and substantial endangerment now exists.
K&B has alleged that it "continues to perform certain quarterly designated environmental monitoring and reporting activities . . . to assess and avoid any potential endangerments to the public health, welfare or environment as a consequence of the release of hazardous substances at the Site," pursuant to the second Abatement Order. Complaint at P 40. "Ongoing monitoring is necessary to assess and prevent any potential for future endangerment to the environment at and near the Site . . . ." Complaint at P 69. The contamination "created a situation that 'may present an imminent and substantial endangerment to the environment' . . . ." Complaint at P 69.
K&B maintains that it is not necessary under section 6972(a)(1)(B) to demonstrate that an emergency situation exists presenting the threat of actual harm, merely potential harm. Dague v. City of Burlington, 935 F.2d 1343, 1356 (2d Cir. 1991), rev'd on other grounds, 120 L. Ed. 2d 449, 112 S. Ct. 2638 (1992).
K&B cites several cases decided under RCRA section 6973(a), which authorizes suit by the EPA. That section contains identical language to section 6972(a)(1)(B): ". . . may present an imminent and substantial endangerment to health or the environment . . . ." Congress intended that actions brought under section 6972(a)(1)(B) should be evaluated "pursuant to the standards of liability established under [section 6973]." H.R. Rep. No. 198, pt. I, 98th Cong., 2d Sess. 53 (1984), reprinted in 1984 U.S.C.C.A.N. 5576, 5612. The court does not find that the two sections are comparable in all respects. However, cases construing section 6973(a) may shed light on the interpretation of identical language used in the citizen suit statute. See U.S. v. Price, 688 F.2d 204, 213 (3d Cir. 1982) ("may present" is expansive language, intended to address "any risk posed by toxic wastes"; "imminence refers 'to the nature of the threat rather than identification of the time when the endangerment initially arose'"), quoting H.R. Committee Print No. 96-IFC, 9th Cong., 1st Sess. at 32 (1979); Environmental Defense Fund v. EPA, 4654 F.2d 528, 535 (D.C. Cir. 1972) ("An 'imminent hazard' may be declared at any point in a chain of events which may ultimately result in harm to the public. It is not necessary that the final anticipated injury actually have occurred prior to a determination that an 'imminent hazard' exists."); U.S. v. Ottati & Goss, Inc., 630 F. Supp. 1361, 1394 (D.N.H. 1985) ("Endangerment means a threatened or potential harm and does not require proof of actual harm.").
K&B has alleged that Unisys, as successor in interest to Memorex, was a generator of waste at the property, and that the waste presents an imminent and substantial endangerment to the environment and to health. Complaint at PP 1, 7-10, 27, 28, 33, 38, 44, 69. K&B also alleges that the Regional Board's remedial action plan requires ongoing monitoring to prevent potential endangerment. Complaint at PP 40, 69. According to Dague and the section 6973 cases, this is sufficient to state a cause of action for injunctive relief under RCRA section 6972(a)(1)(B). Therefore, the court denies Unisys's motion to dismiss K&B's claim for injunctive relief.
Unisys argues that section 6972 provides no cause of action for restitution. This is a question of first impression in the Ninth Circuit; the only two reported decisions on the issue come from other circuits.
In Walls v. Waste Resource Corp., 761 F.2d 311, 316 (6th Cir. 1985), rev'd in part on other grounds, 823 F.2d 977 (6th Cir. 1987), the court noted that neither RCRA section 6972(a) nor the Federal Water Pollution Control Act, 33 U.S.C. § 1365(a), expressly provided for a private cause of action for economic, compensatory or punitive damages. The Walls court refused to imply a private remedy beyond the statute.
