United States District Court, N.D. California
ORDER RE DEFENDANTS' MOTION TO DISMISS AND
PLAINTIFF'S MOTION FOR LEAVE TO FILE FIRST AMENDED
COMPLAINT RE: DKT. NOS. 8, 29.
California Sportfishing Protection Alliance
(“Plaintiff”), a non-profit environmental
organization, filed this citizen suit against Defendants The
Shiloh Group, LLC (“TSG”) and Thomas Nelson
“Defendants”) seeking to enforce the Clean Water
Act (“CWA”). According to Plaintiff, Defendants
own and operate a large industrial park that unlawfully
discharges polluted storm water associated with industrial
activities in violation of the CWA.
now move to dismiss the complaint pursuant to Federal Rules
of Civil Procedure 12(b)(1) and 12(b)(6). Motion to Dismiss
(“MTD”) [Docket No. 8]. Plaintiff opposes the
motion to dismiss, and also moves for leave to file a First
Amended Complaint (“FAC”) pursuant to Federal
Rule of Civil Procedure 15. Motion to Amend
(“MTA”) [Docket No. 29]. Having considered the
parties' submissions as well as oral argument, and for
the reasons stated below, the court DENIES
Defendants' motion to dismiss, and GRANTS Plaintiff's
motion to amend.
FACTUAL AND PROCEDURAL HISTORY
response to Defendants' motion to dismiss, Plaintiff
submitted its opposition brief and also filed a motion for
leave to amend the complaint, along with a proposed FAC.
Given that the motion to dismiss and motion for leave to
amend are heavily intertwined, and in light of the fact that
the court grants leave to file the FAC, the court sets forth
the relevant facts based on the FAC, the exhibits attached to
the FAC, and judicially noticeable documents. In the
interests of clarity and judicial efficiency, the court will
analyze the sufficiency of the allegations in the FAC rather
than the complaint. For the purposes of adjudicating these
motions, the court accepts the allegations in the FAC as
true, except with respect to the analysis of the
jurisdictional issue of mootness, as discussed below.
court discusses the CWA in more detail below, and sets forth
this brief background to provide context for the relevant
facts. The CWA is intended to “restore and maintain the
chemical, physical, and biological integrity of the
Nation's waters.” 33 U.S.C. § 1251(a). To that
end, Section 301(a) of the CWA prohibits the “discharge
of any pollutant” into navigable waters from any
“point source” unless certain statutory
exceptions apply. See 33 U.S.C. §§
1311(a), 1362(12). “One such exception is for
discharges by entities or individuals who hold [National
Pollutant Discharge Elimination System, or NPDES]
permits.” Nat. Res. Def. Council, Inc. v. County of
Los Angeles, 673 F.3d 880, 891 (9th Cir. 2011),
rev'd on other grounds sub nom. Los Angeles Cty.
Flood Control Dist. v. Nat. Res. Def. Council, Inc., 568
U.S. 78 (2013); see also 33 U.S.C. § 1342. For
storm water discharge, a permit is required only if the
discharge falls into one of five categories. See 33
U.S.C. § 1342(p)(2)(A) through (E) (listing the five
categories of storm water discharges that are subject to the
permit requirement). One of these categories is storm water
associated with “industrial activity.”
See 33 U.S.C. § 1342(p)(2)(B). The relevant EPA
regulation, 40 C.F.R. § 122.26(b)(14), defines
“storm water discharge associated with industrial
activity [as] the discharge from any conveyance that is used
for collecting and conveying storm water and that is directly
related to manufacturing, processing or raw materials storage
areas at an industrial plant.” The regulation sets
forth categories of facilities which are considered to be
engaging in “industrial activity, ” and
identifies those industrial activities mainly by
“Standard Industrial Classification” codes,
otherwise known as SIC codes.
own and operate a 31-acre industrial park located at 930
Shiloh Road in Windsor, California (the
“Facility”). FAC ¶¶ 10, 51 [Docket No.
