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Newark Group, Inc. v. Dopaco


April 1, 2010


The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge


Plaintiff, The Newark Group, Inc. ("Newark"), moves for partial summary judgment on its Resource Conservation and Recovery Act ("RCRA") claim in this RCRA citizen suit. Newark seeks an order holding Defendant Dopaco, Inc. ("Dopaco") jointly and severally liable for the contamination of toluene on its property. Dopaco was a former tenant on Newark's property before Newark purchased the property.


When considering a summary judgment motion, all reasonable inferences are drawn from the evidence in the non-movant's favor. Hart v. Parks, 450 F.3d 1059, 1065 n.4 (9th Cir. 2006). Further, the movant "must adduce admissible evidence on all matters as to which [it] bears the burden of proof." Zands v. Nelson ("Zands II"), 797 F.Supp. 805, 808 (S.D. Cal. 1992).


Newark requests that judicial notice be taken of "certain standards established by federal and state environmental agencies concerning various regulatory action levels for toluene contamination," and "of the fact that a chemical called Methyl Isobutyl Ketone ('MIBK') is a common constituent of the types of inks used in rotogravure printing, which is the alleged source of the toluene contamination at issue in this case." (Request for Judicial Notice ("RJN") 1.) Some of the documents are authored by the United States Environmental Protection Agency ("EPA"), the California Environmental Protection Agency ("California EPA"), the California Regional Water Quality Control Board, Central Valley Region, and the Interstate Technology & Regulatory Council. (RJN Ex. A-F.) Two of documents state that MIBK is used in rotogravure printing: one is authored by the EPA and the other by Eastman Chemical Company, a corporation that manufactures MIBK. (RJN Ex. G-H.)

Federal Rule of Evidence 201(b)(2) allows the court to take judicial notice of a fact not subject to reasonable dispute because it is "capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." The documents authored by federal and state agencies concern federal and state toluene standards or MIBK's use in rotogravure printing, and these documents come from "sources whose accuracy cannot reasonably be questioned." New Mexico ex rel. Richardson v. BLM, 565 F.3d 683, 702 n. 22 (10th Cir. 2009)(taking judicial notice of data on web sites of federal agencies). Therefore, Newark's request for judicial notice of these federal and state agency documents is granted. Id.

The website Newark provides from Eastman Chemical Company showing that MIBK is used in "gravure printing inks" is not so easily verifiable. (RJN Ex. H.) Therefore, this portion of Newark's judicial notice request is denied.

III. Summary Judgment Facts Considered in Non-Movant's Favor

Newark is the current owner of the property located at 800 West Church Street in Stockton, California (the "Property"). Newark purchased the Property from Gold Bond in June 1989. (Dopaco's Statement of Undisputed Facts ("SUF") ¶ 1). When Gold Bond was the owner of the Property, Dopaco was Gold Bond's tenant in the basement of a building on the northwest corner of the Property from 1981 to 1988. (Id. ¶ 2). "While a tenant . . . Dopaco operated a rotogravure printing operation in the basement area it leased." (Id. ¶ 3). "During its time on the Property, Dopaco used both solvent and water-based inks and toluene was not used in conjunction with water-based inks;" "toluene was only used by Dopaco as diluent for top lacquer, and top lacquer[s] were not used on all printing jobs." (Id. ¶ 4).

Eight underground tanks are on the Property and are located "adjacent to the building on the northern boundary of the [P]roperty." (SUF ¶ 5, Avery Decl. ¶ 5.) Two of these tanks are storage product tanks and the remaining six are waste tanks. (Id.) Dopaco stored the toluene it used in a 4,000 gallon storage tank ("Toluene Tank") and in 55-gallon drums. (Id. ¶ 5.) Dopaco pumped toluene from the Toluene Tank "through piping that ran from the Toluene Tank to the interior of the building, where it was dispensed from wall-mounted nozzles." (Id. ¶ 6.) At times "Dopaco's rotogravure printing operation generated waste ink that contained toluene, which was disposed of into two other underground storage tanks ("waste tanks") on the Property." (Id. ¶ 7).

