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Orange County Water District v. Alcoa Global Fasteners, Inc..

California Court of Appeals, Fourth District, First Division

June 1, 2017

ORANGE COUNTY WATER DISTRICT, Plaintiff and Appellant,
ALCOA GLOBAL FASTENERS, INC. et al., Defendants and Respondents.

         APPEAL from a judgment of the Superior Court of Orange County, No. 04CC00715 Kim G. Dunning, Judge. Affirmed in part; reversed in part and remanded with directions.

          Connor, Fletcher & Hedenkamp, Edmond M. Connor, Douglas A. Hedenkamp; Miller & Axline, Duane C. Miller, Michael D. Axline and Justin Massey for Plaintiff and Appellant.

          Lewis Brisbois Bisgaard & Smith, R. Gaylord Smith, Malissa McKeith, Ernest Slome, Thomas Teschner and Brittany H. Bartold for Defendant and Respondent Northrop Grumman Systems Corporation.

          Tatro Tekosky Sadwick and René P. Tatro for Defendant and Respondent Alcoa Global Fasteners, Inc.

          Bowman and Brooke and Lawrence Ramsey for Defendant and Respondent CBS Broadcasting, Inc.

          Kutak Rock, Jad T. Davis and Tiffany K. Ackley for Defendant and Respondent Crucible Materials Corp.

          Musick Peeler & Garrett and Steven J. Elie for Defendant and Respondent The Arnold Engineering Company.

          HALLER, J.

         The Orange County Water District (the District) brought this action to recover costs associated with the North Basin Groundwater Protection Project (NBGPP), a proposed $200 million effort intended to address groundwater contamination in northern Orange County, California caused by volatile organic compounds (VOC's) and other chemicals. Since at least the mid-1980's, the District and other regulatory agencies such as the Regional Water Quality Control Board (RWQCB) have been aware of VOC groundwater contamination in the North Basin area. The District and various private parties under the direction of the RWQCB investigated the sources of contamination. Based on these investigations, the District and others concluded that the groundwater contamination was caused by VOC releases at a number of industrial sites in the North Basin area. Under the supervision of the RWQCB and other regulatory agencies, several of these industrial sites have undergone remediation to remove VOC contamination from the shallow soil and groundwater. Other industrial sites received "no further action" letters from the RWQCB based on their investigations.

         Concerned that VOC contamination remained in groundwater notwithstanding these remediation efforts, the District began to develop an overarching solution to groundwater contamination in the North Basin. Beginning in 1999, the District developed and then refined a series of proposals for the NBGPP. The NBGPP is intended to treat VOC contamination in the shallow aquifer, with the goal of preventing contamination of the deeper principal aquifer. The principal aquifer is a source of drinking water for several Orange County municipalities.

         An aquifer, at its most basic level, consists of soil or permeable rock saturated with water. In the North Basin area, the shallow aquifer begins approximately 130 feet below ground level and extends to approximately 250 feet ground level. Below the shallow aquifer, separated by a relatively less permeable layer of soil, is the principal aquifer. The principal aquifer begins just below the shallow aquifer and extends to approximately 1, 200 to 1, 500 feet below ground level in the North Basin area. When used without qualification in this appeal, the term "groundwater" typically refers to water in the shallow aquifer but sometimes the principal aquifer as well.[1]

         In the course of its investigation, the District identified various current and former owners and operators of industrial sites in the North Basin area that it believed were responsible in some way for VOC contamination. The primary VOC's identified included tetrachloroethylene (also known as perchloroethylene or PCE), trichloroethylene (TCE), 1, 1-dichloroethylene (1, 1-DCE), and 1, 1, 1-trichloroethane (1, 1, 1-TCA). The last chemical, 1, 1, 1-TCA, breaks down into 1, 1-DCE and acetic acid. The detection of 1, 1-DCE in soil or groundwater can be evidence of past 1, 1, 1-TCA contamination.

         The District filed suit against a number of these owners and operators, including defendants at issue in this appeal: Alcoa Global Fasteners, Inc. (Alcoa), Arnold Engineering Co. (Arnold), CBS Broadcasting, Inc. (CBS), Crucible Materials Corp. (Crucible), and Northrop Grumman Systems Corp. (Northrop). The District sued several other parties, who settled or were otherwise dismissed from the litigation prior to this appeal. In some cases, as we will explain, the District sued parties who had remediated or were remediating their sites under the auspices of the RWQCB, on the theory that such remediation did not affect VOC contamination that had migrated to the shallow aquifer in the past. The District obtained approximately $21 million in settlements during the underlying litigation.

         The District asserted statutory claims for damages under the Carpenter-Presley-Tanner Hazardous Substances Account Act (HSAA; Health & Saf. Code, § 25300 et seq.) and the Orange County Water District Act (OCWD Act; West's Ann. Wat. Code App. (2016 ed.) ch. 40) and for declaratory relief (Code Civ. Proc., § 1060). The District also asserted common law claims for negligence, nuisance, and trespass.

         By the time of trial, the design of the NBGPP had not been finalized and the vast bulk of the project had not been constructed. The District claimed it had spent approximately $3.7 million in development and construction costs, out of the estimated $200 million total. The District sought to recover its past costs and obtain a declaration holding defendants liable for future costs associated with the NBGPP.

         Following an initial bench trial on the District's statutory claims, the trial court determined that the District should take nothing. The court found, among other things, that the NBGPP was neither a reasonable nor a necessary response to the identified groundwater contamination and that defendants did not cause the District to undertake the NBGPP. The court concluded that defendants were entitled to a declaration that they were not responsible for past or future costs related to the NBGPP.

         In light of the court's findings, defendants argued that a trial on the District's remaining common law claims for negligence, nuisance, and trespass was unnecessary because those findings would apply in any jury trial on the remaining claims. The court agreed and entered judgment in favor of defendants.

         The District appeals. It challenges the judgment on numerous grounds, including (1) the trial court misinterpreted the legal requirements of the District's claims under the HSAA and the OCWD Act; (2) the court erred under Code of Civil Procedure, section 1048, subdivision (b) by scheduling a bench trial on the District's statutory (equitable) claims before a jury trial on the District's common law (legal) claims, thereby depriving the District of its right to trial by jury; (3) the court erred by applying its factual findings on the District's equitable claims to defeat the District's common law claims; (4) the court misapplied Evidence Code section 412 and made other erroneous evidentiary rulings; and (5) the court erred by granting declaratory relief in favor of defendants. In response, among other arguments, defendants contend the District cannot assert a claim under the HSAA because it is not seeking "contribution" or "indemnity" as those terms are used in the statute.

         We conclude the District may assert a claim under the HSAA. On the merits, however, as we shall explain, we find the trial court misinterpreted some elements of this claim, including its causation standard. Based on our review of the evidence and the court's factual findings, we conclude the court's causation error did not prejudice the District, except as to Northrop. However, because the District's HSAA has other essential elements, one of which was not satisfied as to any defendant, the District's HSAA claim against all defendants including Northrop fails. Even though the latter issue is dispositive of the District's HSAA claim, we address the former issues because they present important and novel legal questions and because they affect our consideration of the District's declaratory relief claim.

         We further conclude the trial court misinterpreted elements of the District's claim under the OCWD Act, which are similar but not identical to the elements of an HSAA claim. We conclude these errors prejudiced the District as to Northrop (but not the other defendants). We will therefore reverse the judgment on the District's OCWD Act claim as to Northrop and otherwise affirm.

