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City of San Diego v. Monsanto Co.

United States District Court, S.D. California

November 22, 2017

CITY OF SAN DIEGO, a municipal corporation, Plaintiff,
v.
MONSANTO COMPANY; SOLUTIA INC., and PHARMACIA LLC, Defendants.

          ORDER

          WILLIAM Q. HAYES, United States District Judge

         The matter before the Court is the Motion to Dismiss the City of San Diego's Second Amended Complaint. (ECF No. 108).

         I. BACKGROUND

         On March 13, 2015, Plaintiffs San Diego Unified Port District (the “Port District”) and City of San Diego (the “City”) commenced this action by filing the Complaint. (ECF No. 1). On August 3, 2015, the City and the Port District filed separate First Amended Complaints (“FACs”) against Defendants Monsanto Company, Solutia Inc., and Pharmacia Corporation. (ECF Nos. 24, 25). On August 31, 2015, Monsanto filed a Motion to Dismiss the City's FAC (ECF No. 31) and a Motion to Dismiss the Port District's FAC (ECF No. 32). On September 28, 2016, the Court issued an Order granting in part and denying in part Monsanto's Motion to Dismiss the Port District's FAC and granting Monsanto's Motion to Dismiss the City's FAC in its entirety. (ECF No. 81).

         On November 28, 2016, the City filed a Motion for Leave to File a Second Amended Complaint. (ECF No. 85). On December 20, 2016, Monsanto filed a Statement of Non-Opposition to the City's Motion. (ECF No. 89). On December 21, 2016, the Court granted the City's Motion for Leave to File a Second Amended Complaint. (ECF No. 91).

         On December 22, 2016, the City filed the Second Amended Complaint (“SAC”) alleging a single cause of action against Monsanto for continuing public nuisance.[1](ECF No. 93). On March 24, 2017, Monsanto filed Motion to Dismiss the SAC. (ECF No. 108). On April 7, 2017, the City filed a response in opposition. (ECF No. 109). On April 17, 2017, Monsanto filed a reply. (ECF No. 111).

         On July 28, 2017, the Court held oral argument. (ECF No. 133).

         II. ALLEGATIONS OF THE COMPLAINT

         Plaintiff City is a “California Charter City and municipal corporation.” (ECF No. 93 at ¶ 11). “The City was a trustee of certain relevant tidelands and submerged lands in and around the [San Diego] Bay from the early 1900s through 1963, when that property was transferred to the Port District.” Id.

         Defendants Monsanto Company, Pharmacia LLC, and Solutia Inc. (collectively, “Monsanto”) are three separate corporations spun off from the original Monsanto Company. Id. ¶¶ 13-17. “Mosanto Company has repeatedly held itself out as the sole manufacturer of PCBs in the United States from 1935 to 1979, and trademarked the name ‘Aroclor for certain PCB compounds.” Id. ¶ 2.

         “Polychlorinated biphenyls (or ‘PCBs') are man-made chemical compounds that have become notorious as global environmental contaminants - found in bays, oceans, rivers, streams, soil, and air.” Id. ¶ 1. “In humans, PCB exposure is associated with cancer as well as serious non-cancer health effects, including effects on the immune system, reproductive system, nervous system, endocrine system and other health effects.” Id.

         “Monsanto's commercially-produced PCBs . . . were used in a wide range of industrial applications in the United States, including electrical equipment such as transformers, motor start capacitors and lighting ballasts. In addition, PCBs were incorporated into a variety of products such as caulks, paints and sealants.” Id. ¶ 80. “PCBs easily migrate or leach out of their original source material or enclosure and contaminate nearby surfaces, air, water, soil, and other materials.” Id. ¶ 82.

         Despite knowledge of PCB toxicity, Monsanto continued to “promot[e] the use and sale of Aroclor and other PCB compounds.” Id. ¶ 95. “Monsanto remained steadfast in its production of . . . PCBs.” Id. ¶ 103. “While the scientific community and Monsanto knew that PCBs were toxic and becoming a global contaminant, Monsanto repeatedly misrepresented these facts, telling governmental entities . . . that the compounds were not toxic and that the company would not expect to find PCBs in the environment in a widespread manner.” Id. ¶ 117. “Although Monsanto knew for decades that PCBs were toxic, knew that they could not be contained and as a result were widely contaminating all natural resources and living organisms, and knew that there was no safe way to dispose of PCBs, Monsanto concealed these facts and continued producing PCBs until Congress . . . banned the manufacture of and most uses of PCBs as of January 1, 1979.” Id. ¶ 2.

         “Instead of having customers return fluids, Monsanto instructed its customers to dispose of PCB containing material in local landfills, knowing that landfills were not suitable for PCB contaminated waste.” Id. ¶ 112. “Monsanto had determined that the only effective mothed [sic] of disposing of PCBs was incineration, and it constructed an incinerator for disposal of its own PCB contaminants.” Id. “Nevertheless . . . Monsanto instructed its customers to dispose of PCB contaminated waste in landfills . . . .” Id.

