Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_05-cv-02087/USCOURTS-caed-2_05-cv-02087-4/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, a public 

body, corporate and politic, 

 Plaintiff, 

v. 

BURLINGTON NORTHERN AND SANTA 

FE RAILWAY CORPORATION, UNION 

PACIFIC RAILROAD COMPANY, AND 

DOES 1 THROUGH 100, 

 Defendants. /

No. Civ. S-05-02087 DFL JFM 

Memorandum of Opinion

and Order

This is a diversity action under state environmental laws 

brought by the Redevelopment Agency of Stockton (RAS) seeking 

cost recovery and injunctive relief against the Union Pacific 

and Burlington Northern railroads (Railroads). The RAS alleges 

that the Railroads are liable for petroleum contamination found 

on land they once used and owned, which is now a RAS 

redevelopment project area. The parties have filed cross 

motions for summary judgment, and the RAS has filed a renewed 

motion for a preliminary injunction. 

Case 2:05-cv-02087-JAM-JFM Document 89 Filed 06/19/07 Page 1 of 25
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I. Facts

The court finds that the following facts are established by 

the cross motions. 

In 1968, the State of California decided to build a freeway 

interchange in Stockton to connect Interstate 5 and State 

Highway 4. The proposed interchange was incompatible with 

existing railroad tracks owned by defendant Railroads,1 so the 

State entered into a contract (the 1968 agreement) with the 

Railroads to build substitute tracks at the State’s expense. At 

issue in this lawsuit are three contiguous parcels of land known 

as Areas 3, 4, and 24 (the Property) over which this replacement 

track ran. In consultation with the Railroads and using plans 

they provided, the State performed the grading work for the new 

tracks, including installing an underground perforated drainage 

pipe, or “french drain,” along the track route.2 The purpose of 

 

1 The railroads then involved were the Western Pacific 

Railroad Company, the Atchison, Topeka and Santa Fe Railroad 

Company, and the Southern Pacific Company. The defendants in 

this case, Union Pacific Railroad Company and Burlington 

Northern and Santa Fe Railway Corporation, are the successors in 

interest to the three original railroads. The court refers to 

all of these entities interchangeably as “the Railroads.” 

 

2 The Railroads argue unpersuasively that they had nothing 

to do with the design, installation, use or maintenance of the 

french drain. The RAS has produced substantial evidence that 

the Railroads were closely involved in the design and approval 

of the drain. See Decl. of Warren Boalt; Decl. of Robert 

Hargis; Letter from A. W. Carlson to Warren Boalt of November 9, 

1966. Against this evidence, the Railroads proffer expert 

testimony that it was not the Railroads’ practice to use the 

particular type of corrugated pipe from which the french drain 

was made, and that railroad drainage pipes generally were not 

placed parallel to and underneath tracks. The Railroads’ 

proffered evidence fails to create a genuine issue of fact as to 

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the french drain was to facilitate drainage and stabilize the 

soil, which otherwise would have been too wet to support the 

tracks. When the grading was finished, the Railroads built 

tracks at the State’s expense. The Railroads began using the 

new tracks in 1970 and continued to use them until 1988. 

Under the 1968 agreement, the Railroads agreed to maintain 

the new tracks, roadbed and drainage. The State agreed to 

acquire and, by separate documents, to convey to the Railroads 

all rights of way necessary for the construction and operation 

of substitute tracks. The State finally conveyed title to the 

substitute tracks and underlying land to the Railroads in 1983. 

In 1988, under threat of condemnation, the Railroads sold 

their interests in the Property to the RAS, which planned to 

develop the land. The RAS finally began development in 2004, at 

which time petroleum contamination was found in the soil of Area 

3 along the path of the french drain, in the groundwater under 

Area 3, and elsewhere on the Property. As the Railroads 

conceded at oral argument, the french drain served as a 

preferential pathway for this contamination, which would have 

taken a different course were it not for the drain. Were it not 

for the french drain, the Property would not have become 

polluted with petroleum.3

Upon discovery of the contamination, construction on Area 3 

was halted. Petroleum also was found in soil at the border 

 

whether the Railroads were involved in the design and approval 

of the french drain at issue here. 

3 See Expert Opinion Report of Dawn A. Zemo at 3; Rebuttal 

Report of James Clark at 3. 

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between Areas 3 and 24. Testing showed that the petroleum 

contamination was at least twenty years old. Certain other 

contaminants, including lead, arsenic and hydrocarbons called 

PAHs, subsequently also were found on the Property. 

The likely source of the petroleum contamination was a 

nearby L&M petroleum facility. There were a number of spills 

from the L&M facility in the early 1970s, including a spill of 

3,000-6,000 gallons of diesel in 1974 for which the Coast Guard 

cited L&M because the diesel traveled through storm drains into 

the Stockton Channel.4 The L&M facility ceased operations in 

1982. 

