Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_10-cv-01606/USCOURTS-cand-3_10-cv-01606-2/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 42:6901 Environmental Cleanup Expenses

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28 This disposition is not designated for publication in the official reports. 1

Case No. CV 06-07164 JF (PVT)

Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

**E-Filed 8/12/2010**

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

TYCO THERMAL CONTROLS LLC,

 Plaintiff,

 v.

REDWOOD INDUSTRIALS, et al.,

 Defendants.

ROWE INDUSTRIES, INC.,

 Counter-Claimant,

 v.

TYCO THERMAL CONTROLS, LLC,

 Counter-Defendant.

__________________________________________

TYCO THERMAL CONTROLS LLC,

 Plaintiff,

 v.

ROWE INDUSTRIES, INC.,

 Defendant.

Case Number C 06-07164 JF (PVT)

ORDER GRANTING MOTIONS 1

FOR APPROVAL OF

SETTLEMENT AND TO DISMISS

Re: Docket Nos. 184, 190

Related Case No. C 10-01606 JF (PVT)

Re: Docket No. 6

Case 3:10-cv-01606-NC Document 17 Filed 08/12/10 Page 1 of 31
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Case No. CV 06-07164 JF (PVT)

Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

I. MOTIONS FOR APPROVAL OF SETTLEMENT

A. Background

The instant actions concern remediation at a contaminated property located at 2201 Bay

Road in Redwood City, California ("the Property"). On November 17, 2006 Plaintiff Tyco

Thermal Controls, LLC ("Plaintiff") filed Case No. 06-7164 against Defendants Redwood

Industrials, Roland Lampert, Audrey Lampert, Laverne E. Doolittle, Deceased, Emile K.

Doolittle, Deceased, Masha Lampert, Deceased, Morris M. Grupp, Deceased, and Anna M.

Grupp, Deceased (collectively, "Redwood"), Carlisle Companies Inc., Carlisle Corporation and

Tensolite Company, sued erroneously as Tensolite Insulated Wire Pacific Division, Inc. and

Tensolite Insulated Wire Company, (collectively, "Carlisle"), and Coleman Cable & Wire,

Pacific Transformer Company, Hill Magnetics, Inc., and Hill Industries, Inc., predecessors in

interest of Defendant Rowe Industries, Inc. (“Rowe”). The initial complaint sought recovery of

costs associated with investigation and clean-up, contribution, and declaratory relief pursuant to

the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as

amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. § 9601, et

seq. ("CERCLA"), the Resources Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6901,

et seq., 6972; the Declaratory Relief Act, 28 U.S.C. § 2201, and California state law. 

On January 15, 2007, Plaintiff filed its first amended complaint ("FAC") adding Rowe as

a defendant and alleging eight claims for relief: (1) recovery of response costs under CERCLA,

§§ 107(a)(1-4)(B), 42 U.S.C. § 9607(a); (2) contribution under CERCLA § 113(f), 42 U.S.C. §

9613(f)(1); (3) relief under RCRA, 42 U.S.C. §§ 6901, et seq., 6972; (4) declaratory relief under

federal law; (5) response costs under the Hazardous Substance Account Act (“HSSA”), Cal.

Health & Safety Code § 25300, et seq.; (6) comparative equitable indemnity under state law; (7)

declaratory relief under state law; and (8) attorney's fees under Cal. Civ. P. § 1021.5. On October

29, 2009, Plaintiff moved for leave to file a second amended complaint ("SAC") adding claims

against Rowe under California law for continuing nuisance and continuing trespass and

Case 3:10-cv-01606-NC Document 17 Filed 08/12/10 Page 2 of 31
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 The motion was denied with respect to Plaintiff’s proposed nuisance and trespass 2

claims. Dkt. No. 101 at 6. 

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Case No. CV 06-07164 JF (PVT)

Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

dismissing without prejudice its claim for relief under RCRA based upon its failure to comply

with RCRA's pre-suit notice requirement. On December 14, 2009, the Court granted Plaintiff’s

motion to withdraw the RCRA claim without prejudice and determined that Plaintiff’s first

amended complaint ("FAC"), absent the RCRA claim, would remain the operative pleading.2

On March 2, 2010, Plaintiff again moved to amend its pleading to allege a RCRA claim

against Rowe. The Court denied that motion, concluding that the proposed amendment would

not cure Plaintiff’s failure to comply with RCRA’s jurisdictional notice requirement. On April

14, 2010, Plaintiff filed Case No. 10-1606, alleging the RCRA claim that is the subject of the

motion to dismiss discussed below. See infra, II. On May 4, 2010, the Court related Case No.

06-7164 and Case No. 10-1606. Defendants have filed counterclaims against Plaintiff and crossclaims against each other for contribution and pursuant to the common-law doctrine of equitable

indemnity. 

Plaintiff alleges that the Defendants are responsible for the release of polychlorinated

biphenyls (“PCBs”) which have been identified in the soil at and adjacent to the Property. 

Plaintiff has submitted reports concerning its investigation of the Property and a proposal for

remediation of the contamination to the Regional Water Quality Control Board. These

documents contain cost estimates for remediation ranging from $363,000 to $1,638,000, not

including the cost of ongoing monitoring. Declaration of Margaret K. Peischl in Support of

Motion for Partial Summary Judgment, Ex. F (Draft Remedial Action Plan). This range reflects

two alternative remediation plans. The estimated capital cost for soil capping (Alternative 2) is

$363,000. Id. The estimated cost for soil excavation and off-site disposal (Alternative 3) is

$1.635 million. Id. Regardless of which alternative is selected, Plaintiff has estimated the

monitoring costs to be $778,141, exclusive of contingencies. The total cost estimate for

Alternative 2 is $1,677,000 and for Alternative 3 is $2,611,000. Defendants have proposed a

variant to Plaintiff’s capping alternative with a lower cost estimate and lower monitoring costs. 

Case 3:10-cv-01606-NC Document 17 Filed 08/12/10 Page 3 of 31
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Case No. CV 06-07164 JF (PVT)

Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

B. The Settlement Agreements

In December 2009 and January 2010, Plaintiff and Redwood participated in mediation

sessions with a court-appointed mediator, Daniel Bowling. Declaration of Margaret R. Dollbaum

in Support of Redwood’s Motion (“Dollbaum Decl.”) ¶ 2. The parties entered into a settlement

agreement that recognizes the following: (1) Plaintiff has entered into an arrangement with the

Regional Water Quality Control Board to remediate contamination at the Property pursuant to a

voluntary agreement; (2) Redwood will make a payment of $275,000 that Plaintiff may use

toward the costs of remediation; this sum represents more than seventy-five percent of Plaintiff’s

estimated capital cost for Alternative 2 and approximately seventeen percent of the cost of

Alternative 3; (3) the settlement is contingent upon approval by this Court, including entry of a

final order barring contribution claims against Redwood under the Uniform Comparative Fault

Act (“UCFA”), 12 U.L.A. 147 1996, and confirming that the settlement is in good faith pursuant

to Cal. Civ. P. §§ 877 and 877.6; and (4) Plaintiff will dismiss its claims against Redwood and

will provide Redwood with a release from any claim arising from or related to the action.

Dollbaum Decl., Ex. A (“Redwood-Tyco Settlement Agreement”). 

On January 26, 2010, following a separate mediation session with Mr. Bowling, Plaintiff

and Carlisle also entered a settlement agreement. Carlisle’s Motion at 5. Under the terms of the

proposed settlement, Carlisle will pay Plaintiff the sum of $150,000 in exchange for a release of

Plaintiff’s claims against Carlisle. Declaration of Paul A. Desrochers, Ex. A (“Carlisle-Tyco

Settlement Agreement”). The settlement is conditioned on a judicial determination that the

settlement in is in good faith pursuant to Cal. Civ. P. §§ 877 and 877.6 and on a contribution bar

pursuant to the UCFA. Id. 

On April 23, 2010, Redwood moved for an order approving its settlement with Plaintiff,

barring contribution claims, indemnity, and other claims pursuant to CERCLA and the UCFA,

and determining that the settlement is in good faith pursuant to Cal. Civ. P. § 877.6. On May 21,

2010, Carlisle moved for a similar order approving its settlement with Plaintiff. On June 4,

2010, non-settling defendant Rowe filed "conditional non-opposition" to both motions. Rowe

Case 3:10-cv-01606-NC Document 17 Filed 08/12/10 Page 4 of 31
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 On July 16, 2010, Plaintiff requested that the Court defer ruling on the motions for 3

approval of settlement for a period of ten days to allow the parties to meet and confer with

respect to a mutually acceptable resolution. Plaintiff also requested the opportunity to address

comments made by Redwood’s counsel at the hearing on the motions. On July 21, 2010, the

Court granted Plaintiff’s request to defer issuing an order but denied the request to file additional

briefing or evidence. Dkt. 227 at 2 (noting that Plaintiff already had filed several memoranda

and presented substantial oral argument in support of its position). Subsequently, Plaintiff

notified the Court that the parties’ meet and confer efforts had been unsuccessful. In that notice,

Plaintiff made representations with respect to issues in dispute between the settling parties. Dkt.