Commerce Holding Co. v. Buckstone, 749 F. Supp. 441 (E.D.N.Y. 1990), is directly on point. In ruling on a motion to dismiss, the court determined that plaintiff was not entitled to reimbursement for environmental remediation, regardless of how the request was phrased:
While injunctive relief is available under § 6972(a)(1)(B), the statute does not provide a private action for damages. Nor should one be implied. Even construing [plaintiff's] request for recovery of its "costs for remediation" to be for "equitable relief," as it urges, it cannot maintain its RCRA claim. If awarded this relief, [plaintiff] would be the direct beneficiary of the substantive relief. Thus, regardless of how the request is denominated, it does not comport with the statute's purpose of allowing private parties to bring suit if "genuinely acting as private attorneys general, rather than pursuing a private remedy."
Id. at 445, quoting Environmental Defense Fund, Inc. v. Lamphier, 714 F.2d 331, 337 (4th Cir. 1983).
K&B argues that the court should follow cases interpreting RCRA section 6973, which provides for suit by the EPA. Those cases have held that restitution is recoverable by the EPA. See U.S. v. Price, 688 F.2d 204 (3d Cir. 1991); U.S. v. Aceto Agricultural Chemicals Corp., 872 F.2d 1373 (8th Cir. 1989); U.S. v. Northeastern Pharm. & Chem. Co., 810 F.2d 726 (8th Cir. 1986), cert. denied, 484 U.S. 848 (1987).
Although the court is not bound by the decisions of the Sixth Circuit or the Eastern District of New York, these cases persuasively argue against implying a private remedy for damages or restitution. Therefore, the court grants defendant Unisys's motion to dismiss the part of count two of the complaint that seeks restitution under RCRA.
C. DEFENDANTS' MOTIONS TO DISMISS PART OF COUNT ONE (FOR RECOVERY OF ATTORNEYS FEES AS RESPONSE COSTS PURSUANT TO CERCLA)
All defendants have moved to dismiss the portion of K&B's first cause of action that requests recovery of attorneys fees as response costs pursuant to CERCLA section 9607(a)(3)(B). They contend that K&B is legally prohibited from recovering attorneys fees under this section.
Under what has been termed "the American Rule," a prevailing party may not recover attorneys fees unless explicitly authorized to do so by statute. Runyon v. McCrary, 427 U.S. 160, 185, 49 L. Ed. 2d 415, 96 S. Ct. 2586 (1976); Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 247, 44 L. Ed. 2d 141, 95 S. Ct. 1612 (1975). CERCLA section 9607(a) does not explicitly provide for recovery of attorneys fees as part of response costs. The Ninth Circuit has recently ruled that attorneys fees are not recoverable under this section. Stanton Road Assocs. v. Lohrey Enters., Inc., 984 F.2d 1015 (9th Cir. 1993), and Key Tronic Corp. v. U.S., 984 F.2d 1025 (9th Cir. 1993).
In Stanton Road, the Ninth Circuit noted that section 9607 does not include attorneys fees as "necessary costs of response" or as "enforcement activities," although several other CERCLA provisions explicitly allow recovery of fees. 984 F.2d at 1020. Relying on Runyon and Alyeska, the court refused to imply that fees were recoverable under section 9607(a), and so overturned the trial court's award of fees under the statute. Id.
In Key Tronic, the Ninth Circuit broadened its holding in Stanton Road. The court overturned an award for attorneys fees incurred in pursuing the section 9607(a) action, in investigating other parties who might be responsible for pollution at the site in question, and in negotiating and preparing a consent decree in the case. 984 F.2d at 1027-28. None of these fees were recoverable because Congress had not explicitly provided for recovery of attorneys fees under section 9607(a). Id. at 1027.
Under Stanton Road and Key Tronic, K&B is not entitled to recover attorneys fees under CERCLA section 9607(a). K&B can prove no set of facts that would allow it to avoid these controlling cases. Therefore, the court dismisses the portion of count one of K&B's complaint that requests relief in the form of attorneys fees.
D. DEFENDANTS' MOTIONS TO DISMISS COUNT SEVEN (FOR ATTORNEYS FEES PURSUANT TO C.C.P. § 1021.5)
All defendants have moved to dismiss K&B's seventh cause of action for recovery of attorneys fees under California Code of Civil Procedure section 1021.5.
