United States District Court, E.D. California
MEMORANDUM AND ORDER
MORRISON C. ENGLAND, JR. UNITED STATES DISTRICT JUDGE
Plaintiff
AmeriPride Services, Inc. ("AmeriPride") initiated
this action under the Comprehensive Environmental
Remediation, Contamination, and Liability Act
("CERCLA") more than sixteen years ago. After a
trial, an appeal, and settlements with numerous other
parties, only Texas Eastern Overseas, Inc. ("TEO")
remains as a defendant. Presently before the Court are the
parties' Motions for Summary Judgment. ECF Nos. 1018,
1021, 1026. For the reasons that follow, the Motions are
GRANTED in part and DENIED in part.[1]
BACKGROUND
This
action arises out of the contamination of soil and
groundwater at and around an industrial laundry facility
located at 7620 Wilbur Way in Sacramento, California
("the Facility"). AmeriPride owns the Facility,
which was previously owned and operated for seventeen years
by Valley Industrial Services, Inc. ("VIS") as an
industrial dry cleaning and laundry business. VIS used
perchloroethylene ("PCE") as a solvent in its dry
cleaning operations. During its operations, VIS released PCE
into the soil and groundwater.
For
part of the time that VIS operated the Facility, it was a
wholly owned subsidiary of Petrolane. VIS eventually merged
into Defendant Texas Eastern Overseas ("TEO"),
which expressly assumed VIS's liabilities. TEO is a
Delaware corporation that dissolved in 1992. It first
appeared in this case on July 13, 2000, when it answered and
asserted a counterclaim. In November 2009, a receiver was
appointed for TEO for "the sole purpose of establishing
the capacity of TEO to be sued in [this action] solely to the
extent of its insurance assets . . . ." That appointment
was confirmed in 2010.
In
1983, Petrolane sold the Facility, which subsequently changed
ownership several times until AmeriPride became the owner.
AmeriPride did not conduct dry cleaning operations at the
Facility, but, during its ownership, there were additional
releases of PCE-contaminated water into the soil and
groundwater. The contamination at the Facility migrated onto
a neighboring property owned by Huhtamaki Foodservices, Inc.
("Huhtamaki") and contaminated wells owned by
California-American Water Company ("Cal-Am").
In
1997, AmeriPride found evidence of PCE in the soil under the
Facility and reported the discovery to regulatory
authorities. In 2002, the California Regional Water Quality
Control Board took regulatory control over the investigation
at the Facility. Since then, AmeriPride has performed
investigation and remediation of the PCE in the soil and
groundwater at and near the Facility under the direction of
the California Regional Water Quality Control Board. The
cleanup is ongoing.
In
January 2000, AmeriPride filed this action against VIS, TEO,
Petrolane, Chromalloy, and other parties under CERCLA and
various state laws to recover costs it incurred responding to
the PCE contamination. TEO answered and asserted a
counterclaim against AmeriPride.
On July
9, 2002, Cal-Am filed a separate complaint against AmeriPride
and TEO seeking recovery of its response costs, damages, and
other relief in connection with the contamination of its
wells. AmeriPride paid Cal-Am $2 million to settle those
claims. Two years later, on July 29, 2004, Huhtamaki sued
AmeriPride; AmeriPride later paid Huhtamaki $8.25 million to
settle. In addition, in 2006, AmeriPride entered into
settlement agreements with Chromalloy and Petrolane in which
AmeriPride received $500, 000 and $2.75 million,
respectively.
Settlement
attempts between TEO and AmeriPride in 2007 were ultimately
unsuccessful so AmeriPride pursued its cost recovery claims
against TEO. In January 2011, AmeriPride filed a motion for
summary judgment against TEO seeking an order that TEO was
liable to AmeriPride for its response costs, including the
settlement amount it paid to Cal-Am and Huhtamaki. AmeriPride
also moved to dismiss TEO's counterclaim for
contribution.
On May
12, 2011, the Court granted in part AmeriPride's motion
for summary judgment and determined as a matter of law that:
(1) TEO is a potentially responsible party liable for
AmeriPride's response costs under CERCLA; (2) AmeriPride
paid for investigation and remediation costs of $7, 750, 921
through August 2010, and regulatory oversight costs of $474,
730 through September 2010; and (3) AmeriPride's
investigation and remediation costs are necessary and
consistent with the National Contingency Plan, 40 C.F.R. pt.
300 ("NCP"). With respect to AmeriPride's
claims under CERCLA section 107 for amounts it paid in
settlement to Cal-Am and Huhtamaki, the Court denied summary
judgment. Specifically, the Court found that the settlement
funds were not response costs recoverable under section 107
but that AmeriPride could seek to recover them under section
113(f)(1). The Court also granted leave for AmeriPride to
file an amended complaint (which it did on May 24, 2011). In
light of this ruling, the Court did not address whether those
settlement amounts were paid to reimburse Cal-Am and
Huhtamaki for necessary response costs incurred consistent
with the NCP.
