Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_06-cv-00213/USCOURTS-casd-3_06-cv-00213-1/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 42:6901 Resource &amp; Recovery Act

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

NORTH COUNTY TRANSIT DISTRICT, a

public agency transportation district,

Plaintiff,

CASE NO. 06cv0213 DMS (BLM)

ORDER (1) GRANTING-IN-PART

AND DENYING-IN-PART

DEFENDANTS’ MOTIONS TO

DISMISS AND (2) GRANTING

MOTION TO STRIKE

[Doc. No. 52]

vs.

ATLANTIC RICHFIELD COMPANY, a

Delaware corporation; BP AMERICAN,

INC., a Delaware corporation; FRENCH

AMERICAN INVESTORS, INC., dba 7

DAY TIRE AND BRAKE, a California

corporation; SAMUEL E. WILLIAMSON,

individually; MARCIA D. WILLIAMSON,

individually; TEXACO, INC., a Delaware

corporation; FIRST SAN DIEGO

PROPERTIES XI, a California limited

liability company or limited partnership;

FRANK B. RAMOS, individually; 2719

LTD., a California limited partnership; and

DOES 7-50, inclusive,

Defendants.

This matter comes before the Court on Defendants’ motions to dismiss and motion to strike,

pursuant to Federal Rules of Civil Procedure 12(b)(6) and 12(f), respectively. All defendants filed

motions to dismiss. Defendant Texaco, Inc. (“Texaco”), joined by Defendants Atlantic Richfield

Company (“ARCO”), BP American, Inc. (“BP”), also filed a motion to strike. Plaintiff has filed its

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oppositions, and Defendants have filed their replies. The motions were heard on September 22, 2006,

at which time all parties were represented by counsel. For the reasons discussed below, the Court

grants-in-part and denies-in-part Defendants’ motions to dismiss, and grants Defendants’ motion to

strike. 

I.

BACKGROUND

The following facts derive from the Second Amended Complaint (“SAC”). Plaintiff, North

Country Transit District (“NCTD”), is a public agency transportation district. (SAC, ¶ 30.)

Defendants, ARCO, BP, French American Investors, Inc. dba 7 Day Tire And Brake (“French

American”), Samuel E. Williamson and Marcia D. Williamson (the “Williams”), Texaco, First San

Diego Properties XI (“FSDP”), and Frank B. Ramos (“Ramos”), are current and previous owners and

occupants of the allegedly contaminated land at issue. (SAC, ¶¶ 16-29.)

Plaintiff is in charge of a construction project to build a passenger rail system connecting

Oceanside to Escondido, California, known as the “Sprinter” project. (SAC, ¶¶ 30-32.) Plaintiff owns

the property on which it plans to build the passenger train station (“Property”). (SAC, ¶ 1.) The

Property is located in Escondido, on the west side of Crouch Street, south of Oceanside Boulevard,

and adjacent to Loma Alta Creek. Id. In addition to building the train station, Plaintiff plans to widen

the existing Crouch Street Bridge over Loma Alta Creek, and re-line Loma Alta Creek by removing

the existing concrete creek bottom lining and constructing a box culvert with transition structures and

energy dissipaters underneath the Sprinter’s rail’s tracks. (SAC, ¶ 32.) 

Defendants are current and prior owners and occupants of two parcels of land in the vicinity

of the Property. (SAC, ¶¶ 16-29.) ARCO and its parent company BP own and operate a gas station

and a convenience store on the northwest corner of Oceanside Boulevard and Crouch Street, at 1900

Oceanside Boulevard. (SAC, ¶ 16.) The remaining Defendants – the Williamsons, Texaco, FSDP,

French American, 2719 Ltd. and Ramos – are either current or previous owners and occupants of the

second parcel of land, located on the southeast corner of Oceanside Boulevard and Crouch Street, at

2001 Oceanside Boulevard. (SAC, ¶¶ 23-29.) During the relevant time period, the second parcel of

land was first occupied by the Williamsons and Texaco. (SAC, ¶ 24.) Although it is unclear from the

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SAC the extent and length of each defendant’s ownership interest, the land was owned and occupied

by FSDP and Ramos by June 1988. (SAC, ¶ 25.) After purchasing the gas station from Texaco and

the Williamsons, Ramos turned the gas station into 7 Day Tire & Brake, a gas station and automobile

service station. (SAC, ¶ 7.) At some later point, French American purchased 7 Day Tire & Brake

from Ramos and has been operating the premises ever since through a leasehold from 2917 LTD.