 

4 In its opposition to the Railroads’ motion, the RAS for 

the first time asserts that the Railroads owned a track at the 

L&M facility. The RAS argues that the Railroads’ ownership of 

this track raises a material issue as to whether the Railroads 

are responsible for the L&M spills. 

It does not. First, the RAS raised this issue for the 

first time in their opposition to the Railroads’ motion for 

summary judgment. This theory of liability is not mentioned in 

the RAS’s disclosures, interrogatory responses, or expert 

reports. No discovery has been conducted on the issue. The RAS 

fails to demonstrate a substantial justification for its failure 

to raise the issue earlier. See Fed. R. Civ. P. 37 (c)(1); PreTrial Scheduling Order of December 12, 2005. 

Second, the Railroads aver that the track in question, 

though technically on L&M’s property, was fenced off from the 

L&M facilities and had nothing to do with any spills. The RAS 

does not present any evidence that the Railroads’ tracks were 

involved in the L&M spills. Therefore, the RAS’s allegation 

that the Railroads owned a track at L&M does not raise a genuine 

issue of material fact as to whether the Railroads were 

responsible for the spills at L&M. 

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RAS first sent corrective action notices5 to the Railroads 

requesting that they prepare remedial action plans for Area 3 on 

August 25, 2004. At the same time, the RAS was undertaking its 

own remediation of the Property, which it had largely finished 

by October 24, 2004. In late 2004 and early 2005, the RAS sent 

the Railroads similar notices about Areas 4 and 24. To date, 

the Railroads have not responded to any of the RAS’s notices. 

In late 2005, the RAS filed suit in state court to force 

the Railroads to pay for and take over the remediation of the 

Property. The Railroads removed the case based on diversity. 

On April 11, 2006, the court denied the RAS’s motion for a 

preliminary injunction. 

II. Polanco Act Claims

The RAS’s first two causes of action seek cost recovery and 

an injunction for violation of the Polanco Act, Cal. Health & 

Safety Code § 33459 et seq., which “authorizes redevelopment 

agencies to remediate contaminated properties within a project 

area.” City of Modesto Redevelopment Agency v. Superior Court, 

119 Cal. App. 4th 28, 34 (2004). Under the Polanco Act, a 

“responsible party” is anyone who would be a responsible party 

under the federal Comprehensive Environmental Response, 

Compensation, and Liability Act of 1980 (CERCLA) or under the 

California Porter-Cologne Act (Cal. Water Code § 13304). Id. 

(citing Cal. Health & Safety Code § 33459(h)). As discussed 

 

5 The Railroads object to calling these letters “corrective 

action notices.” The basis for their objection is unclear, 

however, as the letters are headed “Notice of Corrective 

Action,” cite relevant authority, and notify the Railroads that 

they are potentially responsible parties. 

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below, the court finds that the Railroads are not responsible 

parties under CERCLA but that they are under the Porter-Cologne 

Act and hence the Polanco Act. But the court also finds that 

the Railroads may not be held liable under the Polanco Act for 

the remediation of Area 3 because the RAS failed to comply with 

the Act’s notice requirements. 

A. CERCLA

A potentially responsible party (PRP) under CERCLA is “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)(2); see also

Carson Harbor Village, Ltd. v. Unocal Corp., 270 F.3d 863, 870 

(9th Cir. 2001) (en banc) (“CERCLA generally imposes strict 

liability on owners and operators of facilities at which 

hazardous substances were disposed.”) (citation and internal 

quotation marks omitted). The RAS argues that the contamination 

resulted from a “disposal” of hazardous materials within the 

meaning of CERCLA, and that the Railroads both owned and 

operated the Property during the period when the disposal likely 

occurred. The Railroads respond that emission of petroleum from 

the french drain is not a CERCLA disposal, that they did not own 

the Property when it occurred, and that they never operated the 

french drain. As discussed below, the court finds that the 

french drain’s emission of petroleum was indeed a CERCLA 

disposal, but that the Railroads were neither owners nor 

operators within the meaning of CERCLA at the relevant time. 

//// 

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i. Disposal

CERCLA defines “disposal” as “the discharge, deposit, 

injection, dumping, spilling, leaking, or placing of any solid 

waste or hazardous waste into or on any land or water so that 

such solid waste or hazardous waste or any constituent thereof 

may enter the environment or be emitted into the air or 

discharged into any waters, including ground waters.” 42 U.S.C. 

