The opinion of the court was delivered by: Oliver W. Wanger United States District Judge
MEMORANDUM DECISION ON DEFENDANTS' MOTION TO DISMISS SECOND AMENDED COMPLAINT (Doc. 36)
Plaintiff Exxonmobil Oil Corp. ("Plaintiff") is proceeding with an action pursuant to the Resource Conservation and Recovery Act (42 U.S.C. § 6972(a)(1)(B)) against Defendants Nicoletti Oil, Inc., Dino J. Nicoletti, and John A. Nicoletti. In addition to asserting federal claims against Defendants, Plaintiff asserts several state law causes of action.
On May 18, 2010, the court issued a memorandum decision explaining pleading deficiencies which required certain of Plaintiff's claims to be dismissed; these claims were dismissed without prejudice on May 27, 2010. (Docs. 30, 32).
Plaintiff filed a second amended complaint ("SAC") on June 7, 2010. (Doc. 34). Defendants filed a motion to dismiss ("motion to dismiss") the SAC on June 22, 2010. (Doc. 36). Plaintiff filed opposition ("opposition") to Defendant's motion to dismiss on August 30, 2010. (Doc. 40). Defendant's filed a reply on September 7, 2010. (Doc. 43).
Plaintiff is a New York corporation in the business of producing, distributing, and selling petroleum products. (SAC at 3). Plaintiff's predecessor, General Petroleum Corporation, purchased 2801 Blossom Street in Dos Palos, California in January 1946. (SAC at 4).
From 1946 to 1950, Dino J. Nicoletti operated a fuel distribution plant at 2801 Blossom street as a distributor for General Petroleum Corporation. (SAC at 4-5). From 1950 to 1980, Dino Nicoletti operated 2801 Blossom Street as a cosignee of General Petroleum Corporation and then Mobil Oil Corporation. (SAC at 5). Mobil Oil Corporation was also Plainitff's predecessor. (SAC at 5). On or about August 25, 1980, Dino Nicoletti and his wife Floretta Nicoletti purchased 2801 Blossom Street from Mobil Oil Corporation. (SAC at 5). On or about December 5, 1996, ownership of 2801 Blossom Street was transferred to Dino Nicoletti and Floretta Nicoletti as Trustees under the Dino J. Nicoletti and Florretta A. Nicoletti Revocable Living Trust. (SAC at 5).
Defendants have operated and continue to operate a gasoline and diesel sales and distribution facility at 2801 Blossom Street. (SAC at 5). Nicoletti Oil, Inc. ("Nicoletti Oil") was incorporated in California on or about January 1, 1982. (SAC at 6). Dino Nicoletti served as an officer of Nicoletti Oil throughout the 1980's and currently serves as the company's Vice President. (SAC at 6). John A. Nicoletti currently serves as the President of Nicoletti Oil, a position he has held since as early at 1990. (SAC at 6). Cindy Nicoletti serves as the Secretary-Treasurer of Nicoletti Oil. (SAC at 6). The FAC alleges that 100% of the capital stock of Nicoletti Oil is owed by John A. Nicoletti and Cindy Nicoletti. (SAC at 6).
In or about 1998, Defendants purchased a lot adjacent to 2801 Blossom Street from Suburban Propane and installed new diesel dispensers on the parcel; the SAC alleges that Nicoletti Oil, Inc., is the owner of the former Suburban Propane property. (SAC at 5-6). Together, 2801 Blossom Street and the adjacent lot purchased by Defendants in 1998 form the property at issue in this action ("Property"). (SAC at 5). The Property is located directly across the street from a residential area. (SAC at 6). Following the sale of 2801 Blossom Street in 1980, Plaintiff or its predecessors entered into a series of wholesale distributor contracts ("Contracts") with Nicoletti Oil, Inc., pursuant to which Nicoletti Oil agreed to purchase a certain quantity of gasoline, diesel fuel, and lubricant products. (SAC at 7). Such contracts include, but are not limited to, a Wholesale Distributor Agreement for Motor Fuels, dated May 6, 1985 ("1985 Agreement") and a Wholesale Distributor Agreement (Lubricants, Distillates and other Non-Motor Fuels) dated March 1, 1989 ("1989 Agreement"). (SAC at 7). The parties to the Contracts intended the Contracts to bind Plaintiff (or its predecessors) and Nicoletti Oil. (SAC at 7).
Plaintiff alleges that during Nicoletti Oil's ownership of the Property and operation of its businesses, releases of petroleum and petroleum substances, including methyl tertiary butyl ether ("MTBE"), have occurred on and migrated off of the Property. (SAC at 7-8). The SAC states that Nicoletti Oil detected a release of petroleum hydrocarbons at the property in 1988. (SAC at 7-8). On or about May 17, 1991, in response to the 1988 release, the Merced County Department of Public Health issued a Notice and Order to Nicoletti Oil and Mobil Oil Corporation that required investigation of soil and groundwater contamination at the Property. (SAC at 8).
On or about August 24, 1992, Mobil Oil Corporation and Nicoletti Oil entered into a Cost Sharing Agreement wherein the parties agreed that Nicoletti Oil would contract directly with the contractors performing the investigative work required by the Merced County Department of Public Health. (SAC at 8-9). The Cost Sharing Agreement provided that, unless terminated beforehand, it remained in effect until Nicoletti Oil's contractor submitted the Site Contamination Workplan ("SCW"), Preliminary Investigation and Evaluation Report ("PIER") and, if needed, a Problem Assessment Report ("PAR") in final form to the Merced County Department of Public Health. (SAC at 9). The Cost Sharing Agreement provided that Mobil Oil Corporation and Nicoletti Oil would each pay 50% of the costs for the preparation of the SCW, the PIER, and, if needed, the PAR. (SAC at 9). The Merced County Department of Public health required submission of a PAR in 1993, however, Nicoletti Oil's contractors failed to complete or submit a PAR. (SAC at 9).
In 2001, Plaintiff learned of Nicoletti Oil's failure to comply with outstanding directives from the Merced County Department of health and began conducting investigation at the Property as requested by overseeing agencies. (SAC at 9). Plaintiff's investigation included onsite and offsite borings, soil and groundwater analysis, installing monitoring wells, and monitoring analytical data, among other tasks. (SAC at 9).
On or about February 3, 2005, the Regional Board issued Cleanup and Abatement Order No. R5-2005-0701, naming both Nicoletti Oil and Plaintiff jointly as the "Discharger," without attempting to allocate their relative liability for the contamination or assigning responsibility for cleanup at or around the Property ("2005 CAO"). (SAC at 9-10). The 2005 CAO required the development and implementation of an interim remedial action plan, further site assessment of soil vapor migration, and submission of a full corrective action plan, including a human health risk assessment. (SAC at 10). Plaintiff complied with the 2005 CAO in December 2005. (SAC at 10). At the direction of the Regional Board, Plaintiff issued precautionary notices to the residents near the Property warning against on-site excavation or the digging of holes greater than a few feet deep on their properties and against the consumption and distribution of ...