The opinion of the court was delivered by: Oliver W. Wanger United States District Judge
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS PLAINTIFFS' SIXTH CAUSE OF ACTION IN THE FOURTH AMENDED COMPLAINT
Before the court for decision is Defendant Nicoletti Oil's motion to dismiss the sixth cause of action in the fourth amended complaint (Doc. 55), as well as Defendant's request for judicial notice (Doc. 55-2).
Plaintiffs Larry Bonds, Gayle Bonds, Jesus Aguilar, Joe Anderson, Rose Anderson, Jim Ballanger, Jeanie Ballanger, Charles Bates, Loretta Bates, Pedro Bermudez, Hortencia Bermudez, Linda Butler, Gloria Cardenas, Thomas M. Climer, David Darnell, Felix Esquivel, Delia Esquivel, Pablo Martinez, Ezequivel Ortega, Joe Ortega, Hope Ortega, Bobby Parsons, and Jeff Sullivan filed a Fourth Amended Complaint ("FAC") against Nicoletti Oil Inc. and Does 1-100. (Doc. 54, filed August 11, 2008.) The FAC alleges that Plaintiffs reside in or own homes in the City of Dos Palos, California, near a bulk fuel storage and distribution facility owned and operated by Defendants. (FAC at ¶¶ 3-4.) It is alleged that petroleum hydrocarbons leaked from underground and aboveground storage tanks and supply lines at the storage facility and migrated into and contaminated the soil and groundwater on Plaintiffs' property. (FAC at ¶¶ 6-7.)
The FAC alleges causes of action for (1) negligence, (2) private nuisance, (3) trespass, (4) intentional infliction of emotional distress, (5) negligent infliction of emotional distress, (6) unlawful business practice, in violation of California Business and Professions Code §§ 17200 et seq., and (7) declaratory relief and equitable indemnity. The original complaint was filed in the Superior Court for the County of Merced, but was successfully removed under Section 1503 of the Energy Policy Act of 2005, 119 Stat. 594, 1076 (2005) (allowing for removal of legal actions involving actual or threatened contamination by methyl tertiary butyl ether ("MTBE")).
On January 30, 2008, Plaintiffs' motion to remand was denied, and Defendant's motion to dismiss and/or strike Plaintiffs' First Amended Complaint was denied in part and granted in part. (Doc. 30.) The court found that Plaintiffs' claims were barred by the statute of limitations, but granted leave to amend. (Id. at 15-29.) The fraud/concealment claim was dismissed because it did not state a claim upon which relief could be granted. The motion to dismiss the intentional infliction of emotional distress, negligent infliction of emotional distress, and declaratory relief/equitable indemnity claims was denied. (Id. at 29-43, 48-49.) The court addressed the unfair business practice claim:
Defendant moves to dismiss the Seventh Cause of Action because the Amended Complaint does not allege that Defendant "is in violation of any permit requirement governing its operations, that Defendant is in violation of any Regional Water Quality Control Board order, or that Defendant is in violation of any law whatsoever." Defendants assert that, because Plaintiffs cannot plead a material violation of law, they premise the Seventh Cause of Action on a failure to warn theory, and:
This assertion is rather amazing because Plaintiffs cannot deny that they were apprised of, and warned about, site conditions by the Regional Water Quality Control Board and the Defendant. Considering that the Regional Water Quality Control Board and the Merced County Department of Public Health were aware of the existence of the discovery in 1988, of all of the material conditions plead in the Complaint, and of the current status of Defendant's operations, the Complaint's silence speaks volumes.
Plaintiffs respond that Defendant's contention that no violations of law are alleged is belied by the allegations in the Amended Complaint.
The only laws alleged to have been violated by Defendants are Proposition 65 and Business & Professions Code § 17200. At the hearing, Plaintiffs conceded that they cannot bring a private right of action for violation of Proposition 65 because they have not complied with the requirements in California Health & Safety Code § 25249.7(d)(1).
This concession precludes Plaintiffs' reliance on the Unfair Competition Law to state a claim against Defendants under either the Seventh or the Eighth Causes of Action. See In re Vaccine Cases, 134 Cal.App.4th 438, 457-459 (2005)("Proposition 65 conditioned a private right of action for violation of the [Safe Drinking Water and Toxic Enforcement Act of 1986, Health & Safety Code §§ 25249.5 et seq.] on compliance with these substantive provisions. To allow plaintiffs to bring a UCL action against ... defendants without complying with section 25249.7, subdivision (d)(1), would frustrate the purpose of this requirement and would nullify its enactment.")
Defendants further move to dismiss the Seventh Cause of Action to the extent that the Seventh Cause of Action seeks restitution as a remedy. Defendant cites State v. Altus Finance, S.A., 36 Cal.4th 1284, 1304 (2005): "A UCL claim for restitution seeks to compel 'defendant[s] to return money obtained through an unfair business practice to those persons in interest from whom the property was taken, that is, to persons who had an ownership interest in the property or those claiming through that person.' ...." Defendants note that Plaintiffs have not alleged that Defendant ever obtained Plaintiffs' money or that Plaintiffs ever had an ownership interest in any of the defendants' profits.
At the hearing, Plaintiffs explained that their theory underlying the Seventh Cause of Action is that Defendant operated at a competitive advantage over other oil companies, which resulted in a greater profit to Defendant. Defendant complained that Plaintiffs cite no case to support their theory.
In Kraus v. Trinity Management Services, Inc., 23 Cal.4th 116, 127 (2000), the California Supreme Court commented:
An order that a defendant disgorge money obtained through an unfair business practice may include a restitutionary element, but is not so limited ...
[S]uch orders may compel a defendant to surrender all money obtained through an unfair business practice even though not all is to be restored to the persons from whom it was obtained or those claiming under those persons. It has also been used to refer to surrender of all profits earned as a result of an unfair business practice regardless of whether those ...