Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_96-cv-01473/USCOURTS-caed-2_96-cv-01473-4/pdf.json

Nature of Suit Code: 240
Nature of Suit: Torts to Land
Cause of Action: 42:6901 Environmental Cleanup Expenses

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

RECLAMATION DISTRICT NO. 2116,

and WILLIAM P. DePAOLI

NO. CIV. S-96-1473 FCD/JFM

Plaintiffs,

v. MEMORANDUM AND ORDER

ARCADY OIL COMPANY, et al.,

Defendants. 

______________________________\

AND RELATED COUNTERCLAIMS AND 

CROSS-CLAIMS

----oo0oo----

This matter comes before the court on two motions to dismiss

for failure to prosecute under Federal Rule of Civil Procedure

41(b) (“Rule 41(b)”) brought by (1) defendants Hess Corp., ASTA

Construction Co., Inc., Delta Oilfield Services, Inc., OXY USA

Inc., Hamilton Brothers Corp., Occidental Petroleum Corp.,

Western Continental Operating Co., Venturini Associates, Inc.,

Atlantic Richfield Co., CMS Nomeco Oil & Gas Co., BP America 

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1 Defendants Warren E. Gomes Excavating, Inc. and W. F.

Landi Co. join in the motions (Docket #339 ).

2 See Corrected Motion to Dismiss, filed Sept. 27, 2006

(Docket #337).

2

Production Co., Atlantic Oil Co., Castle Minerals, Chevron

U.S.A., Cleveland Drilling, Inc., ConocoPhillips Co., Pacific Gas

& Electric Co., EnCana Corp., A.M. Stephens Construction Co.,

Inc., Marathon Oil Co., and Union Oil Co. of California (Docket

#337) and (2) defendants Hexadyne Energy Corp. and Hexadyne

Drilling Corp. (Docket #314) (collectively, “Moving

Defendants”).1 

Alternatively, some of the Moving Defendants move to dismiss

plaintiffs Reclamation District No. 2116 (“Reclamation District”)

and William P. DePaoli’s (“DePaoli”) (collectively, “plaintiffs”)

action against them on the ground that the complaint is barred by

the doctrine of laches.2

 The issue of laches, however, is not

properly before the court on a motion under Rule 41(b), and

therefore, the court does not consider the issue herein. 

Assuming Moving Defendants have raised the affirmative defense of

laches in their respective answers, the proper procedure to raise

this defense is through a motion for summary judgment, not by way

of the instant motion. Fed. R. Civ. P. 56. Accordingly, the

court confines its decision to the issue of whether plaintiffs’

action against Moving Defendants should be dismissed for failure

to prosecute.

For the reasons set forth below, the court finds that

plaintiffs have not unduly delayed prosecuting this action, and

that any delay attributable to plaintiffs did not cause Moving

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3 Because oral argument will not be of material

assistance, the court orders these matters submitted on the

briefs. E.D. Cal. L.R. 78-230(h).

3

Defendants actual prejudice. Therefore, Moving Defendants’

motions to dismiss under Rule 41(b) are DENIED.3

BACKGROUND

The real property at issue is a 3.5-acre parcel of land

located within the San Joaquin Delta region (“Arcady Dumpsite”).

(Corrected Mot. to Dismiss, filed Sept. 27, 2006 [“Mot’n”], at

1:11-15.) In April 1960, the California Regional Water Quality

Control Board-Central Valley Region (“RWQCB”) authorized Arcady

Oil Co. to use the Arcady Dumpsite, as well as other contiguous

real property, as a non-hazardous waste disposal facility. (Id.

at 1:26-2:11.) In January 1970, the San Joaquin County Planning

Department approved the site for the dumping of “drilling mud,”

which consists of residual material from the installation of oil

and natural gas production wells and other exploration-related

activities. (Id. at 2:1-11.) 

DePaoli purchased the Arcady Dumpsite, as well as other

contiguous property, in June 1979 from Arcady Oil Co. (Id. at

4:7-9.) Arcady Oil Co. paid DePaoli a rental fee to continue to

use the site as a waste disposal facility. (Id. at 4:11-15.) In

addition to Arcady Oil Co., Moving Defendants also disposed of

drilling mud and cuttings from 1983 to 1984. (Id. at 5:9-11.) 

In April 1983, the San Joaquin County Board of Supervisors

(“Board”) granted DePaoli’s application for the formation of

Reclamation District No. 2116 (the real property composed of the

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Arcady Dumpsite and other contiguous land owned by DePaoli). 

(Id. at 4:19-23.) 