228. In light of its denial of Plaintiff’s prior request for an opportunity to address the same

issues, see Dkt. 227, the Court will disregard these representations. 

5

Case No. CV 06-07164 JF (PVT)

Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

conditioned its non-opposition upon a determination by the Court that the protections afforded to

non-settling defendants by the UCFA apply not only to the instant action but also to Plaintiff’s

separate but related RCRA action. Rowe contends that such a determination will ensure that

there will be an appropriate apportionment of liability between itself and other potentially

responsible parties in the RCRA action, including the settling defendants. 

On June 10, 2010, Carlisle and Redwood filed replies to Rowe's conditional

non-opposition papers expressing their agreement with Rowe’s position that the UCFA should

apply to Plaintiff's RCRA action against Rowe. The next day, Plaintiff filed a reply brief

opposing application of the UCFA to the RCRA action. In addition to contending that no right to

contribution exists under RCRA, Plaintiff also expressed disagreement with the assertions by

Redwood and Carlisle that the UCFA sets forth the appropriate method for apportioning liability

with respect to Plaintiff’s CERCLA claims. Plaintiff contends instead that the Court should

adopt the pro tanto method for apportioning liability. Upon learning of Plaintiff's position, Rowe

sought leave to file unconditional opposition to the motions for approval of settlement. The

Court, recognizing that Plaintiff's position on apportionment was not evident before the filing of

the June 11 reply brief, granted Rowe’s request to submit unconditional opposition and permitted

Plaintiff, Redwood, and Carlisle to file additional reply briefs.

3

C. Legal Standard

Cal. Civ. P. § 877.6 permits a court to approve a settlement if it determines that the

settlement was made in good faith. "A determination by the court that the settlement was made

Case 3:10-cv-01606-NC Document 17 Filed 08/12/10 Page 5 of 31
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Case No. CV 06-07164 JF (PVT)

Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

in good faith shall bar any other joint tortfeasor or co-obligor from any further claims against the

settling tortfeasor or co-obligor for equitable comparative contribution, or partial or comparative

indemnity, based on comparative negligence or comparative fault." Cal. Civ. P. § 877.6(c). "[A]

tort defendant who has entered into a good faith settlement within the meaning of section 877.6,

subdivision (c) is absolved of any further liability . . . including claims seeking total equitable

immunity." Far W. Fin. Corp. v. D&S Co., 46 Cal.3d 796, 817 (Cal. 1988). Subdivision (c)

applies only if the court finds that "the amount of the settlement is within the reasonable range of

the settling tortfeasor's proportional share of comparative liability for the plaintiff's injuries." 

L.C. Rudd & Son v. Superior Court, 60 Cal.Rptr.2d 703, 747 (Cal. Ct. App. 1st Dist. 1997)

(internal citation omitted). Should any party challenge a settlement, the burden is on that party to

show that the settlement was not made in good faith. Fisher v. Superior Ct., 103 Cal.App.3d

434, 447-49 (1980). 

D. Discussion

1. Proper method of apportioning liability with respect to Plaintiff’s

CERCLA and state law claims

a. Whether determination of the method of apportionment is

premature

In CERCLA cost recovery actions, a court must consider partial settlements in allocating

response costs among potentially responsible parties (“PRPs”). See K.C.1986 Ltd. P'ship v.

Reade Mfg., 472 F.3d 1009, 1018 (8th Cir. 2007) ("CERCLA plainly requires that the district

court take these settlements into its equitable consideration in the allocation process."). Plaintiff

contends that it is premature and unnecessary to determine which method of apportioning

liability should apply with respect to Rowe. Plaintiff relies upon the doctrine of prudential

ripeness, which requires evaluating “both the fitness of the issues for judicial decision and the

hardship to the parties of withholding court consideration.” Abbott Laboratories v. Gardner, 387

U.S. 136, 149 (1967), overruled on other grounds by Califano v. Sanders, 430 U.S. 99, 105

(1977). Plaintiff argues alternatively that if the Court concludes that it must determine the

appropriate method of apportionment now, it should adopt the pro tanto approach. 

Case 3:10-cv-01606-NC Document 17 Filed 08/12/10 Page 6 of 31
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 “The UCFA provides for equitable allocation of liability based on relative fault.” 4

Adobe Lumber, No. CIV. 05-1510 WBS EFB, 2009 WL 256553, at *3 n.1 (E.D. Cal. Feb. 3,

2009), citing UCFA § 2, 12 U.L.A. 126 (1996). Under CERCLA, a PRP's equitable share

consists of the portion of response costs a court allocates to that PRP “using such equitable

factors as the court determines are appropriate.” 42 U.S .C. § 9613(f)(1). These equitable factors

extend beyond fault. See Waste Mgmt. of Alameda County, Inc. v. E. Bay Reg'l Park Dist., 135

F.Supp.2d 1071, 1090 (N.D. Cal. 2001) (listing a variety of potential considerations, including

relative fault, the care exercised by parties, the degree of cooperation with government agencies,

the benefits received by the parties from the contamination, and the financial resources of the

parties, among others).

7

Case No. CV 06-07164 JF (PVT)

Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

The UCFA “provides that the liability of non-settlers is reduced by the proportionate

share of fault attributed to the settling parties. UCFA § 2.” Am. Cyanamid Co. v. Capuano, 381

F.3d 6, 20 (1st Cir. 2004); UCFA § 6, 12 U.L.A. 126 (1996). In contrast, “the pro tanto 4

approach[] follows the method of the Uniform Contribution Among Tortfeasors Act

(“UCATA”), which reduces the liability of litigants by the dollar amount of third-party

settlements. UCATA § 4.” See Capuano, 381 F.3d at 20; UCATA § 4, 12 U.L.A. 194 (1996). 

“These two approaches, therefore, assign the risk of an inadequate partial settlement – i.e., a

settlement below the amount allocated to the settling defendant at trial – to different parties.

Under the proportionate share approach, the plaintiff bears the risk, while under the pro tanto

approach, the nonsettling defendants bear the risk.” Adobe Lumber, 2009 WL 256553, at *3,

citing In re Jiffy Lube Sec. Litig., 927 F.2d 155, 161 (4th Cir.1991).

Notwithstanding Plaintiff’s argument, use of the pro tanto method of allocation would

appear to require an immediate determination as to the adequacy of the proposed settlements

because the settlements would affect directly – dollar-for-dollar – the non-settling defendant’s

potential liability. Although Plaintiff suggests that Rowe does not contest the adequacy of the

proposed settlement amounts, in fact Rowe does contend that pro tanto allocation would be

unfair, for two reasons. First, Rowe claims that while Carlisle and Redwood might not have used

PCBs themselves, they were well aware of the activities of Rowe’s predecessor at the site and

profited by having Rowe’s predecessor at the Property. Second, Rowe claims that its predecessor

paid $90,000 in 1973 dollars on behalf of all the Defendants to clean up the Property and

Case 3:10-cv-01606-NC Document 17 Filed 08/12/10 Page 7 of 31
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 Rowe also challenges the proposed settlement amounts based upon on-going discovery 5

and the escalating cost of remediation. However, as explained in more detail below, a

determination of good faith settlement must be made based on the facts as they exist at the time a

settlement agreement is reached. 

8

Case No. CV 06-07164 JF (PVT)

Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

effectuate the “as is” sale of the Property to Plaintiff. Rowe argues that the settlement amounts

proposed – ranging from six to seventy-five percent of the cost of remediation depending on

what method of clean up is adopted – thus are unfairly disproportionate to the settling

defendants’ liability. Moreover, the question of who bears the risk of a low settlement amount is

relevant to the Court’s determination as to whether the settlement agreements were reached in

good faith and in accordance with CERCLA. Accordingly, the Court concludes that it must

decide how liability is to be apportioned before determining if the settlement agreements are in

good faith pursuant to Cal. Civ. P. 877.6. See U.S. v. Western Processing Co., Inc., 756 F.Supp. 5

1424, 1431 (W.D. Wash 1990) (“[T]he effect of settlement upon nonsettling parties cannot be

divorced from the overall issue of the basis upon which liability will be apportioned among the

parties.”), quoting United States v. Conservation Chemical Co., 628 F.Supp. 391, 401 (W.D. Mo.

1985).

b. The appropriate method of allocation

The motions for approval of settlement request both a determination that the settlements

are in good faith and a bar on contribution claims, indemnity, and other claims related to this

action. “Under federal law, particularly in CERCLA cases such as this, district courts have

approved settlements and entered bar orders.” AmeriPride Services Inc. v. Valley Indus., Nos.

CIV. S-00-113-LKK JFM, S-04-1494-LKK/JFM., 2007 WL 1946635, at *2 (E.D. Cal. July 2,

2007), citing United States v. Western Processing Co., Inc., 756 F.Supp.1424, 1432-33 (W.D.