37-1]. Defendants lease industrial lots at the Facility to
approximately 60-80 tenant businesses. FAC ¶ 10.
Industrial activities occur throughout the Facility and
contribute to polluted storm water discharges. Id.
¶¶ 51-54, 61-64. These industrial activities
include or have included fencing installation, wood pallet
construction, structural rebar assembly, auto repair, and
trucking operations. Id. ¶ 51. The industrial
activities fall under a number of SIC codes, see 40
C.F.R. § 122.26(b)(14), depending on which businesses
are operating at the Facility at a given time. FAC ¶ 52;
see also First 60-Day Notice at 3-4 (Ex. A to FAC)
(listing SIC codes for the industrial activities occurring at
the Facility as of June 25, 2015) [Docket No. 29-2].
to Plaintiff, as owners and operators of the Facility,
Defendants maintain and control the Facility's common
infrastructure including its ditches and pipes, and thereby
control the discharges of storm water associated with
industrial activities that flow from the Facility into waters
covered by the CWA. FAC ¶¶ 54-64. The Facility
discharges polluted storm water associated with the
industrial activities in a number of ways. For example, the
Facility has multiple subsites containing polluted soil from
past industrial activities. Id. ¶ 54. Although
some of these subsites are the subject of environmental
remediation efforts, they remain exposed to storm water and
storm water flows. Id. ¶ 54. Additionally, the
Facility has ditches and pipes that collect and combine storm
water from different parts of the Facility, see Id.
¶ 57, and a paved road that runs throughout the Facility
on which storm water collects and flows north into the Pruitt
Creek. Id. ¶ 58. Moreover, because the Facility
does not have “essential structural controls such as
grading, berming, and roofing” to prevent storm water
from coming into contact with contaminants and pollutants
created by the industrial activities when it rains,
id. ¶ 73, storm water flows across materials
associated with industrial activities, becomes contaminated,
and leaves the Facility. Id. The polluted storm
water discharges from the Facility through concrete
conveyances into the Pruitt Creek, which joins Pool Creek and
Windsor Creek, both of which drain into Mark West Creek,
which drains into the Russian River. Id.
¶¶ 50-51, 64; see also First 60-Day Notice
in 2002, Defendants maintained a permit for the
Facility's storm water discharges under California's
statewide general permit for industrial activities
(“General Permit”). See FAC ¶ 65;
December 9, 2002 Receipt of Notice of Intent (Ex. B to
Pltf's RJN) [Docket No. 17]. Under the General Permit, a
permit holder must comply with three requirements: “1)
discharge prohibitions; 2) Storm Water Pollution Prevention
Plan (“SWPPP”) requirements; and 3) monitoring
and reporting requirements, including the requirement to
prepare an annual report.” FAC ¶ 31.
to Plaintiff, although Defendants continuously have
maintained coverage under the General Permit since 2002, they
have failed to comply with the General Permit requirements,
notwithstanding their expressed intent to abide by them.
Plaintiff claims that Defendants have repeatedly and
consistently exceeded discharge prohibitions, receiving water
limitations, and effluent limitations, and have failed to
develop and implement adequate SWPPPs. See First
60-Day Notice at 4-13; see e.g., FAC ¶¶
September 7, 2016, in order to address these and other
violations of General Permit requirements, Plaintiff served
Defendants with a 60-Day Notice of its intention to file a
private citizen lawsuit to enforce the CWA. See
First 60-Day Notice.
November 7, 2016, in response to Plaintiff's First 60-Day
Notice, Defendants submitted a Notice of Termination
(“NOT”) of their coverage under the General
Permit to the California State Water Resources Control Board
(“SWRCB”). See November 7, 2016 NOT (Ex.