§ 6903(3). In Carson Harbor, the Ninth Circuit held that the 

passive migration of contaminants through soil did not 

constitute a CERCLA disposal. 270 F.3d at 879. But rather than 

create a bright-line rule that passive migration is never a 

CERCLA disposal, the court “examine[d] each of [§ 6903(3)’s] 

terms in relation to the facts of the case and determine[d] 

whether the movement of contaminants [was], under the plain 

meaning of the terms, a ‘disposal.’” Id. The court concluded 

that although the passive movement of tar-like petroleum 

byproducts and “slag” through wetlands might fairly be 

characterized as “spreading, migration, seeping, oozing, and 

possibly leeching . . . certainly none of those words fits 

within the plain and common meaning of discharge, . . . 

injection, dumping, . . . or placing.” Id. (quoting § 6903(3)) 

(internal quotation marks omitted). The court also stated that 

“the gradual spread here [cannot] be characterized as a 

‘deposit,’ because there was neither a deposit by someone, nor 

does the term deposit encompass the gradual spread of 

contaminants.” Id. 

The Railroads argue that this is a passive migration case 

like Carson Harbor. The RAS argues that the case is 

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distinguishable from Carson Harbor because the contamination 

here resulted from human conduct – the installation of the 

drainage pipe – and therefore that the case is more analogous to 

Kaiser Aluminum & Chem. Corp. v. Catellus. 976 F.2d 1338 (9th 

Cir. 1992). There, the Ninth Circuit held that excavating 

contaminated soil already present on a property and spreading it 

more widely on that property constituted a CERCLA disposal. Id. 

at 1342. Following the mode of analysis in Carson Harbor, 

however, the task at hand is not to decide which case is more 

analogous to the situation here. Rather, it is to determine 

whether the re-direction of petroleum contaminants, through a 

french drain, is a “discharge, deposit, injection, dumping, 

spilling, leaking, or placing” as these terms are used in § 

6903(3). 

The french drain was installed as a “preferential pathway” 

for groundwater. It was, by design, riddled with holes to 

permit the free entry and exit of water along its entire length. 

Its purpose appears to have been to facilitate the movement of 

water through soil. Petroleum released elsewhere traveled 

through the french drain and polluted the Property. But for the 

french drain, the Property would not have been polluted with 

petroleum. In these circumstances, the words “deposit” and 

“placing” accurately describe what happened. See Webster’s 

Third New Int’l Dictionary 605 (Unabridged ed. 1986) (defining 

“deposit” as, inter alia, “to lay down or let fall or drop by a 

natural process”); Id. at 1727 (defining “place” as, inter alia, 

“[to] cause to rest or lie”). Indeed, it is awkward to describe 

what happened here without recourse to one of these terms. 

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Although the french drain did not create or concentrate the 

polluting substance, it was a but-for cause of its placement or 

deposit on the Property. Because the process by which this 

happened is accurately described by at least one of the terms 

listed in § 6903(3), the court finds that the french drain 

caused a CERCLA disposal. 

ii. Owner Liability 

The RAS argues that the Railroads are CERCLA PRPs as owners 

of the Property when the contamination likely occurred. But 

although the State agreed to convey ownership of replacement 

tracks in the 1968 agreement and the Railroads began using the 

new tracks in 1970, it is uncontested that the State did not 

deed the Property to the Railroads until 1983, which was well 

after the contamination likely occurred. The RAS argues, 

however, that the Railroads were de facto or equitable owners of 

the Property from the beginning, because the 1968 agreement 

“obligated the State to acquire and then convey to the Railroads 

all property necessary for construction and operation of 

substitute trackage.” And although there was an inexplicable 

delay until 1983 in deeding the Property, the RAS argues that 

the 1968 agreement gave the Railroads the full bundle of rights 

associated with ownership. The RAS cites a number of cases in 

which courts have stated that CERCLA owner liability might 

attach to a defendant holding less than a fee interest in the 

contaminated property. 

The problem with this argument, as the Railroads point out, 

is that the 1968 agreement did not specify any particular parcel 

of property to be transferred or a date upon which the transfer 

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was to take place. Under the agreement, the State was bound 

only “[t]o acquire and convey to the Railroads by separate 

documents . . . all rights of way necessary for the construction 

and operation of substitute trackage . . . .” Thus, although it 

created a contractual obligation for the State to convey some

land at some future time, the agreement did not convey an 

interest in any particular piece of land. Based on the language 

of the agreement, it would appear that the State could have 

conveyed different land to the Railroads. Indeed, even after 

construction of the replacement tracks, the State may have had 

no contractual obligation to convey the particular land on which 

they were built. Had it discovered a compelling reason to keep 

that land, the State might have built yet another set of tracks 

elsewhere and conveyed that land to the Railroads. And because 

the agreement specified no deadline for the conveyance, the 

State had an indefinite time with which to work. The State did 

not convey the Property to the Railroads until 1983, some 

fifteen years after the agreement was signed. 