Wash. 1990). “Such an order is appropriate to facilitate settlement, particularly in a CERCLA

case.” Id., citing Foamseal, Inc v. Dow Chemical, 991 F.Supp. 883, 886 (E.D. Mich. 1998). 

“Within the Ninth Circuit, a court's authority to review and approve settlements and to enter bar

orders has been expressly recognized.” Id., citing Franklin v. Kaypro Corp., 884 F.2d 1222 (9th

Cir. 1989) (approving settlement of claims and entering bar orders in the context of federal

Case 3:10-cv-01606-NC Document 17 Filed 08/12/10 Page 8 of 31
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 This case is primarily a federal action requesting relief under federal law. Although 6

Plaintiff does allege a claim under California’s Carpenter-Presley-Tanner Hazardous Substance

Account Act (“HSAA”), as well as attendant state law claims for comparative equitable

indemnity, declaratory relief, and attorney fees, HSAA recovery largely is defined by CERCLA

itself, and the statute includes several direct references to and incorporates much of CERCLA’s

language. “Because the principal basis for this action is a federal statute, CERCLA, federal

law-including case law of federal courts-is controlling.” Allied Corp. v. Acme Solvent

Reclaiming, Inc., 771 F.Supp.219, 223 (N.D. Ill. 1990). Accordingly, federal common law

controls the method of apportionment. 

9

Case No. CV 06-07164 JF (PVT)

Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

securities laws). The same is true for settlement of state law claims in a federal action. See id.,

citing Patterson Environmental Response Trust v. Autocare 2000, Inc., No. Civ-F 01-6606 (E.D.

Cal. July 8, 2002); see also Federal Savings and Loan Ins. Corp v. Butler, 904 F.2d 505, 511

(9th Cir. 1990).

Rowe and the settling defendants contend that the Court should apply the UCFA’s

proportionate share method. They contend that the majority of federal case law supports

application of the proportionate share approach. Each party also argues that the language of the 6

settlement agreements and the equitable principles of CERCLA require adoption of their

respective proposed method of allocation. 

i. Legal authority 

CERCLA does not address specifically how settlements in private party cost recovery

actions should be apportioned or evaluated for fairness, nor has the Ninth Circuit issued a

decision directly addressing the issue. 42 U.S.C. § 9613(f)(1) (providing no explicit guidance on

the method of apportioning liability between private PRPs); Adobe Lumber, 2009 WL 256553, at

*3 (“In the twenty-eight years that CERCLA has been [sic] existence, the Ninth Circuit has never

addressed the question of the proper credit method for settlements between private PRPs under

CERCLA.”), but c.f. In re Exxon Valdez, 229 F.3d 790, 796 (9th Cir. 2000) (asserting in the

context of a non-CERCLA case that “[t]he proportionate share approach is the law in the Ninth

Circuit”). “Nevertheless, district judges in the Ninth Circuit [] appear to uniformly employ the

[UCFA] proportionate share approach for settlements between private PRPs.” Adobe Lumber,

2009 WL 256553, at *3, citing Ameripride Serv. 2007 WL 1946635, at *4; Patterson Envtl.

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Case No. CV 06-07164 JF (PVT)

Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

Response Trust v. Autocare 2000, Inc., No. 01-6606, 2002 U.S. Dist. LEXIS 28323, at *15 (E.D.

Cal. July 8, 2002) (Wanger, J.) (“Most courts have adopted the Uniform Comparative Fault Act

(the "UCFA") in evaluating the effect of settlement upon nonsettlors because its principles are

most consistent with Congress's intent in enacting CERCLA.”); West County Landfill, Inc. v.

Raychem Int'l Corp., No. 93-3170, 1997 U.S. Dist. LEXIS 1791, at *3 (N.D. Cal. Feb. 14, 1997);

Acme Fill Corp. v. Althin CD Med., Inc., No. 91-4268, 1995 WL 822663, at *1 (N.D. Cal. Nov.

8, 1995); United States v. W. Processing Co., 756 F.Supp. 1424, 1432 (W.D. Wash. 1990). 

“District courts nationally have also widely adopted the proportionate share credit

method.” Adobe Lumber, 2009 WL 256553, at *3, citing Tosco Corp. v. Koch Indus., Inc., 216

F.3d 886, 897 (10th Cir. 2000) (asserting that a majority of courts deciding CERCLA § 113(f)(1)

contribution claims have adopted the UCFA’s proportionate share method), citing Lynnette

Boomgaarden & Charles Breer, Surveying the Superfund Settlement Dilemma, 27 Land & Water

L.Rev. 83, 109-12, 111 n. 189 (1992); see also New York v. Solvent Chem. Co., Inc., 984 F.Supp.

160, 168 (W.D.N.Y. 1997) (“Under section 113(f)(1), which applies to allocation of costs among

private parties, the court must consider equitable factors. The omission of this language in

section 113(f)(2) appears to dictate application of the UCFA in actions between private parties.

This finding is consistent with the purposes behind [CERCLA] sections 113(f)(1) and

113(f)(2).”); Hillsborough County v. A & E Road Oiling Serv., Inc., 853 F.Supp. 1402, 1410

(M.D. Fla. 1994) (“[T]he intent of Congress and the purposes of CERCLA are inextricably

intertwined: To achieve the prompt clean-up of hazardous waste sites, and fairly allocate the

costs of the clean-up to those responsible for the contamination. . .UCFA effectively embraces

both prompt clean-up and fair allocation.”) (internal citation and quotation marks omitted);

United States v. SCA Serv. of Ind., Inc., 827 F.Supp. 526, 535 (N.D. Ind. 1993) (“The UCFA will

better promote CERCLA's policy of encouraging settlements, while securing equitable

apportionment of liability for Non-settlors.”).

Plaintiff acknowledges that district courts in the Ninth Circuit uniformly have concluded

that the UCFA’s proportionate share approach applies to private party cost recovery actions

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 Here, the Court already has determined that Plaintiff is a PRP. See contra Veolia. 2010 7

WL 898097, at 7 (“Since a non-PRP private party who conducts CERCLA related cleanup

already faces the hurdle and expense of pursuing litigation to receive compensation for its

response costs, the prospect of less than full recovery would add an additional disincentive to

private party cleanups and would therefore be contrary to CERCLA's principle [sic] goals.” )

11

Case No. CV 06-07164 JF (PVT)

Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

under CERCLA, but it argues that better reasoned decisions outside the Ninth Circuit have

concluded otherwise. Dkt. 209 at 5-6, citing Azko Nobel Coatings, Inc. v. Aigner Corp., 197

F.3d 302, 308 (7th Cir. 1999) (adopting the pro tanto approach in part because (1) it provides an

incentive for early settlement and (2) the Supreme Court in McDermott, Inc. v. AmClyde, 511

U.S. 202, 211-14, 114 S.Ct. 1461, 128 L.Ed.2d 148 (1994) concluded in a maritime action that

“the choice between the pro tanto approach and claim reduction is a tossup” and the pro tanto

approach is specified in CERCLA section 113(f)(2), “the most closely related rule of law”);

Capuano, 381 F.3d at 20-21 (interpreting CERCLA to “give the district court discretion

regarding the most equitable method of accounting for settling parties” and applying pro tanto

approach); see also Veolia es Special Services v. Hiltop Investments, No. 3:07-0153, 2010 WL

898097, at *7 (S.D. W.Va. Mar. 12, 2010) (adopting the pro tanto method and focusing in part on

the fact that the non-PRP plaintiff faced the risk of obtaining less than full recovery for its own

undertaking in cleanup).

7

This Court joins other district courts in the Ninth Circuit in concluding that the UCFA’s

proportionate share method applies to claims brought under § 113(f)(1). § 113(f)(1) provides

that courts should "allocate response costs among liable parties using such equitable factors as

the court determines are appropriate." 42 U.S.C. § 9613(f)(1). “This provision promotes fairness

and prevents relatively innocent PRPs from being forced to bear a disproportionate burden of the

liability.” Adobe Lumber, 2009 WL 256553, at *4, citing Carson Harbor Village, Ltd. v. Unocal

Corp., 270 F.3d 863, 871 (9th Cir. 2001) (en banc) ("The contribution provision aims to avoid a

variety of scenarios by which a comparatively innocent PRP might be on the hook for the entirety

of a large cleanup bill."); SmithKline Beecham Corp. v. Rohm & Haas Co., 89 F.3d 154, 163, 163

n. 7 (3d Cir. 1996) (noting that CERCLA policy disfavors the apportionment of liability "in

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Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

disregard of the equities affecting the parties") (citation omitted); In re Hemingway Transp., Inc.,

993 F.2d 915, 922 (1st Cir.1993) (holding that "CERCLA section [113(f)] is aimed at promoting

equitable allocations of financial responsibility").

The Court recognizes that there are advantages and disadvantages to each methodology. 