B to Defs' First RJN) [Docket No. 8-4].
later, on November 8, 2016, Plaintiff filed this citizen suit
alleging four claims under the CWA for discharging polluted
storm water associated with industrial activity in excess of
the limits set forth in the General Permit, and for failing
to implement the plans required under the General Permit
necessary to reduce and/or prevent the discharge of
pollutants in storm water discharges associated with
December 9, 2016, Plaintiff served Defendants with its Second
60-Day Notice, alleging that Defendants violated the CWA by
unlawfully discharging storm water associated with industrial
activities without a required permit. See Second
60-Day Notice (Ex. B to FAC) [Docket No. 29-3].
December 21, 2016, Defendants moved to dismiss the complaint
on the ground that the action is moot because Defendants
terminated their coverage under the General Permit prior to
the filing of the lawsuit, and therefore could no longer be
held liable under the CWA for violating the General Permit as
alleged in the complaint. Defendants also moved to dismiss
the complaint on the ground that it failed to state a claim.
According to Defendants, as passive landlords who merely own
a facility, they are not liable under the CWA for the
pollution created by tenants.
February 8, 2017, Plaintiff moved for leave to file the FAC.
Like the original complaint, the FAC alleges that Defendants
violated the CWA by failing to comply with the requirements
of the General Permit by discharging storm water associated
with industrial activities. Compare FAC ¶¶
80-104 with Compl. ¶¶ 57-81. In addition,
the FAC alleges in the alternative that Defendants violated
the CWA by failing to obtain permit coverage for discharges
of storm water associated with industrial activities.
See, e.g., FAC ¶¶ 71, 105-09.
motion to dismiss filed pursuant to Rule 12(b)(1) is a
challenge to the court's subject matter jurisdiction.
See Fed. R. Civ. P. 12(b)(1). A court will dismiss a
party's claim for lack of subject matter jurisdiction
“only when the claim is so insubstantial, implausible,
foreclosed by prior decisions of th[e Supreme] Court, or
otherwise completely devoid of merit as not to involve a
federal controversy.” Steel Co. v. Citizens for a
Better Env't, 523 U.S. 83, 89 (1998) (citation and
quotation marks omitted). When reviewing a 12(b)(1) motion,
the court sculpts its approach according to whether the
motion is “facial or factual.” White v.
Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). A facial
challenge asserts that “the allegations contained in a
complaint are insufficient on their face to invoke federal
jurisdiction.” Safe Air for Everyone v. Meyer,
373 F.3d 1035, 1039 (9th Cir. 2004). By contrast, a factual
attack disputes “the truth of the allegations that, by
themselves, would otherwise invoke federal
jurisdiction.” Safe Air for Everyone, 373 F.3d
at 1039. A factual challenge permits the court to look beyond
the complaint, without “presum[ing] the truthfulness of
the plaintiff's allegations.” White, 227
F.3d at 1242 (citation omitted). Even the presence of
disputed material facts “will not preclude the trial
court from evaluating for itself the merits of jurisdictional
claims.” Roberts v. Corrothers, 812 F.2d 1173,
1177 (9th Cir. 1987) (citations omitted).
moving to dismiss Plaintiff's action as moot under Rule
12(b)(1), Defendants contest the truthfulness of
Plaintiff's allegations that they violated the CWA by
discharging polluted storm water associated with industrial
activities in excess of the limits in the General Permit.
Defendants submit extrinsic evidence which purportedly
establishes that Defendants were not covered by the General
Permit at the time the complaint was filed. Defendants argue
that this renders the lawsuit moot. Accordingly,
Defendant's jurisdictional attack is factual in nature.
The court therefore does not “presume the
truthfulness” of Plaintiff's allegations,
White, 227 F.3d at 1242, and may look beyond
Plaintiff's complaint to resolve the jurisdictional
dispute. Roberts, 812 F.2d at 1177.
motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) tests the legal sufficiency of the claims alleged in
the complaint. Ileto v. Glock Inc., 349 F.3d 1191,
1199-200 (9th Cir. 2003). When reviewing a motion to dismiss
for failure to state a claim, the court must “accept as
true all of the factual allegations contained in the
complaint, ” Erickson v. Pardus, 551 U.S. 89,
94 (2007) (per curiam) (citation omitted), and may dismiss
the case “only where there is no cognizable legal
theory or an absence of sufficient facts alleged to support a
cognizable legal theory.” Shroyer v. New Cingular
Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir.
