Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-02087/USCOURTS-caed-2_05-cv-02087-0/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 28:1442 Petition for Removal

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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

THE REDEVELOPMENT AGENCY OF THE

CITY OF STOCKTON, 

Plaintiff,

v.

BURLINGTON NORTHERN AND SANTA

FE RAILWAY CORPORATION, et al., 

Defendants. 

 No. Civ. 05-2087 DFL JFM

MEMORANDUM OF OPINION

AND ORDER

Plaintiff Redevelopment Agency of the City of Stockton (the

“Agency”) moves for a preliminary injunction to compel defendants

Burlington Northern and Santa Fe Railway Corporation (“BNSF”) and

Union Pacific Railroad Company (“Union Pacific”) to create,

within the next three months, a remedial action plan to clean up

diesel contamination on properties identified as Areas 4 and 24. 

The Agency asserts that defendants are “responsible parties”

under the California Polanco Redevelopment Act (“the Polanco

Act”), which provides a mechanism for compelling responsible

parties to remediate contamination. Cal. Health & Safety Code §

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33459 et seq. As discussed below, the Agency raises serious

questions, but fails to show probable success on the merits,

irreparable injury, or that the balance of hardships or public

interest tips in its favor. Therefore, the Agency’s motion for a

preliminary injunction is DENIED WITHOUT PREJUDICE. 

I.

The Agency owns three contiguous city blocks in Stockton

that the Agency designates as “Areas 3, 4, and 24.” (Mot. at 5;

Opp’n at 2.) This case arises out of soil and possible

groundwater contamination on that property. (Mot. at 5.) The

parties agree that defendants held at least an easement interest

in portions of a railroad spur and operated a rail line that

traversed all three areas from 1983 to 1989. (Id.; Gracco Decl.

Ex. C.) 

In July 2004, during grading activities undertaken to

develop Area 3, the Agency’s contractor discovered petroleum

contamination below a “french drain” on the parcel that followed

the north-south trend of the former railroad spur. (Mot. at 5;

Opp’n at 3.) The Agency’s contractors took soil samples from

Area 3, but not from Areas 4 or 24. (Opp’n at 3.) Because of

the contamination, the Agency halted construction and notified

the Central Valley Regional Water Quality Control Board

(“Regional Board”) and the Department of Toxic Substances

Control. (Mot. at 5.) 

In August 2004, the Agency exercised its authority under the

Polanco Act and issued a corrective action notice to defendants. 

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(Id.) The notice instructed defendants to prepare a remedial

action plan to clean up Area 3. (Id. at 5-6.) Because

defendants did not respond, the Agency submitted and completed a

work plan approved by the Regional Board at its own expense. 

(Id. at 6.) The Agency later sold Area 3 to a developer who

constructed the “WorkNet Building” on the property. (Opp’n at

4.) 

Because the trend of contamination appeared to follow the

north-south line of the railroad by means of the french drain,

the Agency issued another corrective action notice to defendants

on December 9, 2004 for Areas 4 and 24. (Mot. at 6.) Defendants

have not yet responded to this notice. (Id.) Therefore, the

Agency alleges that it “is now forced to seek injunctive relief

as permitted” by the Act. (Id.) 

II.

The traditional four part test for granting a preliminary

injunction looks to whether the movant has shown: (1) a strong

likelihood of success on the merits; (2) irreparable injury if

the injunction is not granted; (3) a balance of hardships in the

movant’s favor; and (4) the public interest favors granting the

injunction. See Los Angeles Mem’l Coliseum Comm’n v. Nat’l

Football League, 634 F.2d 1197, 1200 (9th Cir. 1980). In the

Ninth Circuit, the moving party can meet its burden by making “a

clear showing of either: (1) a combination of probable success on

the merits and a possibility of irreparable injury if relief is

not granted, or (2) the existence of serious questions going to

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the merits and that the balance of hardships tips sharply in its

favor.” Int’l Jensen, Inc. v. Metrosound U.S.A., Inc., 4 F.3d

819, 822 (9th Cir. 1993). “These two formulations represent two

points on a sliding scale in which the required degree of

irreparable harm increases as the probability of success

decreases.” Taylor By and Through Taylor v. Honig, 910 F.2d 627,

631 (9th Cir. 1990). At best, the Agency raises serious

questions, but it has not shown irreparable injury, probable

success on the merits, or that the balance of the hardships or

public interest tip sharply in its favor.

