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Citizens Development Corp., Inc. v. County of San Diego

United States District Court, S.D. California

March 23, 2017

CITIZENS DEVELOPMENT CORPORATION, INC., a California corporation, Plaintiff,
COUNTY OF SAN DIEGO, a California municipal corporation, CITY OF SAN MARCOS, a California municipal corporation, CITY OF ESCONDIDO, a California municipal corporation, VALLECITOS WATER DISTRICT, a California municipal corporation, HOLLANDIA DAIRY, INC., a California corporation, and DOES 1 through 100, inclusive, Defendants.


          Hon. Gonzalo P. Curiel United States District Judge

         Before the Court is Defendant Hollandia Dairy's Motion for Judgment on the Pleadings. Dkt. No. 190. The motion has been fully briefed. Based upon review of the moving papers, applicable law, and for the reasons that follow, the Court hereby DENIES Hollandia's motion in its entirety.


         This civil action arises out of the alleged contamination of the surface water and groundwater in and around Lake San Marcos (“the Lake”) located in San Marcos, California. See First Amended Complaint (“FAC”) ¶ 1, Dkt. No. 68. On September 20, 2011, the California Regional Water Quality Control Board, San Diego Region (“the RWQCB”) issued an Investigative Order (“the IO”) alleging that Plaintiff Citizens Development Corporation, Inc. (“CDC”) had released pollutants into the Lake. See Id. ¶ 4. In response, Plaintiff filed the present action against Defendants County of San Diego (“San Diego”), City of San Marcos (“San Marcos”), City of Escondido (“Escondido”), Vallecitos Water District (“Vallecitos”), and Hollandia Dairy (“Hollandia”), alleging that each of them was responsible for the discharges that contaminated the Lake and its surrounding waters. See generally Complaint, Dkt. No. 1; FAC, Dkt. No. 68.

         1. CDC's allegations

         The CDC alleges that the Lake has been contaminated by discharges stemming from a wide variety of sources, including but not limited to, improper waste disposal, poor or unmanaged landscaping practices, sanitary sewer overflows, septic system failures, groundwater infiltration, the presence and operation of “the dam, ” and other “non-point source discharges” caused by storm events and dry weather conditions. FAC ¶¶ 5-7. These discharges, CDC alleges, were generated by the real property that is located within the San Marcos Creek watershed and the upgradient of the Lake, which includes the farmland owned and operated by Hollandia Dairy. Id. ¶ 26.

         Based on these and other allegations, the FAC asserts seven causes of action against Defendants. They include: (1) private recovery under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA); (2) declaratory relief under CERCLA; (3) continuing nuisance; (4) continuing trespass; (5) equitable indemnity; (6) declaratory relief under California state law; and (7) injunctive relief under the Resource Conservation and Recovery Act (RCRA) as to Defendant Vallecitos only. See Id. The FAC's CERCLA theory of liability is predicated on the assertion that Hollandia, along with the other Defendants, contaminated the Lake by releasing known “hazardous substances” into its watershed. Id. ¶ 49. CDC identifies those “hazardous substances, ” as “nitrogen, phosphorus, and nutrients found in fertilizers, pesticides and sewage.” Id. ¶ 43.

         2. Escondido's, Vallecitos', and San Marcos' crossclaims

         Hollandia's answer to CDC's initial complaint contained crossclaims against Defendants Escondido, San Marcos, San Diego, and Vallecitos for (1) contribution under CERCLA and (2) indemnity, offset, and contribution under state law. Dkt. No. 21 at 11-16. All of Hollandia's crossclaims were “premised upon the same events, subject matter, and claims made by CDC in its complaint against Hollandia.” Id. at 14.

         Defendants Escondido, San Marcos, and Vallecitos responded to Hollandia's crossclaims by asserting claims of their own. Vallecitos asserted crossclaims against Hollandia for (1) contribution under CERLCA; (2) indemnity offset; and (3) contribution under California law. Dkt. No. 35 at 14-20. Escondido asserted crossclaims against Hollandia for (1) response costs under CERCLA; (2) declaratory relief under CERCLA; (3) response costs under the California Superfund Act (CSA); (4) declaratory relief under the CSA; (5) contribution under California law; (6) negligence; (7) equitable indemnity; and (8) unjust enrichment. Dkt. No. 38 at 10-19. San Marcos asserted crossclaims against Hollandia for (1) responses costs and contribution under CERCLA; (2) declaratory relief under CERCLA; (3) negligence; (4) declaratory relief under California law; and (5) equitable indemnity. Dkt. No. 44 at 8-13.

         3. Motion for Judgment on the Pleadings

         On January 8, 2014, the Court granted the parties' joint motion to stay the action pending mediation. Dkt. No. 94. On October 11, 2016, the Court lifted the stay in order to permit Hollandia to file a motion for judgment on the pleadings. Dkt. No. 180. Hollandia's motion challenges all of the claims asserted against it, including those lodged by CDC, Vallecitos, Escondido, and San Marcos (collectively “the Opposing Parties”). Dkt. No. 190 at 9.


