Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_02-cv-02514/USCOURTS-caed-2_02-cv-02514-3/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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28 * This matter was determined to be suitable for decision

without oral argument. L.R. 78-230(h).

1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

S.S. & G., LLC; and NEVADA )

CITY HOTEL, LLP, )

)

Plaintiffs, )

)

v. )

) 

STATE OF CALIFORNIA, a )

governmental entity; LOWELL )

ROBINSON, an individual, ) No. 02:02-cv-2514-GEB-JFM*

ROBINSON & SONS, a California )

general partnership; ) ORDER

RIEBE’S AUTOMOTIVE SUPPLY, a )

California corporation; BART )

RIEBE, an individual; )

HOLDREGE & KULL, a California )

corporation; and DOES 1 )

through 20, inclusive, )

)

Defendants. )

)

)

And Related Actions. )

______________________________)

Third-party Defendant Newmont Mining Corporation (“Newmont”)

moves for summary judgment on Defendant/Third-party Plaintiff Riebe’s

Automotive Supply and Bart Riebe’s (collectively “Riebe”) third-party

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complaint for contribution under section 113 of the Comprehensive

Environmental Response, Compensation, and Liability Act (“CERCLA”),

42 U.S.C. § 9601-9628. Newmont argues that Riebe cannot maintain its

third-party action for contribution because Plaintiffs cannot obtain

joint and several liability from Riebe under section 107(a) of CERCLA. 

(Newmont’s Br. Supp. Summ. J. at 2.) Alternatively, Newmont argues

that Riebe cannot maintain its third-party action for contribution

under CERCLA because Riebe cannot establish essential elements of the

claim. (Id.) Newmont also seeks summary judgment on Riebe’s state

law claims for nuisance and trespass. (Id.)

Plaintiffs’ Complaint alleges, inter alia, that (1)

hazardous substances were released on a 1.7-acre parcel of property

located at 375 Hollow Way, near Nevada City, California (“Property”),

(2) Plaintiffs are innocent landowners under CERCLA, and (3) Riebe is

jointly and severally liable for response costs Plaintiffs incurred

remediating hazardous substances from the Property. (Compl. ¶¶ 20-23,

31-38.) Riebe, in turn, filed a third-party claim alleging, inter

alia, that “Newmont is the successor-in-interest to the Northstar

[sic] and Empire Gold Mines in Nevada County, California,” and that

these mines are “liable as a generator of hazardous substances which

were processed and disposed of at the Pioneer Reduction Works facility

formerly located immediately to the west of the Property.” (Riebe’s

First Am. Countercls., Cross-cls. & Third-party-cls. ¶ 15.a.)

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1 “The standards applicable to motions for summary

judgment are well known, see, e.g., Rodgers v. County of Yolo,

889 F. Supp. 1284 (E.D. Cal. 1995), and need not be repeated

here.” Reitter v. City of Sacramento, 87 F. Supp. 2d 1040, 1042

(E.D. Cal. 2000).

2 Newmont’s motion to strike Plaintiffs’ opposition to

Newmont’s motion for summary judgment is denied.

3 Michael Snegg’s declaration that all individual members

of SS&G have contributed to response costs related to the

Property (Snegg Decl. ¶ 21) is insufficient to establish that

SS&G contributed to response costs related to the Property. See

Sonora Diamond Corp. v. Superior Court, 83 Cal. App. 4th 523, 538

(2000) (“Ordinarily, a corporation is regarded as a legal entity,

separate and distinct from its stockholders, officers and

directors, with separate and distinct liabilities and

obligations.”) (citations omitted).

3

DISCUSSION1

I. Plaintiffs’ Claim for Cost Recovery against Riebe

A. S.S. & G.’s Claim for Cost Recovery

Newmont argues that S.S. & G. LLC (“SS&G”) cannot maintain a

CERCLA claim against Riebe because there is no evidence that SS&G

incurred response costs related to the Property. (Newmont’s Br. Supp.

Summ. J. at 6 (citing Snegg Depo. at 10:16-11:3; 12:12-14).)2 Newmont

is granted summary adjudication on SS&G’s CERCLA claim because SS&G

does not proffer evidence contradicting Snegg’s deposition testimony. 