(SAC, ¶¶ 8-9.)

The SAC further alleges the ground beneath Defendants’ premises is contaminated with

hazardous substances, petroleum products and other toxic chemicals. (SAC, ¶ 34.) Plaintiff alleges

that each defendant allowed “hazardous substances, including, but not limited to, petroleum based

products, chlorinated solvents, pesticides, and other chemicals, to enter into the groundwater supply

and soils at and surrounding their respective property.” (SAC, ¶ 15.) Specifically, Defendants

allegedly allowed multiple spills of petroleum based products and other hazardous substances to occur

on their premises, thus creating a hydrocarbon plume filled with other hazardous substances

underneath their property. (SAC, ¶¶ 16, 29.) The SAC alleges that the hazardous substances released

by Defendants have moved offsite and down-gradient onto Plaintiff’s Property. (SAC, ¶¶ 22, 29.)

Plaintiff alleges it will encounter, during the construction of project Sprinter, hazardous

substances and petroleum impacted soil and groundwater created by Defendants’ plumes. (SAC, ¶

34.) According to Plaintiff, “remediation must occur prior to or concurrently with the Project to

protect human health and the environment. Substantial remediation costs associated with the

dewatering discharge and/or suitable removal and disposal of contaminated soils and water will occur

during” the project. Id. Plaintiff claims it “has been forced to undertake a clean up of its Property

including, but not limited to soil and groundwater,” and “has expended substantial sums in retaining

the contractors who have performed the required remediation.” Id. 

The SAC asserts eleven claims for relief, each against all defendants. Defendants ARCO and

BP, joined by all other defendants, move to dismiss: (1) the second claim for relief for violation of

the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42

U.S.C. § 9601 et seq.; (2) the fifth claim for relief for unjust enrichment; and (3) the sixth claim for

relief for equitable indemnity and contribution. ARCO and BP, joined by Texaco, French American

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1

 Defendants FSDP, 2719 Ltd. and the Williams do not join ARCO/BP’s request to dismiss the

third claim for relief, reasoning that claim is more appropriately addressed in a summary judgment

motion. (FSDP Joinder, at 3.) 

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and Ramos, also seek dismissal of Plaintiff’s third claim for relief for violation of the California

Hazardous Substances Account Act (HSAA), California Health and Safety Code § 25300 et seq.

1

Texaco, joined by ARCO and BP, moves to dismiss the fourth claim for relief for reimbursement for

costs of abatement under California Water Code § 13304, and the seventh claim for relief for

negligence. ARCO and BP also join Texaco’s motion to strike Plaintiff’s requests for attorney’s fees

for eight of Plaintiff’s eleven claims for relief. 

II. 

MOTION TO DISMISS

A. LEGAL STANDARD

A Rule 12(b)(6) motion tests the legal sufficiency of a claim. Navarro v. Block, 250 F.3d 729,

732 (9th Cir. 2001). A claim may be dismissed only if “it appears beyond doubt that the plaintiff can

prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355

U.S. 41, 45-46 (1957). See also Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 338 (9th Cir. 1996). In

deciding a 12(b)(6) motion, all material factual allegations of the complaint are accepted as true, as

well as all reasonable inferences to be drawn from them. Cahill, 80 F.3d at 338. Dismissal is proper

only where there is no cognizable legal theory or an absence of sufficient facts alleged to support a

cognizable legal theory. Navarro, 250 F.3d at 732 (citing Balistreri v. Pacifica Police Dep’t, 901 F.2d

696, 699 (9th Cir. 1988)). 

The court, however, need not accept all conclusory allegations as true; rather, it must “examine

whether conclusory allegations follow from the description of facts as alleged by the plaintiff.”

Holden v. Hagopian, 978 F.2d 1115, 1121 (9th Cir. 1992) (citation omitted). See also Benson v.