         Under Federal Rule of Civil Procedure (“Rule”) 12(c), “[a]fter the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c).

         The principal difference between motions filed pursuant to Rule 12(b) and Rule 12(c) is the time of filing - a motion for judgment on the pleadings is typically brought after an answer has been filed whereas a motion to dismiss is typically brought before an answer has been filed. See Dworkin v. Hustler Magazine Inc., 867 F.2d 1188, 1192 (9th Cir. 1989). Because the motions are functionally identical, the same standard of review applicable to a Rule 12(b) motion applies to its Rule 12(c) analog. Id.; see also Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012) (“Analysis under Rule 12(c) is ‘substantially identical' to analysis under Rule 12(b)(6), because, under both rules, a court must determine whether the facts alleged in the complaint, taken as true, entitle the plaintiff to a legal remedy.”) (internal quotations and citation omitted).

         When deciding a Rule 12(c) motion, “the allegations of the non-moving party must be accepted as true, while the allegations of the moving party which have been denied are assumed to be false.” Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1550 (9th Cir. 1989). Courts, therefore, construe all material allegations in the light most favorable to the non-moving party. Deveraturda v. Globe Aviation Sec. Servs., 454 F.3d 1043, 1046 (9th Cir. 2006). “Judgment on the pleadings is proper when the moving party clearly establishes on the face of the pleadings that no material issue of fact remains to be resolved and that it is entitled to judgment as a matter of law.” Hal Roach Studios, 896 F.2d at 1550. “[F]actual challenges to a plaintiff's complaint, ” however, have no bearing on the legal sufficiency of the allegations.” Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). As such, judgment on the pleadings in favor of a defendant is not appropriate if the complaint raises issues of fact that, if proved, would support the plaintiff's legal theory. Gen. Conference Corp. of Seventh-Day Adventists v. Seventh-Day Adventist Congregational Church, 887 F.2d 228, 230 (9th Cir. 1989). In sum, a motion for judgment on the pleadings is proper “only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.” Turner v. Cook, 362 F.3d 1219, 1225 (9th Cir. 2004).

         The mere fact that a motion is couched in terms of Rule 12(c) does not prevent the district court from disposing of the motion by dismissal rather than judgment. Sprint Telephony PCS, L.P. v. Cnty. of San Diego, 311 F.Supp.2d 898, 903 (S.D. Cal. 2004) (citing Amersbach v. City of Cleveland, 598 F.2d 1033, 1038 (6th Cir. 1979)). Courts have discretion to grant Rule 12(c) motions with leave to amend. In re Dynamic Random Access Memory Antitrust Litig., 516 F.Supp.2d 1072, 1084 (N.D. Cal. 2007). Courts also have discretion to grant dismissal on a 12(c) motion, in lieu of judgment, on any given claim. Id.; see also Amersbach, 598 F.2d at 1038.


         The gravamen of Hollandia's motion for the judgment on the pleadings is that the Opposing Parties have failed to state valid claims under CERCLA because they have not plead the release of any actionable “hazardous substances.”[1] This argument is without merit. CDC's pleadings, upon which all of the crossclaims are based, identifies phosphorus, ammonia as nitrogen, [2] and nutrients found in fertilizers, pesticides, and sewage as CERCLA-qualifying “hazardous substances.” FAC ¶ 44, Dkt. No. 68 at 11. “Phosphorus” and “ammonia, ” in turn, are listed as “hazardous substances” in EPA regulations. See 42 U.S.C. §§ 9601(14); 40 C.F.R. § 302.4. The FAC, therefore, has adequately named “hazardous substances” for purposes of pleading a CERCLA violation and surviving a motion for judgment on the pleadings.

         Notwithstanding the straightforward nature of this argument, Hollandia argues that the pleadings fall short because they cannot be true. Hollandia, the motion explains, is only responsible for releasing “nutrients” from “cow manure, ” into the Lake and, thus, it contends that it is not liable under CERCLA because “nutrients” from “manure” are not “hazardous substances” as a matter of law. The Court emphatically rejects this conclusion. As this order explains in further detail below, Hollandia's line of argument is both procedurally and substantively defective. Hollandia's contentions are substantively defective because the pleadings have identified actionable “hazardous substances” under CERCLA. Hollandia's argument is also procedurally defective because it improperly challenges the facts in the complaint and relies upon factual allegations absent in the pleadings. Accordingly, and for the reasons set forth below, the Court DENIES Hollandia's Motion for Judgment on the Pleadings.

         A. Defendant Hollandia's Request for Judicial Notice

         The Court will first address Defendant's numerous requests for judicial notice, as those requests inform the scope of ...

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