In October 1984, the RWQCB issued a Cleanup and Abatement

Order for the Arcady Dumpsite. (Id. at 5:1-2.) Subsequently,

the site was closed for cleanup pursuant to the order. (Id. at

6: 4-7.) 

In 1993, DePaoli’s counsel wrote to many of the Moving

Defendants seeking financial assistance to resolve remaining

contamination problems with the dumpsite. (Id. at 7:5-12.) 

After receiving sporadic, non-committal responses from Moving

Defendants, plaintiffs filed this action in 1996 and filed an

amended complaint in 1997. (Id. at 7:15-18.) Plaintiffs, inter

alia, claim that Moving Defendants disposed of drilling mud at

the Arcady Dumpsite, causing and contributing to the presence of

solid and/or hazardous waste which may pose imminent and

substantial endangerment to health and the environment in

violation of the Resource Conservation and Recovery Act’s citizen

provision (42 U.S.C. § 6972). (Opp’n, filed Oct. 12, 2006, at

3:13-17.)

From 1997 to 1999, many of the parties jointly undertook

limited site characterization work to investigate possible

cleanup alternatives in place of litigation. (Mot’n at 7:19-21.) 

This investigation ceased in 2000. (Id.) In April 2001,

defendant Pacific Gas & Electric (“PG&E”) filed a Notice of

Filing a Voluntary Petition under Chapter 11/Bankruptcy and

Imposition of Automatic Stay. (Id. at 7:24-27.) Based on said

Notice, on May 4, 2001, the court administratively closed the

case and informed the parties that the case could be re-opened at

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the parties’ request. The automatic stay in the PG&E bankruptcy

case was terminated on April 12, 2004.

Plaintiffs moved to re-open this case on April 12, 2006. 

(Notice of Termination of Automatic Stay and Request to Re-open

Action, filed Apr. 12, 2006 [“Notice to Re-open Action”].) 

Plaintiffs assert that they did not move to re-open the case

until April 2006 due to profound changes in the DePaoli family. 

(Opp’n at 3:23-4:12.) Upon DePaoli’s death in July 1999, Avon

DePaoli (“Avon”), DePaoli’s widow, became sole owner of the

Arcady Dumpsite and principle of the Reclamation District. (Id.

at 3:24-25.) In late 2001, Avon suffered a debilitating stroke

and presently remains under full-time nursing care. (Id. at 26-

27.) Upon her incapacitation, the DePaoli’s eldest daughter,

Devon DePaoli (“Devon”), assumed control of the family’s affairs

based on a Power of Attorney. (Id. at 4:1-2.)

Until earlier this year, plaintiffs assert that Devon was

cautious about disrupting the status quo with regard to the

Arcady Dumpsite. (Id. at 4:2-4.) In particular, the DePaoli

family leases land contiguous to the Arcady Dumpsite for

commercial and industrial purposes. (Id. at 4:4-5.) These

leaseholds are used to help offset the cost of Avon’s healthcare,

and as such, Devon was concerned that a shift in regulatory or

litigation status could disrupt the necessary income flow. (Id.

at 4:5-7.) Devon substantially concluded the renegotiation of

the leaseholds earlier this year and now desires to bring

finality to the instant action. (Id. at 4:9-12.)

The procedural history of this case spans the past 10 years. 

Plaintiffs filed their complaint in August 1996, followed by

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their First Amended Complaint in January 1997. (Pls.’ Compl.,

filed Aug. 14, 1996; Pls.’ First Am. Compl., filed Jan. 17,

1997.) Subsequently, in February 1997, United States District

Judge Lawrence Karlton, the district court judge initially

assigned to this case, held a scheduling conference. (Status

Order, filed Feb. 26, 1997.) Following the scheduling

conference, discovery was stayed and a settlement conference was

scheduled; the settlement conference was assigned to Magistrate

Judge John Moulds. (Id.) In January 1998, the case was reassigned to the undersigned judge. (Order for Case Reassignment,

filed Jan. 1, 1998.) 

Between January 1998 and May 2001, the following court

activity took place: in February 1998, the court entered default

judgment against defendant Arcady Oil Co.; in July 1998,

Magistrate Judge Moulds held a settlement conference (although a

full mutual agreement was not ultimately reached); in April 2001,

defendant PG&E filed a notice of bankruptcy; and, as a result of

the PG&E bankruptcy, in May 2001, the court administratively

closed the case. Following the termination of the PG&E automatic

stay in April 2004, plaintiffs moved to re-open the case on April

12, 2006. (Notice to Re-open Action.) 