A. Irreparable Injury

When seeking a preliminary injunction, the moving party must

demonstrate a significant and immediate threat of irreparable

injury. Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 725 (9th

Cir. 1999); Caribbean Marine Svcs. Co., Inc. v. Baldridge, 844

F.2d 668, 674 (9th Cir. 1988). A demonstration of “speculative

injury” is insufficient. Baldridge, 844 F.2d at 674. The Agency

argues that if defendants do not prepare and execute a remedial

action plan within the next three months, it will suffer

irreparable harm in several ways. 

First, the Agency states that “[e]nvironmental injury, by

its nature, can seldom be adequately remedied by money damages

and is often permanent or at least of long duration, i.e.,

irreparable.” (Mot. at 11-12 (citing Amoco Prod. Co. v. Village

of Gambell, 480 U.S. 531, 544-545 (1987); Sierra Club v. United

States Forest Serv., 843 F.2d 1190 (9th Cir. 1988)).) However,

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 In Amoco, Alaskan native villages brought an action to 1

enjoin the Secretary of Interior’s sale of oil and gas leases for

federally owned lands in the outer continental shelf of Alaska. 

Similarly, in Sierra Club, plaintiff brought an action under the

National Environmental Policy Act challenging the Forest

Service’s decision not to prepare an environmental impact

statement for nine timber sales in a national forest. 

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the cases relied upon by the Agency are not applicable here

because, like most environmental injunction cases, they deal with

the threat of future, imminent environmental injury. In 1

contrast, the Agency seeks a remedy for an injury that occurred

over twenty years ago. The Agency fails to show why waiting a

few more months until the conclusion of trial for a remedy poses

a significant and immediate threat to the environment.

Second, the Agency claims it will suffer irreparable harm

because potential developers are deterred from building on the

property by the contamination, and the Agency, therefore, is

losing tax revenue. (Reply at 6 (citing Starlight Sugar, Inc. v.

Soto, 114 F.3d 330, 332 (1st Cir. 1997) (holding that loss of a

unique or fleeting business opportunity can constitute

irreparable harm)).) This argument is equally unavailing. 

Although plans for an office building on a portion of Area 24

were recently abandoned because of the threat of contamination,

the Agency has not shown that the opportunity was unique or

fleeting. Moreover, any loss in tax revenue can be compensated

through an award of money damages. 

Third, the Agency suggests for the first time in its reply

brief that children who use the playground at the children’s

museum located on Area 24 are at risk. (Reply at 5.) However,

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 Such measures would likely include fencing off the 2

excavation site and informing parents of any potential risks. In

point of fact, the record before the court does not suggest a

risk to children and the suggestion by the Agency to the

contrary, on this record, should not have been made. 

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all parties agree that the french drain is at least four feet

underground and that the playground is paved. The Agency has

shown no evidence of airborne contamination. Even if the

contamination presented a hazard, the requested relief would not

resolve the problem. The Agency seeks an order requiring

defendants to create and execute a remediation plan within the

next three months. Assuming this were possible, the children

would still be at risk until the plan was completed, a lengthy

prospect. In the meantime, it is incumbent upon the Agency, as

the owner of the property, to take the proper measures to prevent

harm to the children and the public. 

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Finally, the Agency claims it cannot wait until the

conclusion of trial to recover because it “does not have

sufficient resources to remedy all hazardous materials within its

redevelopment project areas” and then sue to recover the costs

through legal action later. (Mot. at 13 (citing State of Cal. on

Behalf of Cal. Dept. of Health Svcs. v. B&R Davis Fertilizers,

Inc., 1994 WL 377788 at *7 (9th Cir. 1994)).) However, as

discussed above, the Agency has not yet shown why the property

must be remediated in the next three months as opposed to waiting

for the conclusion of trial. 