The Gold Bond Property was inspected by representatives of the California Regional Water Board, Central Valley Region ("Regional Board") and the San Joaquin Environmental Health Department ("SJEHD") on May 17 and September 23, 1985. (Id. ¶ 8) Following the inspections, the Regional Board issued Gold Bond a Notice of Violation ("NOV") in 1985 concerning "a discharge of red dye into McDougald Slough allegedly from the Gold Bond facility." (Id.; NOV at EHD0000722.) The NOV noted the following deficiencies when discussing Dopaco:

1. Fifty-five gallon drums of solvent are stored uncovered on an asphalt area adjacent to a paper storage warehouse. Runoff from this area is directed to McDougald Slough via the storm drain.

2. Workers in the plant stated press condensate water is routinely poured into loading dock sump. This sump discharges to the storm drain and McDougald Slough.

3. Waste ink and solvents are delivered to tanks #9 and 10 via underground lines or directly into the the tank from drums. Considerable spillage around poured tanks was evident. The practice of dumping waste drums into the tank by hand needs to be upgraded to prevent spills. (Id.; NOV at EHD0000723)(emphasis added.)

Subsequently, Gold Bond obtained a report authored by environmental engineer Donald K. Rothenbaum ("Rothenbaum"), who investigated the Property for Gold Bond in 1985 after Gold Bond received the NOV. Rothenbaum noted the following in his report:

Ground spillage of solvent waste was very apparent and presents a potential threat to the local ground water quality. We strongly recommend that your tenant, Dopaco, be requested to discontinue use of these tanks and improve their current waste handling practices as soon as it is practical.

(Id.; Rothenbaum Decl. Ex. 1 at NEW 000996)(emphasis added). Dopaco objects to Rothenbaum's report, arguing it lacks foundation, constitutes hearsay, and is speculative; however, Dopaco also acknowledges that the report "can establish . . . that Rothenbaum saw spillage." (Dopaco Obj. ¶ 2.) This objection but is sustained but the report establishes that Rothenbaum saw spillage.

As a result of the NOV, the Regional Board and SJEHD required Gold Bond to submit a technical report addressing the issues discussed in the NOV. (Id. ¶ 8.) The Regional Board, SJEHD, Gold Bond, Dopaco and another Gold Bond tenant on the Property decided that the tanks on the Property should be excavated. (Id. ¶ 10.)

Gold Bond retained American Environmental Management Corporation ("AEMC") to prepare an evacuation plan. This excavation plan was implemented in September 1986, and involved the removal of the six product tanks, referenced below as tanks A, B, C, D, E, and F, and the two waste tanks referenced below as tanks G and H . (Id.) AEMC noted in a written report dated October 21, 1996, ("AEMC Report"), that five of the product tanks appeared to have no leaks, and one of the product tanks and the two waste tanks "showed signs of leakage; ink could be seen around the tanks and the soil" and there was a "possible leak" from one of the tanks. (SUF ¶ 10; AEMC Report at EHD 0001853-54.) AEMC also discusses in the AEMC Report the sample results from the excavation as follows:

[F]our of the eight removed tanks appeared to be in excellent condition with no visible signs of rusting or pitting. [Tanks B, C, D, and E] The remaining four tanks (Tanks A,F,G,H) appear to be rusty, but with no indications of leaks or holes. . . . .

The excavation containing the six product tanks had no visible signs of stains, but a slight odor was detected. Soils containing the strongest odor were segregated from the other excavated soils. . . . .

The second excavation (Tanks G and H) had visible ink stains. Staining was limited, however, to a depth of less than six inches along the sides and bottom of the excavation. The thickest areas were In addition, soils excavated from the waste ink located at the top of the vertically standing tanks. excavation were also stained with ink. The staining was not extensive and was only due to the material scraped off from directly adjacent to the tank.

Odors were detected in the excavation but not the excavated soils. (Id. at EHD0001807-08)(emphasis added). Soil samples were collected between the eight tanks from ten to twelve feet below the tanks. (SUF ¶ 11). Although toluene was detected beneath the product tanks at levels ranging between 3 and 36 parts per billion ("ppb"), and between the waste tanks at levels ranging between 7 and 92 ppb, these levels were below 100 ppb, the state minimum requiring remedial action. (Id. ¶ 10; AEMC Report at EHD0001810-11). "Based on the above," AEMC concluded "the results indicate that although soil contamination exists, it is limited in degree and is not a probable threat to groundwater." (Id. at EHD0001812.) AEMC recommended backfilling the excavations. (Id.)

