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San Francisco Herring Ass'n. v. P. Gas & Elec. Co.

United States District Court, N.D. California

February 26, 2015

SAN FRANCISCO HERRING ASSOCIATION, et al., Plaintiffs,
v.
PACIFIC GAS AND ELECTRIC COMPANY, et al., Defendants

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For San Francisco Herring Association, Dan Clarke, Plaintiffs: Stuart George Gross, Gross Law, P.C., San Francisco, CA.

For Pacific Gas and Electric Company, PG& E Corporation, Defendants: Russell Bertram Selman, LEAD ATTORNEY, Schiff Hardin LLP, Chicago, IL; Scott David Mroz, LEAD ATTORNEY, Sedgwick Detert Moran & Arnold LLP, San Francisco, CA; Bradley S Rochlen, J. Michael Showalter, Schiff Hardin LLP, Chicago, IL.

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ORDER DENYING MOTION TO DISMISS Re: Dkt. No. 13

WILLIAM H. ORRICK, United States District Judge.

Plaintiffs San Francisco Herring Association (" SFHA" ) and Dan Clarke brought a complaint against defendants Pacific Gas and Electric Company and PG& E Corporation (collectively, " PG& E" ) arising from PG& E's operation of manufactured gas plants roughly one hundred years ago. Although these plants no longer exist, they allegedly left behind substantial quantities of waste products that continue to contaminate the land in the Marina and Fisherman's Wharf neighborhoods of San Francisco and the water of the San Francisco Bay. According to the complaint, the defendants failed to conduct adequate testing or remediation to eliminate the danger this waste poses to the environment.

The defendants move to dismiss the plaintiffs' causes of action for violations of the Clean Water Act (" CWA" ) and the Resource Conservation and Recovery Act (" RCRA" ), alleging that the plaintiffs lack standing and that they fail to state a claim upon which relief can be granted. The plaintiffs plausibly allege injury in fact and the factual basis for the challenged causes of action. Therefore I DENY PG& E's motion to dismiss.

BACKGROUND

For purposes of PG& E's motion, I take the allegations of the complaint, which I summarize in the next five pages, as true. The defendants owned and operated manufactured gas plants (" MGPs" ), highly polluting, low-tech refineries used in the nineteenth and early twentieth centuries to create gas from coal (or a combination of coal and oil, or other solid fuel sources). Compl. ¶ ¶ 2, 20 (Dkt. No. 1). MGPs often spread across several city blocks, and consisted of multiple operations and buildings known as " gas works." Id. ¶ 22. Coal was " gasified" by heating it in oxygen-poor ovens. The fuel gases generated were then purified of unwanted compounds before

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they were piped to consumers. Id. ¶ ¶ 2, 20. The gas issued from the coal and fuel stock was a " noxious soup of chemicals" and required reduction before the gas could be distributed. Id. ¶ 23.

The reduction process created considerable solid and gaseous toxic waste. Id. ¶ 24. The waste produced was allowed to leach into the ground, dumped into waterways, or buried onsite. Id. ¶ 27. These wastes allegedly still contaminate the sites of former MGPs and the areas where the waste was deposited. Id.

Among the most problematic types of waste are coal residue solids and coal tar, because they contain chemicals known as polycyclic aromatic hydrocarbons (" PAHs" ). Id. PAHs are both lipophilic (easily dissolvable into fats, allowing them to cross biological membranes and accumulate inside organisms) and genotoxic (able to damage genetic information once accumulated inside an organism's cells, causing mutations). Id. Many PAHs associated with MGP waste are known carcinogens, and identified by the United States Environmental Protection Agency (" EPA" ) as toxic pollutants under 40 C.F.R. § 401.15. Id. Groundwater and aboveground water, contaminated soils, and toxic vapor commonly transport PAHs. Id. ¶ 29.

MGPs were often situated in close vicinity to residential areas. Id. ¶ 21. The plaintiffs specifically point to the modern-day footprints of three MGPs: the North Beach MGP, the Fillmore MGP, and the Beach Street MGP. Id. ¶ 1. The North Beach MGP was comprised of at least four city blocks, bounded by Marina Boulevard, Buchanan Street, North Point Street, Laguna Street, Bay Street, and Webster Street. Id. ¶ 31. Immediately west of the MGP was a canal opening up to the San Francisco Bay that was filled in 1912. Id. ¶ 34. PG& E owned and operated this site until at least April 1906. Id. ¶ 31.

The Fillmore MGP was comprised of at least four city blocks, bounded by Fillmore Street, Cervantes Street, Mallorca Way, Pierce Street, and Toledo Way. Id. ¶ 36. PG& E owned and operated this site until at least April 1906. Id.

The Beach Street MGP was comprised of an area near Beach Street and Powell Street in the Fisherman's Wharf neighborhood. Id. ¶ 43. PG& E owned and operated the site until at least the mid-1950s, when the property was sold and redeveloped for commercial use. Id. The Radisson Hotel Fisherman's Wharf currently occupies portions of the site. Id. ¶ 86.

All of the subject MGP facilities were either abutting the San Francisco Bay shoreline or within a few hundred feet of it at the time of operations. Id. ¶ 86.

