Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_97-cv-20099/USCOURTS-cand-5_97-cv-20099-1/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 42:4321 Review of Agency Action-Environment

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 This disposition is not designated for publication and may not be cited.

Case No. C 97-20099 JF (HRL)

ORDER GRANTING RECEIVER’S REQUEST FOR PAYMENT OF EXPENSES ETC.

(JFLC2)

NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

UNITED STATES OF AMERICA,

 Plaintiff,

 v.

ALISAL WATER CORPORATION, et al.,

 Defendants.

Case Number C 97-20099 JF (HRL)

ORDER1 GRANTING RECEIVER’S

REQUEST FOR PAYMENT OF

EXPENSES FOR (1) THE PERIOD

FROM JANUARY 1, 2006 THROUGH

FEBRUARY 28, 2006 AND (2) THE

PERIOD FROM MARCH 1, 2006

THROUGH APRIL 30, 2006; AND

ORDERING RECEIVER TO

PROVIDE ITEMIZATION OF

EXPENSES 

On March 29, 2006, the Receiver filed a status report for the period from January 1, 2006

through February 28, 2006. The Receiver’s request for payment of expenses incurred during that

period subsequently was extensively briefed by the Receiver and Defendants, and was submitted

to the Court for determination without oral argument pursuant to this Court’s order of May 8,

2006.

On May 11, 2006, the Receiver filed a status report for the period from March 1, 2006

Case 5:97-cv-20099-EJD Document 655 Filed 06/08/06 Page 1 of 5
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Case No. C 97-20099 JF (HRL)

ORDER GRANTING RECEIVER’S REQUEST FOR PAYMENT OF EXPENSES ETC.

(JFLC2)

through April 30, 2006. The Receiver filed a supplement to this status report on May 17, 2006. 

On May 26, 2006, Defendants filed objections to the status report and to payment of any

expenses for the period from March 1, 2006 through April 30, 2006. Although the Receiver has

not yet filed a formal application for payment of expenses for this period, Defendants assert that

their objections to payment of these expenses are the same as Defendants’ objections to payment

of the expenses incurred during the period from January 1, 2006 through February 28, 2006. 

Defendants request that their objections to payment of expenses for the two periods be

considered simultaneously. Accordingly, on this particular occasion, the Court will deem the

Receiver’s report to include a request for payment of the expenses detailed therein, and will

address both requests in the instant order.

Defendants raise a number of global objections to the expenses sought, for example, that

the receivership expired on March 30, 2006; that the Commission improperly has deferred to this

Court on certain issues when the Court has not decided such issues and has no authority to do so;

that Alisal has fulfilled all of its obligations in this matter and cannot be compelled to pay for

capital improvements for other systems that it no longer owns; and that the Receiver is seeking

compensation for services that are outside the scope of the receivership, such as advocating on

behalf of PSMCSD in Commission proceedings and filing a contempt motion. However,

Defendants do not identify any particular expenses that they contend are improper for the two

periods in question. The Court has reviewed the status reports for the two periods in question

and concludes that all of the expenses at least facially appear to be appropriate and within the

scope of the receivership. Accordingly, the Court will grant the Receiver’s requests for payment

of these expenses. 

A number of Defendants’ global objections are without merit. For example, Defendants

contend that the receivership expired on March 30, 2006 despite the fact that this Court signed an

order extending the receivership for one year on March 20, 2006. In reviewing the file, the Court

has discovered that the order extending the receivership was not docketed separately, and appears

in the file attached to the notice of imminent expiration of receivership. This error may have led

to Defendants’ confusion regarding the extension of the receivership. The Court has directed the

Case 5:97-cv-20099-EJD Document 655 Filed 06/08/06 Page 2 of 5
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Case No. C 97-20099 JF (HRL)

ORDER GRANTING RECEIVER’S REQUEST FOR PAYMENT OF EXPENSES ETC.

(JFLC2)

Clerk to separately docket the order extending the receivership as of the date it was signed,

March 20, 2006. 

Defendants also contend that Alisal has fulfilled all of its obligations in this matter and

seem to imply that Alisal cannot be compelled to pay any further receivership fees. However,

this Court’s order of April 9, 2002 provides in relevant part that: “Defendants shall be

responsible for compensation of the Receiver and of any and all persons employed by the

Receiver in carrying out the provisions of this Order. The amount of compensation shall be fixed

by the Court upon written application by the Receiver with notice to the parties.” Alisal, as one

of the defendants in this action, is responsible for payment of the receivership expenses.

Defendants additionally contend that the attorneys’ fees incurred by the Receiver are

excessive and unnecessary. This contention is extremely troubling given the fact that it is quite

obvious from the record that the Receiver has been forced to incur significant attorneys’ fees as a

result of Defendants’ obstructive conduct throughout the entire period of the receivership. 

Defendants have refused to cooperate with the Receiver at virtually every turn, and are primarily

responsible for the fact that the process of selling the smaller water systems has dragged out for

years. 

Defendants do raise some objections that have at least potential merit, for example, their

objection to paying for capital improvements or ordinary operating expenses with respect to

systems that they no longer operate. Defendants assert that the Receiver’s status reports do not

sufficiently itemize the expenses at issue, so that Defendants cannot determine precisely how and

why particular expenses were incurred. The Court will order the Receiver to provide an itemized

accounting of the expenses incurred during the two periods in question, and will make its ruling

without prejudice to a future motion by Defendants for refund of particular expenses improperly

charged to them. 

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Case No. C 97-20099 JF (HRL)

ORDER GRANTING RECEIVER’S REQUEST FOR PAYMENT OF EXPENSES ETC.

(JFLC2)

ORDER

(1) The Receiver’s requests for payment of expenses are GRANTED for the period

from January 1, 2006 through February 28, 2006, and for the period from March

1, 2006 through April 30, 2006;

(2) This ruling is without prejudice to an appropriate future motion by Defendants for

refund of particular expenses improperly charged to them; and

(3) Within fourteen (14) days after receipt of this order, the Receiver shall provide to

Defendants itemizations of the expenses incurred for the period from January 1,

2006 through February 28, 2006, and for the period from March 1, 2006 through

April 30, 2006

DATED: 6/8/06

__________________________________

JEREMY FOGEL

United States District Judge

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Case No. C 97-20099 JF (HRL)

ORDER GRANTING RECEIVER’S REQUEST FOR PAYMENT OF EXPENSES ETC.

(JFLC2)

Copies of Order served on:

Counsel for Plaintiff:

Lori Jonas

Matthew Fogelson

Noel Wise

Environmental Enforcement Section

Environment and Natural Resources Division

U.S. Department of Justice

P.O. Box 7611

Washington, D.C. 20044

Charles O’Connor

U.S. Attorney’s Office

450 Golden Gate Avenue

P.O. Box 36055

San Francisco, CA 94102 

John D. Rothman

United States Environmental Protection Agency, Region IX

75 Hawthorne Street

San Francisco, CA 94105 

Counsel for Defendants:

Marc P. Fairman

Law Offices of Marc P. Fairman

Two Embarcadero Center, Suite 1800

San Francisco, CA 94111

John P. Dwyer

Attorney at Law

1550 California Street, No. 60201

San Francisco, CA 94109

Counsel for Receiver:

Michael A. Isaacs

Diana L. Donabedian

Luce, Forward, Hamilton & Scripps, LLP

121 Spear Street, Suite 200

San Francisco, CA 94105

John W. Richardson

2941 Park Avenue, Suite H

Soquel, CA 95073 

Case 5:97-cv-20099-EJD Document 655 Filed 06/08/06 Page 5 of 5