Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_05-cv-02893/USCOURTS-cand-5_05-cv-02893-2/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 42:6901 Resource &amp; Recovery Act

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ORDER GRANTING NCH'S MOTION TO DISM ISS NATIONAL'S FOURTH CAUSE OF ACTION AND DENYING NCH'S

MOTION FOR SANCTIONS—C-05-02893 RMW

DOH

E-FILED on 10/18/05

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

NATIONAL SEMICONDUCTOR (MAINE),

INC., a Delaware corporation, formerly known as

Fairchild Semiconductor Corporation; and

SCHLUMBERGER TECHNOLOGY

CORPORATION, a Texas corporation,

Plaintiffs,

v.

NCH CORPORATION, a Delaware corporation,

Defendant.

No. C-05-02893 RMW

ORDER GRANTING NCH'S MOTION TO

DISMISS NATIONAL'S FOURTH CAUSE OF

ACTION AND DENYING NCH'S MOTION

FOR SANCTIONS

[Re Docket Nos. 8, 15]

National Semiconductor (Maine), Inc. and Schlumberger Technology Corporation (collectively

"National") have sued NCH Corporation ("NCH") for alleged groundwater contamination. NCH moves to

dismiss National's fourth cause of action for violation of the Hazardous Substance Account Act ("the

HSAA"), Cal. Health & Safety Code §§ 25300 et seq. NCH also moves for sanctions under Federal Rule

of Civil Procedure 11 ("Rule 11"). National opposes the motions. The court has read the moving and

responding papers and considered counsels' arguments. For the reasons set forth below, the court grants

NCH's motion to dismiss and denies NCH's motion for sanctions.

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ORDER GRANTING NCH'S MOTION TO DISM ISS NATIONAL'S FOURTH CAUSE OF ACTION AND DENYING NCH'S

MOTION FOR SANCTIONS—C-05-02893 RMW

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I. BACKGROUND

This case concerns alleged groundwater contamination on two parcels of land in Sunnyvale: the

Arques Parcel and the Kifer Parcel. FAC ¶ 1. According to National, NCH has operated a chemical

blending plant at the Kifer Parcel since 1967. Id. at ¶ 9. National contends that NCH's activities caused

industrial solvents to migrate from the Kifer Parcel to the Arques Parcel. Id. at ¶¶ 10-11. National asserts

that NCH has not taken adequate remedial measures to stop this migration. Id. at ¶ 11. 

National alleges that the California Regional Water Quality Control Board ("the Regional Board")

issued a series of Orders to NCH, including (1) a Site Cleanup Requirement Order on September 17,

1997, (2) a Notice of Violation on September 28, 1998, and (3) a revised Site Cleanup Requirements

Order on October 18, 2000. Id. at ¶¶ 12-15. National claims that its predecessor, Fairchild

Semiconductor Corporation ("Fairchild"), owned the Arques Parcel until 1972, when it sold the land to

Hewlett-Packard Corporation ("HP"). Id. at ¶ 16. National contends that both Fairchild and HP have

taken environmental remedial actions at the Arques Parcel. Id. According to National, despite the fact that

the Regional Board's Orders name NCH as a responsible party, NCH has contributed nothing to this

effort. Id. at ¶ 19. National's fourth cause of action seeks treble damages under Cal. Health & Safety

Code § 25359.4.5 ("section 25359.4.5"). 

II. ANALYSIS

A. Motion to Dismiss

Dismissal under Federal Rule of Civil Procedure Rule 12(b)(6) is proper only when a complaint

exhibits either a "lack of a cognizable legal theory or the absence of sufficient facts alleged under a

cognizable legal theory." Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1988). The

court must accept the facts alleged in the complaint as true. Id. "A complaint should not be dismissed

'unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which

would entitle him to relief.'" Gilligan v. Jamco Dev.Corp., 108 F.3d 246, 248 (9th Cir. 1997) (quoting

Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).