The 1968 agreement’s failure to identify the land to be 

conveyed or the timing of conveyance distinguishes this case 

from those in which courts have found equitable title conveyed 

upon the signing of an executory contract. See, e.g., Los 

Angeles Dodgers, Inc. v. County of Los Angeles, 256 Cal. App. 2d 

918 (1967). And it distinguishes this case from United States 

v. Union Corp., 259 F.Supp.2d 356 (E.D. Pa. 2003), where the 

court found that a defendant holding equitable title to specific 

property, but lacking legal title, was an owner within the 

meaning of CERCLA. The present case is also distinguishable 

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from Commander Oil Corp. v. Barlo Equip.Corp., because it does 

not involve a lease. 215 F.3d 321, 331 (2d Cir. 2000) 

(speculating that “certain lessees may have the requisite 

indicia of ownership vis-a-vis the record owner to be de facto

owners” under CERCLA). 

 The court is guided by Long Beach Unified School District

v. Dorothy B. Godwin California Living Trust, where the Ninth 

Circuit declined to expand the meaning of “owner” under CERCLA 

to include the holder of a mere easement. 32 F.3d 1364, 1369 

(9th Cir. 1994). The court noted that CERCLA incorporates “the 

common law definition of its terms,” and that “[t]he common law 

does not regard an easement holder as the owner of the property 

burdened by it.” Id. at 1368 (citation omitted). Here, the RAS 

has adduced no authority indicating that a contract to convey 

unspecified land at an unspecified time creates a present 

ownership interest in particular land. The court finds that the 

Railroads did not own the Property for CERCLA purposes until the 

State conveyed title in 1983.6

iii. Operator Liability

The RAS argues that the Railroads are CERCLA PRPs because 

they “operated” the french drain when the contamination 

occurred. The Railroads argue that they did not operate the 

drain because they performed no maintenance on it and were 

unaware of its existence. They also argue that even if they 

 

6 One can easily imagine the State arguing under different 

circumstances that it retained ownership rights in the Property 

until it conveyed title in 1983. Muddying the definition of 

“owner,” a term that should be clear, would only serve to 

increase the complexity and cost of CERCLA litigation. 

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might be said to have operated the drain in some general sense, 

they did not operate it within the meaning of CERCLA. 

Leaving aside the issue of whether the Railroads were aware 

of the french drain when the contamination occurred or might 

have operated it in some general sense, it is clear that they 

were not “operators” within the meaning of CERCLA. In United 

States v. Best Foods, 524 U.S. 51, 66 (1998), the Court held 

that for a defendant to be liable as an operator under CERCLA, 

it “must manage, direct, or conduct operations specifically 

related to pollution, that is, operations having to do with the 

leakage or disposal of hazardous waste, or decisions about 

compliance with environmental regulations.” See City of Moses 

Lake v. United States, 458 F.Supp.2d 1198, 1226 (E.D. Wash. 

2006) (“The question is whether under the totality of the 

circumstances, did the person or entity manage, direct or 

conduct operations specifically related to pollution.”) 

(citation and internal quotation marks omitted); Taliesen Corp. 

v. Razore Land Co., 135 Wash. App. 106, 127 (2006) (“[O]perator 

liability under [CERCLA] depends upon authority to control 

decisions about how to dispose of waste, not mere physical 

control over the instrumentality that causes disposal or 

release.”) 

There is no evidence that the Railroads “manage[d], 

directe[d] or conduct[ed] operations specifically related to 

pollution” in connection with the french drain. Best Foods, 524 

U.S. at 66. The perforated french drain never was intended to 

serve as a conduit for hazardous materials, nor, to the extent 

that they may have operated it in a general sense, did the 

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Railroads do so for a purpose related to pollution. 

Accordingly, under Best Foods, the Railroads cannot be held 

liable under CERCLA as operators. 

Because the Railroads are neither owners nor operators 

within the meaning of CERCLA, they are not CERCLA PRPs. 

B. Porter-Cologne

Because the Railroads are not PRPs under CERCLA, they may 

be liable under the Polanco Act only if they are responsible 

parties under the Porter-Cologne Act. Under Porter-Cologne, a 

responsible party is “[a]ny person who has discharged or 

discharges waste . . . or 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). Porter-Cologne is “harmonious with 

the common law of nuisance,” under which “liability . . . does 

not hinge on whether the defendant owns, possesses or controls 

the property, nor on whether he is in a position to abate the 

nuisance.” City of Modesto Redevelopment Agency v. Superior 

Court, 119 Cal. App. 4th 28, 37-38 (2004). Rather, liability 

attaches if a defendant “created or assisted in the creation of 

the nuisance.” Id. at 38. “[E]ven a relatively minor 

contribution to a discharge may support a finding of 

responsibility.” Id. at 41 (citing In re County of San Diego

(Order No. WQ 96-2, Feb. 22, 1996) 1996 WL 101751, at *5 (Cal. 

