Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_14-cv-00595/USCOURTS-caed-2_14-cv-00595-19/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 42:9607 Real Property Tort to Land

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

CALIFORNIA DEPARTMENT OF 

TOXIC SUBSTANCES CONTROL and 

the TOXIC SUBSTANCES CONTROL 

ACCOUNT,

Plaintiffs,

v.

JIM DOBBAS, INC., a 

California corporation; 

CONTINENTAL RAIL, INC., a 

Delaware corporation; DAVID 

VAN OVER, individually; 

PACIFIC WOOD PRESERVING, a 

dissolved California 

corporation; and WEST COAST 

WOOD PRESERVING, LLC, a 

Nevada limited liability 

company,

Defendants,

AND RELATED COUNTERCLAIMS AND 

CROSS-CLAIMS.

CIV. NO. 2:14-595 WBS EFB

MEMORANDUM AND ORDER RE: MOTION 

FOR ORDER APPROVING CONSENT 

DECREE

----oo0oo----

Plaintiffs California Department of Toxic Substances 

Control and the Toxic Substances Control Account (collectively,

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“DTSC”) brought this action under the Comprehensive Environmental 

Response, Compensation, and Liability Act of 1980 (“CERCLA”), 42 

U.S.C. §§ 9601 et seq., to recover cleanup costs incurred at 147 

A Street in Elmira, California (the “Elmira Site”) from 

defendants Jim Dobbas, Inc. (“Dobbas”), Continental Rail, Inc.

(“CRI”), Pacific Wood Preserving Corporation (“PWP”), West Coast 

Wood Preserving, LLC (“WCWP”), Collins & Aikman Products, LLC 

(“C&A Products”), and David van Over (“Van Over”). Presently 

before the court is DTSC’s motion for approval of a proposed 

Consent Decree between plaintiffs and Dobbas. (Docket No. 146.) 

No party has filed an opposition.

I. Factual and Procedural Background

From 1972 to 1982, wood preserving operations at the 

Elmira Site contaminated the soil and groundwater with arsenic, 

chromium, and copper. (MacNicholl Decl. ¶¶ 4-5 (Docket No. 

144).) From the 1980s through 2005, the Wickes Corporation and 

its successor, C&A Products, took various actions at the Elmira 

Site to address environmental contamination under the oversight 

of DTSC. (Id. ¶ 6.) These actions included excavating soil, 

installing asphalt caps over contaminated soils, constructing a 

drainage system, installing a groundwater extraction and 

treatment system, and performing groundwater monitoring. (Id.) 

In 1997, C&A Products sold the Elmira Site to Dobbas and CRI. 

(Id.) However, C&A Products continued to perform environmental

actions and maintain the existing measures.

In May 2005, C&A Products filed a petition for Chapter 

11 bankruptcy. (Id.) It informed DTSC in November 2005 that it 

would not perform any further actions at the Elmira Site. (Id.) 

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In 2006, DTSC requested that Dobbas and CRI carry out certain 

actions at the site. Dobbas and CRI refused. (Id. ¶ 7.) As a 

result, DTSC initiated and performed state-funded response

actions from 2007 to the present, including excavating and 

backfilling soil, demolishing the groundwater extraction system, 

and monitoring groundwater. (See id. ¶¶ 7-10.) Dobbas and CRI 

sold the Elmira Site to Van Over in 2011, and DTSC continues to 

monitor the site and evaluate contamination trends. (See id. ¶¶ 

9-11.) DTSC states that, as of May 5, 2015, its unreimbursed 

response costs relating to the site exceeded $2.65 million, 

exclusive of interest. (Id. ¶ 13.) It further states that the 

costs for future investigation, remediation of contaminated soil, 

and treatment of surface and groundwater could reach 

approximately $3.5 million by 2025. (Id.)

DTSC contends in this action that Dobbas is a 

responsible party pursuant to section 107(a) of CERCLA, 42 U.S.C. 

§ 9607(a), and is therefore jointly and severally liable for the 

costs DTSC has incurred at the Elmira Site. (Docket No. 77 at 

2.) Dobbas has filed counterclaims against DTSC on the same 

grounds, (Docket Nos. 23-1 to 23-3, 25), and cross-claims against 

the other defendants, (Docket No. 101). In March 2015, Dobbas

moved for summary judgment against DTSC, asserting, among other 

things, that DTSC’s claims are barred by the applicable statute 

of limitations. (See Docket No. 116.) Before the court ruled on 

that motion, however, Dobbas and DTSC informed the court that 

they had reached a settlement. (See Docket Nos. 122-25.) DTSC 

lodged the proposed Consent Decree on July 15, 2015. (Docket No. 

