Ninth Circuit Court of Appeals reverses dismissal of CERCLA and CLRRA suit
Paladin Law Group’s client, GP Vincent II (GPV), prevailed in an appeal before the Ninth Circuit Court of Appeals. On May 17, 2023, the appellate court issued an opinion, reversing the district court’s dismissal of GPV’s suit on res judicata grounds. GPV had purchased contaminated property through a foreclosure sale and, before taking title, had entered into a California Land Reuse and Revitalization Act (CLRRA) agreement with the Regional Water Quality Control Board approving a plan to investigate and cleanup the contamination, establishing GPV as a bona fide prospective purchaser under CERCLA, and limiting GPV’s potential liability for the contamination. After GPV took title and began to cleanup and redevelop the property, it sued some of the prior owners of and operators at the property to recover its response costs and attorneys’ fees. The parties GPV sued had been parties to prior litigations. Some of the parties that GPV sued moved to dismiss GPV’s claims on the basis of res judicata. The district court granted the moving parties’ motion to dismiss. GPV appealed.
The Ninth Circuit Court of Appeals reversed the district court’s dismissal of GPV’s suit. In the majority opinion, two judges found that the defense of res judicata did not apply because there was no “identity of claims,” i.e., that the claims settled in the prior suits were different than the claims brought by GPV in the current suit. In a concurring opinion, the third judge found that the defense of res judicata did not apply for a different reason: because GPV was not in privity with the prior owner of the property, at least in part, because an owner of a polluted plot of land cannot pass on its liability for remediation of pollution on that land under CERCLA to a future owner by mere transfer of title because CERCLA imposes that liability in personam (against the person or persons who owned the land), not in rem (against the property). See the opinion here.
One of California’s core environmental protection laws, the Hazardous Substance Account Act, is being recodified and reorganized
The Carpenter-Presley-Tanner Hazardous Substance Account Act, or simply the Hazardous Substance Account Act (“HSAA”), is at the heart of California’s environmental protection laws and is the state’s counterpart to the federal government’s Comprehensive Environmental Response & Liability Act, or “CERCLA.” Put simply, the HSAA authorizes certain responses to address releases of hazardous substances into the environment and imposes liability for such responses.
In 2022, California passed a law to recodify and reorganize the HSAA. That law became “effective” on January 1, 2023, but will not become “operative” until January 1, 2024. The “effective date” is the “date by which the statute came into being as an existing law” whereas the “operative date” is “the date upon which the directives of the statute may be actually implemented” and the rights of individuals affected. (People v. Camba (1996) 50 Cal.App.4th 857, 866.)
The law, known as the Hazardous Substance Account Recodification Act (“HSARA”), moves the HSAA from Division 20 of the Health and Safety Code (commencing with section 25300) to Division 45 of that code (commencing with section 78000) (Health & Saf. Code, § 78000, subd. (b)) but will not substantively change the HSAA (id., at § 78010). As such, each new provision is treated not as a new enactment, but as a restatement and continuation of the corresponding former provision before it was moved. (See id., at § 78015, subd. (a).) Thus, any reference in a statute or regulation to a former provision is deemed a reference to the corresponding new provision (see id., at § 78015, subd. (b)) and vice versa (see id., at § 78015, subd. (c)), and any judicial decision interpreting a former provision is still relevant in interpreting the corresponding new provision (see id., at §§ 78020, subd. (a); 78025, subd. (a)).
Finally, in addition to moving and reorganizing the HSAA, the HSARA also authorizes the California Law Revision Commission to study the HSAA and to make recommendations to the Legislature and the Governor regarding minor substantive improvements to the HSAA.
Federal Court Enters First of its Kind Judgment Under the Gatto Act
The United States District Court, Eastern District of California, entered judgment in favor of the City of West Sacramento on each and every claim brought against operators of a former metal plating facility in a “blighted area” within the City’s boundaries. The judgment was the first of its kind—no other court has entered judgment under the Gatto Act. The Court also entered judgment in favor of the City on its RCRA, CERCLA, Porter-Cologne Act, public nuisance, and HSAA claims, and a declaration that the City is entitled to recover from future response costs. Each of the operators were held jointly and severally liable for the contamination at the site. To read the Stipulated Judgment, click here. To read the Law360 article “Calif. City Reaches Deal With Biz for $1.4M In Fees, Cleanup,” click here.
California City Succeeds in Establishing Joint and Several Liability Under CERCLA – Court Rejects Defendants’ Divisibility Defense
The City of West Sacramento filed a lawsuit under RCRA, CERCLA, the Gatto Act, and several other state law causes of action to address toxic levels of soil and groundwater contamination resulting from the release of hazardous substances at a property once occupied by a metal plating facility. The Court found the defendants liable after the City filed a motion for summary judgment. It also held, however, that the defendants were entitled to an evidentiary hearing on their divisibility defense to joint and several liability on the CERCLA claim. Following three days of testimony and evidence, the Court found that the former operators of a chrome plating facility did not meet their burden to prove their divisibility defense under CERCLA. Accordingly, the Court held each of the defendants jointly and severally liable for the entirety of the harm (i.e., each defendant is responsible for 100% of the harm). To read more, click here.
Paladin Opens Texas Office
Kirk Tracy, licensed to practice in Texas and California, now has an office in both states where he continues to work on environmental matters. Kirk has hitched his horse in San Antonio so message him if you need to know where to find the best brisket in town.