Moving Defendants now move to dismiss this action on the

ground plaintiffs have failed to prosecute it. 

STANDARD

Rule 41(b) authorizes district courts to dismiss an action

for failure to prosecute. See Fed. R. Civ. P. 41(b). However,

before imposing the extreme sanction of involuntary dismissal,

the court must examine the following factors: (1) the public’s

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interest in the expeditious disposition of cases; (2) the court’s

docket concerns; (3) the risk of prejudice to the defendant; 

(4) the judicial policy favoring disposition of cases on the

merits; and, (5) the availability of a less drastic sanction. 

See Yourish v. Calif. Amplifier, 191 F.3d 983, 990 (9th Cir.

1999); see also In re Eisen, 31 F.3d 1447, 1451 (9th Cir. 1994). 

Because dismissal is a harsh penalty, it should be imposed

as a sanction only in extreme circumstances. See Thompson v.

Housing Authority, 782 F.2d 829, 831 (9th Cir. 1986). 

ANALYSIS

Preliminarily, the court must determine the relevant time

period for which plaintiffs may be charged with delay. Moving

Defendants contend that the relevant delay period is from May

2001 to April 2006, the timeframe between the administrative

closure of the case and plaintiffs’ motion to re-open the case. 

(Mot’n at 14:1-15:14.) Plaintiffs argue that Moving Defendants

exaggerate the period of delay, if any, attributable to them and

that if plaintiffs did delay, their delay was not unreasonable or

frivolous and in no way prejudiced Moving Defendants. (Opp’n at

6:13-14.) 

In view of the procedural posture of the case, the court

finds the relevant delay period to be between April 12, 2004, the

termination of the automatic stay in the PG&E bankruptcy

proceedings, and April 12, 2006, plaintiffs’ motion to re-open

the case. For purposes of Rule 41(b), the court does not find

the relevant delay period to encompass the May 2001-April 2004

timeframe because the case was closed by the court during this

period due to the PG&E bankruptcy. Despite the court’s

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permission in its May 2001 notice of administrative closure, no

party moved to re-open the case during this time. Plaintiffs

therefore cannot reasonably be charged with this period of

inaction. 

However, with respect to the timeframe between April 2004

and April 2006, plaintiffs concededly did not litigate this

matter. They maintain that they encountered issues concerning

changes in the DePaoli family during this time, which precluded

them from re-opening the case until April 2006. Under Rule

41(b), the court must balance plaintiffs’ reasons for their

inaction against the alleged harm to Moving Defendants.

In that regard, the first factor of the Rule 41(b) analysis

weighs in favor of dismissal because “the public’s interest in

expeditious resolution of litigation always favors dismissal.” 

Yourish, 191 F.3d at 990. As a result of plaintiffs’ financial

situation between the PG&E bankruptcy and the motion to re-open,

litigation was delayed for two years. This counters the public’s

interest in the expeditious resolution of cases.

Under the second factor, the trial judge is in the best

position to assess whether the delay in a particular case

interfered with docket management. Pagtalunan v. Galaza, 291

F.3d 639, 642 (9th Cir. 2002). Here, the court has not issued a

scheduling order in the case, and thus, plaintiffs’ delay has

not, per se, interfered with the court’s docket management or

caused congestion in the court’s calendar. Cf. Link v. Wabash R.

Co., 370 U.S. 626, 629-30 (1962)(finding dismissal appropriate

“to prevent undue delays in the disposition of pending cases and

to avoid congestion in the calendars of the District Courts”). 

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It is noteworthy that, while this case has been pending for 10

years, the progress of the litigation has been limited to the

filing of pleadings, a default judgment against defendant Arcady

Oil Co., settlement negotiations, and an administrative closure

of the case due a party’s bankruptcy proceedings. The court is

cognizant of the fact that litigation of this type may be

protracted due to its complex nature–-this case raises

significant environmental issues involving over 30 defendants. 

The court therefore does not find the pace of this litigation to

have interfered with its docket management, and as such, the

second factor does not favor dismissal.

Under the third factor, defendants have the burden of

proving that the risk of prejudice to them, as a result of

plaintiffs’ delay, impaired their “ability to proceed to trial.” 

Malone v. United States Postal Serv., 833 F.2d 128, 131 (9th Cir.

1987); See also Chism v. Nat’l Life Insurance Co., 637 F.2d 1328,

1331 (9th Cir. 1981). Plaintiffs, however, have the initial

burden of providing a non-frivolous excuse for their delay before

the burden shifts to Moving Defendants to show actual prejudice. 