135.)

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II. Discussion

“In order to approve a CERCLA consent decree, a 

district court must conclude that the agreement is procedurally 

and substantively ‘fair, reasonable, and consistent with CERCLA’s 

objectives.’” Arizona v. City of Tucson, 761 F.3d 1005, 1011-12 

(9th Cir. 2014) (quoting United States v. Montrose Chem. Corp. of 

Cal., 50 F.3d 741, 748 (9th Cir. 1995)). Parties seeking 

approval of a consent decree must provide “evidence sufficient to 

evaluate the terms of an agreement.” Id. at 1012. 

“Fair” and “reasonable” are comparative terms. Id.

Accordingly, the court’s “obligation to independently scrutinize 

the terms of [such agreements]” must involve, among other things, 

“comparing the proportion of total projected costs to be paid by 

the [settling parties] with the proportion of liability 

attributable to them.” Id. at 1008 (quoting Montrose, 50 F.3d at 

747) (quotation marks omitted). The court must then “factor into 

the equation any reasonable discount for litigation risks, time 

savings, and the like . . . .” Id. at 1012. “A district court

abuses its discretion where it does not fulfill its obligation to 

engage in this comparative analysis.” Id. 

“[W]here state agencies have environmental expertise 

they are entitled to ‘some deference’ with regard to questions 

concerning their area of expertise.” Id. at 1014 (quoting City 

of Bangor v. Citizens Commc’ns Co., 532 F.3d 70, 94 (1st Cir. 

2008)). State agencies are not entitled to deference regarding 

areas outside their expertise, such as their interpretation of 

CERCLA’s requirements. Id. at 1014-15.

A. Terms of the Proposed Consent Decree

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The proposed Consent Decree provides that DTSC will 

release Dobbas from liability in this action in exchange for, 

among other things, payment of $350,000. (See Consent Decree 

¶¶ 12, 22.) Dobbas also agrees to provide DTSC with copies of 

all records, documents, and other information in its possession 

that relate to (1) the ownership, operation, or control of the 

Elmira Site; (2) the purchase, storage, use, handling,

generation, treatment, transportation, or disposal of hazardous 

substances in connection with the Elmira Site; (3) releases or 

threatened releases of hazardous substances at the Elmira Site;

and (4) response actions conducted by any person at the Elmira 

Site. (Id. ¶ 24.) The Consent Decree entitles Dobbas to 

contribution protection pursuant to section 113(f)(2) of CERCLA, 

42 U.S.C. § 9613(f)(2).1 (Id. ¶¶ 33-35.) DTSC and Dobbas also 

agree not to file any claims against each other regarding

response costs at the Elmira Site. (See id. ¶¶ 27, 32.)

B. Analysis

1. Procedurally Fair Process

The court must first determine whether the proposed 

Consent Decree is the “product of a procedurally fair process.” 

Montrose, 50 F.3d at 746. Such a process generally involves good 

faith, arm’s-length negotiations among experienced counsel, 

during which all parties have an opportunity to participate. See

 

1 Section 9613(f)(2) provides, in relevant part, “[a] 

person who has resolved its liability to the United States or a 

State in an administrative or judicially approved settlement 

shall not be liable for claims for contribution regarding matters 

addressed in the settlement.” 42 U.S.C. § 9613(f)(2). However, 

such person “may seek contribution from any person who is not 

party to [the] settlement.” Id. § 9613(f)(3)(B).

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id.; see also United States v. Cannons Eng’g Corp., 899 F.2d 79, 

87 (1st Cir. 1990).

The settling parties represent that they engaged in 

arm’s-length settlement negotiations in which all were 

represented by counsel. (MacNicholl Decl. ¶¶ 14-15.) DTSC and 

Dobbas jointly drafted the terms of the proposed Consent Decree. 

(Id. ¶ 15.) The arm’s-length character of their negotiations is 

reinforced by the fact that the parties reached settlement after 

Dobbas filed counterclaims against DTSC, moved for summary 

judgment, and put forth substantial evidence in its defense,

indicating that both parties had the opportunity to showcase the 

strengths of their positions before they reached settlement.

