Court: District Court, S.D. California; November 17, 2015; Federal District Court
The Court has partially granted and partially denied motions to dismiss filed by Defendants Ametek, Inc. and Senior Operations, LLC. The case involves allegations of toxic waste dumping into a temporary storage tank on property in El Cajon, California, where aircraft engine parts were manufactured from 1953 to 1988. The facility, initially founded as California Aircraft Products and later renamed Straza Industries, was purchased by Ametek in 1968, and then by Senior Operations around 1998.
From 1963 to 1985, it is alleged that up to 7,000 gallons of toxic waste monthly—including acids, chlorinated solvents, and various harmful chemicals—were dumped into a sump that deteriorated over time, leading to contamination of surrounding soil and groundwater. This resulted in a significant waste plume, purportedly the largest TCE plume in California, extending 1.3 miles and containing various hazardous substances.
The California Regional Water Quality Control Board has been aware of the contamination since at least the 1980s and charged the Defendants in 2008 for failing to establish adequate monitoring wells and for neglecting remediation efforts after two decades of investigation.
Defendants are alleged to have caused pollution and contamination in the groundwater beneath the El Cajon Valley, negatively impacting beneficial uses in the Santee/El Monte Basin. The California Department of Toxic Substances Control (DTSC) is monitoring the waste plume affecting three mobile home parks—Greenfield, Starlight, and Villa Cajon—located down-gradient from the Ametek facility, which is the source of the plume. Magnolia Elementary School, situated adjacent to Ametek, is also affected, with DTSC reporting on toxic vapor intrusion risks to the school's indoor air quality. The presentation at a DTSC meeting highlighted that the carcinogenic vapors, particularly PCE and TCE, have been increasingly detected, with cancer risk levels nearing the threshold for unacceptable risk. In response to these health concerns, the Cajon Valley Union School District decided to close Magnolia for the 2015-2016 school year. Plaintiffs claim that similar toxic chemicals identified at Magnolia are present in the soil and groundwater under the mobile home parks, with various federal agencies recognizing their harmful health effects. Plaintiffs, consisting of five limited partnerships and LLCs owning the mobile home parks, filed their initial complaint on July 10, 2015, later amending it on August 20, 2015. They are pursuing seven causes of action: negligence, gross negligence, public nuisance, private nuisance, trespass, trespass due to extrahazardous activity, and strict liability for ultrahazardous activity, seeking both punitive and compensatory damages.
Defendants submitted motions to dismiss on September 8, 2015, with Plaintiffs responding by October 2, 2015, and Defendants replying on October 16, 2015. Under Rule 12(b)(6), a dismissal can occur due to a lack of a cognizable legal theory or insufficient factual allegations. To avoid dismissal, a complaint must present sufficient factual matter to establish a plausible claim for relief, as emphasized by the Supreme Court in Ashcroft v. Iqbal and Bell Atlantic Corp. v. Twombly. Merely stating legal conclusions or unsupported accusations is inadequate. Courts are not required to accept legal conclusions as factual allegations, and the plausibility standard demands more than mere possibility of unlawful conduct. The court may consider only the complaint, documents referenced within, and matters subject to judicial notice. Judicial notice can extend to documents central to the plaintiff’s claim if their authenticity is unchallenged. Additionally, the Federal Rules of Evidence allow judicial notice of facts that are generally known or easily verifiable, either on the court's initiative or upon request from a party.
Under Rule 201, courts may take judicial notice of official acts from the legislative, executive, and judicial branches of the U.S., including records from administrative bodies like the Water Board and DTSC. Judicial notice also extends to press coverage and news articles. In this case, Defendants seek judicial notice of various documents, including memorandums, correspondence, orders, and court documents, which are considered public records and are not disputed for authenticity by Plaintiffs. The Court grants Defendants’ requests for judicial notice as these documents are central to the Plaintiffs' claims.