         Based on these conclusions, we will reverse the court's declaration of no liability in favor of Northrop but affirm court's declaration of no liability in favor of the remaining defendants. We find no merit in the District's assignments of error concerning trial sequencing and its common law claims, and although the court misapplied Evidence Code section 412, it was not prejudicial. The remainder of the judgment will therefore be affirmed as well.


         The District and Its Allegations

         The District is a public entity established by the California Legislature and empowered to manage, replenish, regulate, and protect groundwater supplies within its boundaries. (OCWD Act, §§ 1, 2.) The District has the power to "[t]ransport, reclaim, purify, treat, inject, extract, or otherwise manage and control water for the beneficial use of persons or property within the district and protect the quality of groundwater supplies within the district." (Id., § 2, subd. (6)(j).) In furtherance of these goals, the District may "commence, maintain, intervene in, defend, and compromise... any and all actions and proceedings... to prevent... diminution of the quantity or pollution or contamination of the water supply of the district...." (Id., § 2, subd. (9).)

         In 2004, the District filed this lawsuit against a number of defendants, including defendants at issue in this appeal, to address current and threatened groundwater contamination in the North Basin. In its operative first amended complaint (FAC), the District alleged each defendant owned or operated one or more industrial sites in northern Orange County where hazardous wastes (i.e., VOC's) had been released into the environment. The release of hazardous wastes had caused or threatened to cause contamination in groundwater within the District's geographic area. The District alleged injury in the form of investigation and remediation costs to address this contamination and threatened contamination, as well as the ongoing threat to public health, natural resources, and the environment posted by the hazardous waste releases. To recover its costs and address this threat, the District alleged causes of action against all defendants under the OCWD Act and the HSAA and under common law theories of negligence, nuisance, and trespass. The District also alleged a cause of action for declaratory relief, which claimed "[a]n actual controversy exists concerning who is responsible for abating actual or threatened pollution or contamination of groundwater resources within the District by VOC's" and sought "adjudication of the respective rights and obligations of the parties." The District sought compensatory and punitive damages, attorney fees, costs, an order finding defendants liable for the full cost of remediation, an order declaring the contamination a nuisance and compelling defendants to abate it, and any other proper relief. Defendants cross-complained against the District for, among other things, a declaration of no liability.

         Pretrial and Trial Proceedings

         During a status conference, the court announced its intention to bifurcate trial on the District's claims, with an initial bench trial on the District's equitable claims (under the OCWD Act and the HSAA and for declaratory relief) and a subsequent jury trial on the District's legal claims (for negligence, nuisance, and trespass). The District urged the court to try its legal claims first in front of a jury. It expressed concern that holding a bench trial first would impair its right to a jury trial on its legal claims. The court acknowledged the District's right to a jury trial but confirmed its inclination to hold a bench trial first. Later, the court granted several defendants' motions for summary adjudication of the District's negligence claim on statute of limitations grounds.

         The bench trial on the District's equitable claims began in February 2012 and lasted over seven months. The District and defendants presented extensive lay and expert testimony, as well as documentary evidence, covering the history of the NBGPP, the District's investigation and analysis of the North Basin area, activities at defendants' industrial sites that may have led to hazardous waste disposal and releases, activities at other sites in the North Basin area that may have led to hazardous waste releases, previous soil and groundwater remediation efforts by defendants and others, the involvement of regulatory agencies other than the District in such remediation efforts, the potential impact of hazardous waste releases on groundwater in the North Basin area, and the NBGPP's effect on such groundwater.[2]

         History of the NBGPP

         The evidence at trial showed that the District became aware of groundwater contamination in the North Basin area in the mid-1980's. Data from monitoring wells and other sources identified a plume of VOC contamination in groundwater, oriented east to west, approximately 4.5 miles long and up to one mile wide. This contamination primarily affected groundwater in the shallow aquifer. But by the late 1990's, VOC contamination had reached the principal aquifer in certain areas, leading to the decommissioning of several drinking water wells.

         In 1999, the District issued a request for proposal for a focused feasibility study to assess various options concerning groundwater contamination in the North Basin area. The District's request for proposal stated that the "presumed remedy" for groundwater contamination was hydraulic containment of the VOC plume, i.e., the construction of wells to extract contaminated groundwater from the shallow aquifer, remove VOC contaminants, and discharge the treated water back into the environment. This remedy was intended to minimize the further spread of contaminants in groundwater. It would later be known as the NBGPP.

         The next year, a consultant to the District prepared a draft focused feasibility study. The study analyzed the extent of VOC groundwater contamination in the North Basin area and evaluated the effects of four potential alternative responses. These responses were the following: (1) No Action: "In this alternative, it is assumed that no remedial measures of any type would be implemented by [the District] or any other party and that ongoing remedial efforts by private parties would be terminated." (2) Monitored Natural Attenuation: "In this alternative, it is assumed that no remedial measures would be implemented by [the District], although ongoing and/or planned remedial measures by other parties would continue. Also, [the District] and others would continue to monitor water quality via existing and recommended new wells." (3) Mitigation Control at Leading Edge: "This alternative contains all of the elements of [Monitored Natural Attenuation] but also includes the extraction of 600 gpm of VOC-containing ground water from each of three wells (for a total of 1, 800 gpm) located at or near the 'leading edge' of the VOC plume."[3] (4) Migration Control at Leading Edge with Enhanced Removal: "This alternative contains the same elements as [Migration Control at Leading Edge] but includes three additional extraction wells located within the VOC plume." The two treatment responses, the third and the fourth alternatives, relied on a "modular" system, i.e., individual extraction wells with onsite treatment facilities. The treated water would then be returned to the principal aquifer through injection wells or discharged onto surface spreading grounds to naturally recharge the shallow aquifer. The primary contaminants targeted for remediation were PCE, TCE, 1, 1-DCE, and cis-1, 2-dichloroethylene.

         The draft focused feasibility study was intended to be consistent with standards established by the United States Environmental Protection Agency for environmental remediation programs. These standards, entitled the "National Oil and Hazardous Substances Pollution Contingency Plan" (NCP), are codified in federal regulations. (40 C.F.R. § 300.1 et seq.) Under the NCP, the primary objective of a feasibility study is "to ensure that appropriate remedial alternatives are developed and evaluated such that relevant information concerning the remedial action options can be presented to a decision-maker and an appropriate remedy selected." (40 C.F.R. § 300.430(e)(1).)

         The draft focused feasibility study prepared for the District discussed in detail the four alternatives and assessed them across nine criteria: overall protection of human health and the environment; compliance with ARAR's; long-term effectiveness and permanence; reduction of mobility, toxicity, and volume through treatment; short-term effectiveness; implementability; cost, state acceptance; and community acceptance. (See 40 C.F.R. § 300.430(e)(9)(iii).) The 30-year net present value cost ranges for each alternative (including capital, operation, and maintenance costs) were no cost for the No Action alternative, approximately $3.5 million for the Monitored Natural Attenuation alternative, approximately $11 million to $18 million for the Mitigation Control at Leading Edge alternative, and approximately $13 million to $23 million for the Mitigation Control at Leading Edge with Enhanced Removal alternative.

         Five years after the draft focused feasibility study was prepared, a different consultant for the District prepared a supplemental focused feasibility study. This supplemental study, issued in January 2005, assessed two variations of the Mitigation Control at Leading Edge alternative discussed in the draft focused feasibility study. The supplemental study explained that two changed circumstances required redesign of that alternative: (1) monitoring data noted the presence of additional contaminants that should be remediated, including 1, 1-dicholoroethane and 1, 4-dioxane; and (2) property acquisition for the placement of modular extraction wells and treatment systems had proven difficult. The alternatives under consideration in the supplemental focused feasibility study involved extraction wells placed along the leading edge of the plume, similar to the draft study, but the water would be pumped to a centralized treatment system. In the first alternative, the District would construct and operate a single centralized treatment system. In the second, the District would construct and operate two centralized treatment systems. In both alternatives, the District would release treated water into the shallow aquifer through discharge into flood basins adjacent to the treatment systems.