St. Wat. Res. Bd.)); see also City of Modesto, 119 Cal. App. 4th 

at 41 (“[W]e disagree with defendants’ contention that only 

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those who are physically engaged in a discharge or have the 

ability to control waste disposal activities are liable under 

section 13304.”); Environmental Law Handbook 16 (Thomas F.P. 

Sullivan, et al., eds., 18th ed. 2005) (“In general the courts 

are moving to strict liability for environmental nuisances so 

that, practically speaking, there are few good defenses to 

liability.”). 

The Railroads argue that they neither “discharged” nor 

“caused or permitted” the discharge of any waste. Recycling 

their argument under CERCLA, the Railroads contend that the 

plain meaning of “discharge,” excludes what they characterize as 

the passive migration involved here. Rather, according to the 

Railroads, “discharge” means “the initial release of a potential 

contaminant from confinement (such as a tank or drum), not 

passive migration through soil and groundwater.” 

The Railroads read “discharge” too narrowly, as it is used 

in Porter-Cologne. In Lake Madrone Water District v. State 

Water Resources Control Board, the California Court of Appeal 

held that the term “discharge” in the Porter-Cologne Act should 

be given its ordinary meaning: “to relieve of a charge, load or 

burden; . . . to give outlet to: pour forth: EMIT.” 209 Cal. 

App. 3d 163, 174 (1989) (quoting Webster’s New Int’l Dictionary

644 (3d ed. 1961)). The court noted that broadly defining 

“discharge” “is congruent with the Legislature’s directive that 

water quality control means the regulation of any activity or 

factor which may affect the quality of the waters of this 

state.” Id. (quoting Cal. Water Code § 13050(i)) (internal 

quotation marks omitted). Reading “discharge” broadly is also 

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necessary for Porter-Cologne to harmonize with nuisance law. 

See City of Modesto, 119 Cal. App. 4th at 37-38. 

Under this broad definition of the term, the channeling and 

emission of petroleum by the french drain was a discharge. The 

Railroads concede that the french drain changed the petroleum’s 

course and ultimate location. Although this may be a relatively 

modest contribution to the overall pollution problem caused by a 

third party’s spill or spills, it is nevertheless one but-for 

cause of a “condition of pollution or nuisance” on the Property. 

The Railroads assert that in City of Modesto the court 

found that Porter-Cologne liability does not arise from mere 

passive migration. Leaving aside whether the present case 

involves truly passive migration – the Railroads did play a role 

in bringing the french drain into existence – City of Modesto

was not a passive migration case and stands for no such 

proposition. City of Modesto does state, as the Railroads 

assert, that “the Legislature did not intend the [PorterCologne] act to impose liability on those with no ownership or 

control over the property or the discharge, and whose 

involvement in a discharge was remote and passive.” Id. at 43. 

But this statement came in the context of identifying the limits 

of Porter-Cologne liability for product manufacturers with no 

role in a discharge beyond selling the discharged products to 

the dischargers. City of Modesto holds that nuisance law (and, 

thus, the Porter-Cologne Act) “is not intended to serve as a 

surrogate for ordinary products liability.” Id. at 39. But 

City of Modesto does nothing to limit the scope of nuisance 

liability in cases not involving a discharged product’s 

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manufacturer. In fact, the case unambiguously describes general 

nuisance law as being exceedingly broad. Id. at 38 (“[N]ot only 

is the party who maintains the nuisance liable but also the 

party or parties who create or assist in its creation are 

responsible for the ensuing damages.”) (quoting Mangini v. 

Aerojet-General Corp., 230 Cal. App. 3d 1125, 1137 (1991)). 

Thus, City of Modesto offers the Railroads no support. 

Finally, the Railroads’ connection to the french drain is 

sufficiently strong that they may be held liable for the 

discharge. The Railroads provided or approved the plans and 

specifications for the grading and drainage. They constructed 

the tracks and agreed to maintain the tracks and drainage. In 

1974, they were the exclusive user of the tracks, of which the 

french drain was an integral part, when the petroleum traveled 

through the drain and polluted the Property. Under PorterCologne, this is enough to open the door to liability. See City 

of Modesto, 119 Cal. App. 4th at 37-38. 