B. Statutory Interpretation

The California Supreme Court has explained that a court construing a statute must start with its

plain meaning and only examine extrinsic sources if necessary to resolve an ambiguity: 

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ORDER GRANTING NCH'S MOTION TO DISM ISS NATIONAL'S FOURTH CAUSE OF ACTION AND DENYING NCH'S

MOTION FOR SANCTIONS—C-05-02893 RMW

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[W]e first examine the words of the respective statutes: 'If there is no ambiguity in the

language of the statute, then the Legislature is presumed to have meant what it said, and

the plain meaning of the language governs. Where the statute is clear, courts will not

interpret awayclearlanguage infavor of anambiguity that does not exist.' If, however, the

terms of a statute provide no definitive answer, thencourts mayresort to extrinsic sources,

including the ostensible objects to be achieved and the legislative history.

People v. Coronado, 12 Cal. 4th 145, 151 (1995) (quoting Lennane v. Franchise Tax Bd., 9 Cal. 4th

263, 268 (1994)). At the same time, however, a court may disregard "[t]he literal meaning of the words of

a statute . . . to avoid absurd results . . . ." County of Sacramento v. Hickman, 66 Cal. 2d 841, 849, n.6

(1967). 

1. National's Fourth Cause of Action 

The HSAA provides for treble damages when a polluter ignores a clean-up order:

A responsible party who has entered into an agreement with the department and is in

compliance withthe terms ofthat agreement, or who is in compliance withanorder issued

by the department, may seek, in addition to contribution, treble damages from any

contribution defendant who has failed orrefused to comply with any order or agreement,

was named inthe order or agreement, and is subject to contribution . . . . A partyseeking

treble damages pursuant to this section shall show that the party, the department, or

another entity provided notice, bymeans ofpersonalservice or certifiedmail, of the order

or agreement to the contribution defendant from whom the party seeks treble damages.

Cal. Health & Safety Code § 2539.4.5(a) (emphasis added). Section 2539.4.5(a) expressly defines "the

department" to mean "the Department of Toxic Substances Control," not the Regional Board. See Cal.

Heath & Safety Code § 25312. National does not allege that it has (1) "entered into an agreement" with or

(2) "is in compliance with an order issued by" the Department of Toxic Substances Control. Thus, under

the plain meaning of section 2539.4.5(a), National cannot state a cause of action for treble damages. 

National offers several reasons why, in its view, "the department" means either the Department of

Toxic Substances Control or the Regional Board. National cites Lungren v. Deukmejian, 45 Cal. 3d 727

(1988) and People v. Sup. Ct., 14 Cal. 4th 294 (1996) for the proposition that courts cannot adopt a

statute's literal language without examining its purpose. However, unlike this case, both Lungren and

People involved ambiguous statutes. Lungren resolved whether Article V, section 5(b) of the California

Constitution, which provides that a nominee for state office who "is neither confirmed nor refused

confirmation by both the Senate and the Assembly within 90 days of the submission of the nomination . . .

shall take office" meant that confirmation occurs if one house votes on the nomination and one fails to vote

within 90 days. Lungren, 45 Cal. 3d at 734. As the court acknowledged, the provision was equally

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ORDER GRANTING NCH'S MOTION TO DISM ISS NATIONAL'S FOURTH CAUSE OF ACTION AND DENYING NCH'S

MOTION FOR SANCTIONS—C-05-02893 RMW

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susceptible to multiple meanings. Id. at 735. People involved the issue of whether the term "present

source of drinking water" included facet water. People, 14 Cal. 4th at 301-02. Like Lungren, People

interpreted a phrase that gave rise to "two reasonable inferences" about its meaning. Id. at 302. Both

cases thus looked to extrinsic evidence in order to shed light on a patent ambiguity. Here, on the other

hand, "the department" is a defined term and does not include the Regional Board. Because section

2539.4.5(a) is not ambiguous, the court need not consider National's arguments that extrinsic evidence

elucidates that "the department" means either the Department or the Regional Board. Nevertheless, the

court briefly discusses each below.

a. Overlapping Jurisdiction

The California Department of Environmental Protection oversees both the Department and the

Regional Boards. See Cal. Gov't Code § 12812. The Department primarily enforces the HSAA. 