Arizona State Bd. of Dental Examiners, 673 F.2d 272, 275-76 (9th Cir. 1982) (court need not accept

conclusory legal assertions); Sherman v. Yakahi, 549 F.2d 1287, 1290 (9th Cir. 1977) (“Conclusory

allegations, unsupported by facts, [will be] rejected as insufficient to state a claim under the Civil

Rights Act.”); accord Swanson v. Bixler, 750 F.2d 810, 813 (10th Cir. 1984) (“All well-pleaded facts,

as distinguished from conclusory allegations, must be taken as true.”). “The plaintiff must allege with

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at least some degree of particularity overt acts which defendants engaged in that support the plaintiff’s

claim.” Jones v. Cmty. Redevelopment Agency, 733 F.2d 646, 649 (9th Cir. 1984).

B. DISCUSSION

1. Second Claim for Relief: CERCLA 

Defendants argue that Plaintiff has failed to allege sufficient facts to establish under CERCLA

either a third-party defense or an offshoot of that defense – the “innocent landowner” defense.

Plaintiff argues it has sufficiently alleged an “innocent landowner” defense.

Under CERCLA’s liability scheme, current landowners are presumed to be potentially

responsible parties (“PRPs”) and thus, may bring a claim for cost recovery under § 107(a) only if they

establish one of three affirmative defenses: that the contamination was caused by (1) an act of war,

(2) an act of god, or (3) by a third party. 42 U.S.C. § 9607(b)(1)-(3); see also Lincoln Properties, Ltd.

v. Higgins, 823 F. Supp. 1528, 1533 (E.D. Cal. 1992). The third affirmative defense, that of a “third

party” causing contamination, is at issue here. To state such a defense, a plaintiff must show that: (1)

the third party acted outside a direct or indirect contractual relationship with plaintiff; (2) plaintiff

exercised due care with regard to the hazardous substances; and (3) plaintiff took precautions against

foreseeable acts or omissions of any such third party and their consequences. See 42 U.S.C. §

9607(b)(3); see also Lincoln Properties, 823 F. Supp. at 1539. The defense is unavailable “if the third

party had a direct or indirect contractual relationship with the owner, and the contamination occurred

in the course of that relationship.” Bedford Affiliates v. Sills, 156 F.3d 416, 425 (2nd Cir. 1998)

Congress supplemented the third party defense in 1986, when it passed the Superfund

Amendments and Reauthorization Act (“SARA”). SARA expanded the third-party defense to include

purchasers who acquire property under the following circumstances:

[t]he real property . . . was acquired by the defendant after the disposal . . . of the

hazardous substance . . ., and one or more of the circumstances described in clause (i),

(ii), or (iii) is also established . . .:

(i) At the time the defendant acquired the facility the defendant did not know

and had no reason to know that any hazardous substance . . . was disposed of on, in,

or at the facility;

(ii) The defendant is a government entity which acquired the facility by escheat,

or through any other involuntary transfer or acquisition, or through the exercise of

eminent domain authority by purchase or condemnation;

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(iii) The defendant acquired the facility by inheritance or bequest.

 42 U.S.C. § 9601(35)(A)(emphasis added). The “innocent landowner” defense emerges from this

definition. That is, a PRP landowner may escape liability when it acquires property “after” hazardous

substances have already been disposed on the property, “and one or more” of the enumerated

circumstances above exists (e.g., the PRP is a governmental entity that acquired the property through

eminent domain). See, e.g., Bedford Affiliates, 156 F.3d at 425. Before SARA, a PRP landowner who

purchased the site from a liable third party could not invoke the third-party defense because of the

“contractual relationship” limitation. See 42 U.S.C. § 9607(b)(3). Thus, two potential affirmative

defenses may be available to Plaintiff: the third party defense, and the innocent landowner defense.

Plaintiff contends it is an innocent landowner under §101(35)(A)(ii) because it acquired the

Property through eminent domain after the disposal of hazardous substances. Plaintiff argues “the

Complaint makes clear that NCTD did not acquire property through the ordinary commercial manner.”

