City of West Sacramento v. R & L Business Management

Opinion

1 2

5 UNITED STATES DISTRICT COURT 6 EASTERN DISTRICT OF CALIFORNIA 7 ----oo0oo---- 8 9 CITY OF WEST SACRAMENTO, No. 2:18-CV-00900 WBS EFB 10 CALIFORNIA; and PEOPLE OF THE STATE OF CALIFORNIA, 11 Plaintiffs, MEMORANDUM AND ORDER RE: 12 MOTION TO DISMISS R&L v. BUSINESS MANAGEMENT’S THIRD- R AND L BUSINESS MANAGEMENT, a 14 California corporation, f/k/a STOCKTON PLATING, INC., d/b/a 15 CAPITOL PLATING, INC., a/k/a CAPITOL PLATING, a/k/a CAPITAL 16 PLATING; CAPITOL PLATING, INC., a dissolved California 17 corporation; et al., 18 Defendants. 19 20 ----oo0oo---- 21 The City of West Sacramento, California (“the City”) 22 and the People of the State of California filed suit 23 to address toxic levels of soil and groundwater contamination in 24 the environment within the City. Defendants R&L Business 25 Management and John Clark (collectively referred to as “R&L”) 26 subsequently brought the County of Yolo into the action as a 27 third party to the City’s lawsuit. R&L seeks contribution should 28 1 R&L be found liable in the City’s lawsuit. Before the court is 2 the County of Yolo’s (“the County”) Motion to Dismiss Defendant 3 R&L’s Third-Party Complaint. (Docket No. 100.) 4 I. Factual and Procedural Background 5 A. The City’s Lawsuit 6 The City’s lawsuit against R&L involves the alleged 7 contamination at 319 3rd Street. This court described much of 8 the factual and procedural background to this lawsuit in its 9 prior orders. (See Docket Nos. 18, 33, 44 & 63.) The Third 10 Amended Complaint (“TAC”) is the current operative complaint. 11 (Docket No. 45.) 12 B. R&L’s Third-Party Complaint 13 R&L’s Third-Party Complaint (“TPC”) against the County 14 (Docket No. 90.) involves the alleged contamination at 305 3rd 15 Street, a property two parcels north of the 319 property at issue 16 in the City’s complaint. (Pl.’s Mot. to Dismiss (Docket No. 17 100).) The TPC relies primarily on an Environmental Site 18 Assessment prepared by Wallace Kuhl & Associates in 2006. (TPC 19 at 3, ¶ 14.) The TPC alleges that “historical surface fill 20 material containing heavy metals and a substantial amount of lead 21 was placed and maintained at and around [305 Third Street and 317 22 Third Street], during Yolo County’s ownership of 305 Third 23 Street.” (Id. at 4, ¶ 17. (Docket No. 90).) “As a direct result 24 of the historic operations and importing of soils,” the TPC 25 continues, the two properties “contained fill and native soils 26 that tested for high concentration of levels of heavy materials.” 27 (Id. at 5, ¶ 30.) The TPC also alleges that “lead and other 28 1 toxic chemicals were discharged onto and into the soil beneath” 2 the 305 and 317 properties. (Id. at 4, ¶ 23.) The chemicals 3 thereafter allegedly “contributed to the contamination of the 4 soil and groundwater.” (Id. at 4, ¶ 24.) 5 Because Yolo County has not “engaged in any remedial 6 measures,” the contamination allegedly continues “to spread and 7 become worse.” (Id. at 5-6, ¶ 33; see also id. at 4, ¶ 23 8 (“Absent any remedial activity, that surface contamination will 9 continue to spread and potentially leach into groundwater.”).) 10 Notably, however, R&L’s Third-Party Complaint does not allege 11 that the contamination at 305 3rd Street is the same 12 contamination as that at 319 3rd Street. 13 The TPC alleges four causes of action: (1) contribution 14 under the Comprehensive Environmental Response, Compensation, and 15 Liability Act (“CERCLA”), 42 U.S.C. § 9613(f)(1); (2) equitable 16 indemnity; (3) equitable contribution; and (4) declaratory relief 17 under the Declaratory Judgment Act, 28 U.S.C. § 2201.1 The 18 County now moves to dismiss all claims. 19 II. Legal Standard 20 On a Rule 12(b)(6) motion, the inquiry before the court 21 is whether, accepting the factual allegations in the complaint as 22 true and drawing all reasonable inferences in the plaintiff’s 23 favor, the plaintiff has stated a claim to relief that is 24 plausible on its face. See Ashcroft v. Iqbal, 556 U.S. 662, 678 25

