Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_03-cv-02646/USCOURTS-caed-2_03-cv-02646-1/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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IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

CHARLES H. LEWIS, et al.

Plaintiff, No. CIV-S-03-2646 WBS KJM (GGH)

vs.

 ORDER

ROBERT D. RUSSELL, et al.

Defendants.

___________________________________/

AND RELATED CROSS AND THIRD 

PARTY ACTIONS

___________________________________/

Introduction and Summary

As part of the settlement process order issued by the court on April 14, 2005, the

parties would be permitted to go outside the stay pending Phase I of the settlement process: “for

the purpose of limited discovery and filing motions on issues which are distinct from the facts per

se of hazardous substances (PCE) on the subject site(s), e.g., whether a simple creditor may be

held liable under CERCLA for the acts of the persons/entities loaned money or other resources.”

Order of April 14, 2005 at 6 (emphasis in original). The parties were not permitted to file motions

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which touched upon the relative responsibility of each party for the PCE contamination insofar as

a motion would involve the court in making determination on the who, what, when, and where of

contamination. Not permitting full scale motion practice was an important aspect of the

settlement process order in that attempting to settle over time a complicated environmental case,

which involves a good deal of time consuming scientific investigation, is nearly impossible if the

parties are also contesting in court the facts surrounding the scientific investigation or the relative

responsibility of the parties for the fact of contamination. Also, regardless of the distance between

a motion and the “facts per se of hazardous substances,” if the motion would engender a good bit

of discovery, it would have to be postponed until the completion of Phase I.

Discussion

Three parties have timely availed themselves of the opportunity to be dismissed

assertedly for reasons collateral to the contamination facts. 

The City of Davis seeks to have adjudicated its third party defense as set forth in

Lincoln Properties, Ltd. v. Higgins, 823 F. Supp. 1528, (E.D. Cal. 1992). Defendant Ben Newitt

seeks to be released because his sole, alleged involvement was as a creditor for certain machinery

alleged to be part of the contamination problem (as opposed to an owner or operator). Finally,

third party defendant Marie Whitcombe asserts that the parties suing her ( the Suhs) cannot do so

for a variety of reasons, but primarily because CERCLA does not allow a contribution defendant

to bring in another (third party) defendant for contribution purposes.

For the reasons that follow, the City of Davis may not file its motion until further

order of the court lifts the stay in this case. A “third party defense” in CERCLA actions will be

established when the party, here the City, asserting the defense establishes:

1) that a third party was the sole cause of the release of hazardous substance;

2) that the third party was not the [City’s] employee or agent;

3) that the act or omission of the third party causing the release did not occur in

connection with a contractual relationship, existing either directly or indirectly,

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with the [City];

4) that the [City] exercised due care with respect to the hazardous substance

concerned; and

5) that the [City] took precautions against foreseeable acts or omissions of the third

party. [citation omitted] The [City] must prove each of these elements by a

preponderance of the evidence. 

Id. at 1539.

The City of Davis has offered to assume for the purposes of its motion that PCE

leaked from its sewer pipes. This concession, made only for the purposes of a third party defense

motion, goes some distance in alleviating what the settlement process order sought to avoid. 

Nevertheless, Factors 4 and 5 touch upon facts related to the responsibility for the contamination. 

Much discovery would have to be accomplished with respect to what the City [concededly] knew

about the contamination, and when it knew it. Of course, the City would attempt to establish that

at the appropriate time frame, whatever that is, it actually knew nothing about the leak of PCE

from its sewer pipes, or what the other parties were doing. The City might well wind up

attempting to prove facts at odds with its concession here. At the very least, the other parties, or

some of them, would attempt to show that the City actually did understand that PCE

contamination was taking place, or, at the very least, should have known about the PCE

contamination, yet the City did nothing about it– in a timely fashion.