         The supplemental focused feasibility study did not consider nontreatment alternatives, such as the No Action and Monitored Natural Attenuation alternatives identified in the draft study. The supplemental study explained that it "focuses primarily on treatment technologies in the context of the presumptive remedy (i.e., hydraulic control)." The supplemental feasibility study also limited its assessment to two of the nine previously-considered criteria: implementability and cost. The supplemental study estimated the 30-year net present value costs for both alternatives at approximately $19 million.

         The District circulated a notice of intent to adopt a mitigated negative declaration for the NBGPP under the California Environmental Quality Act (CEQA; Pub. Resources Code, § 21000 et seq.). It made available for inspection the draft mitigated negative declaration and supporting initial study. Following an approximately one-month public review period, the District reported that it did not receive any comments that supported the need for an Environmental Impact Report (EIR) or any significant modification to the project. The District's board of directors adopted the mitigated negative declaration for the project.[4]

         Later in 2005, District staff prepared a report assessing the hydrogeological and engineering aspects of the NBGPP. The report discussed additional modifications to the project following the supplemental focused feasibility study. The RWQCB had notified the District that additional studies were needed to determine whether the project would exacerbate perchlorate contamination in the shallow and principal aquifers. Because of the expense of such studies, and the likelihood that perchlorate contamination would in fact be exacerbated, the District determined that perchlorate treatment should be part of the project. Similarly, the District identified nitrate contamination in groundwater and determined that nitrate treatment should be part of the project as well. For these reasons, among others, the District settled on a single centralized treatment system that would treat extracted groundwater for the previously-identified VOC's as well as perchlorate and nitrate. The report estimated the capital costs of the project, including contingencies, to be approximately $20 million with estimated annual operation and maintenance costs of $1.85 million. The report calculated that the project would treat 5, 650 acre-feet of groundwater per year, leading to a total treatment cost (including amortized capital costs and operation and maintenance costs) of $576 per acre-foot of water.[5] The District's board of directors approved the NBGPP as described in the staff report.

         In light of the changes to the NBGPP project, the District commissioned a Draft Subsequent Environmental Impact Report (Draft SEIR). The Draft SEIR reviewed the environmental impacts associated with the changes in the project after the mitigated negative declaration was approved. The changes identified in the Draft SEIR included, among other things, a new proposed extraction well, additions to the centralized treatment system to accommodate the remediation of additional contaminants (e.g., perchlorate and nitrate), and a new recharge system involving injection wells. The Draft SEIR included discussions of four alternatives, but each alternative involved constructing at least the version of the NBGPP described in the 2005 supplemental focused feasibility study and mitigated negative declaration.

         Prior to preparing the Draft SEIR, the District circulated notices to public agencies and interested parties. It received eight comment letters from various public agencies and Northrop. The District also met with the South Coast Air Quality Management District and Northrop to discuss the changes to the project. The District circulated the Draft SEIR to the public and received a number of comments.

         By the time of trial, the District had constructed five extraction wells. But plans for the centralized treatment system were not complete, and no treatment had yet occurred. The District estimated that it had spent approximately $3.7 million on the project to date. The District's cost estimate for the entire project, however, had increased to over $200 million.

         The NBGPP's Environmental Effects

         The effect of the proposed NBGPP project on the VOC plume, and on the shallow and principal aquifers more generally, was hotly contested at trial. The objectives of the project, as summarized in the District's 2005 staff report, were to (1) "[p]revent exposure of the public to groundwater containing contaminants exceeding drinking water standards, " (2) "[i]nhibit the lateral and vertical migration of contamination to protect the aquifer and existing [drinking water] production wells from further impacts, " and (3) "[r]emove contaminant mass from the aquifer."

         It was undisputed at trial that VOC contaminants in the North Basin area would naturally degrade to some extent over time, even setting aside the effects of the NBGPP, based on natural chemical processes. This process is called natural attenuation. It was also undisputed that other public agencies and private parties had undertaken efforts to remediate VOC-contaminated sites in the North Basin area. For example, the District recognized in its 2000 draft focused feasibility study that at least 15 private parties had been required by the RWQCB to investigate subsurface contaminants at their sites, and at least seven sites had been actively remediated. At least two other sites were remediated by or at the direction of the California Department of Toxic Substances Control (DTSC). This process, called source removal, would likely lead to a decrease in the downward migration of VOC contaminants into groundwater, including the shallow aquifer, and foster the reduction of contaminant levels through natural attenuation.

         At trial, District expert Graham Fogg opined, based on computer models of the North Basin area, that the NBGPP would remove approximately half of the VOC contaminant mass in the shallow aquifer over 30 years of operation. Fogg was impeached, however, by deposition testimony in which he admitted that removing a third of the VOC contaminant mass would be an "optimistic" estimate. Fogg did not model the effect of the NBGPP on existing drinking water production well fields.[6]

         A defense expert, Steven Larson, agreed that the NBGPP would change conditions in some areas of the shallow aquifer. Larson, however, also specifically modeled the effect of the NBGPP on the principal aquifer. He found no material charge in the level of contaminants there, especially in the areas surrounding existing drinking water production wells. Larson concluded that the NBGPP would provide no benefit to the principal aquifer. Based on the data Larson reviewed, which was confirmed in a District report, contaminant levels in the principal aquifer were already relatively stable or declining. Larson expected that trend to continue regardless of whether the NBGPP was constructed. Larson concluded that the cost of the NGBPP was not justified in light of the similarity between the conditions in the principal aquifer, especially around drinking water production wells, if the NGBPP were constructed and if it were not. He believed the NGBPP was neither reasonable nor necessary to reduce VOC contamination in the principal aquifer to an acceptable level.[7]

         Larson criticized the District for not examining the effect of treatment (or lack thereof) on the level of contaminants in the principal aquifer during development of the NGBPP. In Larson's view, this failure was exacerbated when the plan for treated water under the NGBPP changed from injection directly into the principal aquifer to discharge into the shallow aquifer. While injecting treated water into the principal aquifer would tend to inhibit migration of contaminants downward from the shallow aquifer, releasing treated water into the shallow aquifer would likely have the reverse effect: Contaminants in the shallow aquifer would be pushed downward into the principal aquifer.

         Defendants' Sites

         The testimony and evidence at trial also focused on the industrial activities, environmental conditions, and past remediation efforts at defendants' sites in the North Basin area. Richard Waddell, a District expert witness, testified that VOC's had been released into the environment at each site. He concluded that these releases had caused contamination of groundwater, including the shallow aquifer.

         Each defendant, through expert and percipient testimony, disputed Waddell's conclusions. Aside from Northrop, defendants' primary arguments were (1) VOC's had not been released at their sites, (2) they were not responsible for any VOC releases that had occurred, or (3) any releases at their sites had not caused VOC contamination in groundwater. Northrop acknowledged that its sites had potentially contributed to groundwater contamination in the past. It argued, however, that its remediation activities at those sites had removed any potential source of future contamination. The evidence regarding each defendant's site or sites will be discussed in turn below.


