United States District Court, E.D. California
ORDER ON CAL WATER’S MOTION TO APPROVE
SETTLEMENT (DOC. NO. 390)
an environmental law case that arises from the chemical
contamination of property surrounding a dry cleaning business
in Visalia, California. Defendant Cal Water has filed a
motion to approve settlement and for the Court to hold that
the settlement is in “good faith” under
California Code of Civil Procedure §§ 877 and 877.6
(hereinafter “§ 877” and “§
877.6”). See Doc. No. 390. The time to
formally oppose Cal Water’s motion has now passed, and
no party to this case has filed an opposition to Cal
Water’s motion. For the reasons that follow, Cal
Water’s motion will be granted.
explained in previous orders,  Plaintiffs own the real property
and a dry cleaning business located at 717 West Main Street
("717 W. Main"), Visalia, California. Cal Water
owns and operates public drinking water systems throughout
California, including the City of Visalia. Cal Water owned
and operated Well CWS 02-03 (“the Well”) until
2005, at which time the Well was abandoned. In 2000, however,
Cal Water stopped operating the Well because of increasing
levels of the hazardous substance tetrachloroethylene, also
known as perchloroethylene (“PCE”). The Well is
located 20 feet east of 717 W. Main.
October 28, 2009, the California Department of Toxic
Substances Control (“DTSC”) informed Plaintiffs
that it was investigating the occurrence of PCE in the soil
and groundwater at 717 W. Main. It was later determined that
the soil and groundwater both at and near 717 W. Main was
contaminated with PCE.
2011, Plaintiffs and the DTSC entered into a Consent Order
that inter alia required Plaintiffs to conduct
studies and clean-up efforts regarding the PCE plume at and
near 717 W. Main.
brought this lawsuit in 2011, and alleged inter alia
that, in addition to PCE being released by two other dry
cleaning operations in the area, Cal Water’s operation
of the Well led to the release of PCE. Plaintiffs seek
damages and contribution and indemnification associated with
the PCE soil and groundwater contamination and clean up.
several Rule 12(b)(6) motions to dismiss, the claims against
Cal Water have been limited. In addition to declaratory
relief, Plaintiffs have claims against Cal Water under 42
U.S.C. §§ 9607(a) and 9613(f) of the Comprehensive
Environmental Response, Compensation, and Liability Act
(“CERCLA”). Plaintiffs’ CERCLA §
9607(a) claim against Cal Water is based on PCE-contaminated
water entering the Well during pumping, but then somehow
exiting (“leaking, ” “discharging, ”
etc.) the Well when the Well’s pump was cycled off.
See Coppola v. Smith, 19 F.Supp.3d 960, 973 (E.D.
Water states that it and Plaintiffs have agreed to settle all
claims between them in exchange for mutual waivers and the
payment by Cal Water of $110, 00 (each side to bear their own
attorney’s fees and costs), but the settlement is
contingent upon the Court making a finding of “good
faith” under § 877 and § 877.6. Cal Water
argues that several considerations demonstrate that the
settlement has been made in “good faith.” First,
the claims against it have been limited to PCE contaminated
water that actually entered and then exited the Well.
However, there is evidence that testing results from 1984
through 2005 show that the Well did not exceed the applicable
regulatory limit for PCE. Further, in a state court action,
the California Superior Court has found that the amount of
PCE in the Well did not constitute a legally cognizable
injury. Second, there are multiple defendants in this case
who allegedly contributed to the groundwater pollution, and
Plaintiffs’ most recent supplemental discovery shows
that it has incurred $600, 000 in total damages. Third, there
is no collusion in this case. The settlement was reached
after extensive negotiations. Fourth, the settlement saves
costs and other resources that would otherwise be expended
during litigation. Given these considerations, the settlement
is clearly within the ballpark of what is reasonable, and
thus, is a “good faith” settlement.
Martin & Martin Properties, Paragon Cleaners, Inc., and
Richard Laster have each filed formal notices of
non-opposition. See Doc. Nos. 403, 404, and 405.
Plaintiffs have filed a notice of non-opposition and
expressly join Cal Water’s request to find that the
settlement to be in good faith. See Doc. No. 400.
Plaintiffs point out that there are disputed factual issues,
including the standards used by Cal Water relating to
regulatory PCE levels and whether the Well ever exceeded the
applicable regulatory limit, and this dispute supports the
fairness of the settlement. See id. Finally, Cal
Water represented in its motion that it did not anticipate
any other party opposing its motion, and that it received
written confirmation from the City of Visalia that the City
would not file an opposition. See Doc. No. 390 at
8:13-15, 10:14-17. Consistent with these representations,
neither the City of Visalia nor any other defendant has
objected to or opposed Cal Water’s motion in any way.
Terms of Settlement
settlement agreement settles all claims and issues between
Cal Water and Plaintiffs, as raised in Plaintiffs’
complaint and Cal Water’s counterclaim. In part, the
settlement provides that Cal Water will pay Plaintiffs $110,
000.00, Plaintiffs will dismiss their complaint against Cal
Water, and Cal Water will dismiss its counterclaim against
Plaintiffs. There is a denial of liability, and Cal Water and
Plaintiffs are to bear their own attorneys’ fees and
costs. The settlement is contingent upon the Court finding
that the settlement is made in good faith under inter
alia § 877, ...