(Opposition at 3.) Plaintiff requests that the Court take judicial notice of the Purchase Agreement

between it and the seller of the Property, which indicates that Plaintiff and the seller “entered into

negotiations for sale of the Property to [Plaintiff] under [Plaintiff’s] threat to condemn the Property.”

(Id. at 4.) 

The Court, however, may not take judicial notice of facts recited in a contract. See Fed. R.

Evid. 201; Carroll v. Commonwealth Edison, Co., 1997 WL 428528, *3 (N.D. Ill. 1997) (court cannot

take judicial notice of terms of contract). While the Court may take judicial notice of the existence

of a contract, it may not take notice of the contents or terms of the contract. The Court, therefore,

declines to take judicial notice of the terms of the subject Purchase Agreement. Because the SAC is

silent regarding the manner and circumstances in which Plaintiff acquired the Property, Plaintiff has

not sufficiently stated facts to establish an innocent landowner defense under § 101(35)(A)(ii). 

In addition, the SAC fails to allege sufficient facts to establish a “third party” defense. While

Plaintiff alleges that it “did not cause or contribute to the contamination at its property or at”

Defendants’ premises, (SAC ¶ 65); that Defendants are responsible for the contamination, (id.); that

scientific testing and studies “confirm[] that the Property is polluted with petroleum based products,

chlorinated solvents, pesticides, and other chemicals,”(SAC, ¶ 34); that Plaintiff “will encounter

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hazardous substances and petroleum impacted soil and groundwater,” (id.); and that “remediation must

occur prior to or concurrently with the Project to protect human health and the environment,” (id.);

these allegations, taken together, are not sufficient to establish a third party defense. It is unclear, for

example, whether or not Plaintiff had a contractual relationship with any defendant. It is also unclear

whether or not scientific testing and studies were done by Plaintiff after it purchased the Property or

by the previous owner. 

The second claim for relief is therefore dismissed with leave to amend. Plaintiff may attempt

to allege facts giving rise to either an innocent landowner defense or a third party defense, or both.

2. Third Claim for Relief: HSAA, California Health and Safety Code § 25300 et seq.

Defendants contend under both CERCLA and California’s HSAA, Plaintiff cannot recover

costs incurred for addressing petroleum product contamination. Defendants cite several cases for the

proposition that courts have dismissed CERCLA and/or HSAA claims where a complaint

demonstrates on its face that the hazardous substance is a petroleum product. (ARCO/BP Mot. P &

A at 10.) Defendants argue the SAC “makes only bare, boilerplate allegations of non-petroleum

contamination,” and “fails to allege any actual facts in support of its allegations as to other hazardous

substances.” (Id. at 10-11.) In response, Plaintiff acknowledges that petroleum is excluded from

coverage under both CERCLA and HSAA, but points out that the SAC alleges the Property was

contaminated by numerous substances in addition to petroleum, including chlorinated solvents,

pesticides and other chemicals. (Opposition at 8-9.) 

The SAC specifically alleges the Property is contaminated by petroleum-based products, in

addition to “chlorinated solvents, pesticides and other chemicals.” (SAC, ¶ 34.) The Court must

accept as true Plaintiff’s allegation that the Property is contaminated with these non-petroleum based

chemicals. See Pareto v. F.D.I.C., 139 F.3d 696, 699 (9th Cir. 1998) (on a 12(b)(6) motion the court

must accept as true all material allegations in the complaint, as well as reasonable inferences to be

drawn from them).

Defendants argue that case law prohibits Plaintiff from avoiding “the petroleum exclusion by

dropping a few extra non-committal words into an allegation.” (ARCO/BP Reply at 6.) Defendants

contend that the SAC includes “long descriptions of alleged petroleum contamination followed by

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vague, conclusionary and boilerplate riders like ‘and other contamination.’” In support, Defendants

cite Wilshire Westwood, 881 F.2d at 801, and Bunger v. Hartman, 797 F. Supp. 968 (S.D. Fla. 1992).

These cases, however, are factually distinguishable. In both, the plaintiffs merely asserted that the

contamination was caused by “hazardous substances including, but not limited to,” petroleum

(Wilshire, 881F.2d at 802), and “other products” (Bunger, 797 F. Supp. at 969). Here, in contrast,

Plaintiff specifically alleges that the other contaminants include chlorinated solvents and pesticides.