         Alcoa leased the site at 800 South State College Boulevard in Fullerton, California from 2002 through 2007, and it has owned the site since then. For decades prior to Alcoa's tenancy, industrial activities at the site included the use of a large vapor degreaser. The solvents used in this degreaser included TCE and PCE. Alcoa continued to use the degreaser in 2002 and 2003 after it occupied the site. Soil samples taken near the location of the degreaser revealed high concentrations of PCE at shallow depths and high concentrations of TCE at slightly greater depths. In consultation with the RWQCB, Alcoa constructed a soil vapor extraction system to remediate the soil at the site to a depth of 50 feet. The system removed approximately 10, 500 pounds of VOC's from the soil.

         In Waddell's view, the soil samples showed that releases of PCE and TCE had occurred at the Alcoa site in the area of the former degreaser. Because PCE and TCE were also detected in groundwater beneath the site, and based on the site characteristics and historical sampling data, Waddell believed that releases at the Alcoa site had contributed to PCE and TCE contamination of groundwater. On cross-examination, however, Waddell limited his testimony to the opinion that such contamination was possible, i.e., there was a physical mechanism by which contamination could have occurred. His opinion was not that VOC releases at the Alcoa site had actually made their way to groundwater. Waddell acknowledged that a nearby upgradient site operated by Aerojet, a nonparty, contributed to groundwater PCE contamination as well. Because the Aerojet site was such a large contributor to PCE contamination, Waddell admitted that the impact of the Alcoa site on PCE levels in groundwater would be too small to be discernable.

         Alcoa's expert witness, Richard Weiss, reviewed the available data and determined there was no evidence that VOC releases at the Alcoa site reached groundwater. He testified that sampling data revealed an approximately 30-foot gap between the deepest soil VOC detection and groundwater below the Alcoa site. Weiss explained that if VOC's had migrated to groundwater, they would have been detected in the soil in a reasonably continuous manner. As a further basis for his opinion, Weiss cited the composition of the soil under the Alcoa site, which impeded downward migration of VOC's, and the chemical signature of the VOC's detected in groundwater, which differed from the chemical signature of the VOC's released at the Alcoa site. Instead, the chemical signature of VOC's in groundwater matched the chemical signature of VOC's released from the Aerojet site.


         Arnold owned and operated the site at 1551 East Orangethorpe Avenue in Fullerton from 1960 through 1984. During that time, Arnold operated one or more vapor degreasers, clarifiers, and dip tanks (or "strippers") at the site. The identity of the VOC's used in the degreasers and dip tanks was the subject of conflicting testimony at trial. (Clarifiers do not themselves make use of VOC solvents, but they can be a source of VOC discharge into the environment because they may process VOC-contaminated wastewater generated by other activities.)

         A former Arnold maintenance manager testified that he was aware of only one chemical, 1, 1, 1-TCA, used in one Arnold degreaser. Another former Arnold employee, Daniel Hopen, testified to seeing barrels of chemicals with labels showing both "trichloroethylene" (TCE) and "1, 1, 1" used in degreasers. On cross-examination, Hopen appeared to waver, stating confidently only that the barrels were labeled "1, 1, 1." (The only relevant chemical in this litigation with the designation "1, 1, 1" is 1, 1, 1-TCA.) Hopen also recalled other barrels labeled "perchloroethylene" (PCE) used in Arnold's dip tanks. Permits issued from 1970 through 1984 identified only 1, 1, 1-TCA as the solvent used in degreasers and stored in a storage tank at the Arnold site. Other permits did not identify a specific solvent. Use of TCE was restricted after 1976. In Waddell's opinion, based on research into Arnold's activities at the site as well as those of subsequent occupants, Arnold used 1, 1, 1-TCA, TCE, and PCE.

         Soil samples taken in 1995, approximately a decade after Arnold left the site, revealed VOC contamination in the shallow soil. For example, high concentrations of PCE were found in depths up to 30 feet near a clarifier on the southern side of the Arnold site. Waddell testified that these sampling results indicated a PCE release had occurred at the site. Waddell also reviewed evidence of Arnold's activities at the site (including employee testimony, photographs, and brochures) and concluded that the Arnold's handling of VOC solvents was likely to cause releases of those VOC's into the environment.

         The property owner at the time attempted to remediate the VOC contamination and operated a soil vapor extraction system for several months. Additional sampling after this remediation revealed VOC contamination extending to greater depths, including 60 feet for PCE and 95 feet for TCE. In Waddell's view, these results showed that the remediation was not successful.

         Further sampling of the shallow soil (down to 40 feet below the surface) took place in 2007. The sampling revealed PCE, TCE, 1, 1, 1-TCA, and 1, 1-DCE contamination in multiple locations at the Arnold site. (As noted above, 1, 1-DCE is a degradation product of 1, 1, 1-TCA.) The next year, the property owner began remediation with a soil vapor extraction system again. By the time of trial, the system had extracted 90 pounds of VOC's, the vast majority of which was PCE. A small amount of TCE was also extracted. The system remained in operation.

         The groundwater directly under the Arnold site was not tested for VOC contaminants. Monitoring wells at an adjacent property, the nonparty Johnson Controls site, revealed VOC contamination in groundwater. Waddell believed that this contamination was the result of VOC releases at the Arnold site rather than the Johnson Controls site. In 2010, the District retrieved grab samples from the shallow aquifer both upgradient and downgradient of the Arnold site. Concentrations of TCE were higher in grab samples downgradient of the Arnold site. Based on this and other data, Waddell concluded that the Arnold site contributed TCE and 1, 1-DCE to contamination in groundwater. Concentrations of PCE were relatively stable, and Waddell was limited at trial to the opinion that the Arnold site did not contribute to PCE contamination in groundwater.[8]

         Arnold's expert witness, Jonathan Rohrer, reviewed the evidence and concluded that Arnold had used only 1, 1, 1-TCA in its operations. Rohrer further concluded that Arnold's operations at the site had not caused any discharge of VOC's into soil or groundwater. Rohrer based his conclusion on the Arnold's use of 1, 1, 1-TCA only, the soil and groundwater data surrounding the site, the lack of documented chemical releases into soil during Arnold's operations, and the presence of several VOC-contaminated properties upgradient of the Arnold site. He identified subsequent occupants of the Arnold site as possible contributors to VOC contamination based on their activities and the recovery of numerous barrels of hazardous waste from the site. Rohrer admitted that VOC contamination in the shallow soil at the Arnold site indicated that PCE and TCE had been released there by someone, but he did not agree Arnold was responsible.

         Rohrer criticized Waddell's reliance on grab samples and disagreed that the data showed the Arnold site contributed TCE to groundwater. Rohrer testified that the locations of the grab samples were inadequate to distinguish the contribution of the Arnold site to VOC contamination from the contributions of the upgradient sites. Waddell, for his part, agreed that sampling at the site was inadequate to fully characterize the VOC contamination there.

         Separately, Rohrer modeled the potential contribution of contaminants from the Arnold site. This model was based on the District's interpretation of the grab samples and its estimates of the amounts of contaminants that would be remediated by its extraction wells. Rohrer cautioned that his model was based on the assumption that the upgradient and downgradient differentials in the District's grab samples were attributable to the Arnold site, an assumption Rohrer had criticized as unfounded. Rohrer concluded, based on his model, that the Arnold site contributed approximately 4.95 grams of VOC contamination (PCE, TCE, and 1, 1-DCE) to the daily amount that would be remediated by the NBGPP.


         CBS owned and operated the site at 500 South Raymond Avenue in Fullerton from 1965 to 1983. The site housed the Fender Electric Instrument Company, which CBS purchased in 1965. A CBS subsidiary purchased the adjacent site at 1300 East Valencia in 1965, and CBS expanded its holdings at that address the next year. CBS sold the property in 1986.[9] A portion of the 1300 East Valencia site, used by CBS partially as a parking lot, has since been subdivided and now bears the address 700 Sally Place.

