1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 EASTERN DISTRICT OF CALIFORNIA 11 ----oo0oo---- 12
13 CITY OF WEST SACRAMENTO, No. 2:18-cv-00900 WBS EFB CALIFORNIA; and PEOPLE OF THE 14 STATE OF CALIFORNIA,, 15 Plaintiff, 16 v. ORDER RE EQUITABLE APPORTIONMENT 17 R AND L BUSINESS MANAGEMENT, a California corporation, 18 f/k/a STOCKTON PLATING, INC., d/b/a CAPITOL PLATING INC., 19 a/k/a CAPITOL PLATING, a/k/a CAPITAL PLATING; CAPITOL 20 PLATING, INC., a dissolved California corporation; JOHN 21 CLARK, an individual; ESTATE OF NICK E. SMITH, DECEASED; 22 et al., 23 Defendant. 24 ----oo0oo---- 25 A Final Pretrial Conference was held in this matter, 26 pursuant to the provisions of Rule 16(d) of the Federal Rules of 27 Civil Procedure and Local Rule 282, on January 4, 2021. Based on 28 1 a disagreement between the parties at the conference, the court 2 directed the parties to file briefs as to the following issue in 3 its Final Pretrial Order:
4 whether, during a trial solely of the claims brought by plaintiffs against defendants 5 (i.e., excluding the third-party claims under CERCLA § 113(f) for contribution 6 brought by third-party plaintiffs and third party defendant), the court will have to 7 consider the question of how to equitably apportion cleanup costs between the 8 defendants and all other parties, including predecessors at the Site and third-party 9 defendant County of Yolo. 10 (Docket No. 233.) 11 On January 14, 2021, defendants R and L Business 12 Management (“R&L”), John Clark (“Clark”), and the Estate of Nick 13 E. Smith (“Smith”) (collectively, “defendants”), as well as 14 third-party defendant County of Yolo (“Yolo County”), filed their 15 briefs. (See Defs.’ Brief (Docket No. 241); Yolo County’s Brief 16 (Docket No. 242).) On January 21, 2021, plaintiffs City of West 17 Sacramento (“the City”) and the people of the State of California 18 (collectively, “plaintiffs”) filed their response brief. (See 19 Docket No. 248.) The court heard arguments on the issue on 20 January 26, 2021. Based on the parties’ briefs and oral 21 argument, the court orders as follows: 22 I. Equitable Apportionment under CERCLA § 107 23 CERCLA is a comprehensive environmental statute that, 24 among other things, grants the federal government, states, and 25 private parties the ability to recover response costs expended in 26 cleaning up hazardous waste sites. See Arizona v. City of 27 Tucson, 761 F.3d 1005, 1010-11 (9th Cir. 2014). Two separate 28 provisions of CERCLA, § 107 and § 113, provide parties with an 1 avenue to recoup CERCLA-related costs. See United States v. Atl. 2 Research Corp., 551 U.S. 128, 131 (2007). Parties who are not 3 themselves liable or potentially liable for response costs under 4 § 107(a) of CERCLA can bring a cost recovery action directly 5 under § 107(a) against certain classes of potentially responsible 6 parties. See Redwing Carriers, Inc. v. Saraland Apartments, 94 7 F.3d 1489, 1513 (11th Cir. 1996). Section 107 thus provides a 8 “right to cost recovery.” Atl. Research, 551 U.S. at 131. 9 Section 113, by contrast, provides a separate right to 10 contribution. Id. “Contribution is defined as the ‘tortfeasor's 11 right to collect from others responsible for the same tort after 12 the tortfeasor has paid more than his or her proportionate share, 13 the shares being determined as a percentage of fault.’” Id. 14 (quoting Black's Law Dictionary 353 (8th ed.2004)). 15 Accordingly, as the Supreme Court has recognized, 16 Sections 107(a) and 113(f) “provide two ‘clearly distinct’ 17 remedies,” id. (quoting Cooper Indus., Inc. v. Aviall Servs., 18 Inc., 543 U.S. 157, 163 n.3 (2004)), which impose separate forms 19 of liability and are subject to separate defenses. Section 107 20 imposes strict liability on “responsible parties,” which are set 21 forth in four enumerated categories in subsection (a). Arizona, 22 761 F.3d at 1011; see also 42 U.S.C. § 9607(a)(1)-(4). Liability 23 under § 107(a) is generally joint and several, “except in the 24 rare cases where the environmental harm to a site is shown to be 25 divisible.” Pakootas v. Teck Cominco Metals, Ltd., 905 F.3d 565, 26 588 (9th Cir. 2018). Thus, if a responsible party can prove by a 27 preponderance of the evidence that the environmental harm is 28 “theoretically capable of apportionment” and that a “reasonable 1 basis” on which to apportion liability exists, the court can 2 apportion liability based on concepts derived from the 3 Restatement (Second) of Torts. See id. (quoting Burlington N. & 4 Santa Fe Ry. Co. v. United States, 556 U.S. 599, 613-14 (2009)); 5 see also Burlington, 556 U.S. at 613-14 (“Congress intended the 6 scope of liability [under § 107(a)] to be determined from 7 traditional and evolving principles of common law.” (internal 8 citation omitted)). 