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For these reasons, the Agency has failed to demonstrate a

significant and immediate threat of irreparable injury.

B. Likelihood of Success on the Merits

Generally, the movant must show that there is a “fair

chance” of success on the merits. Johnson v. Cal. State Bd. of

Accountancy, 72 F.3d 1427, 1429-30 (9th Cir. 1995). However, a

request for mandatory injunctive relief, like that sought here,

is “subject to heightened scrutiny and should not be issued

unless the facts and law clearly favor the moving party.” Dahl

v. HEM Pharmaceuticals Corp., 7 F.3d 1399, 1403 (9th Cir. 1993). 

Moreover, the burden on plaintiff “is a heavy one where, as here,

granting the preliminary injunction will give [plaintiff]

substantially the relief it would obtain after a trial on the

merits.” Dakota Indus., Inc. v. Ever Best Ltd., 944 F.2d 438,

440 (8th Cir. 1991) (citations omitted); see also Tanner Motor

Livery, Ltd. v. Avis, Inc., 316 F.2d 804, 808 (9th Cir. 1963)

(“[I]t is not usually proper to grant the moving party the full

relief to which he might be entitled if successful at the

conclusion of a trial.”)

The Agency has failed to show that the facts and law clearly

favor its position. The Agency argues that defendants are

responsible parties under the Polanco Act, making them liable for

the clean-up costs of Areas 4 and 24. However, this claim

depends on the resolution of complex factual disputes that are

difficult to resolve at this time. 

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 CERCLA also provides other definitions of “responsible 3

party,” but they are not relevant here. 

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For example, there is a significant dispute about whether

defendants are “responsible parties.” A “responsible party” is

“any person described in subdivision (a) of Section 25323.5 of

this code or subdivision (a) of Section 13304 of the Water Code.” 

Cal. Health & Safety Code § 33459(h). Section 25323.5 defines

“responsible party” as those persons described in the federal

Comprehensive Environmental Response, Compensation, and Liability

Act (“CERCLA”). Under CERCLA, a “responsible party” includes

“any person who at the time of disposal of any hazardous

substance owned or operated any facility at which such hazardous

substances were disposed of.” 42 U.S.C. § 9607(a). However, 3

prior owners of property are not responsible for gradual passive

migration of contamination that took place during their

ownership, because the migration is not a "disposal" under

CERCLA. Carson Harbor Village, Ltd. v. Unocal Corp., 270 F.3d

863, 879 (9th Cir. 2001). 

Similarly, section 13304 of the Water Code defines

“responsible party” as “[a]ny person who . . . has caused or

permitted, causes or permits, or threatens to cause or permit any

waste to be discharged or deposited where it is, or probably will

be, discharged into the waters of the state and creates, or

threatens to create, a condition of pollution or nuisance.” Cal.

Water Code § 13304(a). However, the “cause or permit” language

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 Although the parties agree that the release occurred more 4

than 20 years ago, they cannot provide any more specific

information. 

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requires either an affirmative act or actual knowledge of the

discharge. In re San Diego Port Dist., 1990 WL 272135 at *3

(Cal. State Water Res. Control Bd. 1990) (“Where the landowner

has knowledge of the activity and has the ability to control the

activity, it is reasonable to conclude that such landowner is a

discharger.”) 

At this point, it is difficult to determine whether

defendants are responsible parties because it is unclear: (1) who

was responsible for the french drain; (2) when the leak occurred;4

(3) whether defendants owned or operated the parcels when the

disposal occurred; (4) whether the contamination resulted from a

slow leak or a sudden event; (5) whether defendants had any

knowledge of the french drain or the contamination; and (6)

whether defendants caused the leak. During oral argument, the

Agency’s counsel asserted that one of defendants’ predecessors

must have owned or operated business on the parcels when the leak

occurred. However, plaintiffs have not provided any evidence in

support of this assertion.