After lodging the proposed Consent Decree with the 

court, DTSC published notice of the Consent Decree in the 

California Regulatory Notice Register (2015, Volume No. 29-Z), 

pages 1210-11, and invited the public to comment on it until 

August 17, 2015. (MacNicholl Decl. ¶ 16, Ex. 1.) It also 

published such notice in a local newspaper, the Dixon Tribune, 

(id. ¶ 16, Ex. 2), and emailed notice to all parties in this 

lawsuit, (id. ¶ 16, Ex. 3). DTSC did not receive any comments 

on, or objections to, the proposed Consent Decree. (Id. ¶ 17.) 

Since the court can find no reason to doubt the integrity of 

these steps, the court concludes that the proposed Consent Decree 

resulted from a procedurally fair process.

2. Substantively Fair and Reasonable Terms

Next, the court must determine whether the proposed 

Consent Decree is “substantively fair to the parties in light of 

a reasonable reading of the facts.” Montrose, 50 F.3d at 746; 

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see also Cannons, 899 F.2d at 87 (“Substantive fairness 

introduces into the equation concepts of corrective justice and 

accountability: a party should bear the cost of the harm for 

which it is legally responsible.”). 

Dobbas has agreed to pay $265,000 of the approximately 

$2.65 million that DTSC says it incurred in responding to 

contamination at the Elmira Site. The parties agreed to a

covenant not to sue each other in the future for response costs 

relating to the site, meaning that Dobbas will not face further 

liability for any of the $3.5 million that DTSC estimates it will 

incur by 2025. (See MacNicholl Decl. ¶ 13.) The proportion of 

costs recouped by DTSC is relatively small: Dobbas will pay 10%

of the costs that DTSC has incurred to date and approximately 

7.6% of the estimated costs it will incur by 2025. 

DTSC states that Dobbas’s proportionate liability for 

response costs at the Elmira Site is approximately 20% because 

Dobbas held half of the site’s property interest, never conducted 

wood preserving operations at the site, and did not cause the 

contamination there. (DTSC’s Mem. at 9 (Docket No. 143). 

Because DTSC is the lead agency responsible for enforcing 

California’s Hazardous Substance Account Act (“HSAA”) and for 

investigating and responding to hazardous substance releases in 

California,

2 the court affords “some deference” to DTSC’s 

estimation of Dobbas’s proportionate liability of the agency’s

 

2 See Cal. Health & Safety Code § 25354.5. HSAA is the 

state analogue to CERCLA. See Coppola v. Smith, 935 F. Supp. 2d 

993, 1011 (E.D. Cal. 2013) (Ishii, J.) (“Although the HSAA is not 

identical to CERCLA, the HSAA expressly incorporates the same 

liability standards, defenses, and classes of responsible persons 

as those set forth in CERCLA.” (citations omitted)).

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response costs. See City of Tuscon, 761 F.3d at 1014.

DTSC justifies discounting Dobbas’s proportionate 

liability to 10% of DTSC’s current unreimbursed costs by 

factoring in several risks that arise from continued litigation 

between the parties. Dobbas had previously moved for summary 

judgment on the basis that DTSC’s claims were time-barred by the 

applicable statute of limitations. Such an argument was viable,

as this court has found in the past that DTSC’s CERCLA claims 

were in fact time-barred. See, e.g., State of Cal. ex rel Cal.

Dep’t of Toxic Substs. Control v. Hyampom Lumber Co., 903 F. 

Supp. 1389, 1394 (E.D. Cal. 1995). If Dobbas prevailed on this

argument, it would not have faced any liability for DTSC’s 

response costs.

In addition, Dobbas had filed counterclaims against 

DTSC asserting that the agency’s direction and oversight of 

response actions at the Elmira Site contributed to the site’s 

contamination and incurred unnecessary costs. (E.g., Docket No. 

25 ¶¶ 11-12, 17, 26.) DTSC and Dobbas presumably factored into 

the settlement amount the possibility that DTSC’s negligently 

selected or implemented response actions may have inflated the 

agency’s asserted unreimbursed costs.

Moreover, both parties face costly and time consuming 

discovery from continued litigation. Since DTSC requested 

additional time for discovery in opposing WCWP’s motion for 

summary judgment, (see Docket No. 107 at 17-20), it is likely 

that DTSC would have required additional discovery in opposing

Dobbas’s summary judgment motion as well. Because the discovery 

cutoff set by the court’s Pretrial Scheduling Order is March 30, 

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2016, (Docket No. 20 at 2-3), early settlement also saves DTSC 

and Dobbas at least four months of additional discovery, 

research, and related costs and eliminates the parties’ costs of 

going to trial in this case. It is reasonable that DTSC and 

Dobbas wish to free themselves from these burdens by settling 

their claims. The court thus finds it reasonable that DTSC

discounted Dobbas’s proportional liability based on these

factors.

