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Van Horn v. Department of Toxic Substances Control

California Court of Appeals, Third District

November 26, 2014

MARILYN VAN HORN, Plaintiff and Appellant,
v.
DEPARTMENT OF TOXIC SUBSTANCES CONTROL, Defendant and Respondent.

[As modified Dec. 19, 2014.]

APPEAL from a judgment of the Superior Court of Amador County, No. 11-CV-7493 Susan B. Harlan, Judge.

Page 1288

[Copyrighted Material Omitted]

Page 1289

COUNSEL

Law Offices of Kenneth M. Foley and Kenneth M. Foley for Plaintiff and Appellant.

Kamala D. Harris, Attorney General, Susan S. Fiering, Jamie B. Jefferson and Laura J. Zuckerman, Deputy Attorneys General, for Defendant and Respondent.

OPINION

Page 1290

BUTZ, J.

In this appeal from a demurrer sustained without leave to amend on the ground of uncertainty, we reverse in part. We conclude that plaintiff Marilyn Van Horn has stated a cause of action, by alleging that the procedure used by defendant Department of Toxic Substances Control (the Department)—for placing a lien on real property for hazardous substance alleviation pursuant to California’s “Superfund” statute (Health & Saf. Code, §§ 25300 et seq., 25365.6)—violates due process. Plaintiff alleges this lien procedure fails to allow an affected landowner to dispute the amount of the lien, the extent of the property burdened by the lien, and the characterization of the landowner as a responsible party.

BACKGROUND

Overview of Hazardous Substance Lien Law Underlying This Litigation

We begin with an overview of the hazardous substance lien law underlying this litigation.

The Carpenter-Presley-Tanner Hazardous Substance Account Act (Health & Saf. Code, § 25300 et seq.; hereafter, the HSAA) is California’s Superfund statute, a counterpart to the federal Superfund statute, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. § 9601 et seq.; hereafter CERCLA).[1] (City of Lodi v. Randtron (2004) 118 Cal.App.4th 337, 351-352 [13 Cal.Rptr.3d 107] (City of Lodi).) The HSAA sets forth a comprehensive regulatory scheme and authorizes the Department, among other things, to investigate, remove and/or remediate hazardous substances at contaminated sites. (City of Lodi, at p. 352.)

Section 25365.6 addresses real property liens under the HSAA. It provides as pertinent:

“(a) Any costs or damages incurred by the [D]epartment or regional board pursuant to this chapter [(i.e., pursuant to the HSAA)] constitutes a claim and lien upon the real property owned by the responsible party that is subject to, or affected by, the removal and remedial action.... A lien established by this section shall be subject to the notice and hearing procedures required by due process of the law and shall arise at the time costs are first incurred by the [D]epartment or regional board with respect to a response action at the site.

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“(c) The lien provided by this section shall continue until the liability for these costs or damages, or a judgment against the responsible party, is satisfied. However, if it is determined by the court that the judgment against the responsible party will not be satisfied, the [D]epartment may exercise its rights under the lien.

“(d) The lien imposed by this section shall have the force and effect of, and the priority of, a judgment lien upon its recordation in the county in which the property subject to the lien is located....” (Italics added.)

The Department has established a “Lien Placement Policy and Procedure” (hereafter, the Lien Procedure or the Department’s Lien Procedure) for placing a lien pursuant to section 25365.6.

The Lien Procedure sets forth neutral official meeting procedures, stating as relevant, “The sole issue at the [lien hearing, termed a ‘meeting, ’] is whether [the Department] has a reasonable basis to believe that the statutory elements for placing a lien are satisfied. The meeting will not be concerned with issues unrelated to the proposed lien placement, such as, remedy selection, financial hardship, or allocation of responsibility. [¶] The neutral official will make a decision, based on the information on file and any new information presented at the meeting, whether [the Department] has a reasonable basis to place a lien on the property.” (Lien Procedure, appen. C, § 3, pars. 3, 4, pp. C-2 to C-3.)

The Lien Procedure further specifies, “The neutral official should consider all facts relating to whether [the Department] has a reasonable basis to believe that the statutory elements have been satisfied for the placement of a lien. In particular, the neutral official should consider whether:

“[1.] The property owner was sent notice of liability by mail.

“[2.] The property is owned by a person who is liable to [the Department] for costs related to the property.

“[3.] The property was subject to or affected by a removal or remedial action.

“[4.] [The Department] has incurred costs with respect to a[n] action under [the HSAA] or CERCLA.

“[5.] The record contains any other information which [is] sufficient to show that the lien ...


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