C. Third-Party Defense

The Railroads argue that even if they might otherwise be 

responsible parties, they are entitled to the Polanco Act’s 

third-party defense. See Cal. Health & Safety Code § 

33459.4(b). This defense, which the Polanco Act borrows from 

CERCLA, is available to a defendant who can establish, among 

other things, that the hazardous release was caused “solely” by 

“an act or omission of a third party other than . . . one whose 

act or omission occurs in connection with a contractual 

relationship, existing directly or indirectly, with the 

defendant.” 42 U.S.C. § 9607(b). “Courts construe CERCLA’s 

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limited defenses narrowly to effectuate the Act’s broad 

policies.” Kelley v. Thomas Solvent Co., 727 F.Supp. 1532, 1540 

n.2 (W.D. Mich. 1989) (citing New York v. Shore Realty Corp., 

759 F.2d 1032, 1048-49 (2d Cir. 1985). 

The Railroads’ invocation of the third-party defense fails 

for two reasons. First, as already discussed, the Railroads 

participated in the design and approval of the substitute 

tracks’ drainage, including the french drain, which was a butfor cause of the contamination of the Property by the petroleum. 

Thus, the Property’s contamination is not “solely” attributable 

to the conduct of third parties. 

Second, there is no dispute that the State of California 

installed the french drain in the course of performing under the 

1968 agreement. Therefore, the State also played a causal role 

in the contamination of the Property. Because the Railroads had 

a contractual relationship with the State “in connection” with 

the Property, and the State had a hand in the Property’s 

contamination, the Railroads cannot benefit from the third-party 

defense. 

D. Polanco Act Procedural Defenses

The Railroads argue that they cannot be held liable under 

the Polanco Act because the RAS failed to comply with the Act’s 

various procedural requirements. First among these is that a 

redevelopment agency give responsible parties sixty-days’ notice 

and the opportunity to submit their own remediation plan to 

perform the work before the agency undertakes the work on its 

own. Cal. Health & Safety Code § 3349.1(b)(2). The Railroads’ 

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argument that the RAS failed to satisfy this requirement has 

merit. 

It is uncontested that on August 25, 2004 the RAS sent 

letters to the Railroads requesting that they prepare remedial 

action plans for Area 3. But the RAS did not wait the requisite 

sixty days before undertaking its own remediation. By October 

24, 2004 – sixty days after the RAS’s initial letters went out – 

the RAS had already submitted its own workplan to the RWQCB, 

finished excavating Area 3 and begun disposing of contaminated 

soil. In short, the RAS had nearly completed the remediation of 

Area 3 by the time the deadline passed for the Railroads to 

submit a remediation plan of their own. Thus, the Railroads 

argue, the RAS failed to comply with the Polanco Act’s 

procedural requirements and its claim must fail. 

With respect to its admitted failure to give the Railroads 

sixty-days’ notice before beginning work, the RAS makes two 

arguments. First, it asserts that its failure caused the 

Railroads no harm because they never submitted their own work 

plan. On this basis, the RAS argues that it substantially 

complied with the Act. Second, the RAS argues that it was not 

required to comply with the sixty-day requirement because it 

notified the Railroads that the hazardous condition on Area 3 

required immediate action. Under the Polanco Act, the sixty-day 

notice requirement does not apply if a redevelopment agency 

“determines that conditions require immediate action.” Health & 

Safety Code § 33459.1(c)(2). 

The RAS’s substantial compliance argument is unpersuasive. 

The RAS cites a recent opinion by a California Superior Court, 

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City of Modesto Redevelopment Agency v. The Dow Chemical Co., 

No. 999643 (Feb. 14, 2007), where the court found “substantial 

compliance” with the Polanco Act’s notice requirements because 

“the defendants suffered no loss or disadvantage from any of the 

alleged deficiencies in the timing, content, or delivery of the 

notices.” Id. at 22. The opinion does not specify what the 

alleged deficiencies were or cite any authority for deeming 

“substantial compliance” to be adequate under the Polanco Act. 

A more persuasive, albeit non-precedential, analysis of the 

Polanco Act’s notice requirements may be found in an unpublished 

California Court of Appeal decision, Anaheim Redevelopment 

Agency v. Union Pac. R.R. Co., No. G028913, 2003 WL 21310576 

(Cal. Ct. App. June 9, 2003). The Anaheim court held that a 

redevelopment agency’s failure to give a responsible party sixty 

days’ notice before conducting its own cleanup was fatal to its 

Polanco Act claim. Id. at *7; see also id. at *5 (“[A]n agency 

that does not comply with the Act cannot claim its benefits.”). 