In re Eisen, 31 F.3d 1447, 1453 (9th Cir. 1994). Accordingly,

the court considers plaintiffs’ delay and Moving Defendants’

prejudice together to determine “whether there has been

sufficient delay or prejudice to justify a dismissal of the

plaintiff[s’] case.” Nealy v. Transportacion Maritima Mexicana,

S.A., 662 F.2d 1275, 1281 (9th Cir. 1980).

Plaintiffs re-opened the instant action after Devon

concluded renegotiations on certain leases of real property in

early 2006, which secured the income to pay for Avon’s healthcare

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expenses. (Opp’n at 4:9-12.) Under the circumstances, the court

does not find the reason for plaintiffs’ delay in the prosecution

of the instant action to be frivolous. Therefore, plaintiffs

have met their initial burden of providing a non-frivolous excuse

for their delay, thus triggering Moving Defendants’ obligation to

come forth with evidence of actual prejudice. 

Moving Defendants fail to do so. “Prejudice itself usually

takes two forms--loss of evidence and loss of memory by a

witness.” Nealy, 662 F.2d at 1281. Although Moving Defendants

assert that the passage of time has diminished their witnesses’

memory, Moving Defendants do not persuade the court that they

have suffered actual prejudice that would impair their “ability

to proceed to trial.” Malone, 833 F.2d at 131.

Moving Defendants assert that many defendant corporations

have changed hands and individual defendants have passed away

such that they cannot adequately defend this matter. (Mot’n at

14:19-27.) However, the evidence indicates that many individual

defendants passed away during the early stages of this

litigation–-outside the window of the relevant delay period--such

that the subject two-year delay did not interfere with Moving

Defendants’ ability to proceed to trial. For example, Alex

Diepenbrock, principal of defendant Arcady Oil Co. died before

the commencement of this action. (Opp’n at 7:3-4.) Chester

Dolley, owner and manager of defendant Atlantic Oil Co. passed

away on April 15, 1988, 15 months after plaintiffs filed their

first amended complaint. (Id. at 7:10.) George LaPerle,

principal of defendant Western Continental Operating Co., passed

away in December 2000. (Id. at 7:10-11.) The deaths of these

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witnesses occurred much before the relevant time period for

dismissal under Rule 41(b)--between April 2004 and April 2006. 

In addition, Moving Defendants also assert that records

needed to defend this matter no longer exist. (Mot’n at 14:25-

26.) However, similar to above, Moving Defendants refer to

records that were either lost or not in existence prior to the

relevant Rule 41(b) delay period. (Id.) Since Moving Defendants

do not proffer evidence of actual prejudice during the relevant

time period, the court finds that plaintiffs’ two-year delay did

not interfere with Moving Defendants’ ability to defend this

action.

In sum, plaintiffs have provided a non-frivolous excuse for

their delay in prosecuting this action and Moving Defendants have

not persuaded the court that they suffered actual prejudice due

to the delay. The third factor therefore does not weigh in favor

of dismissal. See Nealy, 662 F.2d 1275 (citation omitted)

(stating that even “[a] weak excuse may suffice if there has been

no prejudice”). 

The court weighs the fourth factor, the disposition of cases

on their merits, against plaintiffs’ delay and the prejudice

suffered by defendants. In re Eisen, 31 F.3d at 1454. As

discussed above, the court finds plaintiffs’ excuse for their

delay to be non-frivolous and that Moving Defendants did not

suffer actual prejudice sufficient to warrant dismissal. In

addition, “public policy favors disposition of cases on the

merits.” Pagtalunan, 291 F.3d at 643. Therefore, the fourth

factor does not favor dismissal. 

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Lastly, the fifth factor does not favor dismissal because in

view of the lack of actual prejudice to Moving Defendants, as

described above, the court does not find that dismissal is proper

in this case. Moving Defendants concede that no less drastic

alternatives are available, short of dismissal, because evidence

and witnesses are no longer available. (Mot’n at 15:16-20.) 

Moving Defendants, however, fail to proffer evidence supporting

their assertions that the unavailability of the subject evidence

and witnesses was a result of plaintiffs’ delay during the

relevant time period. 

CONCLUSION

For the foregoing reasons, Moving Defendants’ motions to

dismiss for failure to prosecute are DENIED. The court sets the

matter for a pre-trial scheduling conference on December 15, 2006

at 10:00 a.m. The parties shall file a joint status report on or

before December 5, 2006. 

IT IS SO ORDERED.

DATED: November 15, 2006.

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