The
Court also denied several of AmeriPride's other summary
judgment claims. Because the Court determined that triable
issues of fact remained about whether AmeriPride released or
disposed of PCE and regarding the equitable allocation of
costs between the parties, the Court: (1) denied
AmeriPride's summary judgment to the extent it pertains
to allocation of liability on AmeriPride's CERCLA claims;
and (2) denied AmeriPride's summary judgment of TEO's
counterclaim.
The
case proceeded to trial. The main issue remaining at trial
was the equitable allocation of responsibility under
AmeriPride's and TEO's respective CERCLA claims. The
parties presented their evidence to the Court over the course
of a twelve-day bench trial. On April 4, 2012, the Court
entered an order finding, in part, that:
[T]he total amount subject to equitable apportionment is $18,
295, 651.00, less $3, 250, 000 for a total of $15, 045,
651.00. After including consultant fees and other costs of
$446, 656.84 paid for investigation and remediation at the
AmeriPride site since August 2010, and the $16, 604.52 paid
for regulatory oversight of the AmeriPride site since January
2011, the total amount subject to equitable apportionment is
$15, 508, 912.36.
The
Court calculated the total amount subject to equitable
apportionment by combining AmeriPride's investigation,
remediation, and regulatory oversight costs, then adding the
$10.25 million AmeriPride paid in settlement to Huhtamaki and
Cal-Am. From this total the Court then deducted the $3.25
million AmeriPride received from settling its claims against
Chromalloy and Petrolane, in effect applying the Uniform
Contribution Among Tortfeasors Act's ("UCATA")
pro tanto approach to equitably account for these
settlements.
Next,
the Court apportioned the total liability fifty-fifty between
TEO and AmeriPride, concluding that "given the facts as
the Court has found them . . . the fairest apportionment is
to divide responsibility equally." ECF No. 915, at 14.
The Court also issued a declaratory judgment that TEO is
responsible for one-half of all future cleanup costs. To
"roughly address" the fact that AmeriPride had
"borne all of [the] costs for the many years since the
first cleanup order, " the Court also ordered TEO to pay
prejudgment interest to AmeriPride "in amounts
calculated in accordance with 42 U.S.C. § 9607."
Because the Court found that the interest accrual date was a
matter of equity rather than statutory dictate, it ordered
the parties to submit a stipulation as to the amount of
interest. The parties filed the interest stipulation on April
18, 2012, agreeing on the methodology for the calculation
except as to when interest should start to accrue. In that
regard, the parties proposed interest amounts based on their
own views as to when interest should commence. The Court then
determined interest accrued from the date the costs were
first incurred by AmeriPride, rejecting TEO's argument
that such interest did not begin to accrue until the date
AmeriPride demanded payment of a specific amount in writing.
On
April 20, 2012, the Court issued its Order determining the
issues raised at trial, which included the Court's award
of interest. The Court adopted all of the undisputed facts
contained in its Pretrial Order, and entered judgment in
accordance with the Court's order on the same day. The
Court ordered TEO to pay AmeriPride $9, 974, 421.95 and
issued a declaratory judgment that TEO is responsible for
one-half of all future cleanup costs.
That
decision was appealed, and, on April 2, 2015, the Court of
Appeals vacated the judgment and remanded with instructions
to:
1. Explain which equitable factors the Court considered in
allocating the $3.25 million in settlement payments from
Chromalloy and Petrolane to AmeriPride, or select those
factors and allocate the settlement payments in accordance
with those factors in the first instance; 2. Determine the
extent to which AmeriPride reimbursed Huhtamaki and Cal-Am
for necessary response costs incurred consistent with the
NCP; and 3. Apply the interest provisions in CERCLA section
107(a) to determine when interest began to accrue on the
costs paid by AmeriPride.
On
September 28, 2015, the Court took its first step towards
responding to the Ninth Circuit opinion's first directive
by holding that the Uniform Comparative Fault Act's
pro rata approach would govern the allocation of
liability to the Settling Parties. ECF No. 1001. Under the
pro rata approach, the Court will determine the
Settling Parties' proportionate share of the liability
for response costs and deduct that share from the total
amount of liability to be allocated between AmeriPride and
TEO, regardless of the dollar amounts of the settlements
obtained by AmeriPride.
Now
pending before the Court are TEO and AmeriPride's
cross-motions for summary judgment. TEO's motion seeks a
ruling that Petrolane, Chromalloy, and Huhtamaki are liable
in part for the clean-up costs incurred by AmeriPride, that
prejudgment interest could not begin to accrue until August
2010, that AmeriPride cannot show that its settlements with
Huhtamaki and Cal-Am reimbursed them for necessary response
costs incurred consistent with the NCP, and that AmeriPride
cannot recover approximately $780, 000 in response costs that
were not presented to Judge Karlton in the first trial in
this case. AmeriPride's motion seeks opposite rulings on
the same issues.
