United States District Court, E.D. California
ORDER VACATING JULY 11, 2016 HEARING DATE AND ORDER
ON VISALIA UNIFIED SCHOOL DISTRICT’S MOTION TO APPROVE
SETTLEMENT (DOC. NO. 415)
This is
an environmental law case that arises from the chemical
contamination of property surrounding a dry cleaning business
in Visalia, California. Defendant Visalia Unified School
District (“VUSD”) 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. 415. Hearing on this motion is set for
July 11, 2016. The time to formally oppose VUSD’s
motion has now passed, and no party to this case has filed an
opposition. The Court will vacate the July 11, 2016 hearing
date and instead issue this order, which grants VUSD’s
motion.
BACKGROUND
As
explained in previous orders, [1] and as alleged in the Eighth
Amended Complaint, Plaintiffs own the real property and a dry
cleaning business located at 717 W. Main Street ("717 W.
Main"), Visalia, California. VUSD operates an irrigation
well (“the SV Well”) and an auto shop, a wood
shop, and custodial closets on the campus of Redwood High
School in Visalia, California. Redwood High School is
approximately 0.5 miles away from 717 W. Main.
On
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 were
contaminated with PCE.
In June
2011, Plaintiffs and the DTSC entered into a Consent Order
that inter alia required Plaintiffs to conduct
studies and clean-up efforts of the PCE plume at and near 717
W. Main.
Plaintiffs
brought this lawsuit in 2011. As to VUSD, Plaintiffs allege
claims under 42 U.S.C. §§ 9607(a) and 9613(f) (the
Comprehensive Environmental Response, Compensation, and
Liability Act (“CERCLA”)), public nuisance,
public nuisance per se, dangerous condition of public
property, and declaratory relief. These claims are based on
alleged releases of PCE attributable to the SV Well, auto
shop, wood shop, and custodial closets at Redwood High
School. VUSD has filed counterclaims against Plaintiffs for
violation of CERCLA § 9613, equitable contribution,
equitable indemnity, nuisance, trespass, and negligence.
DEFENDANTS’
MOTION
Defendant’s
Argument
VUSD
states that it and Plaintiffs have agreed to settle all
claims between them in exchange for mutual waivers and
releases, the payment by VUSD of $110, 000.00, and
VUSD’s promise to work with DTSC regarding any
investigation or remediation that may be associated with the
Redwood High School campus. However, the settlement is
contingent upon the Court making a finding of “good
faith” under § 877 and § 877.6. VUSD argues
that the settlement meets the Tech-Bilt factors,
which show that the settlement is in good faith. First, the
amount that VUSD agrees to pay is within the reasonable range
of its proportional responsibility. Plaintiffs have incurred
$600, 000 in clean-up costs to date. The amount of PCE that
has been found in the SV Well has been generally below the
regulatory limit for drinking water, even though the SV Well
is not a drinking water well. Further, there is only limited
evidence that other operations at Redwood High School
contributed to any PCE contamination. The $110, 000 is the
same amount for which Cal Water settled this matter, and the
limited CERCLA theory against Cal Water would also limit the
CERCLA theories applicable to the SV Well. Second, VUSD has
been unable to locate applicate insurance coverage for this
case. Third, there has been no collusion, and the settlement
was reached after extensive negotiations. No other party has
indicated that they will oppose this motion, and all parties
were notified prior to filing this motion. Fourth, it is
understood that a party should pay less in settlement than by
way of a verdict. Given these considerations, the settlement
is clearly within the ballpark of what is reasonable, and
thus, is a “good faith” settlement.
Other
Parties’ Positions
Defendants
Paragon Cleaners, Inc. and Richard Laster have each filed
formal notices of non-opposition. See Doc. Nos. 420,
422. Plaintiffs have filed a notice of non-opposition and
expressly join VUSD’s request to find that the
settlement is in good faith. See Doc. No. 418.
Plaintiffs point out that there are disputed factual issues,
including the applicability of the standards used by VUSD
regarding regulatory contamination limits for PCE and the
level of contaminated water released from the SV Well.
Plaintiffs state that they have also provided sampling data
relating to the release of PCE at the Redwood High School
auto shop, wood shop, and custodial closets. No other party
has objected to or opposed VUSD’s motion in any way.
Relevant
Terms of Settlement
The
settlement agreement settles all claims and issues between
VUSD and Plaintiffs, as raised in Plaintiffs’ active
complaint and VUSD’s counterclaims. See Doc.
No. 415 at Ex. A at p.2. In part, the settlement provides
that VUSD will pay Plaintiffs $110, 000.00, Plaintiffs will
dismiss their complaint against VUSD, VUSD will dismiss its
counterclaims against Plaintiffs, and VUSD will work with the
DTSC to investigate and remediate (if necessary) PCE
contamination at Redwood High School. See id. at pp.
2-3. There is a denial of liability, and the parties are to
bear their own attorneys’ fees and costs. The
settlement is contingent upon the Court finding that the
settlement is made in good ...