The Anaheim court also rejected the second argument made by 

the RAS here: that notice was not required because the agency 

had determined that the site required immediate action. Id. at 

*7. This is because the basis for the agency’s determination in 

Anaheim was not the existence of a “threat to health or safety 

caused by leaving the site as is until the proper notifications 

could be made,” but rather the agency’s determination “that its 

own financial interests would be harmed by a delay in the 

project.” Id. at *6. The court rejected the agency’s broad 

interpretation of § 33459.1(c)(2), finding that allowing an 

agency to declare an immediate action requirement for reasons 

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other than a health and safety emergency “would create the 

exception that ate the rule.” Id. at *7. Moreover, the court 

found that interpreting the exception to apply only in health 

and safety emergencies is supported by the Act’s legislative 

history. Id. (citing Enrolled Bill Report, AB 3193). 

Here, although the RAS did state in its October 24, 2004 

letters that immediate action was necessary, it has produced no 

evidence that the contamination on Area 3 was a health or safety 

emergency. Indeed, the senior hydrologist who created the RAS’s 

workplan and managed its remediation of Area 3, Kurt Balasek, 

testified in his deposition that the urgency to complete the 

project stemmed from the economic consequences of delayed 

construction, not from an imminent threat to human health or the 

environment. 

The RAS cites no contrary evidence, but simply asserts that 

the petroleum constituted an emergency situation “in light of 

the open pit excavation containing petroleum contamination 

emitted from Railroads’ pipeline, threatening the groundwater 

supply.” This assertion does not create an issue of material 

fact. Moreover, it is implausible that an additional sixty-day 

delay in cleaning up contamination released at least twenty 

years earlier would pose a significant additional risk. In 

short, the Railroads have established with uncontroverted 

evidence that the petroleum on Area 3 did not constitute an 

environmental or public health emergency in the fall of 2004. 

The court is persuaded that economic interests cannot 

justify a redevelopment agency’s finding that immediate action 

is required, lest the exception swallow the rule. “Conditions” 

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under California Health & Safety Code section 33459.1(c)(2) 

refers only to environmental, health or safety conditions, not 

to economic considerations. The court finds that the RAS 

violated the Polanco Act’s sixty-day notice requirement, and 

that “an agency that does not comply with the Act cannot claim 

its benefits.”7 Id. at *5. Accordingly, the Railroads cannot be 

held liable under the Polanco Act for the remediation of Area 3. 

The remediation of Areas 4 and 24 is another matter. In 

late 2004 and early 2005, the RAS issued corrective action 

notices to the Railroads regarding Areas 4 and 24. To date, the 

Railroads have not responded with corrective action plans. The 

RAS apparently has not cleaned up the alleged contamination on 

Areas 4 and 24. Thus, there would appear to be no similar 

notice problems with respect to these areas. 

Accordingly, the court holds that the Railroads are not 

liable under the Polanco Act for the remediation of Area 3 but 

are liable under the Act for the remediation of Areas 4 and 24. 

III. Tort Claims and Requests for Relief

The RAS also brings claims for nuisance, trespass, 

injunctive relief/abatement of nuisance, unjust enrichment, 

equitable indemnity, and declaratory relief. 

 

7 As the Railroads argue, the RAS also may have violated the 

Polanco Act’s requirements having to do with the procedure for 

seeking and obtaining approval from state authorities before 

commencing work. Because the court finds that the RAS’s failure 

to provide sixty-day notice is sufficient to preclude recovery, 

however, it does not reach these issues. Nor, for the same 

reason, does it reach the Railroads’ arguments that the RAS’s 

costs from cleaning up Area 3 are not recoverable under the 

Polanco Act because its remediation of Area 3 was unnecessary 

and inconsistent with other state and federal laws. 

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A. Nuisance

Under California law, a nuisance is “[a]nything which is 

injurious to health . . . or is indecent or offensive to the 

senses, or an obstruction to the free use of property, so as to 

interfere with the comfortable enjoyment of life or property.” 

Cal. Civ. Code § 3479. As discussed briefly above, nuisance 

liability in California is both broad and strict. “[A]ny person 

who creates or helps create and maintain a nuisance is liable 

for its abatement and damages.” California v. Campbell, 138 

F.3d 772, 782 (9th Cir. 1998) (citation omitted); see Lincoln 

Props., Ltd. v. Higgins, No. S-91-760-DFL-GGH, 1993 WL 217423, 

at *25 (E.D. Cal. Jan. 21, 1993). “[N]uisance liability is 

strict, since the injury to the property itself gives rise to 

the liability, irrespective of the care or lack of care.” 

Lincoln Props., 1993 WL 217423, at *23 (quoting Snow v. Marian 

Realty Co., 212 Cal. 622, 626 (1931)) (internal quotation marks 

omitted); see County of Santa Clara v. Atl. Richfield Co., 137 

Cal. App. 4th 292, 306 (2006) (“Liability for nuisance does not 

hinge on whether the defendant owns, possesses or controls the 

property, nor on whether he is in a position to abate the 

nuisance; the critical question is whether the defendant created 

or assisted in the creation of the nuisance.”) (citations and 

internal quotation marks omitted) (emphasis in original). 