Under the proportionate share approach, a plaintiff must bear the risk of settling for too little too

early, thus discouraging early settlement, an ideal that both CERCLA and judicial economy

promote. Veolia, 2010 WL 898097, at *7 (“The proportionate rule would discourage settlement

by making plaintiff bear the risk that the settlement adequately reflected the settlor's share of

fault. Where there are several PRPs, like this case, the proportionate approach encourages

defendants to hold out until a fault-based allocation can be made, requiring the plaintiff to

continuing [sic] litigating and thereby reduce its net recovery.”) However, § 113(f)(1)

specifically concerns allocation of response costs, and the only consideration it expressly

references is equity. “Of the two alternative approaches, the pro tanto method clearly produces a

greater risk of inequitable allocation of liability.” Adobe Lumber, 2009 WL 256553, at *4, citing

McDermott v. AmClyde, 511 U.S. 202, 214, 114 S.Ct. 1461, 128 L.Ed.2d 148 (1994); cf.

Capuano, 381 F.3d at 20 ("The [proportionate share] approach has the benefit [ ] of ensuring, in

theory, that damages are apportioned equitably among the liable parties."). “Under the pro tanto

approach, nonsettling defendants must pay more than their fair share whenever a plaintiff settles

with a defendant for less than that defendant's equitable share.” Id., citing Franklin v. Kaypro

Corp., 884 F.2d 1222, 1230 (9th Cir. 1989). A plaintiff may accept such a settlement for a

variety of reasons, such as the benefit of reduced uncertainty, lower litigation costs, or the ability

to leverage the settlement amount toward litigating the action against the non-settling defendants. 

McDermott, 511 U.S. at 212-13; Kaypro, 884 F.2d at 1230.

Inequity also may result under the proportionate share method. A plaintiff who settles

with a defendant for less than its equitable share no longer will be able to recover its full

damages because its total recovery is reduced by the equitable share of the settling defendant.

However, as the court concluded in Adobe Lumber, “the plaintiff, as the party that decides

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 “The Supreme Court adopted the proportionate share approach for maritime actions 8

specifically because of this tendency to achieve a fairer allocation of costs.” Adobe Lumber,

2009 WL 256553, at *5. “The Court concluded that the two settlement credit methods were

‘closely matched’ with regard to the promotion of settlement and judicial economy, but adopted

the proportionate share approach because it was more consistent with the Court's holding in

United States v. Reliable Transfer Co., Inc., 421 U.S. 397, 95 S.Ct. 1708, 44 L.Ed.2d 251 (1975),

which required that damages in maritime cases be equitably allocated in accordance with the

parties' comparative fault.” Id., citing McDermott, 511 U.S. at 217 ("[T]he proportionate share

approach is superior, especially in its consistency with Reliable Transfer."); see Kaypro, 884

F.2d at 1231 (adopting the proportionate share method for securities class actions in part because

it "comports with the equitable purpose of contribution" (citing Smith v. Mulvaney, 827 F.2d 558,

561 (9th Cir.1987)). In McDermott, contrary to the Seventh Circuit’s conclusion in Azko Nobel

Coatings, the Supreme Court concluded that “the pro tanto approach, even when supplemented

with good-faith hearings, is likely to lead to inequitable apportionments of liability” and that the

“proportionate share approach is superior.” McDermott, 511 U.S. at 214, 217.

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whether to settle with any of the defendants, is in the best position to mitigate that risk by settling

only when the proposed amount approximates the settling defendant's equitable share of

liability.” Adobe Lumber, 2009 WL 256553, at *4, citing Comerica Bank-Detroit v. Allen Indus.,

Inc., 769 F.Supp. 1408, 1414 (E.D. Mich. 1991). The opposite is true under the pro tanto

approach. Under that scheme, the potential injury will be suffered by the nonsettling defendant,

who has no ability to affect the settlement amount. Accordingly, the proportionate share approach

makes it more likely that pre-trial settlements and the overall litigation will achieve the equitable

allocation of liability among all responsible parties that 42 U.S.C. § 9613(f)(1) specifically

demands.8

ii. Language of the settlement agreements

Redwood and Carlisle argue that the language of the settlement agreements calls for the

proportionate share method of allocation, while Plaintiff contends that the same agreements

mandate the pro tanto approach. Because it has concluded that the UCFA’s proportionate share

method of allocating liability is applicable to CERCLA claims brought under § 113(f)(1), the

Court now must determine if the settlement agreements expressly elect to follow this

methodology, opt instead for the pro tanto method, or are so ambiguous that there was no

meeting of the minds as to this material provision of the agreements. 

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ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

“A settlement agreement is treated as a contract and is subject to all contractual

requirements.” Parker v. Foster, No. CV F 05-0748 AWI LJO, 2006 WL 2085152, at *5 (E.D.

Cal. July 25, 2006), citing Huens v. Tatum, 52 Cal.App.4th 259, 264 (1997), disapproved on

other grounds by Zamora v. Clayborn Contracting Group, Inc., 28 Cal.4th 249, 256 (2002). 

“The interpretation of a settlement agreement is governed by the same rules that guide the court's

review of any other contract.” Id., citing Edwards v. Comstock Insurance Co., 205 Cal.App.3d

1164, 1167-69 (1988). “A settlement agreement, like any other contract, is unenforceable if the

parties fail to agree on a material term” or fail to agree to the same thing in the same sense. 

Lindsay v. Lewandowski, 139 Cal.App.4th 1618, 1622-23 (2006). 

However, “[i]t is the objective intent, as evidenced by the words of the contract, rather

than the subjective intent of one of the parties, that controls interpretation.” Titan Group, Inc. v.

Sonoma Valley County Sanitation Dist., 164 Cal.App.3d 1122, 1127 (1985). “[I]t is [] a settled

principle of the law of contract that the undisclosed intentions of the parties are ... immaterial;

and that the outward manifestation or expression of assent is controlling.” Id., quoting Brant v.

California Dairies, Inc., 4 Cal.2d 128, 133, 48 P.2d 13 (1935); see also Mission Valley East, Inc.

v. County of Kern 120 Cal.App.3d 89, 97, 174 Cal.Rptr. 300 (1981); City of Mill Valley v.

Transamerica Ins. Co., 98 Cal.App.3d 595, 603, 159 Cal.Rptr. 635 (1979). “The parties'

undisclosed intent, undisclosed understanding, or subject[ive] intent is irrelevant to contract

interpretation.” Parker, 2006 WL 2085152, at *6, citing Founding Members of the Newport

Beach Country Club v. Newport Beach Country Club, Inc., 109 Cal.App.4th 944, 955 (2003). “It

is enough that a reasonable person would understand that the parties consented to the contract

and consented to the same terms in the same sense.” Parker, 2006 WL 2085152, at *6, citing

Beard v. Goodrich, 110 Cal.App.4th 1031, 1039-40 (2003). 

The settlement agreements at issue here make express reference to the contribution bar

and the statute that authorizes it, which is the UCFA. Redwood Settlement Agreement ¶ 2.b

(“‘Contribution Bar’ as used herein shall mean the contribution protection afforded under

Uniform Comparative Fault Act, 12 U.L.A. 147 (1996).”); Carlisle Settlement ¶ 1.b

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(“Contribution Bar Protection’ as used in this Agreement shall mean the contribution protection

afforded under the Uniform Comparative Fault Act, 12 U.L.A. 147 (1996).”). 

§ 6 of the UCFA provides that: 

A release, covenant not to sue, or similar agreement entered into by a claimant and

person liable discharges that person from all liability for contribution, but it does

not discharge any other persons liable upon the same claim unless it so provides. 

However, the claim of the releasing person against other persons is reduced by the

amount of the released person’s equitable share of the obligation, determined in

accordance with the provisions of Section 2. 

U.C.F.A. § 6, 12 U.L.A. 147 (1996). This language unambiguously calls for application of the

proportionate share methodology. 

Plaintiff argues that the same paragraph in the settlement agreements also refers to Cal.

Civ. P. § 877, which calls for the pro tanto approach. Redwood Settlement Agreement ¶ 2.b

(“‘Good Faith Application’ shall mean an application to the Court for determination of good faith

settlement pursuant to California Code of Civil Procedure sections 877 and 877.6, or similar

federal statutes, common law rules or guidelines.”); Carlisle Settlement ¶ 1.b (“‘Good Faith’

Application’ as used in this Agreement shall mean an application to the Court for determination

of good faith settlement pursuant to California Code of Civil Procedure sections 877 and 877.6,

or similar federal statutes, common law, rules, or guidelines.”) 

§ 877 states in relevant part:

Where a release, dismissal with or without prejudice, or a convenant not to sue or

not to enforce judgment is given in good faith before verdict or judgment to one or

more of a number of tortfeasors claimed to be liable for the same tort, or to one or

more other co-obligors mutually subject to contribution rights, it shall have the

following effect:

(a) It shall not discharge any other such party from liability unless its terms so

provide, but it shall reduce the claims against the others in the amount stipulated

by the release, the dismissal or the covenant, or in the amount of the consideration

paid for it whichever is the greater.