(Snegg Depo. at 13:12-14.)3

B. Nevada City Hotel’s Claim for Cost Recovery

Newmont argues that Nevada City Hotel, a limited

partnership, (“NCH”) cannot seek joint and several liability from

Riebe because NCH is not an “innocent landowner” under CERCLA. 

Newmont contends that NCH is not an innocent landowner because it did

not conduct its own environmental site assessment when it purchased

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4 The principals of SS&G formed NCH to manage the

construction of a hotel at the Property. (Snegg Decl. ¶¶ 4, 13,

14.)

5 Newmont asserts in its reply brief that Riebe lacks

standing to argue that there are genuine issues of material fact

regarding NCH’s status as an innocent landowner under CERCLA. 

(Newmont’s Reply Br. at 4-5 (citing Lawrence v. Crawford, CIV 92-

05115143, 1995 WL 263873, at *2 (Conn. Super. 1995)).) However,

Riebe does not take a position adverse to Riebe’s interest or

contrary to its pleadings by conceding that there are genuine

issues of material fact concerning (1) whether is was reasonable

for NCH to rely on a Phase I Environmental Site Assessment

prepared for SS&G, or (2) whether H&K’s Phase I Environmental

Site Assessment was consistent with generally accepted and

customary standards.

4

the Property from SS&G in 2002. (Newmont’s Br. Supp. Summ. J. at 7.)4

To prevail, Newmont must show that it was unreasonable for NCH to rely

upon the 2000 Phase I Environmental Site Assessment (“Site

Assessment”) that Defendant Holdrege & Kull (“H&K”) prepared when SS&G

purchased the Property from Riebe. 42 U.S.C. § 9601(35)(B); SDP, Inc.

v. Watumull Props. Corp., No. CIV. 99-1703-AS, 2004 WL 1103023, at *7-

6 (D. Ore. 2004).5 Newmont relies on exculpatory language in H&K’s

2001 Geotechnical Engineering Report (“Geotechnical Report”) stating

that “[H&K’s] primary concern regarding the project site is the

presence of existing fill in areas of proposed improvements.” 

(Newmont Br. Supp. Summ. J. at 8; Newmont Reply Br. at 5-6 (citing

(Thayer Decl. Supp. Summ. J. ¶ 2, Exh. A at 6)).) However, this

portion of the Geotechnical Report discusses fill in the context of

compaction, not environmental contamination. (Thayer Decl. Supp.

Summ. J. ¶ 2, Exh. A at 6.) Indeed, “evaluating the project site for

the presence of hazardous materials” was not within the Geotechnical

Report’s scope of service. (Id. at 9.) Newmont offers no evidence to

refute the allegations in the Complaint that nothing occurred on the

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Property between the time SS&G acquired it in November 2000 and the

time NCH acquired the Property from SS&G in February 2002. (Compl. ¶

27; Snegg Decl. ¶ 18.) The lack of activity at the Property during

SS&G’s ownership, and the arguably inapposite concern raised in the

Geotechnical Report juxtaposed to the specific finding in the Site

Assessment, raise genuine issues of material fact as to whether NCH’s

reliance on the conclusions in the Site Assessment were reasonable.

Alternatively, Newmont argues that the Site Assessment did

not constitute “all appropriate inquiry” such that either SS&G or NCH

is an innocent landowner. 42 U.S.C. § 9601(35)(B). To support this

argument, Newmont notes that Plaintiffs seek damages against H&K in

this action for negligently conducting the Site Assessment. 

(Newmont’s Br. Supp. Summ. J. at 8 (citing Compl. ¶¶ 75-84).) Newmont

also points to the deposition testimony of Riebe’s expert, who

concludes that H&K deviated from generally accepted and customary

standards for the performance of due diligence for property

transactions when it prepared the Site Assessment. (Thayer Decl.

Supp. Summ. J. ¶ 4, Exh. C at 2-11.) However, H&K produced an expert

who concludes that “in performing the Environmental Site Assessment,

[H&K] exercised a level of care in accordance with generally accepted

and local standards of professional practice in effect at the time.” 

(Jermstad Disclosure & Report ¶ 6, Exh. A at 9.) Thus, there is a

genuine issue of material fact regarding the adequacy of the Site

Assessment that prevents Newmont from obtaining summary adjudication

on NCH’s status as an innocent landowner. See Dorn v. Burlington N.