Ametek moves to dismiss the case on several grounds: (1) Plaintiffs have not adequately pleaded facts for their causes of action, (2) the economic loss rule prevents recovery, (3) Plaintiffs lack standing, and (4) the statute of limitations bars their claims. Ametek emphasizes that the absence of compensable harm is critical for dismissal, arguing that Plaintiffs only allege groundwater contamination, which under California law does not equate to possessory ownership of groundwater. Ametek cites the economic loss rule to assert that recovery is barred when only a loss in property value is claimed without physical harm. Furthermore, Ametek contends that Article III standing requires demonstrable redressable harm, referencing established legal principles regarding injury, causation, and redressability.
Plaintiffs assert claims of groundwater and soil contamination, along with the emission of toxic vapors, supported by evidence from Ametek’s consultants. The Complaint includes specific allegations of soil contamination and toxic vapor emissions impacting Magnolia Elementary School and subsurface land. Courts have recognized these pollution types as compensable harms, allowing for recovery costs for cleanup efforts, as evidenced by precedents like Newhall Land & Farming Co. v. Superior Court and Mangini v. Aerojet-Gen. Corp. The Court concludes that Plaintiffs have adequately alleged harm due to contamination.
Regarding gross negligence, Ametek contends that Plaintiffs lack sufficient facts to support this claim, arguing that their monitoring efforts negate allegations of carelessness. However, the Water Board’s 2008 Administrative Liability Complaint criticized Ametek for insufficient monitoring and failure to remediate the toxic plume despite two decades of investigation. Plaintiffs allege significant toxic waste dumping by Ametek without adequate cleanup efforts, which the Court finds sufficient to support a claim for gross negligence.
On the issue of trespass and strict liability due to ultrahazardous activity, Ametek challenges the sufficiency of Plaintiffs' allegations. The determination of an activity as ultrahazardous relies on a six-part test assessing risks, likelihood of harm, and the ability to mitigate risks, among other factors. This legal framework guides the evaluation of the claims against Ametek.
Several courts have ruled that using industrial solvents like TCE and PCE for cleaning metal parts does not constitute an ultrahazardous activity, as associated risks can be mitigated through reasonable care. The plaintiffs failed to provide any supporting case law for their claims of ultrahazardous activity related to the use, storage, or disposal of these solvents, leading to the dismissal of their trespass and strict liability claims.
Regarding the statute of limitations, Ametek contends that the plaintiffs cannot meet California's three-year statute for trespass, negligence, or injury to real property, arguing that the cause of action began when contamination ceased in 1988. The plaintiffs counter that they qualify for the 'delayed discovery' rule under Cal. Civ. Proc. Code § 340.8(a), claiming they only became aware of the contamination in May or June 2015 during community meetings.
Ametek argues that even without actual notice until May 2015, the plaintiffs should have been on inquiry notice of the waste plume due to various public reports and complaints dating back to 2008. However, Ametek's application of the inquiry notice standard is challenged, citing the California Supreme Court's interpretation in Jolly v. Eli Lilly Co., which states that the statute of limitations under the delayed discovery rule starts only when a plaintiff has a suspicion of wrongdoing. The discussion further highlights the necessity of a two-part analysis to determine when a claim accrues under this rule.
The excerpt outlines the legal framework regarding the duty of inquiry under California law, particularly related to the statute of limitations and the delayed discovery rule. A plaintiff triggers the duty to investigate when they possess information that would cause a reasonable person to suspect their injuries resulted from wrongdoing. The statute of limitations begins once the investigation could have revealed a factual basis for a cause of action.
Key cases illustrate this principle: In *Miller v. Bechtel Corp.*, the plaintiff was barred from pursuing a fraud claim due to a longstanding suspicion about asset concealment, which she failed to investigate adequately. In *Gray v. Reeves*, the plaintiff was similarly barred after delaying action on a drug-related allergic reaction despite acknowledging wrongdoing. In *Camsi IV*, a company could not pursue a toxic tort suit because it demonstrated awareness of contamination well before the filing.
The delayed discovery rule allows plaintiffs to act when they become aware of the risk, as shown by the plaintiffs in the current matter, who claim they were unaware of the waste plume risk until May 7, 2015, and filed suit shortly thereafter.
