LPOD, Inc. v. Kinder Morgan Liquids Terminals LLC

CourtDistrict Court, E.D. California
DecidedMarch 31, 2025
Docket1:23-cv-01498
StatusUnknown

This text of LPOD, Inc. v. Kinder Morgan Liquids Terminals LLC (LPOD, Inc. v. Kinder Morgan Liquids Terminals LLC) is published on Counsel Stack Legal Research, covering District Court, E.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
LPOD, Inc. v. Kinder Morgan Liquids Terminals LLC, (E.D. Cal. 2025).

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 LPOD, Inc., a California Corporation, dba, No. 1:23-cv-01498-KES-CDB Las Palmas Oil & Dehydration; and 12 MICHAEL J. PORTER, an individual, BRYAN PORTER, an individual, and 13 M&W PROPERTIES, LLC, ORDER DENYING MOTION TO REMAND 14 Plaintiffs,

15 v. (Doc. 26) 16 KINDER MORGAN LIQUIDS TERMINALS, LLC; and DOES 1 through 17 25, inclusive,

18 Defendants. 19 20 Following defendant Kinder Morgan Liquids Terminals, LLC’s (“Kinder Morgan’s”) 21 removal of this state tort action pursuant to section 1503 of the Energy Policy Act of 2005, Doc. 1 22 (“Not. Removal”), plaintiffs LPOD, Inc. (“LPOD”), Michael J. Porter, Bryan Porter, and M&W 23 Properties, LLC moved to remand to Kern County Superior Court on the grounds that Kinder 24 Morgan’s removal was untimely.1 Doc. 26 (“MTR”). For the reasons explained below, the 25 Court denies plaintiffs’ motion to remand. 26 1 Plaintiff Michael J. Porter is the president of LPOD. SAC ¶¶ 3–4. Plaintiff Bryan Porter is an 27 officer of LPOD. Id. ¶ 4. Plaintiff M&W Properties, LLC is the owner of the land that was leased to LPOD for its Kern County facility. Id. ¶ 5. 28 1 I. Background2 2 LPOD operated a facility in Kern County, California, where it dehydrated off- 3 specification streams of petroleum materials and recycled those materials into reusable products. 4 Doc. 1-1, Ex. C (“SAC”) ¶¶ 1–2. LPOD’s facility was never authorized to treat, store, or dispose 5 of “hazardous waste” as that term is defined in the California Hazardous Waste Control Act 6 (“CHWCA”). Id. ¶¶ 10, 19–23; see also Cal. Health & Safety Code § 25117 (defining “hazardous 7 waste”).3 8 Defendant Kinder Morgan is an energy infrastructure company that operates petroleum 9 pipelines and terminals throughout the United States. Id. ¶ 6. Kinder Morgan’s terminal in 10 Carson, California, (“Carson Terminal”) is a hazardous waste remediation site which has been 11 under a Cleanup and Abatement Order (“CAO”) from the Los Angeles Regional Water Quality 12 Control Board since 1990 due to leaks from petroleum storage tanks that contaminated the soil 13 and groundwater below. Id. ¶ 12; Doc. 32 (“Opp’n”) at 7 n.3. As part of the remediation process, 14 Kinder Morgan operates a system which extracts the leaked, free-floating petroleum (which the 15 parties refer to as Light Non-Aqueous Phase Liquid (“LNAPL”)) from the groundwater below 16 Carson Terminal. Id. ¶ 13. 17 The California Department of Toxic Substances Control (“DTSC”) categorizes each 18 regulated toxic substance as either “hazardous waste” or “retrograde material,” depending on, 19 among other things, its precise chemical makeup.4 See, e.g., Opp’n at 7 n.4. Significantly, 20 2 The facts recited here are not in dispute, and the Court may “consider[] evidence outside the 21 pleadings when ruling on a motion to remand—even in the context of federal question jurisdiction.” Vegas Fab & Finish v. AMG Freight LLC, 2024 WL 166759, at *3 n.2 (D. Nev. 22 Jan. 16, 2024); see Hansen v. Group Health Cooperative, 902 F.3d 1051, 1056–57 (9th Cir. 2018) 23 (defendants must establish basis for removal by a preponderance of the evidence).

24 3 Pursuant to CHWCA, a waste is a “hazardous waste” if: (1) it “meets any of the criteria for identification of a hazardous waste adopted by the [Department of Toxic Substances Control] for 25 the identification of hazardous waste”; (2) it is a hazardous waste listed by the U.S. Environmental Protection Agency (“EPA”) pursuant to the Resource Conservation and Recovery 26 Act, 42 U.S.C. ch. 89, § 6901 et seq.; or (3) it is an “extremely hazardous waste or acutely 27 hazardous waste.” Cal. Health & Safety Code § 25117.