The undersigned finds that the court’s intention not to have a litigation about the

contamination facts, or responsibility therefore, proceed along with the Phase I settlement

investigation attempt would be frustrated by the City’s proposed motion. The factual controversy

surrounding the third party defense is closely enough related to the facts of contamination that no

motion is appropriately made at this time. Also, the court’s desire for only “limited” discovery

would be frustrated. The undersigned stresses that he is making no observation on the ultimate

merits of the third party defense– only that its timing is problematical given the settlement process

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order agreed to by all parties, including the City. 

The undersigned also denies the request of cross-defendant Newitt in filing his

motion to be relieved of liability in this case. Ben Newitt, while conceding for the purposes of

this motion only, that the dry cleaning machinery actually leaked PCE which caused

contamination, would attempt to show that he merely held a creditor’s status vis-a-vis the

machinery and the dry cleaner business as a whole, and thus could not be liable as a CERCLA

owner or operator. Newitt contends that he was simply assisting his brother in his brother’s

attempt to keep the brother’s dry cleaning business afloat. While Newitt’s motion may have great

merit if the facts showed that he were only a creditor, the other parties in this case would be

entitled to undertake a substantial amount of discovery to show that the actual business

arrangement acquired by Ben Newitt with respect to his brother’s dry cleaning business was much

more that of a partial owner than merely a creditor.

While Newitt may legitimately believe that he labors under the unwritten law of

“no good deed goes unpunished,” the fact is that CERCLA adopts the spirit of that unwritten law

in part. It would take quite a bit of discovery to demonstrate that Ben Newitt’s good deeds did

not, nevertheless, make him an “owner” or “operator.” The discovery which pushes past the 

“limited” discovery contemplated by the settlement process order is not just measured by Newitt’s

proposed discovery, but also by the discovery which would have to be permitted to oppose

Newitt’s contentions. Moreover, while the court clearly recognizes that being a party to a

litigation can be stressful, expensive, and one’s worst nightmare, Newitt’s status as a non-paying

party with respect to Phase I activities renders the prejudice from postponing Newitt’s motion less

than it might otherwise be.

Finally, third party contribution defendant Marie Whitcombe, who has only been

sued by the Suhs seeks to be excused from this lawsuit on account of her contention that she

cannot be haled into court as a third party cross-defendant, citing City of Merced, et al. v. R. A.

Fields, et al., 997 F. Supp. 1326 (E.D. Cal. 1998). Whitcombe also advances murkier arguments

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that she cannot be a valid party under state law for claims based on state law. Whitcombe asserts

that she needs only a limited amount of discovery from certain other parties to this action, but

ignores the seemingly substantial amount of discovery that the Suhs would be entitled to make on

the point of the “fair and equitable share” of the response costs incurred thus far, or to be incurred. 

This discovery, which the Suhs would be entitled to take, assuming for the moment the validity of

their claims against Whitcombe, also appears to run head long into the court’s prohibition of such

discovery for purposes of the settlement process order.

The court will permit Whitcombe to make her motion within thirty days of the filed

date of this order, but only on the basis of a motion to dismiss. That is, Whitcombe will have to

assume the truth of the factual averments in the Suhs’ third party complaint against her, and seek

dismissal as a matter of law nonetheless. The undersigned’s permitting Whitcombe to make her

Fed.R.Civ.Pro 12(b)(6) motion is again no observation on the merits of her motion. If Whitcombe

determines that a motion to dismiss cannot be made, any final dispositive motion on the merits

will have to await the lifting of the Phase I stay.

Conclusion

Accordingly, the requests of defendants City of Davis and Ben Newitt to file

dispositive motions pursuant to the settlement process order are denied. The request of third party

defendant Marie Whitcombe to file a dispositive motion is granted in part; she may file a Rule

12(b) (6) motion within thirty days of the filed date of this order. 

IT IS SO ORDERED

DATED: June 28, 2005

/s/ Gregory G. Hollows

GREGORY G. HOLLOWS

UNITED STATES MAGISTRATE JUDGE

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