26 1 R&L filed the same four counterclaims against the City (Docket No. 50). The City subsequently moved to dismiss the 27 complaint and this court granted the motion. (Mem. & Order, May 23, 2019 (Docket No. 78).) 28 1 (2009). Legal conclusions “must be supported by factual 2 allegations.” Id. at 679. Pleadings that “are no more than 3 conclusions . . . are not entitled to the assumption of truth.” 4 Id. 5 III. Discussion 6 A. CERCLA Claim 7 R&L brings a claim for contribution against the County 8 under Section 113(f)(1) of CERCLA. See 42 U.S.C. § 9613(f)(1). 9 Section 113(f)(1) allows a party to “seek contribution from any 10 other person who is liable or potentially liable under Section 11 107(a), during or following any civil action under section 106 of 12 this title or under section 107(a) of this title.” Id. A party 13 may assert a contribution claim only “during or following” a 14 civil action under § 106 or §107(a) to which they are a party. 15 Cooper Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 168 16 (2004). If a private party has not been sued, the party cannot 17 obtain contribution under Section 113(f)(1). Id. 18 The face of the Third-Party Complaint seeks 19 contribution from the County for contamination separate from that 20 underlying the City’s § 107(a) action against R&L. The City’s 21 CERCLA claim “stem[s] from alleged environmental contamination, 22 which [the City] contends originated from . . . 319 3rd Street.” 23 (TPC at 4, ¶ 20; see also TAC at 2, ¶ 4 (“The contamination 24 originates from the real property located at 319 3rd Street.”); 25 TAC at 10, ¶ 59 (“The source of the Contaminants . . . is Capitol 26 Plating, the metal plating business that operated on the Property 27 continuously for over 35 years.”).) R&L’s claim against the 28 1 County, however, stems from alleged contamination at 305 3rd 2 Street (TPC at 4, ¶ 23) -– “a property two parcels north” of the 3 319 property. (Pl.’s Mot. to Dismiss at 1.) Nothing in the 4 City’s operating complaint or its subsequent pleadings suggests 5 that the City seeks to hold R&L liable for contamination 6 originating at the 305 property. 7 Further, the kind of contamination R&L alleges was 8 found at 305 property appears from the face of the TPC to be 9 different from that alleged by the City. R&L alleges that “lead 10 and other hazardous chemicals were discharged” at the 305 11 property. (TPC at 4, ¶ 23.) The word “lead,” however, does not 12 appear in the City’s operative complaint or in its motion for 13 summary judgment. Instead, the City specifically and repeatedly 14 seeks damages for the release of nickel, copper, zinc, chromium, 15 and 1,2-DCA, only. (TAC at 10, ¶ 57; see also, e.g., Pls. Mot. 16 Summ. J. at 14-15, 17-18, 20-22, 23, 25-26, 27 (Docket No. 95).) 17 The term “hazardous chemicals” is insufficient for the 18 court to infer that the contamination alleged in the complaint is 19 the same as the contamination alleged in the TPC. First, whether 20 a substance is “hazardous” is a legal conclusion under CERCLA. 21 See 42 U.S.C. § 9607(a)(2), (3), (4). Because the term, without 22 factual allegations, is “no more than [a] conclusion[],” it is 23 “not entitled to an assumption of truth.” Iqbal, 556 U.S. at 24 679. Second, even if the court assumed that hazardous substances 25 were indeed discharged at the 305 property, it would not be a 26 reasonable inference to conclude that R&L’s use of the term 27 “hazardous chemicals” in a generic sense, without more, means 28 1 nickel, copper, zinc, chromium, or 1,2-DCA, specifically. The 2 court therefore cannot infer that R&L seeks to hold the County 3 accountable for the same contamination for which the City is 4 suing R&L. 5 Accordingly, R&L cannot maintain its contribution claim 6 against the County. Because the City does not seek to hold R&L 7 liable for the contamination here at issue, and because the R&L 8 does not allege the same kind of contamination for which R&L is 9 being sued, R&L seeks contribution for contamination for which it 10 is not being sued. The Supreme Court made it clear that a party 11 who has not been subject to a civil action under § 106 or 107(a) 12 “has no § 113(f)(1) claim.” Aviall, 543 U.S. at 168. R&L thus 13 fails to properly plead a contribution claim under Section 14 113(f)(1). 