See Cal. Health & Safety Code § 58000 et seq. The Regional Boards largely administers the PorterCologne Water Quality Control Act. See Cal. Wat. Code § 13000 et seq. 

National first contends that "in numerous provisions throughout the HSAA, the Department and the

Regional Boards are treated by the Legislature as concurrent and co-equal enforcers of the act's

provisions." Opp. Mot. Dism. at 9:24-26. National provides the following examples: (1) Health & Safety

Code §§ 25355.2 (a) (either the Department or a Regional Board may oversee a site for long term

operation and maintenance requirements); (2) id. at §25356 (h) ("The department, or, if appropriate, the

California regional water quality control board, is the state agency with sole responsibility for ensuring that

required action in response to a hazardous substance release . . . at a listed site is carried out in compliance

with the . . . requirements set forth in this chapter . . . ."); (3) id. at §§25356.1 (b) & (c) (either the

Department or the Regional Board shall prepare or approve of remedial action plans at both listed and

non-listed sites); (4) id. at §25356.1 (i) (Water Code provisions governing Regional Board actions apply to

actions taken by the Regional Board under the HSAA); (5) id. at §25356.1.5 (response action

requirements under the HSAA must be no less stringent than those required under the Water Code); (6) id.

at §§25358.7 & 253587.1 (public participation requirements apply to both the Department and the

Regional Board); (7) id. at §25360 (costs incurred by Department or Regional Board are equally

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ORDER GRANTING NCH'S MOTION TO DISM ISS NATIONAL'S FOURTH CAUSE OF ACTION AND DENYING NCH'S

MOTION FOR SANCTIONS—C-05-02893 RMW

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recoverable); (8) id. at §25365.6 (Department or Regional Board may recover costs or damages by a lien

on real property owned by the responsible party). 

However, this argument cuts both ways: the fact that the Legislature saw fit to define the Regional

Boards' powers and responsibilities in several sections of the HSAA—but not section

2539.4.5(a)—suggests that the Legislature could have included the Regional Board in the statute but chose

not to do so. Under the maxim "expressio unius est exclusio alterius," "[t]he expression of some things in a

statute necessarily means the exclusion of other things not expressed." Gikas v. Zolin, 6 Cal. 4th 841, 852

(1993). Thus, National fails to convince the court that the Legislature did not intend to make section

2539.4.5(a) the exclusive province of the Department.

b. Inconsistencies Within the HSAA

National next asserts that "[t]here are several places where the Legislature's intent to include the

Regional Board is manifest in the provision, but references to the Regional Board are mysteriously dropped

midway through the provision, creating obviously absurd results." Opp. Mot. Dism. at 11: 8-10. For

example, National notes that Health & Safety Code 25356.6 governs arbitration under the HSAA, and

refers to both the Department and the Regional Board. However, for no apparent reason, the statute

excludes the Regional Board from a key provision:

The department, the California regional water quality control board, any party to the

arbitration decision, or any party substantially affected by the arbitration decision may

petition the panel to modify the apportionment ofliabilityin an arbitration decision. Upon

a showing of a material change in the facts known to the parties to the arbitrationdecision

at the time it was issued, the panel shall modify the apportionment of liability specified in

the arbitration decision, as appropriate, to reflect these changed facts. Upon a showing

of a material change in the facts known to the department at the time it issued the

finalremedial action plan, orthe discovery of new facts, the department orregional

board shall modify the remedial action plan, as appropriate, to reflect new or

additional facts. The arbitration panel shall then modify its arbitration decision to reflect

any modification of the remedial action plan made by the department.

Cal. Health & Safety Code § 25356.6(b) (emphasis added). National correctly notes that the statute

illogically appears to require both the Department and the Regional Board to modify a plan only if the

Department discovers new facts. National claims that similar deficiencies exist in Health & Safety Code

§25356.1 (referring to the Department and the Regional Board throughout, except in subsection (h)(3)

where only the Department may determine that certain requirements may be waived); and id. at §25365.6

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ORDER GRANTING NCH'S MOTION TO DISM ISS NATIONAL'S FOURTH CAUSE OF ACTION AND DENYING NCH'S

MOTION FOR SANCTIONS—C-05-02893 RMW

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(enabling both the Department and the Regional Board to recover costs through a lien but exempting only

the Department from ownership liability).

