United States District Court, N.D. California
ORDER FOR REASSIGNMENT WITH REPORT & RECOMMENDATION RE: MOTION FOR DEFAULT JUDGMENT Re: Dkt. No. 26
MARIA-ELENA JAMES, Magistrate Judge.
This is a civil action pursuant to section 107(a) of the Comprehensive Environmental Response, Compensation, and Liability Act, as amended ("CERCLA"), 42 U.S.C. §9607(a). Plaintiff Dave Drilling Environmental Engineering, Inc. ("Plaintiff") seeks costs incurred for response actions taken in connection with the release of hazardous substances at 910 Newbridge in East Palo Alto, California ("the Property"). Pending before the Court is Plaintiff's Motion for Default Judgment. Dkt. No 26. In its motion, Plaintiff requests that the Court enter an order granting default judgment on its claims against Defendant Margaret Thersia Gamblin ("Defendant"), awarding $210, 000 in general damages under CERCLA. No response has been received by Defendant. Because the undersigned finds this matter suitable for disposition without oral argument, the Court VACATES the December 4, 2014 hearing. See Fed.R.Civ.P. 78(b); Civ. L.R. 7-(1)(b).
After carefully reviewing the motion and controlling authorities, the undersigned issues this Report and Recommendation. The undersigned RECOMMENDS that the District Court GRANT Plaintiff's motion for the reasons set forth below. Further, because no consent to magistrate judge jurisdiction has been filed by Defendant, the Court ORDERS the Clerk of Court to REASSIGN this case to a district court judge.
Plaintiff is an environmental consulting firm. Compl. ¶ 4, Dkt. No. 4. Defendant, along with Lee A. Gamblin,  operated Kitty Cleaners, a dry cleaning company located at the Property, from 1986 through 2010. Id. ¶¶ 5-6, 8. The Property is owned by Mohammed Karwash. Id. ¶ 5. During that time, the Gamblins had business insurance coverage with Fireman's Fund Insurance Company ("Fireman's"). Id. ¶ 8. Plaintiff claims that this insurance plan provided protection for any damages to the Property resulting from Kitty Cleaners' operation. Id.
As part of its operations, Kitty Cleaners used a number of chemicals for the cleaning of clothing, including perchloroethylene, tetrachloroethene, and a number of other solvents. Id. ¶ 9. In June 2006, the California Regional Water Quality Control Board conducted an assessment of the Property and detected the presence of high levels of tetrachloroethene in its soil. Id. ¶ 10. Mr. Karwash and the Gamblins were informed about the contamination and were required to remediate it by arranging for a removal action to stabilize the situation at the Property and prevent any further release of hazardous substances into the environment. Id. In order to remediate the situation, Mr. Karwash contracted with Plaintiff. Id. The estimated total cost for the cleanup was $407, 846.66. Vergara Decl., Ex. B, Dkt. No. 27.
As part of the remedial action, Plaintiff used a Fenton's Reaction process vis in situ-injection. Compl. ¶ 11. A total of eight injection points ranging in depths from one to five feet below grade and spaced at approximately three-foot intervals were installed at the site. Id. A total of 257 cubic yards of soils were treated as part of the remedial action. Id. Plaintiff completed its removal action on September 15, 2011, at a cost of approximately $352, 000. Vergara Decl., Ex. C. Of that amount, Plaintiff was paid $130, 000 by Mr. Karwash. Vergara Decl. ¶ 13. Plaintiff maintains that $210, 000 remains due.
Following completion of the removal action, Plaintiff started settlement talks with Defendant through her insurer, Fireman's. Compl. ¶ 12. On July 3, 2012, Fireman's informed Mr. Karwash and Plaintiff about its decision to deny payment of any claim on the insurance policy, claiming that Defendant's policy did not provide coverage for the costs related to the environmental cleanup work. Id.
Plaintiff states that the Gamblins filed for Bankruptcy in or around September 2009, and that they were discharged pursuant to the bankruptcy proceedings. Id. ¶ 13. On June 14, 2011, pursuant to California Civil Code section 954, Mr. Karwash, in his capacity as owner of the Property, assigned to Plaintiff all claims he would have against Defendant relating to the Property. Id. ¶ 14. Based on this information, Plaintiff filed the present action to determine Defendant's liability in her capacity as a bankruptcy debtor in order to collect any damages relating to this action from Fireman's. Id.
On June 20, 2014, Plaintiff filed its Complaint, alleging four causes of action: (1) violation of CERCLA, 42 U.S.C. § 9607(a); (2) nuisance; (3) trespass to property; and (4) declaratory relief establishing that Defendant is responsible for the contamination at the Property and responsible for all costs expended to ensure the proper cleanup of the Property. As Defendant failed to respond to the Complaint or otherwise appear in this case, the Clerk of Court entered default against her on August 20, 2014. Dkt. No. 11. Plaintiff filed the present motion on October 20, 2014.
A. Jurisdiction and Service of Process
In considering whether to enter default judgment, a district court must first determine whether it has jurisdiction over the subject matter and the parties to the case. In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999).
1. Subject Matter Jurisdiction
Federal courts are courts of limited jurisdiction and are presumptively without jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A federal court may dismiss an action on its own motion if it finds that it lacks subject matter jurisdiction over the action. Fiedler v. Clark, 714 F.2d 77, 78-79 (9th Cir. 1983); see also Fed.R.Civ.P. 12(h)(3) ("If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.").
Here, the Court has subject matter jurisdiction over this action pursuant to sections 107(a) and 113(b) of CERCLA, 42 U.S.C. §§ 9607(a)(2) and 9613(b), which provide that the United States District Court shall have the exclusive jurisdiction over all controversies arising under CERCLA, and under 28 U.S.C. § 1331, which provides that the District Court will have ...