Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_03-cv-05632/USCOURTS-cand-3_03-cv-05632-5/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 28:1331 Fed. Question

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United States District Court

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

NANCY FERGUSON, individually and as trustee

of the FERGUSON FAMILY TRUST, and on

behalf of her subrogee,

Plaintiff,

 v.

ARCATA REDWOOD COMPANY, LLC, et al., 

Defendants.

 /

No. C 03-05632 SI

ORDER DENYING PLAINTIFF'S

MOTION FOR RULE 11 SANCTIONS

Now before the Court is plaintiff Nancy Ferguson’s motion forsanctions under Rule 11 ofthe Federal

Rules of Civil Procedure against defendant QuebecorWorld Arcata Corporation (“Quebecor”). Pursuant to

Local Rule 7-1(b), the Court finds the motion suitable for disposition without oral argument and therefore

VACATES the hearing setfor December 9, 2005. Having considered the papers submitted, the Court hereby

DENIES plaintiff's motion for sanctions. 

BACKGROUND

Plaintiff Nancy Ferguson filed suit on December 15, 2003, against twenty-one defendants under the

Comprehensive Environmental Response, Compensation, and Liability Act(“CERCLA”), 42 U.S.C. § 9601

etseq., the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6930, and related state laws.

Plaintiffsought contribution for costs ofinvestigationand cleanup ofsoil and groundwater contamination at and

emanating froma property she purchased in 1993, located at 100 Timbers Boulevard, Smith River, California

(“the Property”). 

Defendant Quebecor is a former owner of the Property and the sole remaining defendant in this suit.

Case 3:03-cv-05632-SI Document 161 Filed 12/08/05 Page 1 of 5
United States District Court

For the Northern District of California

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On June 24, 2005, Defendant filed a motion forsummary judgment as to plaintiff’s CERCLA cause of action.

Defendant claimed that plaintiff was a “Potentially Responsible Party” (“PRP”) under CERCLA and therefore

was ineligible to recover under § 113 of CERCLA. In response, plaintiff claimed that her action was based

on both CERCLA § 113 and § 107, even though she made no reference to § 107 in her complaint. In its reply

brief, defendant argued that plaintiff was ineligible to bring a § 107 claim for contribution under both Supreme

Court and Ninth Circuit law. 

At the hearing on defendant's summary judgment motion and again in a letter filed two days later,

defendant requested that if the Court allowed plaintiff to proceed on her § 107 contribution claim, defendant

be allowed to reopen discovery on such limited factualquestions as may relate uniquely to thatclaim. Defendant

further requested leave to file a subsequent motion for summary judgment, directed solely at the § 107

contribution claim.

The Court denied defendant’s summary judgment motion, finding that plaintiff’s complaint provided

sufficient notice of a contributionaction under § 107. In reaching this conclusion, the Court explicitly rejected

defendant’s argument that claims for contribution may not be brought by PRPs under § 107. See August 5,

2005 Order, at 8-9 (Docket No. 118). The Court, however, granted defendant’s requests to take further

discovery and to file a further summary judgment motion.

Defendant filed itssecond summary judgment motiononSeptember 9, 2005. In that motion, defendant

presented substantially the same argument concerning plaintiff’s ability to bring a § 107 claim for contribution

that the Court had previously rejected when it denied defendant’sfirstsummaryjudgmentmotion. Accordingly,

the Court denied the subsequent motion on October 6, 2005, finding that the claim was not based on any

factualdevelopment occurring after the first motion and that the arguments were substantially the same as those

that defendant previously raised. Citing the August 5 Order denying summary judgment, the Court again

concluded that “the Ninth Circuit recognize[s] a PRP’s right to bring a contribution claim under Section 107.”

See October 6, 2005 Order, at 2 (Docket No. 135); see also August 5, 2005 Order, at 8 (Docket No. 118).

On October 7, 2005, plaintiff filed the instant motion, seeking sanctions pursuant to Rule 11 against

defendant and its counselofrecord, WilliamD. Wick of Wacter & Wick, LLP. Plaintiff claims that defendant

Case 3:03-cv-05632-SI Document 161 Filed 12/08/05 Page 2 of 5
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For the Northern District of California

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filed the second summary judgment motion for an improper purpose, and to increase litigation costs and to

improperly pursue reconsideration.