Santa Fe R.R. Co., 397 F.3d 1183, 1196 (9th Cir. 2005).

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6

II. Newmont’s Liability under CERCLA

A. Arrangement for the Disposal of Hazardous Substances

Newmont asserts that it cannot be held liable under CERCLA

for the processing of sulphurets from the North Star and Empire Mines

(collectively “Mines”) because those sulphurets were “valuable

products,” rather than “waste materials.” (Newmont’s Br. Supp. Summ.

J. at 11.) Newmont’s expert describes the role of sulphurets from the

Mines:

In the early years of the operation of both the

Empire and North Star mills, the ore was roasted,

crushed in stamp mills, and subjected to

amalgamation, whereby the free gold in the ore

combined with mercury and was recovered as an

amalgam. This was heated; the mercury was

recovered for re-use by evaporation and

condensation, and the gold remained as the

valuable product. The sulphurets, which contained

about 20% of the gold in the ore, did not respond

to amalgamation, and were lost to the mill

tailings along with the waste minerals such as

quartz. In the early 1860's, several different

types of equipment were introduced to separate the

sulphurets from those tailings, culminating in the

application of the Frue vanner, which recovered a

sulphuret concentrate that contained about 65% of

that gold previously lost. That gold was

initially recovered by a custom chlorination

plant, and later, after the cyanidation process

was introduced into the mills, by recycling the

concentrate within the amalgamation and

cyanidation sections. In both cases, the recovery

of the sulphurets became an essential part of the

operation, and added to the revenues of the

companies.

(Thayer Decl. Supp. Summ. J. ¶ 6, Exh. E at 3.) Pioneer Reduction

Works (“PRW”), a chlorination plant, issued receipts from the late

1890's indicating that it purchased sulphurets from the “North Star

Mine” and the “Original Empire Mine.” (Thayer Decl. Supp. Summ. J.

¶ 5, Exh. D.)

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6 Although Newmont relies on 3550 Stevens Creek Assocs.

v. Barclays Bank of Cal., 915 F.2d 1355, 1361-62 (9th Cir. 1990),

that reliance is misplaced because Stevens Creek “‘involved

products that were produced as the producers’ principal business

products, not by-products that the producers had to get rid of.’” 

ASARCO, 24 F.3d at 1575 n. 6, quoted in Catellus Dev., 34 F.3d at

751.

7

Whether the Mines’ sale of sulphurets to the PRW constitutes

the arrangement for the disposal of hazardous substances depends on

whether “the substance had the characteristic of waste . . . at the

point at which it was delivered to another party.” Catellus Dev.

Corp. v. United States, 34 F.3d 748, 752 (9th Cir. 1994). “A byproduct of a metallurgical process, if sold, can be a product for

purposes of one and waste for purposes of the other.” Louisiana Pac.

v. ASARCO, Inc., 24 F.3d 1565, 1575 (9th Cir. 1994), cited in Catellus

Dev., 34 F.3d at 753. At the time the Mines sold the sulphurets to

PRW, the sulphurets “were lost to the mill tailings along with the

waste minerals such as quartz.” (Thayer Decl. Supp. Summ. J. ¶ 6,

Exh. E at 3.) Consequently, summary adjudication on the issue of

Newmont’s liability as an arranger for disposal of wastes is precluded

because a genuine issue of material facts exists as to whether the

sulphurets were wastes. Cf. ASARCO, 24 F.3d at 1575 (affirming a

district court finding that slag from a smelter was waste even though

the slag was sold to a timber company and put to productive use

because slag was a “by-product[] with a nominal commercial value,” and

“[the generator] wanted to get rid of” the slag).6

B. Causation

Newmont asserts that there is no evidence that sulphurets

processed at the PRW caused the contaminated (purple) soil at the

Property. (Newmont’s Br. Supp. Summ. J. at 11.) However, Riebe’s

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expert opines that the sulphurets processed at the PRW produced a

purple waste containing the hazardous substances found in the purple

soils at the Property. (Krasnoff Depo. 16:5-17:15; 18:3-6; 19:8-10.) 

Further, Riebe’s expert opines that the contaminated soil is located

beneath the fill. (Id. at 26:2-21; 27:4-15; 28:3-29:4.) Therefore,

there is a genuine issue of material fact regarding causation that

precludes granting summary judgment.