I. MGP WASTE CONTAMINATION

A. Contamination at Clarke's home

Plaintiff Clarke's home is a 0.08-acre parcel within the footprint of the North Beach MGP. Id. ¶ 55. There is historical evidence that a coal bin was located in the vicinity of the home during the time that the MGP was in operation. Id. ¶ 56. Small, lightweight " black rocks" are found in the home's backyard in shallow soil. Id. They are typically similar in appearance to raw unprocessed coal or to solids reformed from a liquid state. Id. In March of 2010, Clarke discovered two unusually large black rocks and handed them over to PG& E for testing. Id. ¶ 57. Test results indicated that the rocks contained MGP waste, and that their toxicity was " very high." Id. Samples taken from one rock tested positive for several PAH compounds. Id. ¶ 58. More black rocks were discovered in 2013, when an emergency sewer repair opened a small hole in the slab underneath

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the home. Id. ¶ 59. Remnants of black rocks are also present throughout the footprint of the home. Id. ¶ 66.

PG& E tested samples of Clarke's soil, which revealed " significant" MGP waste, and showed that the contamination is widespread across the entire footprint of the home. Id. ¶ 60. All locations from which soil samples were taken had high levels of benzo(a)pyrene equivalent (" B(a)P-EQ" ), which indicates the degree of toxicity. Id. ¶ 62. The California EPA uses a target of 0.9 ppm for B(a)P-EQ as the allowable limit. Id. ¶ 61. A standard of 0.038 ppm of B(a)P-EQ is equal to a one in 1 million incremental risk of cancer. Id. ¶ 64. At Clarke's home, the B(a)P-EQ levels tested as high as 1,149 ppm -- or more than 1 in 100 risk of cancer. Id.

B. Contamination of San Francisco Bay

According to the complaint, the natural hydrologic connection between the contaminants in groundwater and soil and the San Francisco Bay conveys MGP waste to the Bay. Id. ¶ ¶ 9, 54, 88-91. Another connection is man-made: in the 1970s, the City and County of San Francisco (" CCSF" ) constructed a combined sewer and stormwater collection system to transport waste to water treatment plants. Id. ¶ 93. A network of combined transportation and storage (" T/S" ) boxes was constructed along the perimeter of the San Francisco Bay. Id. The plaintiffs allege that the T/S network conveys MGP waste to the Bay in three ways: (i) via groundwater that flows at or near the subject MGP sites and eventually enters the T/S network; (ii) via groundwater washed into the T/S system during large storm events; and (iii) via the T/S network itself, as the water treatment process does not remove PAHs from water before it is discharged into the Bay. Id. ¶ ¶ 93-98.

Pacific herring are adversely affected by MGP waste discharged into the Bay. Id. ¶ 99. Herring traditionally have very high levels of productivity, and are an important commercial species and source of food for other species. Id. ¶ ¶ 108-09. However, PAHs are known to have " devastating" effects on herring, as they kill fertilized eggs and larva on contact or through photo-enhanced toxicity.[1] Id. ¶ 99.

Herring born in the Bay return to spawn there for up to eight years, traditionally along waterfront areas adjacent to the subject MGP sites. Id. ¶ ¶ 101, 109. Exposure to PAHs " both kills off a large portion of exposed fertilized eggs and larva and weakens those fish that survive the initial insult, decreasing the long-term survival of the fish, which, in turn, decreases the period of ecological services that the fish can provide." Id. ¶ 103. Because herring is a keystone species, a loss of fertilized herring eggs or larval herring is likely to have significant negative consequences for the species and for the pelagic food web almost indefinitely into the future. Id. ¶ ¶ 108-10.

II. TESTING FOR MGP WASTE CONTAMINATION

The plaintiffs assert that PG& E has conducted only " piecemeal testing" for MGP wastes in various areas near the subject MGP sites. Id. ¶ 88. Where such testing has been done, by either PG& E or CCSF, high levels of PAHs have been discovered. Id. In groundwater in and around the subject MGP sites, including Clarke's home, high levels of PAH contamination as a result of MGP waste have been shown. Id. ¶ 92. PAHs have also

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been shown to migrate to other locations via groundwater, including into the Bay. Id. ¶ ¶ 92-98.

A. Testing near North Beach MGP

Testing by CCSF over the past two decades near Gashouse Cove, a harbor in the San Francisco Bay, revealed that sediment in the tidal and submerged lands in an inlet bordering the North Beach MGP site is heavily contaminated with PAH-laden waste. Id. ¶ ¶ 69-72. There is also evidence of a significant deposit of coal tar seeping into the Bay. Id. ¶ ¶ 73-74. The testing determined that the waste migrated into the inlet from upland sources. Id. ¶ 70.

Testing near the Marina substation, which is a PG& E-owned 0.25 acre parcel within the North Beach MGP footprint, revealed PAHs in unsaturated soil, saturated soil, and groundwater found on site. Id. ¶ 75. Further testing in another 0.3-acre parcel within the MGP footprint that previously functioned as the headquarters of the gasworks revealed the presence of " significant" amounts of PAHs in shallow soil and groundwater. Id. ΒΆ 76. The contamination ...


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