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KFD Enterprises, Inc. v. City of Eureka

United States District Court, N.D. California

May 9, 2014

KFD ENTERPRISES, INC., Plaintiff,
v.
CITY OF EUREKA, et al., Defendants.

ORDER ON CROSS MOTIONS FOR SUMMARY JUDGMENT

SAMUEL CONTI, District Judge.

I. INTRODUCTION

Now before the Court are Defendant City of Eureka's ("Eureka") and Plaintiff KFD Enterprises, Inc.'s ("KFD") cross motions for summary judgment. The motion is fully briefed, ECF Nos. 672, 675, 684, 674, 683, 684, and appropriate for determination without oral argument per Civil Local Rule 7-1(b). For the reasons set forth below, Defendant Eureka's motion for summary judgment is DENIED. Plaintiff KFD's motion for summary judgment is GRANTED in part and DENIED in part.

II. BACKGROUND

This case arises out of environmental contamination that occurred at 2907 E St., Eureka, California. KFD has operated a dry cleaning business, Norman's Dry Cleaners ("Norman's"), there since 1980. ECF No. 410 ("FAC") ¶¶ 5, 17. KFD used a chemical called tetrachloroethylene ("PCE") during the dry cleaning process and disposed of wastewater containing PCE through drains on its property. Id . ¶ 22(3). The soil and groundwater around Norman's is now contaminated with PCE, and the California Regional Water Quality Control Board ("RWQCB"), North Coast Region, is overseeing investigation and cleanup of the site. ECF No. 675-26 ("KFD RJN II") Ex. B. KFD asserts that Eureka contributed to the contamination by failing to properly maintain its municipal sewers. KFD claims that PCE leaked out of the sewers, causing the contamination. ECF No. 675 ("KFD Opp.") at 1-2.

KFD brought this action under the federal Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq.; the federal Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6901 et seq.; and the California Hazardous Substance Account Act ("HSAA"), Cal. Health & Safety Code § 25300 et seq. KFD also sued Eureka for equitable indemnity, contribution, public nuisance, public nuisance per se, private nuisance, dangerous condition of public property, and declaratory relief. FAC ¶¶ 32-102. Eureka has counterclaimed under CERCLA and the HSAA, as well as for equitable indemnity, contribution, and declaratory relief. Eureka moves for summary judgment on all of KFD's claims. ECF No. 672 ("Eureka MSJ") at 1-2. KFD has moved for partial summary judgment on its own RCRA claim and all of Eureka's counterclaims, except for its claim for contribution under CERCLA § 113(f). ECF No. 674 ("KFD MSJ") at 1.

III. LEGAL STANDARD

Entry of summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Summary judgment should be granted if the evidence would require a directed verdict for the moving party. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 251 (1986). "A moving party without the ultimate burden of persuasion at trial - usually, but not always, a defendant - has both the initial burden of production and the ultimate burden of persuasion on a motion for summary judgment." Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Cos., Inc. , 210 F.3d 1099, 1102 (9th Cir. 2000).

"In order to carry its burden of production, the moving party must either produce evidence negating an essential element of the nonmoving party's claim or defense or show that the nonmoving party does not have enough evidence of an essential element to carry its ultimate burden of persuasion at trial." Id . "In order to carry its ultimate burden of persuasion on the motion, the moving party must persuade the court that there is no genuine issue of material fact." Id . "The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson , 477 U.S. at 255. However, "[t]he mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff." Id. at 252.

IV. DISCUSSION

A. Requests for Judicial Notice

In their briefs, both parties have submitted requests for judicial notice. ECF Nos. 672-8 ("Eureka RJN I"), 674-21 ("KFD RJN I"), KFD RJN II, 683-1 ("Eureka RJN II"). Facts subject to judicial notice are those which are either "(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Fed.R.Evid. 201(b). A court may not take judicial notice of a matter that is in dispute. Lee v. City of Los Angeles , 250 F.3d 668, 690 (9th Cir. 2001). Eureka's first request for judicial notice refers only to an order issued by Judge Chesney in this case. As Eureka notes in its request, that order is already part of the record. It is therefore unnecessary for the Court to take notice of the order.

Eureka's second request for judicial notice was made in support of its opposition to KFD's motion. Eureka RJN II. Eureka requests that the Court take notice of a series of letters from the RWQCB to Eureka. KFD objects that the request is untimely and that Eureka failed to produce the documents to be noticed in discovery. ECF No. 684 ("KFD Reply") at 4. However, Eureka is correct that these documents are matters of public record, so the objection is OVERRULED. The first letter (Ex. 1) is an acknowledgment by Eureka that it received a copy of RWQCB's reimbursement process and an agreement that the city would participate in the cost recovery program. Because the document is an act of the city government and it appears to be undisputed that Eureka has agreed to reimburse some of RWQCB's costs, the Court takes judicial notice of Exhibit 1. The second letter is an estimate of the RWQCB's costs related to Norman's for the 2012/2013 fiscal year. The Court takes notice only of the fact that these estimates were made. Exhibit 3 is a letter detailing suggested changes to a report prepared by an environmental consultant for Eureka's attorneys. The Court takes notice only of the document's existence and that the findings and recommendations therein were made.