LEGAL STANDARD

Under the Federal Rules of Civil Procedure, Rule 11 sanctions may be imposed against an attorney,

law firm, or party when a pleading is filed for an improper purpose such as harassment or delay. See Fed. R.

Civ. P. 11(b)(1). The primary purpose of Rule 11 is to deter baseless court filings, but this goal must be

considered in light of the fact that, in an adversary system of litigation, the essence of the lawyer’s task is to

present issues of facts and law “as favorably as fairly possible” in support of the client’s claim. See United

Nat.Ins. Co. v. R&D Latex Corp., 242 F.3d 1102, 1115 (9th Cir. 2001). Therefore, judges should “impose

sanctions on lawyers fortheir mode of advocacy only in the most egregious situations, lest lawyers be deterred

from vigorous representation of their clients.” See id. (citing Schlaifer Nance & Co., Inc. v. Estate of

Warhol, 194 F.3d 323, 341 (2nd Cir. 1999)).

In making a determination of whether Rule 11 sanctions should be imposed, the Court need not find

that the violationwas intentional. Rather, sanctions may be imposed even if a filingwas made with “pure heart

and empty head.” Smith v. Ricks, 31 F.3d 1478, 1488 (9th Cir. 1994).

DISCUSSION

Plaintiff claims that defendant frivolously brought its second summary judgment motion in order to

increase plaintiff’slitigationcosts, and to pursue reconsideration ofthe Court's originaldecision. Plaintiff claims

thatsanctions are warranted in order to deter such conduct in the future by defendant, and because plaintiff was

“forced to bear significant litigation costs in responding to the second motion for summary judgment,” costs

which plaintiff has not enumerated. Defendant replies that the second summary judgment motion of

September 9, 2005 was filed within the scope of the leave permitted to defendant in the Court’s Order of

August 5, 2005. Defendant contends that its interpretation of the Order was objectively reasonable under the

circumstances and thus does not constitute a frivolous motion or a filing based on an improper purpose.

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The Court finds that Rule 11 sanctions are not warranted. As evidenced by its original motion for

summary judgment, defendant clearly did not understand there to be a § 107 claim in this case. Once

defendant learned ofthe possibility of a § 107 claim, it understandably wanted the opportunity to address such

a claim thoroughly in a consolidated brief. Indeed, prior to filing its second summary judgment motion,

defendant had only addressed plaintiff’s § 107 claim in piecemeal fashion in its reply brief on its original

summary judgment motion, and in a letter submitted shortly thereafter.

Further, this is not a situation where the subject of defendant’s second motion was a minor issue or a

well-established rule of law. To the contrary, as plaintiff’s § 107 claim is now her sole remaining cause of

action under CERCLA, defendant’s motion went to the heart of these proceedings. Moreover, courts have

split over whether a claim for contribution can be brought under § 107. See, e.g., City of Rialto v. U.S. Dep’t

of Defense, No. 04-0079 VAP (C.D. Cal. Aug. 16, 2005) (finding that PRPs could not bring action for

contribution under § 107); Koutros v. Goss-Jewett Co. of N. Calif, Inc., 2005 WL 1417152 (E.D. Cal.

2005) (finding an implied cause of action for contribution exists under § 107). Given the importance of the §

107 issue to Quebecor’s defense, the uncertain state of the law, and the somewhat confused manner in which

the issue arose, the Court does not believe that Rule 11 sanctions are appropriate in this case. See Cooter &

Gell v. HartMarx Corp., 496 U.S. 384, 393, 110 S. Ct. 2447 (1990) (“[T]he central purpose of Rule 11

is to deter baseless filings in district court . . . .”).

Under these circumstances, the Court finds no basis to impose sanctions on defense counsel.

Accordingly, plaintiff’s request for sanctions under Rule 11 is DENIED. 

CONCLUSION

For the foregoing reasons, the Court hereby DENIES plaintiff’s motion forRule 11 sanctions (Docket

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No. 137). The hearing currently scheduled for December 9, 2005 is VACATED.

IT IS SO ORDERED.

Dated: December 7, 2005

 

SUSAN ILLSTON

United States District Judge

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