Such allegation are sufficient at this stage of the proceedings.

3. Fourth Claim for Relief: Reimbursement for Costs of Abatement, California

Water Code § 13304 

Defendant Texaco contends Plaintiff lacks standing to sue under the California Water Code

because “neither the language of the statute nor any legislative history supports a private right of

action.” (Texaco Mot. P & A at 3.) Rather, section 13304 allows only the California State Water

Resources Control Board or a Regional Water Quality Control Board (“Regional Board”) to issue a

cleanup order. Id. In response, Plaintiff argues that section 13304(c)(1) provides that “any

governmental agency may recover its response costs for cleaning up waste.” (Opposition at 14-15.)

No California court has addressed whether section 13304 confers a private right of action. In

the absence of California Supreme Court authority, a federal court must predict how a state’s highest

court would decide the issue. See Strother v. S. Cal. Permanente Med. Group, 79 F.3d 859, 865 (9th

Cir. 1996). The starting point of this inquiry begins with the statute’s plain language. See Slaven v.

BP America, Inc., 973 F.2d 1468, 1471 (9th Cir. 1992). Where the words of the statute are

unambiguous, the inquiry is complete. Connecticut National Bank v. Germain, 503 U.S. 249, 254

(1992). The language of the statute may also be examined in light of the “overall structure and

purpose of the legislation.” Slaven, 973 F.2d at 1473.

A careful review of the statutory scheme in question suggests no private right of action exists

under section 13304. Chapter 1 of the Porter-Cologne Water Quality Control Act (Wat. Code, §

13000 et seq.) (the “Act”), which sets out the Legislature’s objectives in enacting the statute, provides:

It is the intent of the Legislature that a state board and each regional board shall be

the principal state agencies with primary responsibility for the coordination and

control of water quality. The state board and regional boards in exercising any power

granted in this division [Division 7 of the Porter-Cologne Act] shall conform to and

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implement the policies of this chapter and shall, at all times, coordinate their respective

activities so as to achieve a unified and effective water quality control program in this

state.

California Water Code § 13001 (emphasis added). 

Section 13304 is found in Chapter 5, Article 1 of the Act, which is titled “Administrative

Enforcement and Remedies by Regional Boards.” (Emphasis added.) Section 13304(a) provides:

“any person . . . which has caused . . . any waste to be discharged . . . into the waters of the state” must

clean up the waste or abate the effects of the waste. Cal. Water Code § 13304(a). Additionally,

section 13304(b)(1) provides that “[t]he regional board may expend available money to perform any

cleanup,” and that “[t]he regional board may perform the work itself, or with the cooperation of any

other governmental agency.” Cal. Water Code § 13304(b)(1)-(2) (emphasis added). Section

13304(c)(1), the subsection cited by Plaintiff to support its argument, provides: 

[I]f the waste is cleaned up or the effects of the waste are abated, or, in the case of

threatened pollution or nuisance, other necessary remedial action is taken by any

governmental agency, the person or persons who discharged the waste . . . are liable

to that governmental agency to the extent of the reasonable costs actually incurred in

cleaning up the waste . . . . The amount of the costs is recoverable in a civil action by,

and paid to, the governmental agency and the state board to the extent of the latter’s

contribution to the cleanup costs.

Cal. Water Code § 13304(c)(1) (emphasis added). Accordingly, the statutory scheme when read in

context, provides: (1) the Regional Board may order a party to clean up waste discharged by that party

(§ 13304(a)); (2) the Regional Board may perform the cleanup itself and then seek reimbursement

from the liable party (§ 13304(b)(1) &(4) or (3) the Regional Board may perform the work in

cooperation with another governmental agency (§ 13304(b)(2)), in which case the costs are

recoverable in a civil action brought by the governmental agency and state board. Cal. Water Code

§ 13304(c)(1). The language and structure of the statute make clear that the Regional Board alone,

or in cooperation with another governmental agency, may enforce § 13304. Nowhere does the statute

authorize a governmental agency, other than the state and regional water boards, to act alone.