Under § 877(a), a non-settling defendant’s liability shall be reduced “against the others in the

amount stipulated by the release, the dismissal or the covenant, or in the amount of the

consideration paid for it whichever is the greater.” Id., see also Federal Sav. & Loan Ins. Corp.

v. Butler, 904 F.2d 505, 511 (9th Cir.1990) (noting that Cal. Civ. P. § 877 adopts the UCATA

"almost word for word"). 

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 At the hearing on July 16, 2010, in response to the Court’s inquiry regarding the 9

reference to the UCFA in the settlement agreements, Plaintiff’s counsel asserted that he agreed to

this reference only to provide broad contribution protection to the settling Defendants and not to

protect Rowe from pro tanto liability. However, given the actual effect of the UCFA’s

contribution bar, this assertion is inconsistent with any reasonable reading of the agreements. 

16

Case No. CV 06-07164 JF (PVT)

Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

The reference in the settlement agreements to conflicting methods of apportioning

liability may appear at first glance to create an ambiguity as to a material term of the agreements. 

Plaintiff argues that this ambiguity reflects a failure of the parties to reach a meeting of the

minds. Callie v. Near, 829 F.2d 888, 891 (9th Cir. 1987). However, the Court concludes that

there is only one reasonable interpretation of the settlement agreements. The agreements define

the proposed contribution bar by referring expressly to the UCFA. § 6 of the UCFA defines the

contribution bar in tandem with the method of allocating liability to the non-settling defendants.

U.C.F.A. § 6, 12 U.L.A. 147 (1996) (“A release, covenant not to sue, or similar agreement

entered into by a claimant and person liable discharges that person from all liability for

contribution, but it does not discharge any other persons liable upon the same claim unless it so

provides. However, the claim of the releasing person against other persons is reduced by the

amount of the released person’s equitable share of the obligation, determined in accordance with

the provisions of Section 2.”) Adoption of the UCFA contribution bar thus necessitates adoption

of its corresponding method of allocating liability to the non-settling defendant whose claims for

contribution are extinguished. The only reasonable purpose for an express reference to the

UCFA in defining the contribution bar is to invoke the statute’s proportionate share method.9

Viewed in this light, the reference in the agreements to Cal. Civ. P. §§ 877 and 877.6 is

not inconsistent, nor does it create an ambiguity. The “good faith application” referenced in each

settlement agreement reasonably may be understood as the procedural motion that is the subject

of the instant order. In particular, Cal. Civ. P. § 877.6 is a procedural statute. Apart from the

bare reference to these provisions, nothing in the agreements evidences the parties’ intent to

adopt the pro tanto method of allocation; the parties are agreeing to nothing more than to

approval of the agreements by the Court. 

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 Plaintiff also failed to provide any evidence of its state of mind when it entered into the 10

settlement agreements with Redwood and Carlisle. It was only at oral argument, in response to

Redwood’s assertion that there was no evidence on the record supporting Plaintiff’s position, that

Plaintiff requested leave to proffer such evidence. 

17

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Several other factors support this conclusion. First, the method of allocating liability

often is a disputed and highly relevant issue in CERCLA settlement negotiations. The settlement

agreements at issue here were negotiated at arm’s length over a period of many months under the

supervision and assistance of the judicially-assigned mediator, Daniel Bowling. The settling

parties also were represented by experienced counsel. Plaintiff’s suggestion that the parties did

not agree upon a method of allocating liability strains credulity and is not supported by the

record. Plaintiff’s claim also is called into question by the timing of its filings in response to the

instant motions for approval of settlement. The motion papers and proposed orders filed by

Redwood and Carlisle on April 23, 2010 and May 21, 2010, respectively, clearly and

emphatically call for the application of the UCFA’s proportionate share approach. Plaintiff did

not interpose any objection prior to the filing deadline for opposing the motions. Only on June

11, 2010, after Rowe had filed its conditional non-opposition addressing the related RCRA

action, did Plaintiff suggest that the parties had agreed to pro tanto allocation. 

10

Finally, Plaintiff argues that the determination of the proper method of apportionment

affects only Plaintiff and Rowe, and not Carlisle and Redwood. It contends that application of

the proportionate share approach would amount to an unenforceable gift to Rowe, as Carlisle and

Redwood received no consideration in exchange. However, Rowe’s opposition to the motions

for approval of settlement is evidence of the consideration Carlisle and Redwood were meant to

receive in exchange for an adoption of the proportionate share method: Rowe’s acquiescence to

the agreements and litigation peace. See e.g., Adobe Lumber, 2009 WL 256553, at *5

(concluding that the proportionate share approach governs the effect of settlements in a private

CERCLA action and denying plaintiff’s motion to approve the settlement based upon the settling

parties’ express condition that the pro tanto method apply). 

Accordingly, the Court concludes that both applicable legal authority and the language of

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the settlement agreements themselves support the conclusion that the proportionate share method

applies to the instant settlements.

2. RCRA action

Rowe also opposes approval of the settlement agreements in the event that the Court

determines that the proportionate share approach does not apply to Plaintiff’s related RCRA

claim against Rowe. Plaintiff not only opposes application of the proportionate share method, as

discussed above, see supra, I.D.1, but also disputes Rowe’s contention that there is a right to

contribution under RCRA. 

a. Whether there is a right to contribution under RCRA

It is undisputed that there is no express statutory right to contribution under RCRA. 

United States v. Valentine, 856 F.Supp. 627, 631 (D. Wyo. 1994). However, “contribution may

also arise from a federal statute ‘by clear implication’ or ‘through the power of federal courts to

fashion a federal common law of contribution.’” Id., quoting Texas Industries, Inc. v. Radcliff

Materials, Inc., 451 U.S. 630, 638 (1981). 

The Ninth Circuit has not addressed whether there is an implied or common-law right to

contribution under RCRA. Rowe contends that district courts consistently have found that there

is an implied right to contribution, as such a right is consistent with the purpose of the statute. 

Dkt. No. 202, 203 at 2, citing Valentine, 856 F.Supp. at 632-34; Aurora National Bank v. Tri

Star Marketing, Inc., 990 F.Supp. 1020, 1034 (N.D. Ill. 1998); Bayless Investment and Trading

Co. v. Chevron U.S.A., Inc., No. 93C704, 1994 WL 1841850 (D. Ariz. May 25, 1994). Rowe

also argues that an implied right to contribution arises from the fact that RCRA liability is joint

and several. Id., citing Valentine, 856 F.Supp. at 634. 

However, Valentine examined 42 U.S.C. § 6973, which governs actions brought by the

United States, rather than citizen suits brought pursuant to § 6972. Valentine, 856 F.Supp. at 637

n. 11 (distinguishing its holding from United States v. Production Plated Plastics, Inc., 21 E.L.R.

21220, 1991 WL 257083 (W.D.Mich.1991) in part based upon the fact that Production Plated

Plastics was “decided under a different RCRA provision, 42 U.S.C. § 6972. Consequently, the

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court in that case did not review Section 7003, its legislative history or the decisions recognizing

the sweeping nature of the authority it grants to federal courts.”). Moreover, as Plaintiff points

out, Valentine was decided prior to the Supreme Court’s decision in Meghrig v. KFC Western,

Inc., 516 U.S. 479, 116 S.Ct. 1251, 134 L.Ed.2d 121 (1996). Plaintiff notes that two district

court decisions subsequent to Meghrig addressed directly the question before the Court and

determined that there is no right to contribution, implied or otherwise, under RCRA. Dkt. 208 at

3-5, citing Davenport v. Neely, 7 F.Supp.2d 1219 (M.D. Ala. 1998) and U.S. v. Domestic

Industries, Inc., 32 F.Supp.2d 855 (E.D. Va. 1999). 

In Meghrig, the Supreme Court distinguished RCRA from CERCLA, in part by noting

that RCRA is not a "clean-up" statute. As the district court observed in Domestic Industries,

“[w]hile RCRA provides for private causes of action to stop polluters injunctively through its

citizen suit provisions, see 42 U.S.C. § 6972(a)(1)(A), in CERCLA, Congress specifically

provided for remedies such as contribution and indemnity.” Domestic Industries, 32 F.Supp.2d.

at 870. The Supreme Court also held that citizens cannot maintain private suits under RCRA for

past clean-up costs. Although Meghrig did not address the precise issue presented in this case –

whether a private party can recover – through an action for contribution or indemnity – civil

penalties or clean-up costs where remediation has not been completed, it did conclude that

RCRA “is not principally designed to effectuate the cleanup of toxic waste sites or to compensate

those who have attended to the remediation of environmental hazards.” 516 U.S. at 483. 

The Eighth Circuit did address the issue before the Court in Furrer v. Brown, 62 F.3d

1092 (8th Cir. 1995), cert. denied, 517 U.S. 1167, 116 S.Ct. 1567, 134 L.Ed.2d 667 (1996). 