Dopaco vacated the property in 1988, taking with it to a new location the rotogravure presses for its printing services. (Id. ¶ 18).*fn1

ii. Newark's Purchase of the Property

Newark purchased the Property from Gold Bond in 1989. (Id. ¶ 1.) In 2005, a prospective purchaser of the property retained environmental consultant Advanced GeoEnvironmental, Inc. ("AGE") to take soil borings on the Property. (Id. ¶ 12). Samples taken "in the vicinity of Dopaco's former underground storage tanks adjacent to the [b]asement" at a depth of fifteen to twenty feet below the ground surface "showed up to 13,000 [parts per million ("ppm")] of toluene in soil, and 6,800,000 [('ppb') of toluene] in groundwater." (Id.) Further, MACTEC, Engineering and Consulting, Inc. ("MACTEC"), another environmental consultant, took "additional soil and groundwater samples adjacent to the [b]asement [which] "revealed toluene in groundwater at 7,600 and 36,000 ppb." (Id. ¶ 13.) Dopaco objects to the MACTEC report, arguing it has not been authenticated and is hearsay. (Dopaco's Obj. ¶ 5). Dopaco, however, produced the MACTEC report itself as Exhibit 18 to the Pulliam Declaration, which is attached to Dopaco's opposition brief. Dopaco therefore waives its objection. See Ohler v. U.S., 529 U.S. 753, 755 (2000) (stating generally a party introducing evidence waives objection to that evidence).

The toluene level in the soil far exceeds even the highest state and federal regulatory cleanup standards and the toluene level in the groundwater "far exceed[s] environmental cleanup standards set by state and federal regulatory agencies." (Id. ¶¶ 15-16). These concentrations "are in excess of levels toxic to fish and invertebrates, and to microorganisms that might otherwise break down the contamination, causing it to attenuate over time." (Id. ¶ 17). Further, "[t]he groundwater samples taken in the vicinity of the [b]asement also detected the chemical . . . MIBK." (Id. ¶ 14).


A. RCRA Liability

"RCRA is a comprehensive statute designed to reduce or eliminate the generation of hazardous waste and to minimize the present and future threat to human health and the environment created by hazardous waste. To achieve this goal, the statute empowers [the] EPA to regulate hazardous wastes from cradle to grave, in accordance with [RCRA's] rigorous safeguards and waste management procedures." Crandall v. City and County of Denver, Colo.,--- F.3d ----, 2010 WL 430918 (10th Cir. 2010)(internal citations and quotations omitted). RCRA also grants private citizens standing, such as Newark, to enforce some of the statute's provisions. See 42 U.S.C. § 6972. The Supreme Court held in Meghrig v. KFC Western, Inc., that RCRA's citizen-suit provision "permits a private party to bring suit only upon a showing that the solid or hazardous waste at issue may present an imminent and substantial endangerment to health or the environment." 516 U.S. 479, 484-86 (1996)(internal citation and quotations omitted). Further, Newark must also show that Dopaco "contributed" to the "handling, storage, treatment, . . . or disposal" of the toluene which caused the contamination on Newark's Property. Lincoln Properties, Ltd. v. Higgens, No. S-91-760DFL/GGH, 1993 WL 217429 at *12 (E.D. Cal. January 21, 1993).

EPA regulations promulgated under RCRA list toluene as a hazardous waste. 40 C.F.R. § 261.33(f). It is also undisputed that Dopaco was a "past . . . operator" of toluene on the property. See Singer v. Bulk Petroleum Corp., 9 F.Supp.2d 916 (N.D. Ill. 1998)(stating "Subsection (a)(1)(B) authorizes suits against all past or present owners or operators").

I. Imminent and Substantial Endangerment to Health or the Environment

Newark argues that the toluene contamination on its property poses an "imminent and substantial endangerment" under RCRA. Newark indicates in its argument that since the toluene contamination on the Property is in excess of the standards set by the governmental regulatory agencies, this contamination evidence is sufficient to show the existence of a "hazardous waste which may present an imminent and substantial endangerment to health or the environment." 42 U.S.C § 6972(a)(1)(B). Dopaco counters that Newark's evidentiary showing is insufficient because it does not contain evidence that health or the environment is at risk, or that a "pathway" exists for exposure of the contamination to humans or the environment.