Section 1021.5 provides that a court may award attorneys fees to a successful party in a private attorney general action which (a) enforces an important right affecting the public interest, and (b) confers a significant benefit (pecuniary or nonpecuniary) upon the general public or a large class of persons, if (c) the necessity and cost to plaintiff in bringing its private enforcement action outweighs its stake in the action. Woodland Hills Residents Ass'n v. City Council, 23 Cal. 3d 917, 934-35, 154 Cal. Rptr. 503, 593 P.2d 200 (1979); Beach Colony II v. California Coastal Comm'n, 166 Cal. App. 3d 106, 110, 212 Cal. Rptr. 485 (1985).
Under the first two prongs of this analysis, a plaintiff may not recover fees under section 1021.5 if its suit is primarily motivated by its own pecuniary interests, even if an incidental public benefit derives from the suit. See, e.g., Wallis v. Farmers Group, Inc., 220 Cal. App. 3d 718, 741, 269 Cal. Rptr. 299 (1990) (insurance agents' suit on breach of contract); Beach Colony II, 166 Cal. App. 3d at 114 (developer's suit for unconstitutional taking of property); Schwartz v. City of Rosemead, 155 Cal. App. 3d 547, 558-59, 202 Cal. Rptr. 400 (1984) (action by private landowner to enjoin cogeneration plant as a private nuisance).
In Beach Colony II, the court denied attorneys fees to a developer who reaped substantial personal economic benefits from his suit against the California Coastal Commission for an unconstitutional taking of property. Beach Colony II, 166 Cal. App. 3d at 113. The court's justification for its ruling is equally applicable to the Beach Colony developer and to K&B's decision to clean up the Milpitas site: "Development is Colony II's business and its decision to sell or develop will be based upon economic considerations. The public benefit from the lawsuit was wholly coincidental to Colony II's personal profit-making goals."
K&B has alleged that it purchased the Milpitas site in order to develop it for profit. Counsel acknowledged during oral argument that remediating the environmental damage to the site was a commercially reasonable action. According to the complaint, K&B's overwhelming motivation for the cleanup was to ensure its own profits, not to pursue any public benefit.
Under the third prong of section 1021.5, a court may award attorneys fees only "when the cost of the claimant's legal victory transcends his personal interest, that is, when the necessity for pursuing the lawsuit places a burden on the plaintiff 'out of proportion to his individual stake in the matter.'" County of Inyo v. City of Los Angeles, 78 Cal. App. 3d 82, 89, 144 Cal. Rptr. 71 (1978), quoting Serrano v. Priest, 20 Cal. 3d 25, 45-46 n.18, 141 Cal. Rptr. 315, 569 P.2d 1303 (1977), and quoted in Woodland Hills, 23 Cal.3d at 934-35. K&B alleges that its stake in this matter exceeds $ 26 million. Although this suit may prove costly for the parties, it is virtually unimaginable that K&B's attorneys fees will approach that figure. K&B has not alleged facts sufficient to demonstrate that the cost of pursuing this action is out of proportion to its individual stake.
K&B has failed to allege facts sufficient to support its plea for section 1021.5 attorneys fees. Accordingly, the court grants defendants' motion to dismiss count seven of K&B's complaint with leave to amend.
For the foregoing reasons, the court orders:
1. that the motion to dismiss K&B's entire complaint as to the Kundes is granted with leave to amend to specify facts showing that it entered into the release because of fraud or economic duress;
2. that Unisys's motion to dismiss count two of the complaint is denied as to the claim for injunctive relief and litigation costs, and granted as to the claim for restitution;
3. that defendants' motions to dismiss the part of count one that seeks relief in the form of attorneys fees is granted; and
4. that defendants' motions to dismiss count seven of the complaint is granted with leave to amend.
Plaintiff must file its amended complaint within twenty days of the date of this order.
DATED: MAY 7, 1993
RONALD M. WHYTE
United States District Judge