Dobbas’s status as the second defendant3 to settle in 

this case also justifies a discount from its estimated 

proportional liability. “Given CERCLA’s joint and several 

liability scheme, the government may find it appropriate to offer 

relatively favorable terms to early settlers, thereby encouraging 

other parties to settle based on the possibility that late 

settlers and non-settlers bear the risk that they might 

ultimately be responsible for an enhanced share of the total 

claim.”4 United States v. Fort James Operating Co., 313 F. Supp. 

2d 902, 909 (E.D. Wis. 2004); see also Cannons, 899 F.2d at 92 

(“Disproportionate liability, a technique which promotes early 

settlements and deters litigation for litigation’s sake, is an 

integral part of the statutory plan.”). 

CERCLA enables this strategy through 42 U.S.C. 

§ 9613(f)(2). “The statute immunizes settling parties from 

liability for contribution and provides that only the amount of 

the settlement--not the pro rata share attributable to the 

 

3 The court approved a consent decree between DTSC and 

WCWP on September 2, 2015. (Docket Nos. 139, 141.)

4

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settling party--shall be subtracted from the liability of the 

nonsettlors.” Cannons, 899 F.2d at 91. It would thus be 

reasonable for DTSC to discount Dobbas’s proportionate liability 

and provide Dobbas favorable terms to leverage the remaining 

defendants’ comparatively greater liability in resolving the 

claims against them.

Accordingly, after conducting the required comparative

fault analysis and considering facts in the record that justify a 

discounted settlement amount, the court concludes that the terms 

of the proposed Consent Decree are substantively fair and 

reasonable.

3. Consistent with CERCLA’s Objectives

Finally, the court must determine whether the proposed 

Consent Decree is consistent with CERCLA’s objectives. See

Montrose, 50 F.3d at 746. This includes holding accountable the 

parties who are legally responsible for the contamination at 

issue. See Cannons, 899 F.2d at 90-91. Having addressed 

Dobbas’s accountability at length above, the court sees no need 

to reiterate the same points here except to note that, by 

requiring Dobbas to pay for a portion of DTSC’s cleanup costs,

the Consent Decree advances that objective. See Cannons, 899 

F.2d at 90 (noting “consideration of the extent to which consent 

decrees are consistent with Congress’ discerned intent involves 

matters implicating fairness and reasonableness” and that the 

approval criteria “were not meant to be mutually exclusive”).

In addition, “one of the core purposes of CERCLA is to 

foster settlement through its system of incentives and without 

unnecessarily further complicating already complicated 

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litigation.” Chubb Custom Ins. Co. v. Space Sys./Loral, Inc., 

710 F.3d 946, 971 (9th Cir. 2013) (citation omitted). DTSC and 

Dobbas’s settlement of their claims and counterclaims at the 

pretrial stage advances this purpose and increases the pressure 

on the remaining defendants to reach a settlement. See Cannons, 

899 F.2d at 92.

Lastly, CERCLA was intended to give regulators “the 

tools necessary for a prompt and effective response to . . . 

hazardous waste disposal.” Cannons, 899 F.3d at 90. The court 

does not find this objective directly relevant here because the 

proposed Consent Decree focuses on recovering response costs that 

DTSC has already expended responding to contamination. However, 

the Consent Decree may indirectly advance this objective because 

funds from the settlement reinforce DTSC’s ability to respond 

promptly and effectively to contamination. It also enables DTSC 

to use state funds with the knowledge that similar consent 

decrees may be used to bypass the uncertainties of litigation and

recover those expenses in the future.

Accordingly, because the court concludes from the 

evidence before it that the proposed Consent Decree is 

procedurally and substantively fair, reasonable, and consistent 

with CERCLA’s objectives, the court will order its approval. See

City of Tucson, 761 F.3d at 1011-12.

IT IS THEREFORE ORDERED that plaintiffs’ motion for 

approval of the Consent Decree between plaintiffs and Jim Dobbas, 

Inc. (Docket No. 146) be, and the same hereby is, GRANTED.

IT IS FURTHER ORDERED that all claims for contribution 

or indemnity against Jim Dobbas, Inc. arising out of response

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costs incurred at the Elmira Site be, and the same hereby are, 

DISMISSED pursuant to 42 U.S.C. § 9613(f)(2).

Dated: November 13, 2015

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