S.C. § 9607 and 9613, and Washington’s Model Toxics Control Act, chapter 70A.305 RCW (“MTCA”), for

contribution and for a declaratory judgment that the City is obligated to pay for all remedial action costs that Bornstein has incurred or will incur related to contamination of the Site. (See id. ¶¶ 33-62.) Bornstein did not name the Port in its initial complaint. (See generally id.) On February 1, 2021, the Port filed a separate lawsuit in Whatcom County

Superior Court. (See Woolson Decl. (Dkt. # 19) ¶ 3, Ex. A (Compl., Port of Bellingham

1 Bornstein requests oral argument. (See Resp. at 1.) The court, however, finds oral argument unnecessary to its disposition of the motion. See Local Rules W.D. Wash. LCR 7(b)(4). v. Bornstein Seafoods, Inc., No. 21-2-00095-37 (Whatcom Cty. Super.) (“Port Complaint”)).) In that suit, the Port alleged claims under the MTCA against Bornstein

for contribution and for a declaratory judgment that Bornstein is strictly liable, jointly and severally, for remedial action costs at the Site. (See id. ¶¶ 4.1-5.4.) The Port did not assert any federal claims against Bornstein. (See generally id.) On February 25, 2021, Bornstein answered the Port’s state-court complaint and asserted counterclaims for contribution and for a declaratory judgment of liability under both the MTCA and CERCLA §§ 107 and 113, 42 U.S.C. § 9607 and 9613. (See Woolson Decl. ¶ 4, Ex. B

(Ans., Port of Bellingham v. Bornstein Seafoods, Inc.) ¶¶ 7.1-8.9 (“Bornstein Ans.”).) The City is not a party in the state court proceedings. (See Port Compl; Bornstein Ans.) On February 26, 2021, the day after it filed its answer, Bornstein removed the Port’s lawsuit to this court. (See Not. of Removal (C21-0245JLR Dkt. # 1).2) The Port moved to remand on March 12, 2021. (See Mot. to Remand (C21-0245JLR Dkt. # 8).)

On March 18, 2021, Bornstein amended its complaint in this action to name the Port as an additional defendant. (See Am. Compl.) Bornstein added claims against the Port for contribution and for a declaratory judgment of liability under the MTCA and CERCLA §§ 107 and 113—the same claims it alleged as counterclaims in the Port’s Whatcom County action. (See id. ¶¶ 73-101.) On April 1, 2021, Bornstein moved to

consolidate this case with Port of Bellingham v. Bornstein Seafoods. (See Cons. Mot. (Dkt. # 14).) On April 26, 2021, while the motions to remand and to consolidate were

2 For ease of reference, the court identifies filings in Port of Bellingham v. Bornstein Seafoods by including the case number in the citation. pending, the Port filed the instant motion to dismiss. (See Mot.) On April 27, 2021, the City answered Bornstein’s complaint in this action and asserted counterclaims against

Bornstein for contribution and a declaratory judgment of liability under the MTCA and CERCLA §§ 107 and 113. (See City Ans. (Dkt. # 22) at 11-13). On May 5, 2021, the court granted the Port’s motion to remand Port of Bellingham v. Bornstein Seafoods to Whatcom County Superior Court. (See 5/5/21 Remand Order (C21-0245JLR Dkt. # 17).) The court denied Bornstein’s motion to consolidate as moot. (5/5/21 Cons. Order (Dkt. # 25).)

The Port moves the court to abstain from exercising federal jurisdiction over this action and to dismiss or stay the case pursuant to Colorado River Water Conservation District v. United States, 424 U.S. 800, 813 (1976). (See generally Mot.) Bornstein argues that a Colorado River stay is not appropriate in this case and moves the court to

strike certain arguments that, it asserts, the Port raised for the first time in its reply. (See generally Resp.; see also Surreply.) The court considers Bornstein’s motion to strike, then turns to the merits of the Port’s motion to dismiss. A. Motion to Strike Bornstein asks the court to strike the Port’s argument, asserted for the first time in

the Port’s reply, that the court should abstain from hearing this action under Wilton v. Seven Falls Co., 515 U.S. 277, 288 (1995). (Surreply at 2-3; see Reply at 2, 6-7.) “New arguments may not be introduced in a reply brief,” United States v. Puerta, 982 F.2d 1297, 1300 n.1 (9th Cir. 1992), and a court “need not consider arguments raised for the first time in a reply brief,” Zamani v. Carnes, 491 F.3d 990, 997 (9th Cir. 2007). If new facts or arguments are introduced, the nonmoving party may file a surreply requesting

that the court strike the material. Local Rules W.D. Wash. LCR 7(g). Because the Port did not raise its argument regarding the applicability of Wilton until its reply, the court will not consider the argument and GRANTS Bornstein’s motion to strike the portion of the Port’s reply that advances this new argument.3 B. Colorado River Stay The Port moves the court to either dismiss or stay this action pursuant to Colorado

River. (See Mot. at 3-11.) It argues that Bornstein has engaged in “procedural gamesmanship” and forum shopping in an effort to “strip the state court of its rightful jurisdiction over state-law clams.” (Id. at 2.) The court finds that a dismissal or stay under Colorado River is not warranted in this case, and therefore DENIES the Port’s motion to dismiss.

Under Colorado River, there are, in rare cases, “‘principles unrelated to considerations of proper constitutional adjudication and regard for federal-state relations which govern in situations involving the contemporaneous exercise of concurrent jurisdictions, either by federal court or by state and federal courts.’” United States v.