There is no question but that the presence of petroleum on 

the Property constitutes a nuisance. And, as already discussed, 

the Railroads were a but-for cause of this nuisance because they 

participated in the design and approval of the substitute 

tracks’ drainage, agreed to maintain the tracks and drainage, 

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and used the tracks (and, thus, the drainage) for nearly two 

decades. Therefore, they are liable to the RAS for nuisance. 

B. Trespass

The RSA also alleges that the petroleum’s presence on the 

Property constitutes a trespass by the Railroads. In Newhall 

Land & Farming Co. v. Superior Court, the California Court of 

Appeal held that a prior owner who tortiously leaves 

contamination on a property may be liable to the current owner 

for trespass. 19 Cal. App. 4th 332, 345 (1993). Because “one 

whose action or inaction causes a public nuisance is considered 

a tortfeasor,” id., and the Railroads are liable for creating a 

public nuisance, they are also liable for trespass. 

C. Unjust Enrichment

The RAS brings a claim for unjust enrichment. But “[t]here 

is no cause of action in California for unjust enrichment.” 

Melchoir v. New Line Prods., Inc., 106 Cal. App. 4th 779, 793 

(2003) (citation omitted). 

D. Equitable Indemnity, Declaratory Relief, and 

 Injunctive Relief

The RAS seeks equitable indemnity for the sums it has 

expended remediating Area 3 and a declaratory judgment holding 

that the Railroads are liable for remediating Areas 3, 4, and 

24. The RAS also brings a renewed motion for a preliminary 

injunction compelling the Railroads to assume responsibility for 

the remediation of Areas 4 and 24. 

Because the court grants summary judgment for the RAS on 

its Polanco Act claims with respect to Areas 4 and 24, and for 

the Railroads with respect to Area 3, declaratory relief of the 

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scope requested is inappropriate. Further, the court remains 

unpersuaded that a preliminary injunction is in order. 

Moreover, the precise terms of a permanent injunction concerning 

areas 4 and 24 will require further briefing by the parties, now 

that they have the court’s rulings on so many of the pending 

issues. 

As for Area 3, the RAS asserts that the Railroads are 

responsible for the entire cost of remediation. The Railroads 

assert that this cost would have been significantly lower if the 

RAS had been concerned only with cleaning up petroleum. 

According to the Railroads, the project was much more costly 

because the RAS had to deal with other, more toxic contaminants 

present in Area 3 – including lead, arsenic and PAHs – for which 

the Railroads are not responsible or even alleged to be 

responsible. Thus, although the Railroads are liable for 

creating a nuisance and trespassing on Area 3, the amount of the 

RAS’s damages are disputed and cannot be resolved on the 

briefing and record now before the court.8 

 

8 Once again the RAS attempts to introduce new factual issues 

in its opposition. In the opposition to the Railroads’ motion, 

the RAS asserts for the first time that the Railroads are a 

likely source of the PAHs. In support, it points to the 

deposition of its expert toxicologist, James Clark, who 

testified that railroad ties likely are a major source of PAHs. 

The RAS also points to the report of its expert, Doug Heard, 

which states that railroad operations are potential sources of 

contaminants found on the Property. 

In reply, the Railroads point out that Clark offered no 

opinions regarding PAHs in his expert reports, and that when the 

Railroads asked the RAS in interrogatories to identify all facts 

supporting its contention that the Railroads were responsible 

for releasing hazardous substances on the Property, the RAS’s 

responses mentioned nothing about railroad ties or PAHs. Nor 

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In further briefing or other proceedings, the parties must 

clarify how much, if any, of RAS’s remediation expenses relating 

to Area 3 are attributable to the presence of contaminants other 

than the petroleum emitted by the french drain. 

CONCLUSION 

The court GRANTS summary judgment for the RAS on its 

Polanco Act liability claim with respect to Areas 4 and 24, and 

on its nuisance and trespass claims with respect to the entire 

Property. 

The Railroads’ motion for summary judgment is GRANTED on 

the Polanco Act claims with respect to Area 3, and GRANTED with 

respect to the unjust enrichment claim. 

The court will set a status conference to schedule such 

further proceedings as may be necessary to resolve the remaining 

issues concerning injunctive relief and damages. 

 IT IS SO ORDERED. 

Dated: June 18, 2007 

 /s/ David F. Levi___________

 DAVID F. LEVI 

United States District Judge 

 

did the RAS ever supplement its responses to include such 

contentions. In these circumstances, the RAS may not now assert 

that the Railroad were responsible for PAH on the property. 

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