Plaintiff’s reading of the statute ignores both subsections (a) and (b) of § 13304, and focuses

only on subsection (c)(1). Such selective reading of the statute is inappropriate. See Slaven, 973 F.2d

at 1473 (the language of the statute must be examined in light of the “overall structure and purpose

of the legislation.”) Moreover, subsection (c)(1), even when read in isolation, does not support

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2

 The term “private right of action” has been used by the parties in their briefing and is

commonly used in case law. To the extent Plaintiff is a public agency transportation district (SAC,

¶ 30), the terminology is somewhat awkward. Nevertheless, the issue behind the term as discussed

in the case law referenced above, applies to the present case. That is, does the statute either expressly

or implicitly grant a right of action to the party seeking legal redress under that statute? The legal

analysis remains the same regardless whether the party is a private individual or entity or a public one.

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Plaintiff’s argument. While subsection (c)(1) appears to create a right in favor of governmental

agencies to recover cleanup costs in conjunction with authorized state agencies (i.e., state and regional

water boards), it does not create a private remedy authorizing such governmental agencies to act alone.

See Vikco Ins. Servs., Inc. v. Ohio Indem. Co., 70 Cal. App. 4th 55, 62-63 (1999) (when the “legislature

intends to create a private right of action, it will do so ‘directly and in clear, understandable,

unmistakable terms.’”). A plaintiff may not sue under a statute unless the statute “displays an intent

to create not just a private right but also a private remedy.” Alexander v. Sandoval, 532 U.S. 275, 286

(2001). Thus, while the statute in question appears to create a right of recovery in favor of

governmental agencies, whether the legislature intended additionally that the statute could be enforced

solely through private litigation without involvement of a designated water board is a different

question.2

 See Transamerica Mortgage Advisors, Inc. V. Lewis, 444 U.S. 11, 18 (1979)(“whether

Congress intended additionally that provisions would be enforced through private litigation is a

different question.”) Without both a private right and remedy, “a cause of action does not exist and

courts may not create one, no matter how desirable that might be as a policy matter, or how compatible

with the statute.” Sandoval, 532 U.S. at 286-87. 

So. California Water Co. v. Aerojet-General Corp., 2003 U.S. Dist. LEXIS 26534 (C.D. Cal.

2003), on which Plaintiff relies, does not assist Plaintiff. That case does not hold that § 13304

provides a private right of action. There, the plaintiff brought suit for violation of California Business

and Professions Code section 17200 predicated on alleged violations of, among other provisions,

California Water Code §§ 13304 and 13350. Id. at *38. The defendant argued the court should

dismiss the claim because there is no private right of action under §§ 13304 and 13350. Id. at * 37.

The court disagreed, reasoning “whether a private right of action should be implied under [the

predicate] statute . . . is immaterial since any unlawful business practice may be redressed by a private

action charging unfair competition in violation of” section 17200. Id. at *41 (citing Stop Youth

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Addiction, Inc. v. Lucky Stores, Inc., 17 Cal.4th 553, 562 (1998)). So. California Water Co., therefore,

does not assist Plaintiff because it does not hold that § 13304 provides a private right of action.

4. Fifth Claim for Relief: Unjust Enrichment

Defendants contend Plaintiff’s claim for unjust enrichment fails because Plaintiff either

voluntarily cleaned up the contamination or did so pursuant to government order. (ARCO/BP Mot.

P & A at 11-12.) Therefore, it cannot be said that Plaintiff unjustly enriched Defendants by satisfying

its own legal duty. The Court agrees. 

To state a claim for unjust enrichment under California law, the benefits must be conferred “by

mistake, fraud, coercion, or request; otherwise, though there is enrichment, it is not unjust.” Witkin,

Contracts, §1020 at 1109 (emphasis in original). “[W]here the plaintiff acts in performance of his or

her own duty or in protection or improvement of the plaintiff’s own property, any incidental benefit

conferred on the defendant is not unjust.” Id. 