28 4 Methyl tertiary butyl ether (“MTBE”) is not expressly listed as a “hazardous waste” by EPA or 1 LNAPL may—but does not always—contain a chemical known as methyl tertiary butyl ether 2 (“MTBE”), a chemical that California banned for sale and use in gasoline in December 1999,5 id. 3 at 6 n.1. See Opp’n at 7 n.4. DTSC categorized Kinder Morgan’s LNAPL as hazardous waste, 4 id., for reasons not fully explained in the parties’ briefs and exhibits.6 5 Plaintiffs allege that, prior to 2016, Kinder Morgan properly handled and treated the 6 recovered LNAPL as hazardous waste, as DTSC required. SAC ¶ 18; Doc. 26-1 (“Moss Decl.”) 7 ¶ 5. The fact that DTSC classified Kinder Morgan’s LNAPL as “hazardous waste” rather than 8 “retrograde material” meant that Kinder Morgan was required to comply with more stringent and 9 costly regulations, such as shipping the LNAPL only to facilities permitted by DTSC to treat, 10 store, or dispose of hazardous waste, among other things. See SAC ¶¶ 18–19. During the period 11 prior to 2016 in which Kinder Morgan treated the LNAPL as hazardous waste, plaintiffs contend 12 that Kinder Morgan attempted on numerous occasions to persuade regulators to recategorize the 13 LNAPL as retrograde material rather than hazardous waste. Moss Decl. ¶¶ 6–10. Each time, 14 regulators declined to recategorize Kinder Morgan’s LNAPL. Id. 15 DTSC. See 40 C.F.R. § 261; 22 C.C.R. §§ 66261.30–66261.50. However, the parties’ briefings 16 suggest that under some circumstances, MTBE could meet the criteria for identification of hazardous waste set by DTSC. See MTR at 7–11. Prior to 2008, at least, Kinder Morgan treated 17 the LNAPL recovered from Carson Terminal, which contained MTBE, as a hazardous waste because it exhibited the characteristic of “ignitability” under 22 C.C.R. § 66261.21(a)(1). Moss 18 Decl., Ex. 1, (“Charles Corcoran Email”), at 380, 383. 19 5 The California Air Resources Board promulgated regulations requiring the elimination of 20 MTBE’s use in fuel and gasoline in 2002. Staff Report: Proposed Amendments to the California Phase 3 Reformulated Gasoline Regulations, California Air Resources Board (Oct. 25, 2002), 21 https://ww2.arb.ca.gov/sites/default/files/barcu/regact/mtberesid/isor.pdf. The California State Water Resources Board thereafter began to regulate MTBE levels in drinking water. See MTBE: 22 Regulations and Drinking Water Monitoring Results, California State Water Resources Board 23 (July 22, 2024), https://www.waterboards.ca.gov/drinking_water/certlic/drinkingwater/MTBE.html. 24 6 Plaintiffs cite to evidence that, prior to 2008, LNAPL which contained MTBE was classified as 25 a hazardous waste because it exhibited the characteristic of “ignitability” under 22 C.C.R. § 66261.21(a)(1). Moss Decl., Ex. 1, (“Charles Corcoran Email”), at 380, 383. It is not clear that 26 Kinder Morgan continued to treat the LNAPL as a hazardous waste for this reason after 2008, nor 27 is it clear that MTBE had anything to do with the LNAPL’s classification as hazardous waste. As Kinder Morgan points out, “LPOD’s allegations and . . . discovery inquiries [prior to September 28 22, 2023,] centered on LNAPL and not MTBE.” Opp’n at 7 n.4. 1 Plaintiffs allege that after Kinder Morgan failed to have LNAPL recategorized, in 2016 2 Kinder Morgan sought to avoid the costly DTSC regulations by secretly labelling the recovered 3 LNAPL hazardous waste as “retrograde material” and shipping it to plaintiffs’ facility. Doc. 1-1, 4 Ex. A (“Compl.”) ¶ 10. Plaintiffs’ facility was not authorized to accept hazardous waste. SAC 5 ¶¶ 10, 19–23. Plaintiffs allege that they unwittingly received a total of 181,349 gallons of such 6 hazardous waste through 66 separate shipments. Id. ¶¶ 20–21. 7 DTSC issued a Statement of Violations (“SOV”) against LPOD and its owner, Michael J. 8 Porter, when it discovered the hazardous waste present on plaintiffs’ property. Id. ¶ 21.

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Bluebook (online)
LPOD, Inc. v. Kinder Morgan Liquids Terminals LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lpod-inc-v-kinder-morgan-liquids-terminals-llc-caed-2025.