         CBS's operations at 500 South Raymond included the use of a degreaser and an above-ground storage tank for VOC solvent. The solvent CBS used was PCE. Samples collected from the shallow soil near the degreaser and the storage tank revealed VOC contamination. Additional samples, taken up to a depth of 100 feet below the surface, showed PCE contamination down to 70 feet. PCE was also detected in groundwater beneath the site.

         At 1300 East Valencia, CBS operated a dip tank using solvents. Although a former CBS employee denied that CBS used PCE at the site, shallow soil and groundwater samples revealed PCE contamination. Waddell admitted that some contamination was the result of an adjacent site (nonparty American Electronics), but he believed that monitoring well data showed that the 1300 East Valencia site contributed PCE to groundwater as well. Waddell observed that concentrations of TCE had decreased over time while PCE concentrations had increased. In his view, if the American Electronics site were the only site contributing PCE and TCE to groundwater, changes in their concentrations should mirror each other.[10]

         At the site now known as 700 Sally Place, soil samples revealed PCE contamination near a former storage area. Again, however, a former CBS employee denied that CBS used PCE there, and Waddell admitted that there was no evidence CBS used or stored PCE at that site.

         Based on the site data and his analyses, Waddell opined that CBS had released PCE into the environment at the 500 South Raymond and 1300 East Valencia sites. He concluded that those releases had likely resulted in contamination of groundwater at the sites.

         CBS's expert witness, Daniel Stephens, disagreed. He concluded that contamination at the sites associated with CBS had not impacted groundwater. Stephens based his conclusion on historical data as well as his own investigation of the sites in 2011. Stephens agreed the shallow soil around the degreaser and storage tank at the 500 South Raymond site was contaminated with PCE. But Stephens believed that deeper soils were impacted by contamination at another site, most likely Chicago Musical. He relied primarily on a gap in the detections of PCE between the shallow soil and groundwater and differences in the chemistry (i.e., the VOC profile) of the shallow soil when compared to groundwater. Stephens criticized Waddell for misstating and minimizing the concentrations of VOC's found at the Chicago Musical site.

         Regarding the 1300 East Valencia site, Stephens pointed out that the shallow soil was extensively sampled in 1988, but only one sample detected PCE, near the former dip tank at the edge of the property. Later, more extensive testing revealed PCE contamination to a depth of around 70 feet below the surface at that location. But no contamination was found for approximately 40 feet below that level, until the testing hit groundwater. Based on this fact, and his own interpretation of monitoring well data, Stephens concluded there was no nexus between the PCE contamination found in the shallow soil at the 1300 East Valencia site and contamination in groundwater.

         Stephens's conclusion was supported by two prior investigations of the 1300 East Valencia site. In a 2003 letter, the RWQCB reviewed the existing data regarding the site and recommended that no further action be taken: "Based on the low concentrations and small amount of mass of VOC's that are present in the soil and groundwater, the limited volume of groundwater that is impacted at this site, the limited lateral and vertical extent of VOC's in groundwater, and the existence of an off-site source, this site does not appear to pose a current, significant threat to the beneficial uses of groundwater."[11] Similarly, a 2002 report commissioned by the then-owner of the 1300 East Valencia site concluded, based on the limited extent of shallow soil PCE contamination in the area of the former dip tank, that "the data collected during this investigation indicates that groundwater has not likely been impacted by this past release."

         For 700 Sally Place, as with CBS's other sites, Stephens opined that any VOC contamination there did not impact groundwater. Stephens based his opinion on soil samples (which showed a gap in PCE detections before reaching groundwater), the differing chemical profiles of the contamination in shallow soil and in groundwater, and the presence of upgradient sources of contamination. In 1995, the RWQCB issued a no further action letter for the 700 Sally Place site. The RWQCB confirmed the gap in PCE detections, but it determined that PCE contamination at the site had impacted groundwater: "It appears that volatile organic compounds are not present in the soil at concentrations that would require remediation or that would pose a significant threat to groundwater quality. However, the presence of PCE in a groundwater sample from the low spot area indicates that PCE from the site has impacted groundwater quality."[12] Stephens analyzed the historical uses of 700 Sally Place by CBS and determined that the "low spot" identified by the RWQCB was created after CBS sold the property. Stephens therefore opined that any such contamination was caused by subsequent occupants.


         Crucible owned and operated the site at 2100 East Orangethorpe Avenue in Fullerton from the late 1950's until 1985. Crucible admitted using the solvents TCE and 1, 1, 1-TCA in an immersion degreaser at the site. The solvents were stored at a separate location on the site. Shallow soil sampling conducted in 1984 showed the presence of PCE, TCE, 1, 1, 1-TCA, and 1, 1-DCE. The next year, a limited amount of soil was excavated in an effort to partially remediate a portion of the site. Additional sampling occurred in 2002 and 2003, specifically in the areas surrounding the degreaser and chemical storage area. The sampling revealed contamination with PCE, TCE, 1, 1, 1-TCA, and 1, 1-DCE in both areas. No contamination was found at 40 feet below the surface, however, and the sampling did not proceed to depths below that level.

         Based on this data, Waddell concluded that Crucible had released not only TCE and 1, 1, 1-TCA, but also PCE, into the soil at the degreaser and the chemical storage area. (As noted above, 1, 1-DCE is a degradation product of 1, 1, 1-TCA.) Although the chemical storage area was adjacent to a site occupied by nonparty Vista Paint, which was also contaminated, Waddell determined that the soil contamination came from the Crucible site based on its chemical profile.[13]

         A groundwater monitoring well on the site of nonparty AC Products, located approximately 1, 000 feet from the Crucible site, detected VOC contamination in groundwater. The District conducted further sampling at locations surrounding the Crucible site. The sampling detected PCE, TCE, 1, 1, 1-TCA, and 1, 1-DCE in perched groundwater, 60 to 70 feet below the surface, and PCE, TCE, and 1, 1-DCE in the shallow aquifer as well, 100 to 120 feet below the surface. Waddell observed that the chemical profile of the VOC's found in soil sampling at the site was similar to the chemical profiles of the perched groundwater and (aside from 1, 1, 1-TCA, which had degraded into 1, 1-DCE) the shallow aquifer. Based on this data, as well as data from the AC Products monitoring well, Waddell opined that VOC releases at the Crucible site had caused contamination of both the perched groundwater and the shallow aquifer. Waddell further opined that soil contamination at the Crucible site was a continuing source of groundwater contamination.

         On cross-examination, Waddell admitted that many of the recent samplings had revealed relatively low levels of contamination. He acknowledged that the Crucible site was not a "major impact" site. Waddell was unable to quantify the amount of VOC groundwater contamination caused by the Crucible site and did not calculate the amount of VOC contamination from that site that the NBGPP would remediate.

         Crucible's expert, Andrew Kopania, acknowledged that Crucible had used PCE, TCE, and 1, 1, 1-TCA at the site. He also admitted that those VOC's had been released into the soil at the Crucible site. But he concluded there was no evidence that VOC releases at the Crucible site had impacted groundwater or migrated to downgradient monitoring wells. Kopania determined that the soil sampling conducted in 1985, 2002, and 2003 showed only modest shallow soil contamination rather than the type of significant release that would migrate down to the shallow aquifer. He also observed that there were no consistent detections of contamination from the shallow soil down to groundwater.