Dopaco's argument concerns terms used in 42 U.S.C § 6972(a)(1)(B). "A finding of 'imminency' [under 42 U.S.C § 6972(a)(1)(B)] does not require a showing that actual harm will occur immediately so long as the risk of threatened harm is present: "An 'imminent hazard' may be declared at any point in a chain of events which may ultimately result in harm to the public [or the environment]." Price v. United States Navy, 39 F.3d 1011, 1019 (9th Cir. 1994) (internal citation omitted). "Imminence refers 'to the nature of the threat rather than identification of the time when the endangerment initially arose.'" Id. (citing United States v. Price, 688 F.2d 204, 213 (3d Cir. 1982)(quoting H.R.Committee Print No. 96-IFC 31, 96th Cong., 1st Sess. at 32 (1979))). Further,

'Substantial' does not require quantification of the endangerment (e.g., proof that a certain number of persons will be exposed, that 'excess deaths' will occur, or that a water supply will be contaminated to a specific degree). . . . [However, there must be] some reasonable cause for concern that someone or something may be exposed to a risk of harm by a release or a threatened release of a hazardous substance if remedial action is not taken.

Lincoln, 1993 WL 217429 at *13 (internal citation omitted). "Courts have also consistently held that 'endangerment' means a threatened or potential harm and does not require proof of actual harm. However, at the very least, endangerment or a threat must be shown." Price, 39 F.3d at 1019 (internal citation omitted).

Newark submits test results from "two separate environmental consultants [who] have confirmed that the groundwater and soil immediately adjacent to Dopaco's operation[,] [specifically near the product tanks and the building basement where Dopaco "piped in and dispensed the toluene", show] contaminat[ion] with toluene at levels thousands of times higher than action standards established by the [EPA] and the California [EPA]." (Mot 2:8-14). The first samples of soil and groundwater were taken in 2005, and the test results show 13,000 ppm of toluene in the soil and 6,800,000 ppb of toluene in the groundwater fifteen to twenty feet below the surface on the property near Dopaco's tanks and adjacent to the basement. (SUF ¶ 12). The second samples were taken "adjacent to the [b]asement" in 2006 and the test results "reveal[] toluene in groundwater at 7,600 and 36,000 [ppb,]" as well as the presence of MIBK in the groundwater samples." (Id. ¶¶ 13-14.) These results show that the levels of toluene in the soil and groundwater far exceed environmental cleanup standards set by state and federal regulatory agencies. (Id. ¶¶ 15-16.)

Newark also relies on statements from the Regional Board about toluene: "Regional Board considers all groundwater in the Central Valley Region to be potential sources of municipal or domestic water supply." (RJN Ex. A)(emphasis added). In addition, Newark provides evidence on the effect toluene can have on humans:

Humans exposed to intermediate to high levels of toluene for short periods of time experience adverse central nervous system effects ranging from headaches to intoxication, convulsions, narcosis, and death. . . . .

Exposure to 600 ppm for 8 hours resulted in the same and more serious symptoms including euphoria, dilated pupils, convulsions, and nausea (U.S. EPA 1994) . . . .

Exposure to 10,000-30,000 ppm has been reported to cause narcosis and death (U.S. Air. Force 1898) . . . .

Exposures to high levels of toluene can result in adverse effects in the developing human fetus . . . .

Variable growth, microcephaly, CNS dysfunction, attentional deficits, minor craniofacial and limb abnormalities, and developmental delay were seen in three children exposed to toluene in utero as a result of maternal solvent abuse before and during pregnancy (U.S. EPA 1994). (RJN Ex. E). Further, it is undisputed that "[t]oluene concentrations on the [p]roperty are in excess of levels toxic to fish and invertebrates, and to microorganisms that might otherwise break down the contamination, causing it to attenuate over time." (SUF ¶ 17).