C. Disposal at the Property

Newmont argues that there is no evidence that the PRW

disposed of hazardous substances at the Property because the PRW’s

contamination of “the adjacent Property does not impose liability on

any party who allegedly disposed of or treated materials at the PRW.” 

(Newmont’s Br. Supp. Summ. J. at 12.) Alternatively, Newmont argues

that the PRW chlorination facility was located more than 100 yards

away from the Property in the 1890's when the Mines sold sulphurets to

the PRW, and that “Riebe[] has produced no evidence that the Mines

sold sulphurets to the PRW after [the PRW relocated to an area

adjacent to the Property].” (Id.) (emphasis in original). Newmont’s

first argument is unpersuasive because the Mines may be liable under

CERCLA as arrangers for disposal even if they did not have “continued

ownership or control of [the sulphurets].” Catellus Dev., 34 F.3d at

752.

Newmont’s second argument requires that an inference be

drawn in its favor: the PRW disposed of all waste material deriving

from the Mines’ sulphurets at a “waste dump” that existed north of the

former chlorination plant location. However, all reasonable

inferences must be drawn in favor of Riebe. Eastman Kodak Co. v.

Image Tech. Servs., Inc. 504 U.S. 451, 456 (1992). It is reasonable

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to infer that the Mines sold sulphurets to the PRW on more than the

two occasions documented by the receipts from the late 1890's because

“the recovery of the sulphurets became an essential part of the

operation, and added to the revenues of the [Mines].” (Thayer Decl.

¶ 6, Exh. E at 3.) Further, it is reasonable to infer that the PRW

disposed of wastes from the chlorination process near the Property,

because the chlorination works facility was relocated adjacent to the

Property after 1910. (Thayer Decl. ¶ 6, Exh. E at 2; Krasnoff Decl.

¶¶ 3-4, Exh. B at 3-4.) Newmont’s expert states that “there was no

reason to ship sulphuret concentrates after the addition in 1910 or

1911 of the cyanidation process at the two Empire mills.” (Thayer

Decl. ¶ 6, Exh. E at 2.) This statement is consistent with the

reasonable inference that Empire mine sold sulphurets to the PRW

sometime after the PRW relocated its plant to an area adjacent to the

Property. (Thayer Decl. ¶ 6, Exh. E at 2.)

D. Successor Liability

Newmont contends that it is not the successor in interest to

the Empire Mine Company (“Empire”) because Newmont merely purchased

Empire’s real and personal property. (Newmont’s Br. Supp. Summ. J. at

12-13.) Newmont supports this argument by proffering a 1929 agreement

that was purportedly entered into between “The Empire Mines” and

“Empire Star Mines Company, Limited.” (Thayer Decl. ¶ 9, Exh. H.) 

Under the terms of the agreement, “The Empire Mines” sells and conveys

to Newmont’s nominee “all of the real and personal property making up

what is commonly known as the ‘Empire Mine’ in the Grass Valley Mining

District.” (Id.) However, the copy of the agreement submitted with

Newmont’s motion was not executed by “The Empire Mines.” (Id.) 

Consequently, Newmont fails to show that Riebe lacks evidence to

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support its assertion that Newmont is the successor-in-interest to

Empire. Nissan Fire & Marine Ins. Co., Ltd. v. Fritz Cos., Inc., 210

F.3d 1099, 1106 (9th Cir. 2000).

III. Riebe’s State Law Claims for Nuisance and Trespass

Riebe does not dispute Newmont’s position that Riebe has no

standing to assert claims for nuisance and trespass against Newmont,

and therefore summary adjudication of those claims is granted in

Newmont’s favor. (Riebe’s Br. Opp’n Summ. J. at 2.)

CONCLUSION

In conclusion, Newmont’s motion for summary judgment on

Riebe’s claim under section 113 of CERCLA for contribution is denied. 

Newmont’s motion for summary adjudication on Riebe’s state law claims

for nuisance and trespass is granted. Newmont is granted summary

adjudication on SS&G’s CERCLA claim.

IT IS SO ORDERED.

Dated: August 19, 2005

/s/ Garland E. Burrell, Jr.

GARLAND E. BURRELL, JR.

United States District Judge

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