Domestic Industries, 32 F.Supp.2d at 870-71. “The Furrer’s [sic] property was contaminated and

they were ordered by the State to remediate the contamination.” Id. at 871. The Furrers then filed

a third-party complaint seeking the costs of remediation from the previous owners and lessees of

the property. “The Eighth Circuit denied the Furrer's [sic] attempt to recover from the

third-parties noting that it was ultimately a question of Congressional intent, and that there was

no basis in the law for such an action.” Id. at 871, citing Furrer, 62 F.3d at 1101-02 (citations

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 While such a result may seem inequitable, such a conclusion is mandated by existing 11

law. As the Furrer court noted, “remediation of contaminated property attaches, without regard

to fault, to the then owner of the property.” Furrer, 62 F.3d at 1098-99. Moreover, § 6972(f)

specifically reserves state remedies. 42 U.S.C. § 6972(f). 

20

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omitted). Moreover, “[w]hile the Supreme Court did not specifically address the question

presented here or in Furrer, the Court denied the request for certiorari in Furrer, and tacitly

affirmed Furrer by resolving the conflict between the Eighth Circuit's decision in Furrer and the

Ninth Circuit's decision in Meghrig with an unanimous reversal of the Ninth Circuit's Meghrig

decision.” Id. (citation omitted).

In Davenport, the district court determined that “[d]efendants ha[d] not established that

they have a right to indemnity/contribution from the proposed third-party defendants under the

RCRA.” Davenport, 7 F.Supp.2d at 1230. A significant element of the holdings in both

Meghrig and Davenport is that a “court should not impose a remedy where Congress specifically

declined to allow th[at] remedy.” Domestic Industries, 32 F.Supp.2d at 871; see Davenport, 7

F.Supp.2d at 1228; see also Meghrig, 516 U.S. at 485 (comparing what relief is provided under

RCRA and CERCLA and noting that CERCLA provides that “‘[a]ny person may seek

contribution from any other person who is liable or potentially liable’ for these response costs.

See § 9613(f)(1). Congress thus demonstrated in CERCLA that it knew how to provide for the

recovery of cleanup costs, and that the language used to define the remedies under RCRA does

not provide that remedy.”) This Court also “declines to ‘engraft’ a contribution or indemnity

action” onto RCRA. Domestic Industries, 32 F.Supp.2d at 872.11

b. Method of apportionment for RCRA liability

In light of its conclusion that a defendant has no right to contribution under RCRA, the

Court need not determine the proper method of apportioning RCRA liability. Plaintiff’s right to

relief under RCRA generally is discussed below. See infra, II. 

3. Good faith settlement

Whether a settlement is made in “good faith” within the meaning of § 877.6 is determined

based on a variety of factors identified in the California Supreme Court's decision in Tech-Bilt,

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Inc v. Woodward-Clyde & Associates, 38 Cal.3d 488, 499-500 (1985). Relevant factors here

include: (i) a rough approximation of plaintiffs’ total recovery and the settler's proportionate

liability; (ii) the amount paid in settlement; (iii) a recognition that a settler should pay less in

settlement than if found liable after trial; (iv) the allocation of the settlement proceeds; (v) the

settling party's financial condition and the availability of insurance; and (vi) evidence of any

collusion, fraud, or tortious conduct between the settler and the plaintiff aimed at requiring the

non-settling parties pay more than their fair share. Id. 

A settling party in a federal action involving California claims may file a motion seeking

a good faith determination. Federal Savings & Loan Ins. Corp. v. Butler, 904 F.2d 505, 511 (9th

Cir. 1990). Consistent with Federal Savings and the language of the settlement agreements,

Carlisle and Redwood have moved for an order determining that the settlements are in good

faith. Federal courts in California have jurisdiction to apply the Tech-Bilt factors in ruling on

such a motion. Shawmut Bank N.A. v. Kress Assoc., 33 F.3d 1477, 1504 (9th Cir.1994); Rutgard

v. Haynes, 61 F.Supp.2d 1082, 1085 (S.D. Cal. 1999).

There is no evidence that either of the settlements before the Court was the result of

collusion or fraud or was structured in a way that imposes an undue share of liability on

non-settling parties. Instead, each of the settlements was reached through arm's length

negotiations among sophisticated entities represented by counsel after years of investigation and

discovery with the assistance of a professional, judicially-assigned mediator. 

The first Tech-Bilt factor – an approximation of recovery and potential liability – typically

is the most important. There are no firm guidelines that define whether the amount of a

settlement is “grossly disproportionate.” The settlement amount only need be “in the ballpark,”

with any party challenging a settlement having the burden of establishing that it is so far “out of

the ballpark” that the equitable objectives of § 877 are not satisfied. Tech-Bilt, 38 Cal.3d at 499-

500. Here however, because the Court has determined that the proportionate share method

applies, the fairness of the settlement to the non-settling defendant is not at issue. Moreover,

Rowe has no objection to the settlement amounts provided that the Court adopts the

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Case No. CV 06-07164 JF (PVT)

Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

proportionate share method. 

The Court nonetheless concludes that the proposed settlements appear to be in the

ballpark. Tech-Bilt, 38 Cal.3d at 499-500. “[P]ractical considerations obviously require that the

evaluation be made on the basis of information available at the time of settlement. A defendant’s

settlement figure must not be grossly disproportionate to what a reasonable person, at the time of

the settlement, would estimate the settling defendant’s liability to be.” Tech-Bilt, Inc., 38 Cal. 3d

at 499 (emphasis added) (internal quotation marks and citation omitted); see also Bonds v.

Nicoletti Oil Inc., No. CV-F-07-1600 OWW/DLB, 2008 WL 4104272, at *2 (E.D. Cal. Sept. 3,

2008) (citing Tech-Bilt and granting unopposed motion for good faith settlement in

environmental contamination case); Buckner v. E.I. Du Pont De Nemours and Co., No. CV F

05-0156 AWI SMS, 2006 WL 1314008, at *6 (E.D. Cal. May 12, 2006) (granting motion for

determination of good faith settlement in a products liability case and concluding that “[p]ractical

considerations require that evaluation be made on the basis of the information available at the

time of settlement.”) (internal quotations marks and citation omitted). 

In determining whether the proposed settlement amounts are fair, the Court looks to the

known or estimated costs of remediation at the time of settlement. At the time the settlement

agreements were reached, the Regional Water Quality Control Board’s approved remediation

plans estimated the total cost of remediation, including annual operation and maintenance and

groundwater monitoring, as between $1,677,000 and $2,611,000. Accordingly, Carlisle’s

proposed settlement ($150,000) would constitute between six and nine percent of the total cost of

remediation, and Redwood’s proposed settlement ($275,000) would satisfy eleven to sixteen

percent of the total cost. At the time of settlement, Defendants’ environmental consultant

estimated that with more reasonable estimates for future operation, maintenance, and

groundwater monitoring expenses, the total cost of remediation would be in the range of

$647,266 to $1,038,640. Using these numbers, Carlisle’s contribution would be approximately

fifteen to twenty percent of the total costs, and Redwood’s settlement would represent twenty-six

to forty-two percent of the total cost of remediation. 

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Case No. CV 06-07164 JF (PVT)

Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

While the proposed settlement amounts are less than one-third of the likely total cost of

remediation under the approved remediation plan, it is undisputed that Carlisle and Redwood

never used PCBs on the property. Moreover, because Plaintiff is a PRP, the appropriate division

of the costs of remediation should not be assumed to be in thirds merely because there are three

named defendants. Finally, while its claim is disputed by Plaintiff, Rowe asserts that the

Southern Pacific Railroad, a non-party, is principally responsible for the PCB contamination. 

Accordingly, the evidence supports a determination that the settlement amounts reached are not

“out of the ballpark” of the settling parties’ approximate liability. 

II. MOTION TO DISMISS

A. Factual Background

Plaintiff alleges that the Property is contaminated with PCBs. It claims that this

contamination occurred between 1965 and 1973, when electrical transformers were manufactured

by Rowe’s predecessors-in-interest, Pacific Transformer Co., Hill Magnetics, Inc., and Hill

Industries, Inc. RCRA Complaint ¶¶ 1, 2. Plaintiff seeks recovery of investigation, response and

abatement costs that it has incurred and will continue to incur in cleaning up and remediating the

environmental contamination at the Property, as well as attorney’s fees. Id. ¶¶ 10, 25. Plaintiff

also seeks a judicial declaration that it is entitled to payment of these costs. Id. ¶ 22-36. 

Plaintiff alleges that Rowe is liable under RCRA, 42 U.S.C. §§ 6901-6972, because

“Rowe has contributed to the past and present handling, storage, treatment, transportation or

disposal of hazardous waste at the Property, which may present an imminent and substantial

endangerment to health or the environment.” RCRA Complaint ¶ 23. Plaintiff also claims that

“[t]o date, [it] has incurred Response Costs to fully characterize the Property,” id., and has

prepared groundwater and sub-slab investigation reports, which characterize the contamination at

the Property. Id. ¶ 9. Documents of which the Court may take judicial notice establish that the

Regional Water Quality Control Board approved a Remedial Action Plan, and a Remedial

Design/Remedial Action Work Plan on October 9, 2009 and January 20, 2010, respectively. 