Dopaco counters Newark's evidence with expert testimony from geoenvironmental and civil engineer Patrick Lucia ("Lucia"). Lucia declares that "Newark has not demonstrated a finding of imminent and substantial endangerment because [Newark] [has] not evaluated whether there is a population at risk and [it] [has] not evaluated potential exposure pathways." (Lucia Decl. ¶ 8). Lucia declares that a work plan showing the "extent of impacted soil and groundwater" and contamination characterization, a receptor survey to identify "water supply wells, buildings, surface water bodies, and any other receptors that could be impacted or potentially threatened by the identified contamination," and a "site conceptual model" concerning exposure pathways and potential receptors should be done in accordance with the "Tri-regional Board Staff Recommendations for Preliminary Investigation and Evaluation of Underground Tank Sites ([Regional Water Quality Control Board] 1990)." (Id.) Dopaco also cites expert testimony from Newark's expert, Keith M. O'Brien ("O'Brien"), in which O'Brien opines that the toluene contamination on the Property "has remained in the subsurface in the northwest corner of the facility despite shallow groundwater flow directions generally to the southeast." (Opp'n 28:5-6; L'Orange Decl. 35, O'Brien Report at 18.)

Dopaco argues the evidence shows that Newark has not satisfied RCRA's citizen suit provision, which requires Newark to demonstrate that the disposal of hazardous waste "'may present an imminent and substantial endangerment to health or the environment.'

42 U.S.C. § 6972(a)(1)(B)." (Opp'n 25:5-19)(citing Price 39 F.3d at 1011 and Foster v. United States, 922 F.Supp. 642 (D. D.C. 1996)).

Newark objects to Lucia's opinion, arguing it concerns an incorrect legal standard since contamination of groundwater by itself is sufficient to constitute an "imminent and substantial endangerment" to health or the environment. (Newark's Obj. D.)

Newark's objection to Lucia's opinion is overruled. The objection indicates that Newark fails to appreciate "that there is a limit to how far . . . the word may [in 42 U.S.C. § 6972(a)(1)(B)] can carry a plaintiff. Meghrig tells us that an endangerment cannot be merely possible, but must threaten[ ] to occur immediately." Crandall v. City and County of Denver, Colo.,--- F.3d ----, 2010 WL 430918 at *6 (10th Cir. February 8, 2010) (internal citations and quotations omitted). "One essential point that [Newark] appear[s] to overlook is that although the harm may be well in the future, the endangerment must be imminent." Id. (referencing Meghrig, 516 U.S. at 486 ("[T]here must be a threat which is present now, although the impact of the threat may not be felt until later.")(emphasis in original).

Newark fails to establish that the contamination "may present an imminent and substantial endangerment to health or the environment . . . " 42 U.S.C. § 6972(a)(1)(B). Newark was required to show more than just that toluene contamination exists on the Property. The risk of endangerment from the toluene contamination "must be imminent for there to be a claim under RCRA." Crandall, 2010 WL 430918 at *7 (citing § 6972(a)(1)(B)). Newark "does not contend that the contaminated groundwater is used for drinking, . . . [or] how or whether [the] groundwater had been drawn from the site by individuals unrelated to this litigation. Kara Holding Corp. v. Getty Petroleum Marketing, Inc., No. 99 Civ. 0275(RWS), 2004 WL 1811427 at *11 (S.D.N.Y. 2004). "It is not enough under RCRA that in the future someone may do something with solid waste that, absent protective measures, can injure human health" or the environment. Crandall, 2010 WL 430918 at *7 (citing Meghrig, 516 U.S. at 485-86).

"In sum, evidence that certain samples taken from the [Newark Property] exceeded [government] standards simply provides an inadequate basis for a jury to conclude that federal law, specifically, [RCRA's citizen suit provision, § 7002(a)(1)(B),] [42 U.S.C.] § 6972(a)(1)(B), has been violated. Absent additional evidence, the mere fact that [Newark] has produced such samples does not support a reasonable inference that [the contamination on its Property] presents an imminent and substantial endangerment" to health or the environment. Cordiano v. Metacon Gun Club, Inc.,575 F.3d 199, 214 (2nd Cir. 2009). Therefore, Newark has "failed to make a sufficient showing on an essential element of [its liability claim]," "with respect to which [it] has the burden of proof" at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).


Since Newark has failed to satisfy "the imminent and substantial endangerment" element of its RCRA claim, Newark's motion for partial summary judgment is DENIED.

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