The evidence presented by the Agency shows that the rail

line was constructed by CalTrans sometime after 1968. (Gracco

Decl. in Support of Plaintiff's Reply, Ex. B.) In an exhibit

supporting its motion, the Agency introduces a deed that seems to

show that Union Pacific's predecessor in interest, Southern

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Pacific Transportation Company (SPTC), gained an ownership

interest in Area 24 beginning in 1975. (Gracco Decl. in Support

of Mot. Ex. A.) The Agency then presents a contradictory deed in

support of its reply that suggests that SPTC gained an ownership

interest in Area 24 and "appertanances thereto" in 1927. (Gracco

Decl. in Support of Reply, Ex. F.) The Agency fails to explain

why a 1975 deed would be necessary if SPTC acquired the property

in 1927. Nor does the Agency explain why SPTC would need an

easement (which it acquired in 1983) if it already owned the

property. Because the facts surrounding defendants’ ownership

interests are ambiguous, at best, it is impossible to tell

whether any of the defendants owned the property or operated

business on it at the time of disposal. 

In addition, the Agency has not shown that defendants had

any control over or knowledge of the french drains. As discussed

above, knowledge and control are deciding factors in determining

whether a party is liable under Cal. Water Code §13304(a). In re

San Diego Port Dist., 1990 WL 272135 at *3. The Agency argues

that knowledge and control are irrelevant because “regardless of

who installed the drain, the defendants' railroad tracks and

associated bedding benefitted from the french drain.” (Reply at

3.) However, no case law is cited for this proposition, nor did

the court locate any. 

Ultimately, the question whether defendants were responsible

parties hinges on questions of fact that cannot be resolved on

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this spare record. For these reasons, while the Agency has

raised serious questions, it has not demonstrated a likelihood of

success on the merits sufficient to warrant a mandatory

injunction. 

C. The Balance of Hardships

The balance of hardships tips in favor of defendants. “The

basic function of a preliminary injunction is to preserve the

status quo pending a determination of the action on the merits.” 

Chalk v. United States Dist. Court Cent. Dist. of Cal., 840 F.2d

701, 704 (9th Cir. 1988). The mandatory injunction sought here

does not aim to preserve the status quo. Rather, it would

require defendants to actively prepare and execute a costly

remediation plan, even though defendants are no longer owners or

operators and may not be “responsible parties” under the Act.

A delay in the clean up of Areas 4 and 24 imposes a hardship

on the Agency because it delays development and causes the Agency

to lose tax revenue. However, the Agency acquired this property

over 16 years ago and only began development on the property in

2004. While waiting another year may be unfortunate, it does not

compare to the hardship the Agency seeks to impose on defendants. 

The Agency noted during oral argument that this case may

take several years to litigate and resolve. To remedy this

potential problem, the court orders the parties to suggest a

revised scheduling order that will bring the case to resolution

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in this court at a brisker pace. 

D. Public Interest

“The less certain the district court is of the likelihood of

success on the merits, the more plaintiffs must convince the

district court that the public interest and balance of hardships

tip in their favor.” Southwest Voter Registration Educ. Project

v. Shelley, 344 F.3d 914, 918 (9th Cir. 2003) (en banc). The

Agency asserts that “[w]hen blighted conditions are remedied, the

community at large benefits as development serves as a catalyst

to the economic financial well-being of a community and its

citizens.” (Reply at 7.) While this is a significant interest,

it does not support prematurely placing liability on parties who

may not be responsible. Because there are equally important

public interests at stake on both sides, this factor does not

weigh in favor of granting a preliminary injunction. Univ. of

Haw. Prof’l Assembly v. Cayetano, 183 F.3d 1096 (9th Cir. 1999). 

III.

The Agency raises serious questions, but fails to show

probable success on the merits, irreparable injury, or that the

balance of hardships or public interest tips in its favor. 

Therefore, the Agency’s motion for a preliminary injunction is

DENIED WITHOUT PREJUDICE. If, at a further point in the case, 

plaintiff can make a stronger showing, the court will entertain a

renewed motion. The court also orders the parties to suggest a

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revised scheduling order that will allow for a quicker resolution

of this case. 

IT IS SO ORDERED.

Dated: 4/11/2006

 /s/ David F. Levi 

DAVID F. LEVI

United States District Judge 

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