15 B. Equitable Indemnity and Contribution Claims 16 R&L also brings counterclaims for equitable indemnity 17 and equitable contribution under California laws. Equitable 18 indemnity “is premised on a joint legal obligation to another for 19 damages.” W. Steamship Lines, Inc. v. San Pedro Peninsula Hosp., 20 8 Cal. 4th 100, 114 (1994). The doctrine is “subject to 21 allocation of fault principles and comparative equitable 22 apportionment of loss.” Prince v. Pac. Gas & Elec. Co., 45 Cal. 23 4th 1151, 1158 (2009). It is also subject to immunities and 24 other limitations on liability available against the injured 25 party. Id. at 1159-59. Contribution is similar because it permits 26 one joint tortfeasor to recover from another. See Sullins v. 27 Exxon/Mobil Corp., No. C 08-04927 CW, 2009 WL 2779172, at *7 28 1 (N.D. Cal. Sept. 2, 2009). However, contribution “is a creature 2 of statute and distributes the loss equally among all 3 tortfeasors.” Coca-Cola Bottling Co. v. Lucky Stores, Inc., 11 4 Cal. App. 4th 1372, 1378 (2d Dist. 1992) (citing Cal. Civ. Proc. 5 Code § 875). A defendant cannot recover under both theories of 6 indemnification and contribution. See id. at 1379 (citing Cal. 7 Civ. Proc. Code § 875(f)). 8 1. Equitable Indemnity 9 In evaluating R&L’s counterclaims against the City, 10 this court found that R&L is barred under the California 11 Government Claims Act (CGCA) from bringing a claim for equitable 12 indemnity against the City of West Sacramento. (Mem. & Order, 13 May 23, 2019 (Docket No. 78).) 14 The court now reaches the same conclusion here, for the 15 same reason it previously provided. In short, under Section 815 16 of the CGCA, “[e]xcept as otherwise provided by statute, [a] 17 public entity is not liable for an injury.” Cal. Gov’t Code § 18 815. R&L’s equitable indemnity claim lacks a statutory basis 19 because none of the statutes under which R&L is suing the County 20 expressly waive the County’s immunity. The court must therefore 21 dismiss this claim. (See Mem. & Order, May 23, 2019.) 22 2. Equitable Contribution 23 This court also previously ruled that R&L cannot bring 24 an equitable contribution counterclaim absent allegations that 25 “(1) a judgment has been rendered jointly against it and the 26 [County]” and (2) that “R&L has discharged more than its pro rata 27 share of that judgment.” (Id. at 9 (citing Coca-Cola, 11 Cal. 28 1 App. 4th at 1380.) R&L has not alleged any facts that go to 2 either of the elements above. Accordingly, the court will 3 dismiss R&L’s equitable contribution counterclaim. (See Mem. & 4 Order, May 23, 2019.) 5 C. Declaratory Judgment 6 R&L’s only remaining claim seeks a judicial declaration 7 that “Yolo County [is] liable for [its] proportionate share of 8 the harm suffered and costs incurred as a result of contamination 9 alleged in the City’s Third Amended Complaint.” (TPC at 7, ¶ 10 48.) 11 In the City’s motion to dismiss R&L’s counterclaims, 12 this court found that, “because R&L’s other counterclaims have 13 all been dismissed,” the court had to dismiss R&L’s claim for 14 declaratory relief. (Mem. & Order, May 23, 2019.) The 15 situation here is no different and the court reaches the same 16 conclusion. Declaratory relief is not an independent claim. See 17 Lane v. Vitek Real Estate Indus. Grp., 713 F. Supp. 2d 1092, 1104 18 (E.D. Cal. 2010) (Shubb, J.). R&L is not entitled to relief 19 under the Declaratory Judgment Act “absent a viable underlying 20 claim.” See Shaterian v. Wells Fargo Bank, N.A., 829 F. Supp. 2d 21 873, 888 (N.D. Cal. 2011); see also Tex. Health & Human Servs. 22 Comm’n v. United States, 166 F. Supp. 3d 706, 712 (N.D. Tex. 23 2016) (“To obtain relief under the Declaratory Judgment Act, the 24 [party] must first identify a cause of action under some other 25 law.”). Because R&L does not have any remaining viable claims, 26 the court now dismisses R&L’s claim for declaratory relief. 27 IT IS THEREFORE ORDERED that the County’s Motion to 28 Dismiss R&L’s Third-Party Complaint (Docket No. 100) be, and the same hereby is, GRANTED. R&éL has twenty days from the date of this order to file an Amended Third-Party Complaint if it can do so consistent with ° this Order. ° Dated: October 28, 2019 he ble 7H. “a A | WILLIAM B. SHUBB 8 UNITED STATES DISTRICT JUDGE 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28