2010) (citation and quotation marks omitted).
complaint presents a cognizable legal theory, the court may
grant the motion if the complaint lacks “sufficient
factual matter to state a facially plausible claim to
relief.” Id. (citing Ashcroft v.
Iqbal, 556 U.S. 662 (2009)). A claim has facial
plausibility when a “plaintiff pleads factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678 (citation omitted).
purposes of Rule 12(b)(6) review, the court reviews documents
incorporated into the complaint, as well as judicially
noticeable material. Tellabs, Inc. v. Makor Issues &
Rights, Ltd., 551 U.S. 308, 322 (2007); Knievel v.
ESPN, 393 F.3d 1068, 1076-77 (9th Cir. 2005)
(incorporation by reference); Skilstaf, Inc. v. CVS
Caremark Corp., 669 F.3d 1005, 1016 n.9 (9th Cir. 2012)
(judicial notice). The court may also consider
“documents whose contents are alleged in a complaint
and whose authenticity no party questions, but which are not
physically attached to the pleading.” Branch v.
Tunnell, 14 F.3d 449, 454 (9th Cir. 1994), overruled
on other grounds by Galbraith v. Cty. of Santa Clara,
307 F.3d 1119 (9th Cir. 2002).
Leave to Amend
Federal Rule of Civil Procedure 15(a), leave to amend should
be granted as a matter of course, at least until the
defendant files a responsive pleading. Fed.R.Civ.P. 15(a)(1).
After that point, Rule 15(a) provides generally that leave to
amend the pleadings before trial should be given
“freely . . . when justice so requires.”
Fed.R.Civ.P. 15(a)(2). “This policy is to be applied
with extreme liberality.” Eminence Capital, LLC v.
Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003)
(quotation omitted). In the absence of an “apparent
reason, ” such as undue delay, bad faith or dilatory
motive, prejudice to the opposing party, futility of the
amendments, or repeated failure to cure deficiencies in the
complaint by prior amendment, it is an abuse of discretion
for a district court to refuse to grant leave to amend a
complaint. Foman v. Davis, 371 U.S. 178, 182 (1962);
Lockheed Martin Corp. v. Network Sols., Inc., 194
F.3d 980, 986 (9th Cir.1999). These factors do not
“merit equal weight, ” and “it is the
consideration of prejudice to the opposing party that carries
the greatest weight.” Eminence Capital, 316
F.3d at 1052. “Granting leave to amend does not
necessarily mean that the underlying allegations ultimately
have merit.” FlatWorld Interactives LLC v. Apple
Inc., 12-CV-01956-WHO, 2013 WL 6406437, at *3 (N.D. Cal.
Dec. 6, 2013). “Rather, ‘[a]bsent prejudice, or a
strong showing of any of the remaining [ ] factors, there
exists a presumption under Rule 15(a) in favor of granting
leave to amend.'” Id. (quoting
Eminence Capital, 316 F.3d at 1052).
REQUESTS FOR JUDICIAL NOTICE
parties submitted several requests for judicial notice
(“RJNs”) in conjunction with these motions.
Defendants filed four RJNs, which collectively request that
the court take judicial notice of Exhibits A through U.
See Defs' RJN No. 1 [Docket No. 8-2] (Ex. A
through Ex. C); Defs' RJN No. 2 [Docket No. 20-6] (Ex. D
through Ex. R); Defs' RJN No. 3 [Docket No. 24] (Ex. S
and Ex. T); Defs' RJN No. 4 [Docket No. 36-1] (Ex. U).
Plaintiff filed one RJN requesting that the court take
judicial notice of Exhibits A through D. See
Pltf's RJN [Docket No. 17].