3 In any event, the court finds that the Port’s reliance on Wilton is misplaced. Because this action involves claims for contribution in addition to declaratory judgment claims (see Am. Compl.), Wilton’s relaxed abstention standard does not apply. See R.R. St. & Co., Inc. v. Transport Ins. Co., 656 F.3d 966, 977-78 (9th Cir. 2011) (noting that (1)“claims that exist independent of the request for a declaration are not subject to the Declaratory Judgment Act’s discretionary jurisdictional rule” and (2) “if the district court must exercise jurisdiction over claims for damages, the court should also retain similar claims for declaratory relief to avoid piecemeal litigation.”). State Water Res. Control Bd., 988 F.3d 1194, 1202 (9th Cir. 2021) (quoting Colo. River, 424 U.S. at 817). In those situations, a district court can dismiss or stay a federal suit due

to the presence of a concurrent state proceeding. Id. (citing Colo. River, 424 U.S. at 817-18). Because of “‘the virtually unflagging obligation of the federal courts to exercise the jurisdiction given [to] them,’” however, “‘[o]nly the clearest of justifications will warrant [a] dismissal’ or stay.” Id. (quoting Colo. River, 424 U.S. at 819). The court’s “‘task in [such] cases . . . is not to find some substantial reason for the exercise of federal jurisdiction by the district; rather, the task is to ascertain whether there exist

“exceptional” circumstances . . . to justify the surrender of that jurisdiction.’” Id. at 1203 (quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 (1983) (emphasis in Moses H. Cone)). “‘If there is any substantial doubt as to’ whether ‘the parallel state-court litigation will be an adequate vehicle for the complete and prompt resolution of the issues between the parties . . . it would be a serious abuse of discretion

to grant the stay or dismissal at all.’” Id. (quoting Moses H. Cone, 460 U.S. at 28). The Ninth Circuit has listed eight factors that courts should consider in determining whether a Colorado River stay is appropriate: (1) which court first assumed jurisdiction over any property at stake; (2) the inconvenience of the federal forum; (3) the desire to avoid piecemeal litigation; (4) the order in which the forums obtained jurisdiction; (5) whether federal law or state law provides the rule of decision on the merits; (6) whether the state court proceedings can adequately protect the rights of the federal litigants; (7) the desire to avoid forum shopping; and (8) whether the state court proceedings will resolve all issues before the federal court. Id. (quoting R.R. St., 656 F.3d at 978-79). “These factors are not a ‘mechanical checklist.’” Id. (quoting Moses H. Cone, 460 U.S. at 16). Rather, “‘[t]he weight to be

given to any one factor may vary greatly from case to case, depending on the particular setting of the case.’” Id. (quoting Moses H. Cone, 460 U.S. at 16). “Some factors may not apply in some cases, and, in some cases, a single factor may decide whether a stay is permissible.” Id. (internal citations omitted). There is a presumption that a partial Colorado River stay is inappropriate except in rare cases. See id. at 1206-07. District courts should address the eighth Colorado River factor—“whether the

state court proceedings will resolve all issues before the federal court”—as a preliminary matter. R.R. St., 656 F.3d at 978-79, 979 n.9. This is because “‘the decision to invoke Colorado River necessarily contemplates that the federal court will have nothing further to do in resolving any substantive part of the case, whether it stays or dismisses.’” State Water Res. Control Bd., 988 F.3d at 1203-04 (quoting Moses H. Cone, 460 U.S. at 28)

(emphasis in State Res. Control Bd.). The court concludes that the eighth Colorado River factor controls the outcome of the Port’s motion. See id. at 1208 (finding the eighth factor “dispositive” and concluding a stay was not appropriate where the United States’ immunity claim was not raised in the state court action). Here, the state court cannot resolve Bornstein’s claims against the

City and the City’s counterclaims against Bornstein because those claims have not been raised in that action. As a result, this court cannot have “full confidence that the parallel state proceeding will end the litigation.” See id. (quoting Intel Corp. v. Advanced Micro Devices, Inc., 12 F.3d 908, 913 (9th Cir. 1993)). Where “‘there exists a substantial doubt as to whether the state court proceedings will resolve all of the disputed issues in this case, it is unnecessary for [the court] to

weigh the other factors included in the Colorado River analysis.’” Id. (quoting Intel, 12 F.3d at 913 n.7); see also id. at 1204 (“We have repeatedly emphasized that a Colorado River stay is inappropriate when the state court proceedings will not resolve the entire case before the federal court.”); Harris as Tr. of Edith Heinemann Harris Tr. v. Mundel as Tr. of Mundel Tr., --- F. App’x ---, No. 18-35669, 2021 WL 2172082, at *2 (9th Cir. May 27, 2021) (declining to dismiss or stay case under Colorado River where there was a

“substantial doubt” as to whether state court proceedings were capable of resolving all of the issues in the action). Because the state court proceeding will not resolve all of the claims at issue in this action, the court declines to apply Colorado River to dismiss the Port’s claims or stay this case pending the resolution of the state court action and need not weigh the remaining Colorado River factors. See State Water Res. Control Bd., 988

F.3d at 1208; see also James River Ins. Co. v. Thompson, No. CV-20-01052-PHX-DGC, 2021 WL 1841676, at *9 (D. Ariz. May 7, 2021) (applying State Water Res. Control Bd. in granting motion for reconsideration and vacating prior order staying case). The court DENIES the Port’s motion to dismiss. //

// // // // For the foregoing reasons, the court GRANTS Bornstein’s motion to strike (Dkt.

# 35) and DENIES the Port’s motion to dismiss (Dkt. # 18). Dated this 14th day of June, 2021. A United States District Judge