National's argument is unpersuasive. Unlike these provisions, which begin by referring both to the

Department and the Regional Board and only then inexplicably stop referring to the Regional Board, section

2539.4.5(a) never mentions the Regional Board. Thus, while National's examples may represent the

inadvertent exclusion of an agency, the court is not convinced that the same is true for section 2539.4.5(a).

c. Section 2539.4.5(a)'s Legislative History

National next argues that section 2539.4.5(a)'s legislative history reveals that it applies both to the

Department and the Regional Board. National notes that the Department drafted section 2539.4.5(a), but

the Legislature altered it to "reduce[ ] the extent to which [it] . . . focused on the Department." Opp. Mot.

Dism. at 13:20-21. For example, the Legislature eliminated the Department's request to approve or deny

claims for treble damages and expanded the class of agency mandates that could give rise to such damages. 

National's Request for Judicial Notice ("RJN") Ex. 1, Tab 1. 

However, section 2539.4.5(a)'s legislative history indicates that the Legislature enacted the treble

damages provision to compensate for a key difference between the Porter-Cologne Act and the HSAA. 

The Department receives one-half of any treble damage award under section 2539.4.5(a). See Cal. Health

& Safety Code § 2539.4.5(b). As the statute's legislative history reveals, this is because the PorterCologne Act permits joint and several liability, while the HSAA does not. Compare Union Oil Co. of

California, 1990 Cal. ENV LEXIS 23 at *11, Order No. WQ92-3 (SWRCB 1990) (noting that the

Regional Boards "consider all dischargers jointly and severally liable for dischargers of waste") with Cal.

Health & Safety Code § 25363(a) ("any party found liable for any costs or expenditures recoverable under

this chapter who establishes by a preponderance of the evidence that only a portion of those costs or

expenditures are attributable to that party's actions, shall be required to pay only for that portion"). Joint

and several liability makes "each liable party . . . individually responsible for the entire obligation," and

thus permits the Regional Board to be more certain that it will recover full damages. See Black's Law

Dictionary 377 (1996). Section 2539.4.5(a)'s legislative history indicates that the Legislature intended the

treble damages provision to give the Department—and only the Department—an especially potent

enforcement mechanism. See RJN Ex. 1, Tab 3, at 3 ("[w]ithout potential joint and several liability, there is

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ORDER GRANTING NCH'S MOTION TO DISM ISS NATIONAL'S FOURTH CAUSE OF ACTION AND DENYING NCH'S

MOTION FOR SANCTIONS—C-05-02893 RMW

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little leverage to persuade a [responsible party] to clean[] up more than its perceived proportionate share"). 

Accordingly, section 2539.4.5(a)'s legislative history suggests that the Legislature had a rational basis for

permitting treble damages under only the HSAA. 

d. California's Site Designation Program

National argues that "the Legislature also granted the Regional Board express authority to act in the

shoes of the Department when it is designated as the administering agency under California's Unified

Agency Review program." Opp. Mot. Dism. at 15:19-21 (emphasis in original). The Unified Agency

Review program permits a responsible party to apply to have a single agency supervise remediation. 

See Cal. Health & Safety Code § 25262. Once the state has granted such an application, the administering

agency "ha[s] sole jurisdiction over all activities that may be required to carry out a site investigation and

remedial action," including the power to "[a]dminister all [applicable] state and local laws, ordinances,

regulations, and standards . . . ." Id. at § 25264(a). National's application to have the Regional Board

oversee remediation is pending. According to National, once the state grants its application, "the Regional

Board [will] act[ ] with the same authority as the Department . . . and its orders should be equivalent to

orders issued by the Department for the purposes of the treble damages provision of the HSAA." Opp.

Mot. Dism. at 16:16-19; RJN Ex. 6. 

