City of San Diego v. Monsanto Co.

334 F. Supp. 3d 1072
Procedural entryThis page is a short order in City of San Diego v. Monsanto Co.. Read the opinion of the Court — 310 F. Supp. 3d 1057
District Court, S.D. California·Decided August 10, 2018·No. Case No.: 15cv578-WQH-AGS·Published

Opinion

HAYES, Judge:

The matter before the Court is the Motion to Dismiss the First Amended Counterclaims filed by Plaintiff City of San Diego. (ECF No. 208).

I. BACKGROUND

On December 22, 2016, the City of San Diego (the "City") filed the Second Amended Complaint ("SAC") against Defendants Monsanto Company, Solutia Inc., and Pharmacia Corporation (collectively, Monsanto). (ECF No. 93). The City brings a single cause of action against Monsanto for a continuing nuisance arising from alleged PCB contamination of the San Diego Bay ("the Bay") and the City's municipal stormwater system.1 The City alleges that *1077"Plaintiff has suffered and continues to suffer actual damages and injuries to property requiring abatement and other costs to be determined at trial" as a result of Monsanto's creation of a public nuisance through its production and marketing of PCBs and improper disposal directions related to PCBs. Id. at 46. The City alleges that Monsanto is liable to the City for the creation of a public nuisance. The City seeks the following relief: (1) any and all compensatory damages according to proof; (2) punitive damages; (3) litigation costs and attorney's fees; (4) pre-judgment and post-judgment interest; and (5) "any other and further relief as the Court deems just and proper." Id.

On November 22, 2017, this Court denied a motion to dismiss the City's SAC filed by Monsanto. (ECF No. 163). The Court concluded that the City adequately alleged a property interest in its municipal stormwater system which had been injuriously affected by the presence of PCBs produced by Monsanto and that the City alleged sufficient facts to state a non-representative public nuisance claim. The Court further denied a motion to stay or dismiss the suit under administrative exhaustion principles pending resolution of the City's test claims before the California Commission on State Mandates. Id.2

On February 22, 2018, Monsanto filed the First Amended Answer and Counterclaims. (ECF No. 203). Monsanto denies liability for the alleged contamination of the Bay and injuries claimed by the City. Further, Monsanto alleges that the City is responsible for the contamination of the Bay because "throughout the twentieth century to the present," the City has "discharged, or caused to be discharged, a variety of pollutants into the Bay, including PCBs." Id. ¶ 38; see also id. ¶¶ 19-21. Monsanto brings the following two causes of actions as counterclaims against the City: (1) unjust enrichment and (2) violations of the Clean Water Act ("CWA") and the City's NPDES3 permit.

II. ALLEGATIONS OF THE FIRST AMENDED ANSWER AND COUNTERCLAIMS (ECF No. 203)

[A]ll relevant U.S. manufacturing of the product at issue by Old Monsanto terminated in 1977, the original manufacturer is not alleged to have done anything since the 1970s, and Defendants are not alleged to have discharged any PCBs into the Bay ever . Instead the City's own conduct vis-à-vis the Bay is marked by decades of neglect, mismanagement, and contamination, which has led to the conditions about which it complains.

(ECF No. 203 at ¶ 20). "The City has, throughout the twentieth century to the present, discharged, or caused to be discharged, a variety of pollutants into the Bay, including PCBs." Id. ¶ 38. "Notable sources of the City's discharges include its: (1) storm water discharges; (2) inadequate maintenance of sites under its control; (3) failure to follow best management practices with regard to construction and demolition activities; and (4) use and disposal of PCB-containing products." Id. ¶ 43.

*1078"For many decades, the Bay served as the final destination point for city-wide industrial discharges, intentionally facilitated by the City for economic gain." Id. ¶ 33. The City operated a downtown landfill and incinerator that discharged industrial waste into the Bay prior to the early 1950s. Id. ¶¶ 33-34. "From 1943-1963, the City located its main sewage treatment plant along the Bay ... [and] allowed direct discharges of raw sewage (containing industrial byproducts) to the Bay...." Id. ¶ 35.

The City owns and operates a [municipal separate storm sewer system ("MS4") ] through which it discharges waste commonly found in urban runoff to the Bay. Throughout the twentieth century and continuing to this day, the City's MS4 has discharged waste commonly found in urban runoff into the Bay subject to the conditions of NPDES Permits.

Id. ¶ 45. The City's storm water discharges into the Bay include a variety of pollutants, including PCBs. Id. ¶ 46. "[B]ecause the City fails to take reasonable measures to reduce the discharge of PCBs, the City's storm water continues to include PCBs at levels that are greater than the CWA allows." Id. ¶ 49. "[D]uring the over fifty years in which the City controlled the San Diego Bay tidelands and chose its industrial tenants, in exchange for rental income, the City leased tideland properties to heavy industrial dischargers that used and disposed of PCBs and other contaminants, without ensuring adequate pollution controls." Id. ¶ 37. The City has been specifically identified as a "liable discharger of PCBs and other contaminants under California Water Code Section 13304" in a Cleanup and Abatement Order ("CAO") issued by the State of California. Id. ¶ 40. The City is a "significant property owner" and "has failed to require even the most basic measures to prevent PCB discharges from its own construction, renovation, and demolition activities." Id. ¶¶ 68, 70. "[T]he City at all relevant times through today has purchased, used, and disposed of a variety of PCB-containing products ... in a manner that has resulted in discharges into the Bay." Id. ¶ 75.

The City's past and ongoing discharges of PCBs and other pollutants have caused [Monsanto] to incur investigation costs related to conditions in the Bay caused by the City's discharges, and have also created significant contingent liability in the instant lawsuit, as well as the First Amended Complaint filed by the Port District. This contingent liability continually increases with every discharge of PCBs and other pollutants by the City-which continue to the present day.

Id. ¶ 84.

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City of San Diego v. Monsanto Co., 334 F. Supp. 3d 1072 (S.D. Cal. 2018).

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