Request for Judicial Notice, Exs. A (October 2, 2009 Approval of Plaintiff’s Remedial Action

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 Exhibits A and B are official public records of the Regional Water Quality Control 12

Board that are not subject to reasonable dispute. “A court may take judicial notice of ‘matters of

public record’ without converting a motion to dismiss into a motion for summary judgment,’ as

long as the facts noticed are not ‘subject to reasonable dispute.’” Intri-Plex Technologies, Inc. v.

The Crest Group, Incorporated, 499 F.3d 1048, 1052 (9th Cir. 2007), quoting Lee v. City of Los

Angeles, 250 F.3d 668, 689 (9th Cir. 2001). 

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Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

Plan) and B (January 20, 2010 Approval of Plaintiff’s Remedial Design/Remedial Action

Work). Rowe moves to dismiss, arguing that (1) the complaint does not plead sufficiently a 12

request for injunctive relief; and (2) even if it did, it impermissibly seeks pre-suit damages that

cannot be recovered under RCRA. 

B. Legal Standard

“Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a

cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v.

Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). For purposes of a motion to

dismiss, the plaintiff's allegations are taken as true, and the court must construe the complaint in

the light most favorable to the plaintiff. Jenkins v. McKeithen, 395 U.S. 411, 421, 89 S.Ct. 1843,

23 L.Ed.2d 404 (1969). “To survive a motion to dismiss, a complaint must contain sufficient

factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ A claim

has facial plausibility when the plaintiff pleads factual content that allows the court to draw the

reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, ---

U.S. ----, ----, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009), Bell Atl. Corp. v. Twombly, 550

U.S. 544, 556, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Thus, a court need not accept as

true conclusory allegations, unreasonable inferences, legal characterizations, or unwarranted

deductions of fact contained in the complaint. Clegg v. Cult Awareness Network, 18 F.3d 752,

754-755 (9th Cir.1994).

Leave to amend must be granted unless it is clear that the complaint's deficiencies cannot

be cured by amendment. Lucas v. Dep't of Corr., 66 F.3d 245, 248 (9th Cir.1995). When

amendment would be futile, however, dismissal may be ordered with prejudice. Dumas v. Kipp,

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Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

90 F.3d 386, 393 (9th Cir.1996).

C. Discussion

1. RCRA claim

a. Whether Plaintiff adequately pleads injunctive relief

Pursuant to RCRA’s citizen suit provision, 42 U.S.C. § 6972(a), “[t]he district court shall

have jurisdiction. . .to restrain any person who has contributed or who is contributing to the past

or present handling, storage, treatment, transportation, or disposal of any solid or hazardous

waste. . .to order such person to take such other action as may be necessary, or both. . .” “The

primary relief available to a private party under RCRA is a mandatory injunction, i.e., one that

orders a responsible party to ‘take action’ by attending to the cleanup and proper disposal of toxic

waste, or a prohibitory injunction, i.e., one that ‘restrains’ a responsible party from further

violating RCRA.” Gilroy Canning Company, Inc. v. California Canners and Growers, 15

F.Supp.2d 943, 945 (N.D. Cal. 1998), quoting Meghrig, 516 U.S. at 484. The parties agree that a

plaintiff must seek injunctive relief in order to state a RCRA claim upon which relief may be

granted, but they dispute whether a request for such injunctive relief is asserted adequately in the

operative complaint. 

Plaintiff’s prayer for relief seeks “payment by Defendant Rowe of all Response Costs that

have been or will be incurred by Plaintiff as required by law in response to the Release and

threatened Release of Hazardous Substances and in enforcement of RCRA’s statutory liability

scheme, or in an amount this Court deems appropriate.” RCRA Complaint, Prayer ¶ 1. Plaintiff

also seeks attorney’s fees, costs, and pre-judgment interest. Id. ¶¶ 2, 3. Nowhere does the

complaint mention injunctive relief as such. Plaintiff expressly defines the “response costs” it

seeks as a statutory remedy under CERCLA. Id. ¶ 19 (“[T]he term ‘Response Costs’ means the

costs of ‘removal’ and ‘remedial actions’ of Hazardous Substances, as those terms are defined in

CERCLA § 101(23) and (24), and all other costs to respond to Releases of Hazardous

Substances, as defined in CERCLA § 101(25), 42 U.S.C. § 9601(25).”). However, in Meghrig,

the Supreme Court made clear that “CERCLA differs markedly from RCRA [] in the remedies it

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 Plaintiff argues that it may seek an injunction requiring Rowe to pay costs of 13

remediation, as distinguished from an injunction requiring Rowe to assume the actual work of

remediation. Dkt. No. 10, citing City of Waukesha v. Viacom International, Inc., 362 F.Supp.2d

1025 (E.D. Wisc. 2005) and Nashua Corp. v. Norton Co., 116 F.Supp.2d 330 (N.D.N.Y. 2000). 

The Court agrees that under some circumstances a RCRA plaintiff may seek an injunction

ordering a defendant to pay future remediation costs. However, in Waukesha, the plaintiff’s

pleading clearly sought injunctive relief in the form of, “an order requiring Viacom, Amrom

LLC, and A.W. Holding ‘to take action to address the endangerment which exists...” Waukesha,

362 F.Supp.2d at 1029. In Nashua, the plaintiff “s[ought] injunctive relief directing Norton to

participate in the Site investigation and clean up, an order directing Norton to pay the costs and

expenses incurred by Nashua in connection with the Site to date, and an award of the costs of

litigation.” Nashua, 116 F.Supp.2d at 355 (emphasis added). Here, Plaintiff does not allege with

any clarity the nature of prospective relief it seeks. 

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Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

provides. . . Congress [] demonstrated in CERCLA that it knew how to provide for recovery of

cleanup costs, and that the language used to define the remedies under RCRA does not provide

that remedy.” Meghrig, 516 U.S. at 485. 

Plaintiff contends that “injunctive relief is encompassed within the relief pled” in its

complaint, Dkt. No. 10 at 5, because it alleges that Rowe is liable under RCRA, 42 U.S.C. §§

6901-6972 for contributing to past and present disposal of hazardous waste at the Property. 

Complaint ¶ 23. As noted above, § 6972(a) gives the district court authority to “restrain any

person” contributing to the disposal of hazardous waste, or “to take such other action as may be

necessary, or both.” Plaintiff argues that its invocation of § 6972 amounts to a prayer for

injunctive relief under the liberal pleading standard applicable to a motion to dismiss. However,

the Court need not make unreasonable inferences or unwarranted deductions of fact, Clegg, 18

F.3d at 754-755, particularly because Plaintiff defines “response costs” elsewhere in its

complaint as the costs of removal and remedial actions of Hazardous Substances, as those terms

are defined in CERCLA. See Green Hills (USA) v. Aaron Street, Inc., 361 F.Supp.2d 81, 85 13

(E.D.N.Y. 2005) (granting leave to amend RCRA when “[t]he complaint clearly [sought] money

damages for past clean-up efforts and only vaguely [sought] injunctive relief.”)

b. Whether the relief requested is recoverable under RCRA

The Supreme Court held in Meghrig that “[a] private party cannot recover the cost of a

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ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

past cleanup effort under RCRA.” Meghrig, 516 U.S. at 488 (emphasis in original). In reaching

this conclusion, it reasoned that “[u]nlike the Comprehensive Environmental Response,

Compensation, and Liability Act of 1980 (CERCLA), 94 Stat. 2767, as amended, 42 U.S.C. §

9601 et seq., RCRA is not principally designed to effectuate the cleanup of toxic waste sites or to

compensate those who have attended to the remediation of environmental hazards.” Id. at 483,

citing General Electric Co. v. Litton Industrial Automation Systems, Inc., 920 F.2d 1415, 1422

(8th Cir. 1990) (the “two. . . main purposes of CERCLA” are “prompt cleanup of hazardous

waste sites and imposition of all cleanup costs on the responsible party.”) Rather, “RCRA’s

primary purpose. . .is to reduce the generation of hazardous waste and to ensure the proper

treatment, storage, and disposal of that waste which is nonetheless generated, ‘so as to minimize

the present and future threat to human health and the environment.’” Id. (emphasis added),

quoting 42 U.S.C. § 6902(b). “Finally, the Court found that RCRA's failure to set a statute of

limitations for damages claims or any standard by which to judge the reasonableness of its

response costs both sharply contrasted with the response costs provisions of CERCLA and

suggested that Congress did not intend RCRA to function as a cost recovery plan for private

agents.” Nashua Corp. v. Norton Co., 116 F.Supp.2d 330, 358 (N.D.N.Y. 2000), citing Meghrig,

516 U.S. at 486. 

Meghrig expressly did not “consider[] whether a private party could seek to obtain an

injunction requiring another party to pay cleanup costs which arise after a RCRA citizen suit has

been properly commenced, [] or otherwise recover cleanup costs paid out after the invocation of

RCRA’s statutory process. . .” 516 U.S. at 488 (internal quotation omitted). Accordingly, as

Plaintiff argues, because it has not spent or incurred any remediation costs or cleanup costs at this

point, the relief it seeks is not necessarily barred under Meghrig. There is no binding postMeghrig authority that addresses whether a plaintiff can recover investigative costs expended

prior to initiation of a RCRA action or whether a plaintiff may seek cleanup costs under RCRA

when a remediation plan already is in place at the time of suit. 