Court of Appeal affirms denial of anti-SLAPP motion in a published decision
Paladin Law Group recently prevailed in the California Court of Appeal against an anti-SLAPP motion brought in an insurance coverage action. “SLAPP” is an acronym for strategic lawsuit against public participation and in California, as in many states, there are procedures that allow defendants to bring a special motion to strike such suits. Zurich brought such a motion after it was sued by its insureds for bad faith and breach of its duty to defend. The trial court denied the motion, Zurich appealed, and the California Court of Appeal for First Appellate District Court affirmed the trial court’s denial of the motion and remanded the case back to the trial court in a published opinion. See Miller v. Zurich Am. Ins. Co., No. A155398, 2019 WL 5304862, 2019 Cal. App. LEXIS 1036 (Ct. App. Oct. 21, 2019).
Paladin says “Aloha” at the International Network of Environmental Forensics Conference
Bret Stone discussed environmental litigation regarding PFAS during the plenary session of the International Network of Environmental Forensics Conference at the University of Hawaii. The panel discussion included toxicology and screening levels for PFAS, the impact of PFAS in oceans, how water purveyors are reacting to the increasingly stringent PFAS regulations, litigation risks, and the insurance industry reactions to potential PFAS liabilities. For more information about the conference, click here.
Paladin speaks at Center for Creative Land Recycling Conference
Paladin was featured at a Brownfields conference organized by the Center for Creative Land Recycling (CCLR), which brought together experts from around the country to speak about cutting-edge topics in Brownfields redevelopment. Jon’s well-received presentation focused on how the legal environment contributes to the creation of Brownfields, along with several legal strategies for how to put those Brownfields back in to productive use. CCLR posted the slides from the presentation here.
Settlement Reached with Chevron
Representing a developer that purchased property that had been a Standard Oil bulk fuel storage facility for seventy years starting in the 1900s, Paladin negotiated an out-of-court resolution of claims for assessment and remediation of soil and groundwater contamination.
CLRRA Signed for Redevelopment Project
Paladin Law Group recently completed a successful transaction for a Brownfields redeveloper that included immunity protections under the California Land Reuse and Revitalization Act (“CLRRA”). In the agreement reached with the Regional Water Quality Control Board (“RWQCB”), the buyer obtained immunity for a site that had been the subject of a Cleanup and Abatement Order and litigation in state and federal courts. Ten separate environmental consulting firms worked on the site for years prior to the CLRRA agreement without a remedial action plan. Under the CLRRA consultative services process, the buyer worked with the RWQCB to prepare an acceptable response plan to address contamination at the site.
Stone Named as Who’s Who in Energy & Environment
Bret Stone was recognized for his work in environmental law by the Pacific Coast Business Times.
Paladin Settles Dry Cleaning Contamination Case
After years of litigation with the former owners and operators of a dry cleaning plant and their insurers, a highly contested and complex environmental contamination case has finally come to a close. Paladin’s insurance archaeology efforts identified the historic insurance assets. Extensive investigation activities ensued and, once the parties were comfortable with the total cost of cleanup, a settlement was reached providing sufficient funds for the cleanup.
Stone Featured at Groundwater Law Conference
Bret Stone was part of panel on Strategies to Address Major Groundwater Contaminant Plumes at the upcoming Groundwater Law Conference at Loyola Law School. For more information, click here.
Court Holds Insurer has Duty to Defend in Rev 973 Case
One of Paladin’s policyholder clients obtained a ruling in the U.S. District Court for the Central District of California held that Wilshire Insurance Company has a duty to defend a lawsuit entitled, Rev 973, LLC v. Mouren-Laurens et al., CV 98-10690-DSF (Ex), alleging liability against thousands of potentially responsible parties for environmental contamination. Wilshire had argued that there could be no potential for coverage and thus no duty to defend its insured because the claims asserted against him do not allege an “accident” as required by the policies and are excluded from coverage by the qualified pollution and the handling of property exclusions contained in the policies. The court rejected these arguments. To read more, click here.
Pro Bono Brownfields Deal Closes for Bike Coalition
Long-time bike commuter, Bret Stone, provided pro bono legal support to help the Santa Barbara Bicycle Coalition purchase the property that houses its community cycling center and DIY bike repair shop. The Brownfields site had been contaminated by historic dry cleaning operations. Stone negotiated the transaction and related environmental protections to a successful close. To read the article in the Santa Barbara Independent, click here.
John Till Featured at Environmental Law Section Seminar
Paladin Managing Partner, John Till, led a discussion regarding the implementation of AB 440 legislation to redevelop contaminated properties in urban blighted areas. The Sacramento County Bar Association Environmental Law Section underwrote the event.
Paladin Featured in Stormwater Webinar
Paladin was featured speaker in a webinar entitled “Managing Risk Amid Changing Storm Water Regulations.” Topics covered included an exploration of evolving compliance requirements related to updated Municipal (MS4), Industrial, and Construction General Storm Water Permits and best practices for managing risk.
Paladin wins Climate Leader Award
Paladin Law Group is proud to announce that the California Air Resources Board has recognized it with a Climate Leader Award. The CoolCalifornia Small Business Awards recognize California small businesses that took action to reduce their greenhouse gas emissions, promoted climate friendly practices and integrated the tools on CoolCalifornia.org into their business operations. For more information about CoolCalifornia.org, click here.