         “PCBs have traveled into San Diego Bay and the City of San Diego's stormwater system by a variety of ways.” Id. ¶ 4. “The Bay is one of the region's most widely used natural resources, and the PCB contamination affects all San Diegans, who reasonably would be disturbed by the presence of a hazardous, banned substance in the sediment, water, and wildlife.” Id. ¶ 124. “PCBs . . . have been found in samples of sediments and water taken from the Bay at varying times and locations, requiring substantial remediation work and cost.” Id. ¶ 125. “PCBs are identified as a Primary Chemical of Concern (‘COC') in California Regional Water Quality Control Board, San Diego Region (‘Regional Water Board') Cleanup and Abatement Order (‘CAO') No. R9-2012-0024 . . . which directed the City to, among other things, remediate PCB contaminated sediments within a discrete area known as the Shipyard Sediment Site.” Id. ¶ 126. “Other areas of PCB deposition and impacts have been located, and it is probable that the Regional Water Board may order remediation of PCB contaminated sediments in other areas.” Id. ¶ 127. “PCBs leach from landfills and are found in commercial and industrial waste water as a result of Monsanto's directions to its customers on proper disposal methods when it knew . . . that disposal of PCBs in landfills was not proper.” Id. ¶ 130. “PCBs regularly leach, leak, off-gas, and escape their intended applications, causing runoff during naturally occurring storm and rain events, after being released into the environment. The runoff originates from multiple sources and industries and enters the City of San Diego's stormwater system and San Diego Bay through stormwater and dry weather runoff.” Id. ¶ 4.

         “The City has property rights in its stormwater system, captured stormwater, and tidelands or submerged lands, and other public trust lands that are contaminated with Monsanto's PCBs, to the extent the City of San Diego owns or holds lands in public trust.” Id. ¶ 25. “The City owns, manages, and operates a municipal stormwater and dry weather runoff system, which captures, collects, reuses for beneficial purposes, and/or transports stormwater and dry weather runoff.” Id. ¶ 26. “Monsanto's PCBs have contaminated and damaged multiple facilities within the City's stormwater and dry weather runoff systems.” Id. ¶ 27. “As a result of Monsanto's PCB's presence, the City cannot operate many of its stormwater and dry weather runoff systems as designed because the system now requires upgrades and retrofits to accommodate Monsanto's PCBs.” Id. ¶ 28. “The City has incurred and will continue to incur costs to reduce PCBs from stormwater and dry weather runoff, which includes efforts to capture and beneficially use stormwater and dry weather runoff to augment existing water supplies.” Id. ¶ 29. “The City's stormwater and dry weather runoff management system is damaged such that multiple facilities within the City's system has [sic] been and must be further retrofitted and improved in order to reduce and remove PCBs from stormwater and dry weather runoff. The retrofits and improvements required to reduce PCBs from stormwater and dry weather runoff have cost and will continue to cost the City money.” Id. ¶ 30. “Retrofits . . . are required to reduce and remove Monsanto's PCBs to prevent further contamination of the San Diego Bay.” Id. ¶ 33.

         The municipal stormwater system “collects and transports stormwater to be discharged into the Bay.” Id. ¶ 130. “In order to discharge stormwater into the Bay, [the City] is required to receive a Municipal Regional Stormwater Permit from the Regional Water Board, pursuant to the National Pollutant Discharge Elimination System under the Clean Water Act.” Id. “As stormwater system owners and operators, [the City] has spent substantial amounts of money to limit the amount of PCBs in the Bay. [The City] will also likely continue to incur costs to remove PCBs from the Bay and to keep PCBs from entering the Bay for the foreseeable future.” Id. ¶ 131.

         California's Stormwater Resources Planning Act “authorizes the City to develop a stormwater resource plan, including compliance with stormwater regulations and beneficial capture of stormwater” and “confer[s] use or usufructuary rights on the City regarding . . . dry weather runoff and stormwater.” Id. ¶ 41. Further, in Assembly Bill 2594, “[t]he Legislature passed legislation confirming and codifying the Cities' use rights in stormwater.” Id. ¶ 36. “The City built, and owns, and manages an entire stormwater system, including plans and programs designed and intended to capture stormwater for beneficial uses outlined in The Stormwater Resources Planning Act . . .” Id. ¶ 50. “The City has a usufructuary right and property interest in stormwater and dry weather runoff by its beneficial capture and use of stormwater.” Id. ¶ 49.

         “The City of San Diego has specific water rights and property interests in the San Diego River, and other rivers and streams in San Diego, through Pueblo Rights.” Id. ¶ 75. The San Diego River “transports stormwater and dry weather runoff” and “is part of the stormwater management system and plan for the City of San Diego.” Id. ¶ 77. The San Diego River operates “as the main stormwater thoroughfare for all flows from the San Diego River Watershed to drain to the ocean.” Id.

         III. ...


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