Here, assuming arguendo that Plaintiff’s cleanup of the contamination benefitted Defendants,

it is clear that the benefit was not conferred by “mistake, fraud, coercion, or request,” on the part of

Defendants. The SAC alleges that Plaintiff cleaned up its Property “in connection with the

construction of the Sprinter . . . .” (SAC, ¶ 35.) Plaintiff also alleges that “remediation must occur

prior to or concurrently with the Project to protect human health and the environment.” (SAC, ¶ 34.)

Therefore, it is clear that Plaintiff’s remediation activities occurred voluntarily, and not by mistake,

fraud, coercion, or at Defendants’ request. 

Plaintiff contends restitution is an appropriate remedy here, because “defendants are not simply

innocent parties who will incidentally benefit” from Plaintiff’s conduct. Rather, “[Defendants] are

the very parties responsible for causing the contamination” that Plaintiff had to clean up. Plaintiff’s

focus on Defendants’ potential liability is unavailing. California law requires Plaintiff to allege that

Defendants unjustly benefitted from Plaintiff’s conduct, as a result of “mistake, fraud, coercion or

request.” Without such an allegation, even if Defendants are found liable for the contamination,

Plaintiff may recover from Defendants through other legal theories, but not through an equitable claim

of unjust enrichment. The three cases cited by Plaintiff, 55 Motor Co. v. Liberty Indus. Finishing

Corp., 885 F. Supp. 410, 424 (E.D. N.Y. 1994), State of New York v. Schenectady Chemicals, Inc.,

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103 A.D. 2d 33, 38-39 (Sup. Ct. App. Div. 1984), and Wyandotte Transp. Co. v. United States, 389

U.S. 191, 204-05 (1967), are unhelpful because they do not apply California law. Therefore,

Plaintiff’s fifth claim for unjust enrichment is dismissed with prejudice.

5. Sixth Claim for Relief: Equitable Indemnity and Contribution 

“Indemnity generally arises where one party must make good a loss or damage incurred by

another.” Selma Pressure Treating Co. Inc., v. Osmose Wood Preserving Company of America, Inc.,

221 Cal.App.3d 1601, 1611 (1990). The elements of a cause of action for indemnity are: (1) a

showing of fault on the part of the indemnitor, and (2) resulting damages to the indemnitee for which

the indemnitor is contractually or equitably responsible. Expressions at Rancho Niguel Ass. v.

Ahamnson Developments, Inc., 86 Cal.App.4th 1135, 1139 (2001). 

Defendants argue the second element – “resulting damages” – is absent. A prerequisite for

equitable indemnity is “an actual monetary loss through payment of a judgment or settlement.” (Mot.

P & A at 13) (citing Christian v. County of Los Angeles, 176 Cal.App.3d 466, 471 (1986). Defendants

point out that Plaintiff has not alleged it is a party to “any adverse judgment or settlement, or even an

adverse lawsuit.” (Mot. P & A at 14.) In essence, Defendants argue that the costs incurred by Plaintiff

are not the type of damages cognizable in an equitable indemnity claim, because Plaintiff has not

incurred any financial obligations to third parties as a result of a settlement or judgment. 

While the California Supreme Court has declared that a claim for indemnity does not accrue

until the indemnitee suffers loss through payment of an adverse judgment or settlement (Valley Circle

Estates v. VTN Consolidated, Inc., 33 Cal.3d 604, 611 (1983)), it has not directly examined the

question at issue: whether the resulting damages must arise from a financial obligation to a third party

as a result of a judgment or settlement, or whether any damage is adequate as long as the indemnitee

suffers a loss?

City of San Diego v. United States Gypsum Co., 30 Cal.App.4th 575 (1994), is instructive.

There, the plaintiff City of San Diego claimed “it was entitled to equitable indemnification from

defendants in abating asbestos in city buildings.” Id. at 587. The City had not been sued by anyone

for the presence of asbestos in city buildings. Id. The trial court granted the defendants summary

judgment on the City’s equitable indemnity claim, and the Court of Appeal affirmed. Id. The

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appellate court reasoned, among other things, that the “City has not incurred damages for payments

to any third party in settlement of a claim or in satisfaction of a judgment.” Id. Similarly, the SAC

here indicates Plaintiff voluntarily cleaned up the contamination on its Property. Nowhere in the SAC

does Plaintiff allege it incurred damages through payment to a third party. Like the court in Gypsum,

this Court concludes Plaintiff has not sufficiently pled a valid claim for indemnity.

