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GILROY CANNING CO. v. CALIFORNIA CANNERS & GROWERS

July 21, 1998

GILROY CANNING COMPANY, INC., Plaintiff,
v.
CALIFORNIA CANNERS AND GROWERS, Defendant.



The opinion of the court was delivered by: TRUMBULL

ORDER DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

 (Re: Docket Nos. 38, 39)

 The parties appeared before Magistrate Judge Trumbull at 10:00 a.m. on July 7, 1998 for hearing on Defendant's motion for summary judgment or, in the alternative, partial summary judgment. Based upon the arguments and briefs presented, the court DENIES Defendant's motion.

 I. FACTUAL AND PROCEDURAL BACKGROUND

 Gilroy Canning Company, Inc. ("GCC") brings a sole cause of action against California Canners and Growers ("Cal Can") under the Resource, Conservation and Recovery Act (RCRA) pursuant to RCRA ยง 7002(a)(1)(B). Cal Can owned the property located at 1 Lewis Street in Gilroy, California (the "Site") from 1965 to 1983, during which it operated a food cannery. In July, 1983, Cal Can filed for bankruptcy under Title 11, Chapter 7 of the United States Bankruptcy Code.

 In July, 1983, Custom Food Machinery ("CFM") purchased the Site from Cal Can. The Asset Purchase Agreement between Cal Can and CFM contained an "as is" clause. CFM subsequently leased the Site to GCC, and GCC purchased the Site in 1984.

 In January, 1994, the California Regional Water Quality Control Board, Central Coast Region ("CRWQCB") issued Cleanup and Abatement Order No. 94-35 ("Order"). The Order documents petroleum hydrocarbon contamination in the soils and groundwater at the Site, as well as Tetrachlosoethylene ("PCE") and other VOCs contamination in the groundwater. PCE, petroleum hydrocarbon, benzene, toluene, 1,1 dichloroethane and naphthalene is hazardous waste as defined by RCRA. The Order requested further investigation and cleanup of the contaminants.

 GCC conducted investigative work, and the CRWQCB removed the requirements to remediate and monitor the groundwater for solvent contamination in a letter dated May 23, 1997. The requirements to remediate and monitor remained as to the petroleum hydrocarbons.

 Regulatory oversight was transferred from CRWQCB to the Santa Clara Valley Water District ("SCVWD"). On June 9, 1998, SCVWD issued a letter to GCC, ordering submission of a work plan by July 15, 1998, addressing suspected solvent contamination.

 GCC seeks an injunction mandating that Cal Can take all acts necessary to investigate and abate the imminent and substantial endangerment to health and the environment which exists at the Site, including, without limitation, requiring Cal Can immediately and at its sole cost, to develop and implement a workplan. Plaintiff applied to bankruptcy court for relief from automatic stay to bring this suit against Defendant. Bankruptcy court entered a stipulated order granting Plaintiff relief from stay on December 3, 1997, limiting enforcement of Defendant's liability under RCRA to the extent of Defendant's available insurance coverage.

 II. ANALYSIS

 On summary judgment, the moving party must demonstrate that no genuine issue of material fact exists for trial and that the moving party is entitled to a judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). The moving party is "entitled to a judgment as a matter of law" if the nonmoving party has failed to make a sufficient showing on an essential element of its case with respect to which it has the burden of proof. Id. at 317-18. The moving party is not required to negate those portions of the nonmoving party's claim on which the nonmoving party bears the burden of proof. Id.

 Defendant contends it is entitled to judgment as a matter of law based on three theories *fn1"

 
1) The suit is barred because Plaintiff's relief under RCRA is limited to injunctive relief, such relief cannot be enforced against Cal Can's insurance carriers, and the bankruptcy court's ...

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