STANDARD
The
Federal Rules of Civil Procedure provide for summary judgment
when "the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to
judgment as a matter of law." Fed.R.Civ.P. 56(a);
see also Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986). One of the principal purposes of Rule 56 is to
dispose of factually unsupported claims or defenses.
Celotex, 477 U.S. at 325.
Rule 56
also allows a court to grant summary judgment on part of a
claim or defense, known as partial summary judgment.
See Fed.R.Civ.P. 56(a) ("A party may move for
summary judgment, identifying each claim or defense-or the
part of each claim or defense-on which summary judgment is
sought."); see also Allstate Ins. Co. v. Madan,
889 F.Supp. 374, 378-79 (C.D. Cal. 1995). The standard that
applies to a motion for partial summary judgment is the same
as that which applies to a motion for summary judgment.
See Fed.R.Civ.P. 56(a); State of Cal. ex rel.
Cal. Dep't of Toxic Substances Control v. Campbell,
138 F.3d 772, 780 (9th Cir. 1998) (applying summary judgment
standard to motion for summary adjudication).
In a
summary judgment motion, the moving party always bears the
initial responsibility of informing the court of the basis
for the motion and identifying the portions in the record
"which it believes demonstrate the absence of a genuine
issue of material fact." Celotex, 477 U.S. at
323. If the moving party meets its initial responsibility,
the burden then shifts to the opposing party to establish
that a genuine issue as to any material fact actually does
exist. Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586-87 (1986); First Nat'l
Bank v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968).
In
attempting to establish the existence or non-existence of a
genuine factual dispute, the party must support its assertion
by "citing to particular parts of materials in the
record, including depositions, documents, electronically
stored information, affidavits[, ] or declarations . . . or
other materials; or showing that the materials cited do not
establish the absence or presence of a genuine dispute, or
that an adverse party cannot produce admissible evidence to
support the fact." Fed.R.Civ.P. 56(c)(1). The opposing
party must demonstrate that the fact in contention is
material, i.e., a fact that might affect the outcome of the
suit under the governing law. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248, 251-52 (1986); Owens v.
Local No. 169, Assoc. of W. Pulp and Paper Workers, 971
F.2d 347, 355 (9th Cir. 1987). The opposing party must also
demonstrate that the dispute about a material fact "is
‘genuine, ' that is, if the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party." Anderson, 477 U.S. at 248. In other
words, the judge needs to answer the preliminary question
before the evidence is left to the jury of "not whether
there is literally no evidence, but whether there is any upon
which a jury could properly proceed to find a verdict for the
party producing it, upon whom the onus of proof is
imposed." Anderson, 477 U.S. at 251 (quoting
Improvement Co. v. Munson, 81 U.S. 442, 448 (1871))
(emphasis in original). As the Supreme Court explained,
"[w]hen the moving party has carried its burden under
Rule [56(a)], its opponent must do more than simply show that
there is some metaphysical doubt as to the material
facts." Matsushita, 475 U.S. at 586. Therefore,
"[w]here the record taken as a whole could not lead a
rational trier of fact to find for the nonmoving party, there
is no ‘genuine issue for trial.'" Id.
87.
In
resolving a summary judgment motion, the evidence of the
opposing party is to be believed, and all reasonable
inferences that may be drawn from the facts placed before the
court must be drawn in favor of the opposing party.
Anderson, 477 U.S. at 255. Nevertheless, inferences
are not drawn out of the air, and it is the opposing
party's obligation to produce a factual predicate from
which the inference may be drawn. Richards v. Nielsen
Freight Lines, 602 F.Supp. 1224, 1244-45 (E.D. Cal.
1985), aff'd, 810 F.2d 898 (9th Cir. 1987).
ANALYSIS
A.
Liability of Petrolane, Huhtamaki, Cal-Am, and
Chromalloy
One of
the central issues remaining in this litigation is the
liability of Petrolane, Huhtamaki, Chromalloy, and Cal-Am
(the "Settlors") for contamination at the Facility.
The extent of the Settlors' liability as determined by
this Court is important because TEO's liability to
AmeriPride will be reduced by the amount of the Settlors'
liability for contamination at the facility. This places
AmeriPride in a peculiar position: although it sued the
Settlors under CERCLA, and extracted sizable settlements from
Chromalloy and Petrolane, AmeriPride now argues that the
Court cannot find that they did anything to cause
contamination at the Facility. AmeriPride further argues that
even if the Settlors are PRPs, the Court must allocate a zero
percent share of liability to them. TEO, on the other hand,
seeks a ruling that while the Settlors are ...