         The environmental consulting firm that conducted the 2003 sampling reached the same conclusion. In its report, the firm wrote, "[The firm] recommends that no further action be required for this Site. It has been clearly demonstrated that the low concentrations of VOC's[, ] where present beneath the Site, do not present a threat to human health or groundwater beneath the Site." The DTSC accepted the firm's conclusion and agreed no further investigation was necessary.

         Kopania criticized Waddell's reliance on the District's 2011 sampling because they were one-time "grab" samples. Kopania testified that grab samples are not accepted by regulatory agencies as adequate to characterize contamination at a site.

         Kopania believed that VOC contamination in the shallow aquifer at the Crucible site was caused by the adjacent Vista Paint site. Kopania's analysis of chemical signatures, particularly the concentration of the VOC stabilizer 1, 4-dioxane, showed consistency between the contamination in groundwater and the contamination at the Vista Paint site. Kopania also believed, based on the VOC composition of the contamination, that other sites upgradient of the Crucible site, including the AC Products site, also caused contamination.


         Northrop owned and operated three sites in the project area: 500 East Orangethorpe Avenue (referred to as EMD), 1730 North Orangethorpe Park (Kester Solder), and 301 East Orangethorpe Avenue (Y-12), all in Anaheim, California. Northrop owned the EMD site from 1952 until 1995 and occupied the site for the vast bulk of that time. Northrop acquired the corporate owner of the Kester Solder site, Litton Industries (Litton), in 2001 or 2002. Litton had owned and occupied the site since 1967. Northrop occupied the Y-12 site from 1962 until 1994. It owned the Y-12 site from 1992 until 1995.

         Northrop operated several degreasers at the EMD site and admitted using TCE, 1, 1, 1-TCA, and 1, 1, -DCE there. At the time operations at the EMD site ceased in 1991, soil sampling revealed extensive VOC contamination. Northrop undertook remediation of the EMD site under the supervision of the RWQCB. All existing buildings at the site were demolished. Northrop installed and operated a soil vapor extraction system in the area of greatest contamination. After completing that extraction process, Northrop excavated soil in the area down a depth of approximately 40 feet below the surface, including a clay layer 10 feet in thickness. The resulting excavation was filled with soil from offsite. After remediation, the RWQCB reviewed soil and groundwater data from the site to determine whether the remaining contamination posed a threat to groundwater. The RWQCB concluded it did not. In a 1991 letter, the RWQCB wrote, "The data from the soil investigation and remediation activities that have taken place indicate that the VOC's that remain in the soil at the site do not appear to be present in concentrations that would result in a significant impact on water quality." While the RWQCB concluded that shallow groundwater at the site had been affected by onsite VOC contamination, the RWQCB believed that contamination in deeper groundwater may have originated from offsite sources because the concentration of contaminants in the deeper groundwater was higher than the concentration in shallow groundwater. Following further groundwater monitoring, the RWQCB repeated its conclusion in 1993: "Several years of site monitoring have indicated that contaminants in the groundwater beneath the site probably originate from an off-site source."[14]

         The District performed additional soil and groundwater sampling in 2010 at locations selected by its expert witness Waddell. The soil samples showed VOC contamination at or below Northrop's remediation goal of one part per million. The groundwater samples showed relatively low levels of contamination.

         Based on these investigations, Waddell opined that Northrop had released TCE and 1, 1, 1-TCA at the EMD site. Waddell also opined that these releases remained a source of groundwater contamination with TCE, 1, 1, 1-TCA, and 1, 1-DCE. Waddell's opinion relied upon his analysis of the degradation time of 1, 1, 1-TCA into 1, 1-DCE, the continued presence of contaminated groundwater under the site, and other factors.

         Waddell believed that groundwater contamination from the EMD site would be captured by at least one, and possibly three, extraction wells as part of the NBGPP. On cross-examination, however, Waddell admitted that it would take approximately one to two years for groundwater under the EMD site to migrate to the District's extraction wells. Groundwater flowing under the EMD site prior to that time would therefore not be captured by the extraction wells.

         Northrop's expert witness on site conditions, Glenn Tofani, testified that any contamination at the EMD site would not impact the shallow aquifer. Tofani based his opinion on a comparison of the concentrations of VOC contaminants at monitoring wells upgradient and downgradient of the site, groundwater VOC concentrations at the site, and the results of the District's 2010 groundwater sampling. Among other observations, Tofani determined that VOC concentrations in groundwater downgradient of the EMD site were similar to upgradient concentrations, both historically and in 2010. (Waddell admitted that the 2010 groundwater samples showed VOC concentrations consistent with upgradient sources.) Tofani also refuted Waddell's conclusion that the degradation time of 1, 1, 1-TCA into 1, 1-DCE showed that the EMD site was a source of groundwater contamination. Based on Tofani's analysis, the contamination originated from a source several thousand feet upgradient of the site.[15]

         At the Kester Solder site, Litton (the prior owner) stored and repackaged PCE. Testing revealed PCE contamination in the shallow soil, perched groundwater, and shallow aquifer. It was undisputed at trial that PCE had been released at the site.

         With the approval of the RWQCB, Northrop installed and operated a soil vapor extraction system to remediate VOC contamination at the Kester Solder site. The system operated between 2007 and 2009. During that time, it removed almost 1, 000 pounds of VOC's. The RWQCB issued a no further action letter at the Kester Solder site in 2010. VOC contamination in perched groundwater remains, however, and Northrop is currently working with the RWQCB to formulate a remediation plan for that contamination as well.

         Based on Northrop's initial testing, Waddell concluded that PCE from the Kester Solder site had reached the shallow aquifer. Waddell testified that contamination at the Kester Solder site had created a plume of PCE contamination that had reached one of the District's extraction wells and would be remediated by that well if the NGBPP were constructed. Based on comparisons between the PCE contamination in upgradient and downgradient monitoring wells, Waddell believed the Kester Solder site-particularly contamination in perched groundwater-continued to contribute to PCE contamination in the shallow aquifer.

         Tofani agreed that the Kester Solder site had contributed to PCE contamination in the shallow aquifer in the past. But he concluded that Northrop's soil remediation had removed the site as a source for further PCE contamination. His conclusion was supported by his own analysis of the concentrations of PCE contamination in upgradient and downgradient monitoring wells. His analysis found there was no increase in PCE concentrations as groundwater flowed beneath the Kester Solder site. Moreover, even if the Kester Solder site were still contributing to VOC contamination in the shallow aquifer, Tofani believed any such contamination would be remediated by a recirculation well Northrop had installed at its Y-12 site, downgradient of the Kester Solder site.

         At its Y-12 site, Northrop's operations included a quench tank that was cleaned with solvents and a degreaser. Northrop admitted that TCE and 1, 1, 1-TCA were among the solvents it used. It was undisputed at trial that TCE, 1, 1, 1-TCA, and at least a small amount of PCE had been released at the site.

         After an initial investigation that did not disclose significant contamination, monitoring activities in the early 2000's revealed more serious soil and groundwater VOC contamination at the site. Northrop commissioned a series of tests, including a soil vapor survey and dozens of groundwater monitoring wells, to characterize the nature and extent of VOC contamination. Northrop developed a remedial action plan consisting of a dual phase soil vapor extraction system. The RWQCB approved the plan in 2008, and Northrop began remediation. By the time of trial, the system had removed approximately 20, 000 pounds of VOC's, with the majority extracted in the first year of the system's operation. Also with the approval of the RWQCB, Northrop installed a treatment and recirculation well at the downgradient edge of the Y-12 site. The well captured and remediated VOC-contaminated groundwater in the shallow aquifer. Although Northrop encountered design hurdles at the beginning of the well's operation, the treated water currently released by the well meets drinking water standards. Northrop's remediation efforts have been reflected in decreasing VOC contamination in most downgradient monitoring wells.