9 Even if a responsible party under § 107(a) cannot 10 establish that the harm is divisible, it can still avoid 11 liability if it can establish one or more of three affirmative 12 defenses enumerated in § 107(b): (1) an act of God, (2) an act of 13 war, or (3) “an act or omission of a third party other than an 14 employee or agent of the defendant . . . .”1 42 U.S.C. § 15 9607(b). Relying on prefatory language contained in § 107(a), 16 that responsible parties shall be held liable “Notwithstanding 17 any other provision or rule of law, and subject only to the 18 defenses set forth in subsection (b) of this section,” 42 U.S.C. 19 § 9607(a) (emphasis added), several courts of appeals have held 20 that, “[b]y its terms . . . [§ 107(b)] set[s] forth the universe 21 of defenses to section 107 liability.” Velsicol Chem. Corp. v. 22 Enenco, Inc., 9 F.3d 524, 530 (6th Cir. 1993); Gen. Elec. Co. v. 23 Litton Indus. Automation Sys., Inc., 920 F.2d 1415, 1418 (8th 24 Cir. 1990), overruled on other grounds by Key Tronic Corp. v. 25 United States, 511 U.S. 809 (1994). In other words, § 107(a) 26
27 1 Subsection (b) also provides that “any combination of” these three defenses may be invoked as a defense. 42 U.S.C. 28 § 9607(b)(4). 1 liability is limited only by causation-based defenses, and “non- 2 enumerated equitable defenses” to liability are not proper. 3 Velsicol, 9 F.3d at 530; see also Gen. Elec., 920 F.2d at 1418 4 (holding that defense of unclean hands was not available as 5 defense to § 107 liability). 6 By contrast, “a contribution claim under § 113(f) is a 7 means of equitably allocating response costs among responsible or 8 potentially responsible parties.” Redwing Carriers, 94 F.3d at 9 1513–14. “Whereas joint and several liability is the rule for 10 defendants in actions under § 107(a), courts in contribution 11 cases may ‘allocate response costs among liable parties.’” Id. 12 (quoting 42 U.S.C.
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1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 EASTERN DISTRICT OF CALIFORNIA 11 ----oo0oo---- 12
13 CITY OF WEST SACRAMENTO, No. 2:18-cv-00900 WBS EFB CALIFORNIA; and PEOPLE OF THE 14 STATE OF CALIFORNIA,, 15 Plaintiff, 16 v. ORDER RE EQUITABLE APPORTIONMENT 17 R AND L BUSINESS MANAGEMENT, a California corporation, 18 f/k/a STOCKTON PLATING, INC., d/b/a CAPITOL PLATING INC., 19 a/k/a CAPITOL PLATING, a/k/a CAPITAL PLATING; CAPITOL 20 PLATING, INC., a dissolved California corporation; JOHN 21 CLARK, an individual; ESTATE OF NICK E. SMITH, DECEASED; 22 et al., 23 Defendant. 24 ----oo0oo---- 25 A Final Pretrial Conference was held in this matter, 26 pursuant to the provisions of Rule 16(d) of the Federal Rules of 27 Civil Procedure and Local Rule 282, on January 4, 2021. Based on 28 1 a disagreement between the parties at the conference, the court 2 directed the parties to file briefs as to the following issue in 3 its Final Pretrial Order:
4 whether, during a trial solely of the claims brought by plaintiffs against defendants 5 (i.e., excluding the third-party claims under CERCLA § 113(f) for contribution 6 brought by third-party plaintiffs and third party defendant), the court will have to 7 consider the question of how to equitably apportion cleanup costs between the 8 defendants and all other parties, including predecessors at the Site and third-party 9 defendant County of Yolo. 10 (Docket No. 233.) 11 On January 14, 2021, defendants R and L Business 12 Management (“R&L”), John Clark (“Clark”), and the Estate of Nick 13 E. Smith (“Smith”) (collectively, “defendants”), as well as 14 third-party defendant County of Yolo (“Yolo County”), filed their 15 briefs. (See Defs.’ Brief (Docket No. 241); Yolo County’s Brief 16 (Docket No. 242).) On January 21, 2021, plaintiffs City of West 17 Sacramento (“the City”) and the people of the State of California 18 (collectively, “plaintiffs”) filed their response brief. (See 19 Docket No. 248.) The court heard arguments on the issue on 20 January 26, 2021. Based on the parties’ briefs and oral 21 argument, the court orders as follows: 22 I. Equitable Apportionment under CERCLA § 107 23 CERCLA is a comprehensive environmental statute that, 24 among other things, grants the federal government, states, and 25 private parties the ability to recover response costs expended in 26 cleaning up hazardous waste sites. See Arizona v. City of 27 Tucson, 761 F.3d 1005, 1010-11 (9th Cir. 2014). Two separate 28 provisions of CERCLA, § 107 and § 113, provide parties with an 1 avenue to recoup CERCLA-related costs. See United States v. Atl. 2 Research Corp., 551 U.S. 128, 131 (2007). Parties who are not 3 themselves liable or potentially liable for response costs under 4 § 107(a) of CERCLA can bring a cost recovery action directly 5 under § 107(a) against certain classes of potentially responsible 6 parties. See Redwing Carriers, Inc. v. Saraland Apartments, 94 7 F.3d 1489, 1513 (11th Cir. 1996). Section 107 thus provides a 8 “right to cost recovery.” Atl. Research, 551 U.S. at 131. 9 Section 113, by contrast, provides a separate right to 10 contribution. Id. “Contribution is defined as the ‘tortfeasor's 11 right to collect from others responsible for the same tort after 12 the tortfeasor has paid more than his or her proportionate share, 13 the shares being determined as a percentage of fault.’” Id. 14 (quoting Black's Law Dictionary 353 (8th ed.2004)). 15 Accordingly, as the Supreme Court has recognized, 16 Sections 107(a) and 113(f) “provide two ‘clearly distinct’ 17 remedies,” id. (quoting Cooper Indus., Inc. v. Aviall Servs., 18 Inc., 543 U.S. 157, 163 n.3 (2004)), which impose separate forms 19 of liability and are subject to separate defenses. Section 107 20 imposes strict liability on “responsible parties,” which are set 21 forth in four enumerated categories in subsection (a). Arizona, 22 761 F.3d at 1011; see also 42 U.S.C. § 9607(a)(1)-(4). Liability 23 under § 107(a) is generally joint and several, “except in the 24 rare cases where the environmental harm to a site is shown to be 25 divisible.” Pakootas v. Teck Cominco Metals, Ltd., 905 F.3d 565, 26 588 (9th Cir. 2018). Thus, if a responsible party can prove by a 27 preponderance of the evidence that the environmental harm is 28 “theoretically capable of apportionment” and that a “reasonable 1 basis” on which to apportion liability exists, the court can 2 apportion liability based on concepts derived from the 3 Restatement (Second) of Torts. See id. (quoting Burlington N. & 4 Santa Fe Ry. Co. v. United States, 556 U.S. 599, 613-14 (2009)); 5 see also Burlington, 556 U.S. at 613-14 (“Congress intended the 6 scope of liability [under § 107(a)] to be determined from 7 traditional and evolving principles of common law.” (internal 8 citation omitted)). 9 Even if a responsible party under § 107(a) cannot 10 establish that the harm is divisible, it can still avoid 11 liability if it can establish one or more of three affirmative 12 defenses enumerated in § 107(b): (1) an act of God, (2) an act of 13 war, or (3) “an act or omission of a third party other than an 14 employee or agent of the defendant . . . .”1 42 U.S.C. § 15 9607(b). Relying on prefatory language contained in § 107(a), 16 that responsible parties shall be held liable “Notwithstanding 17 any other provision or rule of law, and subject only to the 18 defenses set forth in subsection (b) of this section,” 42 U.S.C. 19 § 9607(a) (emphasis added), several courts of appeals have held 20 that, “[b]y its terms . . . [§ 107(b)] set[s] forth the universe 21 of defenses to section 107 liability.” Velsicol Chem. Corp. v. 22 Enenco, Inc., 9 F.3d 524, 530 (6th Cir. 1993); Gen. Elec. Co. v. 23 Litton Indus. Automation Sys., Inc., 920 F.2d 1415, 1418 (8th 24 Cir. 1990), overruled on other grounds by Key Tronic Corp. v. 25 United States, 511 U.S. 809 (1994). In other words, § 107(a) 26