Regarding punitive damages, the excerpt cites Cal. Civ. Code § 3294(a), stipulating that such damages require clear and convincing evidence of the defendant's oppression, fraud, or malice. Definitions of these terms are provided: "malice" involves intentional harm or despicable conduct with disregard for others' rights, "oppression" refers to cruel treatment, and "fraud" entails intentional deceit or concealment meant to deprive someone of rights or property.
Conclusory assertions alone do not suffice to justify punitive damages; specific factual allegations are necessary. In the case presented, Ametek contends that the plaintiffs have not sufficiently alleged facts to support punitive damages. However, the plaintiffs claim Ametek intentionally disposed of 1.848 million gallons of toxic waste near vulnerable areas and disregarded a state Cleanup and Abatement Order, which implies willful disregard for others' rights and safety. Unlike in Smith v. Superior Court, where claims for punitive damages were dismissed due to a lack of factual support, the plaintiffs here have provided adequate facts to potentially warrant punitive damages, leading the Court to allow this request to proceed.
Senior Operations seeks dismissal of the case on two grounds: (1) the statute of limitations bars the claims, and (2) the plaintiffs fail to state a claim against Senior. Regarding the statute of limitations, Senior argues that the plaintiffs should have been aware of the toxic plume due to various public notices and reports. However, under California's delayed discovery rule, the statute begins to run only when a plaintiff has enough information to reasonably inquire about their injuries. The plaintiffs assert they were unaware of the risks until May 7, 2015, and filed suit shortly thereafter. The Court finds that the available information did not reasonably alert the plaintiffs to any risk until that date, thus allowing them to utilize the delayed discovery rule.
In addressing the claims against Senior, the Court notes that the plaintiffs have not sufficiently attributed wrongful conduct to Senior, nor have they met the essential elements required for claims of negligence, gross negligence, public nuisance, and trespass. Additionally, the plaintiffs did not establish a basis for punitive damages against Senior.
The Court will systematically evaluate the arguments presented. First, Senior contends that Plaintiffs have not clearly distinguished Senior’s alleged wrongful conduct from that of Ametek. However, the Complaint details that Senior Operations has knowledge of toxic chemicals, specifically pure TCE, contaminating groundwater and has ignored the risk of further contamination without taking action to remediate the situation. These allegations provide sufficient notice for Senior regarding the claims against them.
Second, Senior argues that Plaintiffs have failed to demonstrate that Senior contributed to or worsened the contamination. They reference *Resolution Trust Corp. v. Rossmoor Corp.* to assert that landowners are only liable for trespass if they actively participated in causing the contamination. This argument is flawed because, unlike in Rossmoor, where the lessor was not aware of contamination and acted upon discovering it, Plaintiffs allege that Senior was aware of the contamination and failed to act. Moreover, Senior's ownership and control of the Ametek facility since 1998 distinguishes this case from the Rossmoor precedent.
Finally, Senior claims that regulatory documents assign the duty to remediate solely to Ametek and not to Senior, but fails to provide legal authority supporting that a regulatory duty on one party absolves another from common law responsibilities. Additionally, Senior argues that Plaintiffs’ nuisance claims are barred by Cal. Civ. Code § 3482, which allows for nuisances maintained under statutory authority. Senior asserts that a Prospective Purchaser Agreement (PPA) with the Water Board releases them from liability related to contamination claims, referencing CERCLA provisions that shield parties from liability after resolving claims through approved settlements.
The PPA explicitly releases Senior from liability solely concerning the Water Board, and it does not qualify as a 'statute' under § 3482, following the California Supreme Court's narrow interpretation of the section. Statutory immunity cannot be claimed for actions constituting a nuisance unless expressly permitted by statute. Senior's argument for immunity under federal and state laws for bona fide purchasers is unsubstantiated, as the relevant statutes, CERCLA and the CLRRA, do not apply—the PPA predates the CLRRA and lacks the necessary approvals associated with it. Regarding negligence, the court finds that the Plaintiffs have presented sufficient allegations to establish that Senior had a duty to exercise reasonable care concerning potential contamination, which they breached, resulting in damage. On the public nuisance claim, Senior contends that Plaintiffs have not shown unique harm distinct from the public. Generally, such claims must be initiated by government officials, though private parties can pursue them if they demonstrate "specially injurious" harm. The court acknowledges this common law exception allowing private claims under specific circumstances.