         Waddell reviewed the sampling data and concluded that substantial PCE releases had occurred at multiple locations at the Y-12 site. For one large area of PCE contamination, Waddell believed the concentration of PCE was higher at the Y-12 site when compared to the adjacent site, occupied by nonparty Aero Scientific, showing that the release occurred at the Y-12 site. On cross-examination, however, Waddell admitted that he had interpreted the data incorrectly: The concentrations at the Aero Scientific site were higher than the concentrations at the Y-12 site, indicating that the release did not occur at Northrop's site. Nonetheless, Waddell believed that PCE, TCE, and 1, 1, 1-TCA (and its breakdown products) from the Y-12 site had contaminated groundwater in the shallow aquifer. Although Northrop's recirculation well would capture some onsite contamination, Waddell testified it would have no effect on contamination that had already migrated beyond the well. The District's NBGPP extraction wells would capture this contamination as well as contamination that continues to flow from the Y-12 site.

         Tofani acknowledged that VOC contamination remained at the Y-12 site, notwithstanding Northrop's remediation efforts. Tofani estimated that approximately 200 to 300 pounds (or 1 to 2 percent of the total) remained to be extracted by Northrop's soil vapor extraction system. The remaining VOC's would be extracted by 2014. At that point, in Tofani's view, the Y-12 site would no longer be contributing significantly to groundwater contamination and the recirculation well could be decommissioned.

         At the time of trial, though, the Y-12 recirculation well remained in operation, and Tofani admitted that it does not capture all of the contamination emanating from the site. Because the well captured contamination from upgradient offsite sources, however, Tofani testified that Northrop's efforts achieved a "net balance, " i.e., the recirculation well remediated at least the same amount of offsite contamination as the amount of onsite contamination that escaped remediation.

         Tofani believed adjacent sites, including Aero Scientific, had contributed significant amounts of PCE and 1, 1, 1-TCA contamination to groundwater under the Y-12 site. Tofani analyzed sampling results at the Aero Scientific site and determined that a PCE release at that site had not only contaminated groundwater but migrated laterally into the shallow soil at the Y-12 site. While a separate, smaller release of PCE had occurred on another portion of the Y-12 site, Tofani concluded that the Y-12 PCE release had not impacted groundwater because it extended only to a depth of 10 to 15 feet below ground surface.

         Statement of Decision

         Following trial, the court issued a tentative decision finding in favor of defendants on the statutory causes of action and soliciting responses from the parties regarding potential additional bases for its decision. After several rounds of briefing, the court issued a 74-page statement of decision. The statement of decision recounted the history of the litigation, the District's allegations, the development of the NGBPP, and the court's view of the evidence presented at trial. It also assessed each of the District's statutory claims and explained why the District did not prevail. The statement of decision concluded, among other things, that defendants had not caused the District to develop the NBGPP, that the non-Northrop defendants had not caused contamination in the shallow aquifer at all, that the NBGPP was not necessary to address groundwater contamination in the North Basin area, that the District had not complied with the NCP during development of the NBGPP, that the District's costs were merely "investigatory" and thus not recoverable under the OCWD Act, and that the District was not entitled to a declaration that defendants were liable for future NBGPP costs.

         The court spent the bulk of its statement of decision discussing causation under the HSAA. Although the court did not explicitly apply its discussion to the District's claim under the OCWD Act, it appears the court intended its discussion to apply to that statute as well.

         The court prefaced its causation analysis with a section entitled "Weaker Evidence and Witness Credibility." In that section, the court provided an overview of its reasons for distrusting and failing to credit the District's evidence, including in particular its expert witness Waddell. The court faulted the District for offering weaker evidence where it could have introduced stronger evidence. (See Evid. Code, § 412.) For example, the court noted that the District did not undertake a mass transport analysis of VOC contamination, it did not create an updated map of the VOC contamination plumes, it did not calculate natural attenuation rates, and it did not conduct an adequate analysis of the costs and benefits of the NBGPP. The court criticized the District for relying on grab samples to determine the nature and extent of VOC contamination at defendants' sites.[16] And the court questioned Waddell's credibility in light of the District's failure to provide relevant information to him, his creation of a misleading labeling system to characterize the effect of contamination at defendants' sites on groundwater, and his use of a misleading demonstrative chart that minimized the amount of contamination at a nonparty site.

         The court applied the traditional "substantial factor" causation standard to the District's claims. (See, e.g., Viner v. Sweet (2003) 30 Cal.4th 1232, 1240 (Viner).) In doing so, the court focused on the NBGPP as a whole. The court found that "there was no evidence that the conduct of any one Trial Defendant, or even the conduct of the Trial Defendants considered together, was sufficient to necessitate the NBGPP." The court further found, "Substantial trial evidence demonstrated that the District would have approved the NBGPP even if any one of the Trial Defendants or even if all Trial Defendants had not been operating in the NBGPP area." For example, "None of the trial defendants caused the nitrate or perchlorate contamination, and that problem was a major factor in the decision to approve the more costly, centralized treatment plan. In sum, the Trial Defendants' activities were not a 'but for' cause of, or a substantial factor in, the District's decision to approve a centralized water treatment plan for the NBGPP."

         The court made additional factual findings regarding conditions at defendants' sites. In general, the court wrote, "The weight of the credible trial evidence failed to establish a causal connection between any Trial Defendant's localized releases of hazardous substances into the soil and costs the District has already incurred and might incur in the future. For example, there is no direct evidence of any release of VOC's to the shallow aquifer in the NBGPP area by any Trial Defendant except Northrop.... Although the court found Northrop's historical activities at Kester [Solder] and Y-12 resulted in shallow aquifer contamination, the [c]ourt finds that Northrop, under the [RWQCB's] supervision, has remediated, or is currently remediating, those contaminant releases to levels exceeding those contemplated by the NBGPP, without the District reasonably incurring any remediation or removal expenses."

         As to the Alcoa site, the court concluded that any VOC releases there did not impact the shallow aquifer: "No VOC's of any kind were detected at [the Alcoa site] in the main soil borings between the water table and a point approximately 30 feet above the water table.... [Alcoa's] expert, Richard Weiss, testified without contradiction that if VOC's passed through the soil column underneath [the Alcoa site] and into the shallow aquifer, there would have been detectable amounts of VOC's in the lower soil." In addition, the soil composition at the site made migration down to the shallow aquifer unlikely: "Thick layers of clay underlying the [Alcoa] site discouraged migration of VOC's from the soil to the shallow aquifer." Given Waddell's credibility issues, and Alcoa's successful effort to remediate the soil at the site, the court found the District had not proved causation.

         As to Arnold, the court weighed the conflicting testimony regarding its TCE use and concluded that the District had not shown Arnold used that solvent at its site. Although Arnold acknowledged using 1, 1, 1-TCA, the court determined "there is insufficient evidence that Arnold caused a release of 1, 1, 1-TCA or 1, 1-DCE into soil." On that basis, the court rejected "Waddell's opinion that Arnold's operations contaminated groundwater or threaten today to contaminate groundwater."