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Case No. CV 06-07164 JF (PVT)

Related Case No. C 10-01606 JF (PVT)

ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

i. Investigative costs incurred prior to the filing of the instant

action

Defendants argue that recovery of any pre-suit costs necessarily is precluded by Meghrig, 

Addressing this precise issue, the court in Nashua Corp. concluded that “whether characterized

as investigative costs or clean up costs” RCRA “cannot be read to allow an award of [such]

damages.” 116 F.Supp.2d at 358, citing Avondale Fed. Sav. Bank v. Amoco Oil Co., 170 F.3d

692, 694 (7th Cir. 1999), cert. denied, 528 U.S. 922, 120 S.Ct. 284, 145 L.Ed.2d 238 (1999). 

Recognizing that both Avondale and Nashua hold that a plaintiff cannot recover investigative

costs incurred even after a RCRA suit is filed, but before an injunction has been issued, Plaintiff

contends that the instant case is distinguishable because Plaintiff seeks only investigative costs

and gave notice of its intent to file a RCRA action before expending such costs. RCRA

Complaint ¶ 24 (alleging that “Plaintiff provided notice to Rowe of its intent to file a RCRA

claim [] on November 13, 2006.”). Plaintiff goes on to argue that “[t]here is no logical reason

why the defendant should not pay for these costs. The plaintiff could not be expected to seek an

injunction before conducting an investigation to develop the facts.” Dkt. No. 10 at 8. 

However, while there is a certain logic to Plaintiff’s argument, the relief intended by

Congress under RCRA is solely prospective. This is supported by the reasoning of Meghrig. See

Nashua, 116 F.Supp.2d at 358 (“[plaintiff’s] argument overlooks the most powerful basis for the

Meghrig opinion-the statutory language. Section 7002(a) simply cannot be read to allow an

award of damages, whether for investigative costs incurred or clean up costs incurred.”); see also

Express Car Wash Corp. v. Irinaga Bros., 967 F.Supp. 1188, 1193 (D. Or. 1997) (“[f]ederal

courts addressing the issue have universally held that RCRA citizen suits provide no damages

remedy.”). Accordingly, because Plaintiff’s previously incurred investigative costs cannot be

characterized as anything but damages, they are unrecoverable under RCRA. 

ii. Recovery of costs based upon the remediation plan adopted

prior to the instant action

“Federal courts addressing the issue have universally held that RCRA citizen suits

provide no damages remedy.” Express Car Wash Corp., 967 F.Supp. at 1193; Furrer v. Brown,

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(JFLC1)

62 F.3d 1092 (8th Cir. 1995); Walls v. Waste Resource Corp., 761 F.2d 311 (6th Cir. 1985); see

also Green Hills (USA) v. Aaron Street, Inc., 361 F.Supp.2d 81, 85 (E.D.N.Y. 2005) (citation

omitted) (“The statute provides injunctive relief, not damages; as the Supreme Court has

ruled...”); Portsmouth Redevelopment & Housing Auth. v. BMI Apartments Assocs., 847 F.Supp.

380 (E.D. Va. 1994); Polcha v. AT & T Nassau Metals Corp., 837 F.Supp. 94 (M.D. Pa. 1993);

Commerce Holding Co. v. Buckstone, 749 F.Supp. 441 (E.D.N.Y. 1990). Relying upon this

authority, numerous courts “ha[ve] held that RCRA does not allow clean-up costs incurred after

commencement of the process.” City of Oakland v. Keep on Trucking Company, Inc., C 95-

03721 CRB, 1998 WL 470465, at *1 (N.D. Cal. July 30, 1998), citing Express Car Wash Corp.,

967 F.Supp. at 1194 ( “[T]he Supreme Court's logic in Meghrig indicates that, if squarely faced

with the question at issue here, it would hold that RCRA does not allow a plaintiff to recover any

costs for remediation substantially in place at the time of suit”); Orange Environment, Inc. v.

County of Orange, 923 F.Supp. 529, 539 (S.D.N.Y. 1996) (“[T]he [Meghrig] opinion suggests

that the Court would be reluctant to read into the RCRA remedies not clearly provided by

Congress”); Nutrasweet Co. v. X-L Eng'g Corp., 926 F.Supp. 767, 771 (N.D. Ill. 1996) (opining

that there is no private right of action under RCRA for the recovery of investigation and

remediation costs, and that the plaintiff would have to seek such costs by bringing a state law tort

claim); Agricultural Excess and Surplus Ins. Co. v. A.B.D. Tank & Pump Co., No. 95 C 3681,

1996 WL 515088, at *2 (N.D. Ill. 1996) (stating that “under the Supreme Court's reasoning in

Meghrig, this court is compelled to find that plaintiffs also may not recover cleanup costs

incurred after the invocation of RCRA's statutory process”).

In Express Car Wash, the court held not only that costs already incurred were barred

under RCRA but also that the “Supreme Court's logic in Meghrig indicates that, if squarely faced

with the question at issue here, it would hold that RCRA does not allow a plaintiff to recover any

costs for remediation substantially in place at the time of suit.” Express Car Wash, 967 F.Supp.

at 1194 (emphasis added), citing Meghrig, 615 U.S. at 487 (holding that the difference in

language between RCRA and CERCLA’s costs recovery provisions “amply demonstrate that

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Congress did not intend for a private citizen to be able to undertake a cleanup and then proceed

to recover its costs under RCRA.”). The court reasoned that “plaintiff at this juncture seeks only

to recover its present and future costs for an established remediation” and that such relief only

can be classified as damages. Id. at 1194. 

Plaintiff argues that the instant case is distinguishable from Express Car Wash because

the plaintiff in that case already had engaged in at least some active remediation prior to filing its

RCRA claim, while here no remediation has taken place. Plaintiff cites the district court’s

comment in Express Car Wash that “a plaintiff facing an imminent threat from hazardous waste,

when no remediation has yet taken place, clearly can sue under RCRA for an injunction to force

appropriate parties to clean up the contamination. That same plaintiff absolutely cannot sue

under RCRA if he or she has already cleaned up the waste and only seeks reimbursement.” Id. at

1192 (emphasis in original). 

However, this dictum does not effect the outcome here. In fact, the court in Express Car

Wash reasoned that once an established remediation plan is in place, recovery under RCRA

cannot be sought because all that remains are unrecoverable monetary damages. Id. at 1194

(observing that “plaintiff at [that] juncture seeks only to recover its present and future costs for

an established remediation. . .and RCRA, as discussed above, does not provide a damages

remedy.”) In the instant case, the Regional Water Quality Control Board approved a remediation

plan prior to the filing of the action. Because the relief sought is based upon a previouslyapproved remediation plan, the costs properly must be characterized as damages and thus are

unrecoverable under RCRA. 

In ABB Indus. Systems, Inc. v. Prime Techn., Inc., 32 F.Supp.2d 38, 42 (D.Conn. 1998),

the court concluded that the plaintiff’s RCRA claim fell within an exception identified in Express

Car Wash and thus pled a claim for recoverable relief. In Express Car Wash, the court

commented that, “I would expect that many RCRA citizen suits would continue to be viable if a

plaintiff who had begun remediation at a site sued to have defendants install additional

remediation systems or perform different required activities than plaintiff had already

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 Plaintiff also cites Gilroy Canning for the proposition that even after a remediation 14

plan has been approved, a plaintiff may seek an order from the court requiring a defendant to pay

response costs. However, Gilroy Canning did not address the issues now before the Court or the

holding in Express Car Wash. 

31

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ORDER GRANTING MOTIONS FOR APPROVAL OF SETTLEMENT AND TO DISMISS

(JFLC1)

undertaken, or if a plaintiff sought to have defendants completely take over responsibility for

completing a remediation that plaintiff had already begun.” ABB Indus., 32 F.Supp.2d at 41-42

(emphasis in original), quoting Express Car Wash, 967 F.Supp. at 1194 n. 5. Although

Plaintiff’s claim as presently pled does not fall within this exception, it is conceivable that

Plaintiff may be able to plead a claim for prospective relief recoverable under RCRA.14

2. Declaratory relief claim

The parties do not dispute that Plaintiff’s claim for declaratory relief depends upon the

viability of its claim for relief under RCRA. 

III. ORDER

Good cause therefore appearing, the motions for approval of settlement in case number

06-7164 are GRANTED, and the motion to dismiss case number 10-1606 is GRANTED with

leave to amend. 

IT IS SO ORDERED.

DATED: 8/11/2010 

____________________________

JEREMY FOGEL

United States District Judge

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