27 1 Subsection (b) also provides that “any combination of” these three defenses may be invoked as a defense. 42 U.S.C. 28 § 9607(b)(4). 1 liability is limited only by causation-based defenses, and “non- 2 enumerated equitable defenses” to liability are not proper. 3 Velsicol, 9 F.3d at 530; see also Gen. Elec., 920 F.2d at 1418 4 (holding that defense of unclean hands was not available as 5 defense to § 107 liability). 6 By contrast, “a contribution claim under § 113(f) is a 7 means of equitably allocating response costs among responsible or 8 potentially responsible parties.” Redwing Carriers, 94 F.3d at 9 1513–14. “Whereas joint and several liability is the rule for 10 defendants in actions under § 107(a), courts in contribution 11 cases may ‘allocate response costs among liable parties.’” Id. 12 (quoting 42 U.S.C. § 9613(f)(1)). Courts have routinely held, 13 therefore, that causation-based defenses to liability, such a 14 divisibility, are only appropriate under § 107(a) claims, while 15 equitable considerations are only appropriate under § 113(f) 16 claims. See id.; Velsicol, 9 F.3d at 530. 17 Here, the court has already found defendants to be 18 liable under § 107(a) on summary judgment (see Docket No. 125), 19 and has rejected defendants’ request for a finding of 20 divisibility. (See Docket No. 203.) All parties agree that 21 defendants are jointly and severally liable for the City’s 22 response costs under § 107(a), see Pakootas 905 F.3d at 588, and 23 concur in their briefing that the court need not consider 24 equitable factors when determining the amount of response costs 25 to which the City is entitled under § 107(a) at the March 9, 2021 26 trial. In light of the parties’ agreement, and in light of the 27 fact that only the City’s claim under § 107(a) against defendants 28 will be at issue at the trial (as defendants’ and Yolo County’s 1 claims under § 113(f) will be tried separately, at a future 2 date), the court finds that it need not consider equitable 3 apportionment when determining what response costs the City is 4 entitled to under its CERCLA § 107(a) claim against defendants. 5 See Velsicol, 9 F.3d at 530; Redwing Carriers, 94 F.3d at 1513– 6 14. 7 II. Equitable Apportionment under the HSAA 8 “The HSAA is California’s counterpart to [CERCLA].” 9 Orange Cty. Water Dist. v. Alcoa Glob. Fasteners, Inc., 12 Cal. 10 App. 5th 252, 297 (2017). As such, the HSAA expressly “adopts 11 CERCLA’s standards for determining liability: ‘Responsible party’ 12 or ‘liable person,’ for the purposes of this chapter, means those 13 persons described in Section 107(a) of the federal act (42 U.S.C. 14 Sec. 9607(a)).” Id. (quoting Cal. Health & Safety Code 15 § 25323.5(a)(1)); Castaic Lake Water Agency v. Whittaker Corp., 16 272 F. Supp. 2d 1053, 1084 n.40 (C.D. Cal. 2003) (“HSAA creates a 17 scheme that is identical to CERCLA with respect to who is 18 liable.”). 19 However, as Yolo County points out in its brief, 20 “unlike liability under CERCLA [§ 107(a)], liability under HSAA 21 is not truly joint and several.” Fireman’s Fund Ins. Co. v. City 22 of Lodi, Cal., 302 F.3d 928, 946 (9th Cir. 2002) (quoting 23 Bancroft-Whitney, California Civil Practice, Environmental 24 Litigation § 3:85 (1993)). Pursuant to HSAA § 25363(a), “[a]ny 25 person found liable for costs under [] HSAA who establishes by a 26 preponderance of the evidence that only a portion of those costs 27 or expenditures are attributable to that person’s actions will be 28 required to pay only for that portion.” Id. “[I]f the trier of nee nnn een nnn nn nn on nnn nn nn nn ne on nn ne SN ONO
1 fact finds the evidence insufficient to establish each party’s 2 portion of costs under subdivision (a), the court shall apportion 3 those costs, to the extent practicable, according to equitable 4 principles, among the defendants.” Cal. Health & Safety Code 5 | § 25363(b). “Liability under HSAA is therefore apportioned 6 according to fault.” Fireman’s Fund, 302 F.3d at 946. 7 Here, the court has already found each of the three 8 defendants--R&L, Clark, and Smith--to be liable for the City’s 9 response costs under the HSAA. (See Docket No. 225.) Since this 10 liability is not “truly joint and several,” as it is under CERCLA 11 $ 107(a), the HSAA may require the court to apportion costs among 12 these three defendants according to equitable principles (if no 13 defendant can prove by a preponderance of the evidence that it is 14 only responsible for a portion of the City’s costs). See Cal. 15 Health & Safety Code § 25363(a)-(b). 16 Therefore, at the March 9, 2021 trial of plaintiffs’ 17 claims against defendants, the court will not consider the 18 question of how to equitably apportion response costs between the 19 defendants or any other party, including predecessors at the Site 20 and Yolo County, under the City’s CERCLA § 107(a) claim. The 21 court will, however, consider equitable apportionment among named 22 defendants under the City’s HSAA claim. 23 IT IS SO ORDERED. 24 | Dated: January 26, 2021 be thom th Ad. 25 WILLIAM B. SHUBB UNITED STATES DISTRICT JUDGE 26 27 28