National's argument lacks merit. Nothing in the statute suggests that designating the Regional Board

as administering agency under the site designation program transforms previous orders issued by the

Regional Board into orders issued by the Department. In addition, although the statute confers specific

powers upon the administering agency, these do not include the power to issue orders. See Cal. Health &

Safety Code § 25264(a) (noting only that administering agency may "[i]ssue permits"). Thus, even if the

state does designate the Regional Board as the agency in charge of remediation at the Arques Parcel,

National fails to persuade the court that this will imbue the Regional Board with a host of new enforcement

powers.

e. Coordination Between the Department and the Regional Boards

Finally, National claims that "the extensive coordination and cooperation between the Department

and the Regional Boards makes a cleanup order issued by a Regional Board tantamount to one issued by

the Department." Opp. Mot. Dism. at 16:25-26. National cites several Memoranda of Understandings

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In addition, National notes that the Ninth Circuit has held that knowledge held by a

Regional Board can be imputed to the Department. See In re Jensen, 995 F. 2d 925, 931 (9th Cir.

1993). Of course, this issue has no bearing on whether the Legislature intended "the department" to mean

the Regional Board in section 2549.4.5(a). 

ORDER GRANTING NCH'S MOTION TO DISM ISS NATIONAL'S FOURTH CAUSE OF ACTION AND DENYING NCH'S

MOTION FOR SANCTIONS—C-05-02893 RMW

DOH 8

between the Department and the Regional Boards, which include policy statements such as "[n]either

agency will take enforcement actions that are not compatible or complimentary to the enforcement actions

of the other agencies." Memorandum of Understanding Between the Department of Health Services and

the State Water Resources Control Board, The Regional Water Quality Control Boards for the Cleanup of

Hazardous Waste Sites, August 1, 1990, RJN Ex. 4, at 11 ("the MOU").1

However, the MOU says nothing about one agency's ability to assume another agency's powers. 

Instead, National's cited language simply requires both agencies not to contradict the other's enforcement

actions. Moreover, the MOU makes clear that the Department and Regional Boards must continue to act

"within their respective authorities, jurisdiction, and expertise." MOU at 5. Because the MOU does not

suggest that the Regional Board may step into the Department's shoes whenever it would be pragmatic to

do so, the court rejects National's assertion. 

B. Motion for Sanctions

NCH moves for Rule 11 sanctions against National for asserting its fourth cause of action. Rule 11

empowers courts to award sanctions against parties who make baseless factual or legal contentions. Rule

11 exempts, however, "nonfrivolous argument[s] for the extension, modification, or reversal of existing law

or the establishment of new law." Here, no case of which this court is aware has interpreted section

2539.4.5(a). Thus, National's fourth cause of action, at worst, constitutes a non-frivolous attempt to break

new ground interpreting an exceedingly complex statute. The court denies NCH's motion for sanctions. 

 

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ORDER GRANTING NCH'S MOTION TO DISM ISS NATIONAL'S FOURTH CAUSE OF ACTION AND DENYING NCH'S

MOTION FOR SANCTIONS—C-05-02893 RMW

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III. ORDER

For the foregoing reasons, the court grants NCH's motion to dismiss National's fourth cause of

action with prejudice and denies NCH's motion for sanctions.

DATED: 10/18/05 /s/ Ronald M. Whyte

RONALD M. WHYTE

United States District Judge

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ORDER GRANTING NCH'S MOTION TO DISM ISS NATIONAL'S FOURTH CAUSE OF ACTION AND DENYING NCH'S

MOTION FOR SANCTIONS—C-05-02893 RMW

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Notice of this document has been electronically sent to:

Counsel for Plaintiff(s):

Richard Craig Coffin rcc@bcltlaw.com

Jon Goddard Lycett jgl@bcltlaw.com 

Thomas D. Trapp tdt@beltlaw.com 

Counsel for Defendant(s):

William David Wick bwick@ww-envlaw.com 

Counsel are responsible for distributing copies of this document to co-counsel that have not registered for

e-filing under the court's CM/ECF program.

Dated: 10/18/05 DOH

Chambers of Judge Whyte

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