         The court found that the District's allegations against CBS were limited to potential PCE contamination. For two of CBS's three sites, 1300 East Valencia and 700 Sally Place, the court concluded that CBS did not use PCE at all. And, in any event, PCE contamination detected at 1300 East Valencia "[did] not go all the way from just below the surface to groundwater, " indicating that groundwater was unaffected by any contamination there. For the third site, 500 South Raymond, the court did not believe that any PCE releases at that site impacted groundwater or posed a threat to groundwater. The court credited the testimony of CBS's expert witness, Daniel Stephens, whose investigation showed that PCE contamination "has dissipated to non-detect levels... before the water table is reached." The court concluded that VOC groundwater contamination at the 500 South Raymond site was caused by offsite sources.

         As to Crucible, the court found that VOC contamination at the site did not reach groundwater. The court found the shallow soil sampling, which did not detect VOC contamination at 40 feet below the surface, more persuasive than the District's grab samples showing deeper contamination. The court determined that VOC contamination in deeper soil at the Crucible site was likely caused by migration from offsite sources.

         The court found that Northrop used and released 1, 1, 1-TCA and TCE, but not PCE, at its EMD site. The court reviewed the history of remediation at the site and concluded that "the weight of credible evidence supports a finding that the EMD site, following remediation in 1991, did not then and does not now present a significant threat to groundwater quality." Data collected by the District in 2010 "demonstrates there is no perceptible contribution from the EMD site to groundwater contamination as groundwater passes below EMD." The court concluded, "The District's evidence concerning shallow aquifer contamination or the threat thereof attributable to Northrop's EMD site was not persuasive."

         At the Kester Solder site, the court found, PCE was stored, mixed, and repackaged. PCE was released on the edge of the site and contaminated shallow soil, perched groundwater, and the shallow aquifer. Following Northrop's remediation efforts, however, the court concluded that the Kester Solder site was no longer a "source of potential groundwater contamination" and "is not contributing to PCE contamination in the shallow aquifer." While the court acknowledged that perched groundwater at the site remains contaminated (and Northrop is attempting further remediation), the court rejected Waddell's opinion that the site "remains a source of groundwater contamination." Instead, the court was persuaded by Northrop's expert witness, Glenn Tofani. Even if the Kester Solder site were still causing groundwater contamination, the court believed Northrop's recirculation well at its Y-12 site would capture any such contamination.

         Regarding the Y-12 site, the court found, "Without dispute, TCE was released... that [has] impacted groundwater." PCE, however "was not used by Northrop at Y-12." While PCE was found in shallow soil at the site, the court concluded based on testing data that "Y-12 is not a source of PCE groundwater contamination." The court found that Northrop's remediation efforts had been largely successful, with 98 percent of VOC contamination having been removed from the soil and a recirculation well treating the shallow aquifer to drinking water standards. The court concluded, "At the time of trial it was estimated that remediation of the perched zone would be completed by 2014, at which point the circulation well will no longer be necessary because the site will no longer be a source of elevated VOC's."

         The court's statement of decision also considered whether any NBGPP costs should be allocated to defendants. The court found that certain contaminants, such as nitrate and perchlorate, were introduced by the District's groundwater recharge activities, which involved (among other things) discharging contaminated Colorado River water into the North Basin area. Regarding VOC contamination, the court wrote, "the evidence is overwhelming that many entities other than the Trial Defendants contributed to VOC releases into the soil and groundwater in the NBGPP area. In addition, the District's recharge activities contributed not only to VOC contamination in the shallow aquifer, but also contributed to the commingling of different-sourced VOC contaminants, making it more difficult, if not impossible, to determine the potentially responsible party. [¶] The Court further finds that the conduct of the District and entities other than the Trial Defendants are a substantial factor in the District's decision to develop the NBGPP. There is no factual basis for allocation of responsibility for past or future expenditures among the Trial Defendants or as between one or more Trial Defendant and the District."

         With respect to the District's claim under the HSAA specifically, the court determined that it was required to show that the NBGPP was consistent with the NCP, the federal regulations governing remedial environmental actions, in order to recover. (40 C.F.R. § 300.1 et seq.) The court found that the NBGPP was not consistent with the NCP because (1) the District did not involve the public in selection of the remedy for VOC contamination in the North Basin; (2) the District did not adequately undertake required investigations, including a remedial investigation, a feasibility study, and a conceptual site model; and (3) the District did not show the NBGPP was a cost-effective response to contamination in the North Basin.

         The court articulated four bases for its rejection of the District's claim under the OCWD Act. First, the court found that the District had not satisfied the preconditions for cost recovery under the statute. The court interpreted the OCWD Act to allow cost recovery under two situations: either the contamination must be "cleaned up or contained [or] the effects thereof abated" or necessary action must have been taken to address "threatened contamination." (OCWD Act, § 8, subd. (c).) As to the first situation, the court found that the NBGPP had not yet been implemented, so the District had not yet cleaned up, contained, or abated any contamination. As to the second situation, the court found that the consequences of the contamination were not urgent enough to qualify as a threat. Second, the court found that funds already expended by the District were merely "investigatory" and thus not recoverable under the OCWD Act. (OCWD Act, § 8, subds. (a)-(c).) Third, the court found that the NBGPP was not a "reasonable" response to contamination in the North Basin area. Fourth, the court found that the NBGPP was not a "necessary" response to contamination in the North Basin area, i.e., the District did not show "each Trial Defendant's conduct was a substantial factor in the decision to develop the NBGPP."

         The court rejected the District's request for a declaration holding defendants liable for future NBGPP costs because it found (1) the District did not adequately investigate the need for the NGBPP (including its failure to create updated maps of VOC contamination, analyze the threat to the deep aquifer, and calculate natural attenuation rates); (2) the District did not adequately assess the costs and benefits of the NBGPP, particularly after the cost increased to over $200 million; (3) the NBGPP was not necessary to protect the deep aquifer or remediate VOC contamination the shallow aquifer; and (4) the District did not adequately consider the effects of source removal on VOC contamination levels in the North Basin area. The source removal referenced by the court included defendants' RWQCB-approved remedial actions and the efforts of nonparties to remediate other sites in consultation with various regulatory bodies.

         After summarizing its conclusions, the court found in favor of defendants, and against the District, on its claims under the OCWD Act and the HSAA and for declaratory relief. The court further found that each defendant was "entitled to a judicial declaration that it has no liability to the District for damages, response costs, or other costs claimed by the District, or any future costs associated with the NBGPP."

         The District's Legal Claims

         Three months after the court's statement of decision, defendants filed a motion for judgment on the District's remaining claims for negligence, nuisance, and trespass. Defendants argued that the court's causation findings in its statement of decision would apply in any jury trial on the District's claims. In defendants' view, these findings precluded recovery on the District's claims for negligence, nuisance, and trespass because those claims each required a showing of causation.[17]

         The District opposed. Analogizing to principles of collateral estoppel, the District argued that the court's causation findings were not essential to its decision (because it found alternative bases to rule in favor of defendants) and they were not identical to the findings required on its remaining claims (because they do not require the same showing of causation). The District also argued that new facts had arisen after the bench trial, including additional evidence of continuing groundwater contamination by the Crucible site and Northrop's Y-12 site. The District contended these new facts prevented the court from applying its prior findings on causation to the District's remaining claims. As to Northrop, the District additionally contended that a jury could award damages for past VOC contamination (e.g., investigatory costs) notwithstanding the court's causation findings.

         The court granted the motion for judgment. It agreed that the District's claims for negligence, nuisance, and trespass required the District to establish causation as to each defendant. Given the court's causation findings in its statement of decision, it found that the District could not prevail on its remaining claims. The court did not believe the District was entitled to offer new evidence in support of its claims.


         Following further briefing, the court entered judgment in favor of defendants, and against the District, on each of the District's causes of action. The judgment included a declaration that defendants "have no liability to the [District] for damages, response costs, or other costs ...

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