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Coppola v. Smith

United States District Court, E.D. California

July 1, 2016

GARY COPPOLA, et al., Plaintiffs


         This is an environmental law case that arises from the chemical contamination of property surrounding a dry cleaning business in Visalia, California. Defendant Visalia Unified School District (“VUSD”) has filed a motion to approve settlement and for the Court to hold that the settlement is in “good faith” under California Code of Civil Procedure §§ 877 and 877.6 (hereinafter “§ 877” and “§ 877.6”). See Doc. No. 415. Hearing on this motion is set for July 11, 2016. The time to formally oppose VUSD’s motion has now passed, and no party to this case has filed an opposition. The Court will vacate the July 11, 2016 hearing date and instead issue this order, which grants VUSD’s motion.


         As explained in previous orders, [1] and as alleged in the Eighth Amended Complaint, Plaintiffs own the real property and a dry cleaning business located at 717 W. Main Street ("717 W. Main"), Visalia, California. VUSD operates an irrigation well (“the SV Well”) and an auto shop, a wood shop, and custodial closets on the campus of Redwood High School in Visalia, California. Redwood High School is approximately 0.5 miles away from 717 W. Main.

         On October 28, 2009, the California Department of Toxic Substances Control (“DTSC”) informed Plaintiffs that it was investigating the occurrence of PCE in the soil and groundwater at 717 W. Main. It was later determined that the soil and groundwater both at and near 717 W. Main were contaminated with PCE.

         In June 2011, Plaintiffs and the DTSC entered into a Consent Order that inter alia required Plaintiffs to conduct studies and clean-up efforts of the PCE plume at and near 717 W. Main.

         Plaintiffs brought this lawsuit in 2011. As to VUSD, Plaintiffs allege claims under 42 U.S.C. §§ 9607(a) and 9613(f) (the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”)), public nuisance, public nuisance per se, dangerous condition of public property, and declaratory relief. These claims are based on alleged releases of PCE attributable to the SV Well, auto shop, wood shop, and custodial closets at Redwood High School. VUSD has filed counterclaims against Plaintiffs for violation of CERCLA § 9613, equitable contribution, equitable indemnity, nuisance, trespass, and negligence.


         Defendant’s Argument

         VUSD states that it and Plaintiffs have agreed to settle all claims between them in exchange for mutual waivers and releases, the payment by VUSD of $110, 000.00, and VUSD’s promise to work with DTSC regarding any investigation or remediation that may be associated with the Redwood High School campus. However, the settlement is contingent upon the Court making a finding of “good faith” under § 877 and § 877.6. VUSD argues that the settlement meets the Tech-Bilt factors, which show that the settlement is in good faith. First, the amount that VUSD agrees to pay is within the reasonable range of its proportional responsibility. Plaintiffs have incurred $600, 000 in clean-up costs to date. The amount of PCE that has been found in the SV Well has been generally below the regulatory limit for drinking water, even though the SV Well is not a drinking water well. Further, there is only limited evidence that other operations at Redwood High School contributed to any PCE contamination. The $110, 000 is the same amount for which Cal Water settled this matter, and the limited CERCLA theory against Cal Water would also limit the CERCLA theories applicable to the SV Well. Second, VUSD has been unable to locate applicate insurance coverage for this case. Third, there has been no collusion, and the settlement was reached after extensive negotiations. No other party has indicated that they will oppose this motion, and all parties were notified prior to filing this motion. Fourth, it is understood that a party should pay less in settlement than by way of a verdict. Given these considerations, the settlement is clearly within the ballpark of what is reasonable, and thus, is a “good faith” settlement.

         Other Parties’ Positions

         Defendants Paragon Cleaners, Inc. and Richard Laster have each filed formal notices of non-opposition. See Doc. Nos. 420, 422. Plaintiffs have filed a notice of non-opposition and expressly join VUSD’s request to find that the settlement is in good faith. See Doc. No. 418. Plaintiffs point out that there are disputed factual issues, including the applicability of the standards used by VUSD regarding regulatory contamination limits for PCE and the level of contaminated water released from the SV Well. Plaintiffs state that they have also provided sampling data relating to the release of PCE at the Redwood High School auto shop, wood shop, and custodial closets. No other party has objected to or opposed VUSD’s motion in any way.

         Relevant Terms of Settlement

         The settlement agreement settles all claims and issues between VUSD and Plaintiffs, as raised in Plaintiffs’ active complaint and VUSD’s counterclaims. See Doc. No. 415 at Ex. A at p.2. In part, the settlement provides that VUSD will pay Plaintiffs $110, 000.00, Plaintiffs will dismiss their complaint against VUSD, VUSD will dismiss its counterclaims against Plaintiffs, and VUSD will work with the DTSC to investigate and remediate (if necessary) PCE contamination at Redwood High School. See id. at pp. 2-3. There is a denial of liability, and the parties are to bear their own attorneys’ fees and costs. The settlement is contingent upon the Court finding that the settlement is made in good ...

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