KFD's first request for judicial notice comes in support of its motion. The Court takes notice of Facts 2-5 and 8. Facts 2-5 refer to documents that have been filed publicly, and KFD requests only that the Court notice their existence. The Court does so. Fact 8 is a reference to the Code of Federal Regulations, and the Court takes notice of that fact as well. Facts 1, 7, and 9, however, are technical documents and opinions, and KFD apparently seeks judicial notice of the facts contained therein. Facts 1 and 9 refer to documents issued by the RWQCB, a public agency. The Court takes notice of those documents solely for the purpose of establishing that the RWQCB has made the findings or recommendations therein. The findings themselves are not considered established for the purposes of this litigation, as the Court is not persuaded that the expert findings are capable of immediate and accurate determination by a source whose accuracy cannot reasonably be questioned, or that they are not in dispute. Fact 7 refers to a draft remedial action plan prepared by an environmental consultant retained by KFD's attorneys on behalf of Norman's. KFD argues that judicial notice is proper because the document was submitted to the RWQCB and is therefore a matter of public record. However, submission of a document by a private party to a government agency does not transform the document into an official act of that agency. Additionally, many of the facts contained in the report are in dispute, which alone renders the document inappropriate for judicial notice. The Court takes notice only that the document exists, but takes no notice of its contents. Fact 5 is a reference to KFD's original complaint in this matter. Again, that document is already part of the record, and judicial notice is unnecessary.

KFD's second request for judicial notice was made in support of its opposition to Eureka's motion. KFD RJN II. The Court takes notice of Facts 2, 3, 4, and 5. The Court takes notice of Fact 1 only insofar as it recognizes that the RWQCB has created a draft plan, but does not take notice of any of the facts contained therein.

B. Evidentiary Objections

The parties have also made a number of evidentiary objections. KFD first objects to Exhibits 35, 38, 39, and 58 to the declaration of Charles Bolcom in support of Eureka's motion (ECF No.672-3) on grounds of lack of foundation and lack of personal knowledge. KFD Opp. at 29-30. Eureka has provided the necessary foundation and met the personal knowledge and foundational requirements by supplying deposition testimony. Those objections are OVERRULED.

In the same brief, KFD objects to the declaration of Bruce Young (ECF No. 672-2) as a sham declaration. "The general rule in the Ninth Circuit is that a party cannot create an issue of fact by an affidavit contradicting his prior deposition testimony." Kennedy v. Allied Mut. Ins. Co. , 952 F.2d 262, 266 (9th Cir. 1991). The Ninth Circuit has added two additional requirements that must be met before a declaration can be stricken as a sham. First, "the district court must make a factual determination that the contradiction was actually a sham.'" Id. at 267. Second, "the inconsistency between a party's deposition testimony and subsequent affidavit must be clear and unambiguous...." Van Asdale v. Int'l Game Tech. , 577 F.3d 989, 998 (9th Cir. 2009).

KFD takes issue with Mr. Young's statement in his declaration that "[i]f [KFD] had informed the City that it was disposing PCE and/or PCE waste into the City sewer system at any time, that information would be documented in a City record." ECF No. 672-2 ¶ 4 (emphasis added). KFD asserts that that statement contradicts Mr. Young's deposition testimony that Eureka's record retention policy is "mostly current year plus two years." ECF No. 675-1 ("Graben Decl.") Ex. E at 49:10-21. The Court first notes that the exhibit purported to contain Mr. Young's contradicted testimony is not even a deposition of Mr. Young. KFD cites to the declaration of Jan Greben, Exhibit C (ECF No. 675-4), which is a deposition of David Parson and includes no discussion of the issue. See KFD Opp. at 30. The Court presumes that KFD intended to refer to Exhibit E (ECF No. 675-6), which appears to be the correct deposition of Mr. Young.

The Court finds that paragraph four of Mr. Young's declaration is a sham. Mr. Young's declaration was made in March 2014. His deposition testimony indicates that Eureka keeps records for the current year, plus two years. That means 2012-2014. Given that most of the conduct giving rise to this case occurred between 1980 and 2003, it seems highly unlikely that Eureka would have a record of the type Mr. Young discusses if the city follows its retention policy. Indeed, Mr. Young claims in his declaration that Eureka would have a record of KFD informing it about the PCE at any time, which is clearly contrary to the city's retention policy. In response, Eureka claims that the city records vary by circumstance. However, the only exception to the current year plus two year policy that Mr. Young notes in his deposition is for maps. Graben Decl. Ex. E at 49:16.

Mr. Young's assertion that Eureka would retain a record indefinitely clearly and unambiguously contradicts his deposition testimony that Eureka typically retains only a few years of records. Mr. Young's conclusive statement that the city would have a record of the type he discusses is inexplicable except as an attempt to create an issue of material fact by contradicting his deposition testimony. Accordingly, the Court SUSTAINS KFD's objection and STRIKES paragraph four of Mr. Young's declaration. However, KFD's objection on the same grounds to paragraph five of the declaration, which states that Mr. Young was unable to find such a document in his search of the city records, is OVERRULED. That statement does not contradict his deposition testimony.

KFD also objects to the declaration of Eric Price, ECF No. 674-15, and Exhibit 1 thereto. This objection, and the corresponding exhibit, deals only with an element of KFD's RCRA claim that does not affect the Court's analysis of these motions. Consequently, the Court declines to rule on that objection at this time.

Eureka objects to all of the exhibits attached to the declaration of Brett Boon (ECF No. 674-2 Exs. A-N) in support of KFD's motion on the grounds of lack of personal knowledge and hearsay. ECF No. 683 ("Eureka Opp.") at 23-24. The objections based on lack of personal knowledge are OVERRULED. Regarding the hearsay objections, it appears from Eureka's brief that it objects to the testimony of Mr. Young and Mr. Parson during their depositions as hearsay. Those objections are OVERRULED. "To survive summary judgment, a party does not necessarily have to produce evidence in a form that would be admissible at trial, as long as the party satisfies the requirements of Federal Rules of Civil Procedure ...


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