To establish a claim for public nuisance, a plaintiff must demonstrate special damages that exceed the general harm experienced by the public. The case Venuto v. Owens-Corning Fiberglas Corp. emphasizes that injuries must be different in kind, not merely in degree. In Venuto, the court dismissed a public nuisance claim where plaintiffs suffered from air pollution-related ailments similar to the general public, merely to a greater extent. Other courts, such as in Birke v. Oakwood Worldwide, have critiqued Venuto's approach, suggesting it may misstate the law. They have allowed claims to proceed where injuries to individual health, such as allergic reactions from secondhand smoke, were deemed special. The Restatement (Second) of Torts supports the idea that harm to private property or individual health can constitute special injury, distinct from public harm. Despite this, the current court finds that the plaintiffs’ claims of groundwater and soil contamination are too similar to those of the general public, leading to the dismissal of their public nuisance claim against all defendants. Moreover, the court addresses a trespass claim, noting that the landlords lack the necessary possessory interest in the land to assert such a claim, countering the argument presented by Senior based on Dieterick Int’l Truck Sales.
A landlord lacks a present possessory interest in property leased to a tenant, preventing the tenant from acquiring a prescriptive easement against the landlord. However, an out-of-possession property owner can seek damages for injuries to their land caused by trespassers. The nature of the injury determines the appropriate legal action; if possessory rights are affected, the possessor may file for trespass, while damages to ownership interests allow the property owner to pursue recovery through various legal avenues, including trespass or waste. In a relevant case, landlords successfully sued a concrete company for damages caused by a tenant's sub-lessee.
Regarding punitive damages, the defendant Senior contended that plaintiffs did not present sufficient facts to warrant such damages, arguing that their actions in allowing Ametek to handle cleanup did not meet the criteria for oppression, fraud, or malice. However, the court found that plaintiffs plausibly alleged that Senior acted with willful disregard for the rights and safety of others regarding a toxic waste plume. Consequently, the court allowed plaintiffs’ request for punitive damages to proceed at this stage.
In conclusion, the court partially granted and denied motions to dismiss by Ametek and Senior Operations, dismissing plaintiffs’ trespass, strict liability, and public nuisance claims against all defendants. The court emphasized the inadequacy of plaintiffs' legal arguments and the need for proper legal support in future filings. Ametek suggested limiting the Newhall case's applicability to its specific facts involving contamination-related damages.
Ametek contends that the Plaintiffs have not provided sufficient allegations, such as the use of contaminated groundwater, attempts to sell the property, or incurred costs for investigating the pollution. However, the Newhall case illustrates that the Court of Appeal's focus was on the plaintiff's special injury related to their private nuisance claim, emphasizing a broader definition of nuisance under Cal. Civ. Code § 3479. This definition encompasses anything injurious to health or obstructive to property enjoyment. The court also determined that creating a public nuisance constitutes tortious conduct relevant to a trespass claim. The opinion is limited to the facts in the first amended complaint, but the court's holding regarding causes of action for nuisance, trespass, and negligence relies on allegations that Mobil and Amerada discharged hazardous substances, polluting the soil and groundwater, and failed to disclose this contamination upon property sale. The court did not condition its ruling on the Plaintiffs' specific use of groundwater, property sale attempts, or investigation costs. Consequently, the court declined to address Ametek's arguments regarding the Plaintiffs' claims of diminished property value or the application of the statute of limitations due to the waste plume as a continuing nuisance. Additionally, the court dismissed Senior's counterarguments regarding the permanence of the nuisance, as well as claims of failing to identify actionable harm and not pleading essential elements for private nuisance and trespass, which were already addressed in prior sections of the order.