Rule of Evidence 201 permits a court to take judicial notice
of facts not subject to reasonable dispute and “can be
accurately and readily determined from sources whose accuracy
cannot reasonably be questioned.” Fed.R.Evid. 201(b).
“[A] court may take judicial notice of ‘matters
of public record.'” Lee v. City of Los
Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (citing
Mack v. S. Bay Beer Distrib., 798 F.2d 1279, 1282
(9th Cir. 1986), abrogated on other grounds by Astoria
Fed. Sav. & Loan Ass'n v. Solimino, 501 U.S. 104
may also take judicial notice of “records and reports
of administrative bodies.” Mack, 798 F.2d at
1282. However, when courts take judicial notice of
administrative records, only the existence of the documents
themselves including the findings therein are judicially
noticeable, and not the contents of the documents for the
truth of the matters asserted. See, e.g.,
Lacayo v. Donahoe, No. 14-CV-04077-JSC, 2015 WL
993448, at *10 (N.D. Cal. Mar. 4, 2015) (taking judicial
notice of documents in ruling on a motion to dismiss
“only . . . [as to] the existence of the administrative
proceedings and the agency's findings, ” and not
“credit[ing] the truth of any fact recounted or matter
asserted in the documents”).
cannot take judicial notice of the contents of documents for
the truth of the matters asserted therein when the facts are
disputed, as they are here for certain exhibits.
See, e.g., Lee, 250 F.3d at 689-90
(district court appropriately took judicial notice of the
fact of the extradition hearing, that the waiver of
extradition was signed, and that the defendant purportedly
waived his right to challenge his extradition, but erred by
taking judicial notice of the disputed fact of the validity
of the waiver); see also Daghlian v. DeVry Univ.,
Inc., 461 F.Supp.2d 1121, 1146-47 (C.D. Cal. 2006)
(taking judicial notice of the existence of administrative
reports including their contents, but not “for their
truth” due to a disputed issue of fact); Ctr. for
Envtl. Health v. Vilsack, No. 15-CV-01690-JSC, 2015 WL
5698757, at *5 (N.D. Cal. Sep. 29, 2015) (taking judicial
notice of the existence of USDA's Program Handbook in
ruling on a motion to dismiss, but declining to take
“judicial notice of the substance of the Program
Handbook for the truth of any matter asserted within the
Program Handbook, including the disclaimer as to the legal
effect of the ‘guidance' contained therein”).
these principles, the court grants Defendants' request
for judicial notice as to Exhibit A, O, P, and U because they
are matters of public record, and contain facts not subject
to reasonable dispute that are capable of accurate and ready
determination by resort to sources whose accuracy cannot
reasonably be questioned. Exhibits A and O are selected
portions of California's General Permit for Storm Water
Discharges Associated with Industrial Activity, Order No.
2014-0057-DWQ, NPDES No. CAS000001 (“General
Permit”). Exhibit P is a selected portion of the
Federal Register from November 16, 1990, Vol. 55, No. 222,
pp. 48006-7. Exhibit U is the North Coast Regional Water
Quality Control Board (“NCRWB”) Order No.
RI-2007-0006 entitled “Waste Discharge Requirements for
In-Situ Treatment of Contaminated Soil for Ecodyne
Corporation” (“NCRWB Waste Discharge
court grants Defendants' request as to Exhibits C, M, and
S but only as to the existence of the documents, the dates
they were submitted, and the existence of the contents
therein. The court declines to take judicial notice of the
contents for the truth of the matters asserted, because those
facts are disputed. Exhibits C, M, and S are letters from a
public agency. See
http://www.waterboards.ca.gov/northcoast/ (last accessed on
July 24, 2017). Exhibit C is the November 30, 2016 Letter
from Paul Keiran of the NCRWB regarding Defendants'
November 7, 2016 NOT (“November 30, 2016 NCRWB
Letter”). Exhibit M is the January 5, 2017 Letter from
Mona Dougherty of the NCRWB regarding ...