Mason v. Ashbritt, Inc.

          ORDER ON DEFENDANTS' MOTIONS TO DISMISS RE: DKT. NOS. 41, 42

          Donna M. Ryu, United States Magistrate Judge

         This case relates to property damage caused by the Northern California wildfires of October 2017 and subsequent remediation efforts. Defendants AshBritt, Inc. (“AshBritt”) and Tetra Tech, Inc. (“Tetra Tech”) contracted with the United States government to provide disaster relief services following the fires. Plaintiff Craig Mason, a property owner in Sonoma County, filed this putative class action on February 26, 2019, alleging that Defendants caused property damage and engaged in fraudulent conduct during their remediation efforts. [Docket No. 1.] Mason brings claims for relief under the Racketeering Influenced and Corrupt Organizations Act (“RICO”), as well as state law claims for trespass, conversion, trespass to chattels, and violations of California's Unfair Competition Law (“UCL”), California Business and Professions Code §§ 17200 et seq. [Docket No. 35 (“SAC”).]

         Defendants now move to dismiss Mason's RICO claims pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6). [Docket Nos. 41 (“Tetra Mot.”), 42 (“AshBritt Mot.”), 53 (“Tetra Reply”), 54 (“AshBritt Reply”).] Plaintiffs timely opposed. [Docket Nos. 47 (“Opp. to Tetra”), 48 (“Opp. to AshBritt”).] Having taken oral argument and after considering the parties' submissions, the motions are granted for the reasons stated below.

         I. BACKGROUND

         The following facts are alleged in the operative complaint.

         A. October 2017 Wildfires

         Mason, a California resident, owned real property in Sonoma County during the class period, which is defined as October 2017 to the present. SAC ¶¶ 8, 11. In October 2017, a series of wildfires caused extensive damage throughout the Northern California counties of Sonoma, Napa, Mendocino, and Lake, among others. Id. ¶ 19. The fires burned over 245, 000 acres of land and destroyed over 14, 700 homes. Id. On October 10, 2017, President Trump ordered federal aid to assist the recovery efforts in areas affected by the fires. Id. ¶ 20. The Federal Emergency Management Agency (“FEMA”) coordinated those efforts. Id. The Army Corps of Engineers (“ACE”), working under FEMA, “oversaw and coordinated contractors' clean up and debris removal work as part of the recovery efforts” (the “Project”). Id. ¶ 21. ACE contracted with AshBritt, a Florida corporation, to manage the Project. Id. ¶ 22.

         B. Scope of the Project

         Under AshBritt's contract with ACE, AshBritt was required to perform various services, including:

Obtain, analyze and evaluate background soil samples to establish cleanup goals for the project, including asbestos testing. Asbestos testing will not be required if the Contractor is assuming that all ash is toxic and disposing of it at the proper landfill location. If this assumption is not made, tests will be required at a rate of one test per 5000 [cubic yards] of ash.

Collect, consolidate, and remove ash and debris for disposal. This material typically requires special handling and disposal as “designated” or “special” waste at a lined landfill.

Remove three to six inches of soil for reuse or disposal pending waste characterization. If soil is clean, a landfill may accept it as daily cover.

Upon removing all the debris and three to six inches of soil, sample and analyze the remaining soil surface for the same constituents identified as clean-up goals.

If results are higher than the threshold for clean-up goals . . ., the Contractor will remove another layer of soil (from 1/2[] inch to 3 inches) for disposal and conduct re-sampling of the soil. The removal and re-sampling shall be repeated until the remaining soil meets objectives.

If results are less than the threshold clean-up goals, observe and verify the site preparation for final erosion control and certification.

SAC ¶ 23. In October 2017, AshBritt subcontracted with Tetra Tech to collect and test soil, among other services, on all properties where AshBritt and its debris removal subcontractors performed work. Id. ¶ 24; Tetra Mot. at 3. As the Project progressed, Defendants were awarded additional contracts to continue performing work, and each additional contract “included the same terms and requirements” as those listed above. SAC ¶ 25.

         C. Allegations of Excessive Excavation and Removal

         Mason claims that the ACE contract required Defendants to perform incremental soil removal by removing small layers of soil and re-sampling the soil for additional contamination before removing more. SAC ¶ 26. He alleges that Defendants “routinely removed excessive amounts of soil, up to six feet in depth at a time far more than was necessary to dispose of contaminants without performing sampling to determine whether the soil was contaminated.” Id. ¶ 27. He contends that Defendants “instructed or knowingly permitted” subcontractors to perform excessive excavation, and that Tetra Tech on-site supervisors “monitored the workers and approved the removal of excessive amounts of soil without performing sampling to determine whether the soil was contaminated.” Id. ¶ 28.

         Mason lists several examples of the conduct described above:

In one instance, workers for Ashbritt and its subcontractors took topsoil from surrounding properties and used it to loosely fill an excavated hole to create the appearance that the land had not been overexcavated. The property owner was forced to pay for the cost to compact and backfill the land.

In another instance, a property owner working to rebuild his house in Santa Rosa discovered that workers for a subcontractor contracted and supervised by Ashbritt had overexcavated the land, removed pieces of the foundation, and loosely poured soil to cover it up. As a result, the owner was forced to pay $55, 000 for remediation.

In another instance, where 30 truckloads of overexcavated soil were removed from a single individual's land, a supervisor on-site admitted to the property owner that the Army Corps of Engineers had made ...