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TC Rich, LLC v. Shaikh

United States District Court, C.D. California

September 25, 2019

TC Rich, LLC, et al.
v.
Hussain M. Shaikh, et al.

          Present: The Honorable DOLLY M. GEE, UNITED STATES DISTRICT JUDGE

          CIVIL MINUTES-GENERAL

         Proceedings: IN CHAMBERS - ORDER TO SHOW CAUSE WHY THE ACTION SHOULD NOT BE DISMISSED FOR CLAIM-SPLITTING

         On June 4, 2019, Plaintiffs Richard Fleischer, Jacqueline Fleischer, TC Rich, LLC, Rifle Freight, Inc., and Fleischer Customs Brokers filed a First Amended Complaint (“FAC”) against Defendants Haroon Khan, Hussain M. Shaikh, and Shah Chemical Corporation (“Shah Chemical”). [Doc. # 22]. The FAC brings six claims relating to Defendants’ alleged contamination of Plaintiffs’ property at 132 W. 132nd Street, Los Angeles, California 90061 (“the Property”): (1) cost recovery under owner liability under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§ 9601 et seq. (“CERCLA”); (2) cost recovery under CERCLA operator liability; (3) declaratory relief; (4) continuing private nuisance; (5) continuing trespass; and (6) injunctive relief and attorneys’ fees under the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq. (“RCRA”). Id.

         A related case is currently before the court: TC Rich, LLC, et al. v. Pacifica Chemical Inc., et al., CV 15-4878-DMG (AGRx) (the “Pacifica Action”). In that case, the same plaintiffs- Richard and Jacqueline Fleischer, TC Rich, Rifle Freight, and Fleischer Customs Brokers-filed a complaint against Pacifica Chemical Inc. (“Pacifica”), a corporation wholly owned by Defendant in the current action, Hussain Shaikh, as well as against two engineering and environmental consultants not party to the instant action. The complaint in the Pacifica Action involved allegations that Pacifica’s business had contaminated the Property and stated claims for: (1) cost recovery under CERCLA owner liability; (2) cost recovery under CERCLA operator liability; (3) declaratory relief; (4) continuing private nuisance; and (5) continuing trespass, as well as negligence claims against the environmental consultants. In contrast to the FAC in this action, there is no claim for injunctive relief under the RCRA in the Pacifica Action.

         After several years of litigation, the plaintiffs in the Pacifica action sought leave to amend to add the RCRA claim against Pacifica. See Pacifica Action, Pls.’ Mot. for Leave to File a First Am. Compl. at 6[1] [Doc. # 105]. The plaintiffs claimed that Pacifica was no longer cooperating with the plaintiffs and the Department of Toxic Substances Control to perform voluntary cleanup of the Property, thus a claim for injunctive relief was required. Id. Citing the plaintiffs’ delay in seeking leave to amend, the Court denied the plaintiffs’ motion on April 15, 2019. See Pacifica Action, Order re Pls.’ Mot. for Leave to File a First Am. Compl. at 2-3 [Doc. # 116].

         Just weeks prior, on March 21, 2019, Plaintiffs filed this action-including the RCRA claim-against Pacifica’s owner, Shaikh, and its predecessor company, Shah Chemical, as well as another related former owner of the Property, Khan. Meanwhile, the Pacifica action is still active, with a Seventh Joint Status Report submitted on August 14, 2019 indicating that the parties are now making progress in remediating groundwater at the Property and that the parties anticipate returning to mediation as soon as November 2019. See Pacifica Action, Seventh Further Joint Quarterly Status Report at 2 [Doc. # 118].

         It appears that Plaintiffs have brought, in a brand-new suit, the very claims they were denied leave to amend in the Pacifica Action. But under the doctrine of claim-splitting, a party is “not at liberty to split up his demand, and prosecute it by piecemeal, or present only a portion of the grounds upon which special relief is sought, and leave the rest to be presented in a second suit, if the first fail.” Cook v. C.R. England, 2012 WL 2373258, at *3 (C.D. Cal. June 21, 2012) (quoting United States v. Haytian Republic, 154 U.S. 118, 125 (1894). The ultimate objective of the doctrine is to “protect the Defendant from being harassed by repetitive actions based on the same claim” and “to promote judicial economy and convenience.” Id. (citing Clements v. Airport Auth. of Washoe Cnty., 69 F.3d 321, 328 (9th Cir. 1995)).

         Therefore, Plaintiff is hereby ORDERED TO SHOW CAUSE in writing, no later than October 10, 2019, why this action should not be dismissed as claim-splitting and an end run around this Court’s denial of leave to amend. See Adams v. California Dep’t of Health Servs., 487 F.3d 684, 688 (9th Cir. 2007), overruled on other grounds by Taylor v. Sturgell, 553 U.S. 880, 904 (2008) (“Plaintiffs generally have “no right to maintain two separate actions involving the same subject matter at the same time in the same court and against the same defendant [or those in privity with them].” (citation and internal quotation marks omitted)).

         The Court will hold in abeyance its decision on Defendant Shaikh’s Motion to Dismiss and Motion to Strike Plaintiffs’ Sixth Cause of Action until Plaintiff has responded to this Order to Show Cause (“OSC”). Failure to respond to this OSC in a timely and satisfactory manner will result in the dismissal of this action.

         IT IS SO ORDERED.

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Notes:

[1] All page references herein are to page numbers inserted in the header of the document by the CM/ECF ...


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