Plaintiff cites Mangini v. Aerojet-General Corp., 230 Cal.App.3d 1125 (1991), and Selma

Pressure Treating, supra, 221 Cal. App. 3d 1602, for the proposition that an equitable indemnity claim

is properly stated where the plaintiff has been ordered to clean up the contamination. Plaintiff then

argues it “has been forced to undertake a clean up of its property” as part of the project requirements

for constructing the Sprinter. (Opposition at 12.) Mangini and Selma Pressure Treating, however,

do not support Plaintiff’s argument. In both, the plaintiffs were subject to an order to clean up the

contamination on their property. Here, as is in Gypsum, Plaintiff “was under no such requirement”

and has “suffered no financial losses to third parties.” 30 Cal.App.4th at 589. Notably, Plaintiff’s

opposition does not claim that it was subject to such an order. The SAC alleges that Plaintiff

undertook the remediation on its own, and not as a result of an order. Therefore, Plaintiff has failed

to state a claim for equitable indemnity. The SAC is dismissed with prejudice.

6. Seventh Claim for Relief: Negligence

Defendant Texaco argues Plaintiff’s negligence claim is barred by the three-year statute of

limitations because Texaco’s ownership of the contaminated property, as alleged in the SAC, ended

at the latest in June 1988. (Texaco Mot. P & A at 5.) Texaco also contends Plaintiff may not rely on

the discovery rule – which states that a tort of action may not accrue until a plaintiff discovers or

should have discovered the facts essential to its claim for relief – because it has not alleged sufficient

facts. (Id. at 6.) In response, Plaintiff asserts that whether the equitable tolling doctrine applies is a

fact-intensive inquiry inappropriate for a rule 12(b)(6) motion. Plaintiff asserts that the SAC satisfies

the federal notice pleading standard even though it does not disclose when Plaintiff became aware of

the contamination. 

California law provides that to invoke the benefit of the discovery rule, a plaintiff “must plead

facts to show his or her inability to have discovered the necessary information earlier despite

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reasonable diligence.” Fox v. Ethicon Endo-Surgery, Inc., 35 Cal.4th 797, 815 (2005). Although the

heightened pleading standard of the discovery rule seems to conflict with the liberal federal notice

pleading standard, the Ninth Circuit has unequivocally held that in order to rely on a defense to a

statute of limitations challenge provided by state law, a plaintiff must meet the pleading requirements

of that state law. Cal. Sansome Co. v. U.S. Gypsum, 55 F.3d 1402, 1407 (9th Cir. 1995).

Plaintiff cannot save its claim for relief by invoking the liberal notice pleading standard.

Instead, Plaintiff must allege adequate facts showing its “inability to have discovered the necessary

information earlier despite reasonable diligence.” Id. Plaintiff’s claim for negligence against Texaco

is therefore dismissed without prejudice. 

III. 

MOTION TO STRIKE

Federal Rule of Civil Procedure 12(f) provides that a court “may order stricken from any

pleading . . . any redundant, immaterial, impertinent, or scandalous matter.” “[T]he function of a 12(f)

motion to strike is to avoid the expenditure of time and money that must arise from litigating spurious

issues by dispensing with those issues prior to trial . . . .” Sidney-Vinstein v. A.H. Robins Co., 697

F.2d 880, 885 (9th Cir. 1983). “‘Immaterial’ matter is that which has no essential or important

relationship to the claim for relief or the defenses being pleaded.” 5 Charles A. Wright & Arthur R.

Miller, Federal Practice and Procedure § 1382, at 706-7 (1990). “‘Impertinent’ matter consists of

statements that do not pertain, and are not necessary, to the issues in question.” Id. at 711.

Texaco, joined by ARCO and BP, moves to dismiss Plaintiff’s requests for attorney’s fees for

the second claim for relief (a violation of CERCLA) and all state law claims (third through ninth).

Plaintiff opposes the motion only insofar as it seeks to strike Plaintiff’s request for fees under the

second claim for relief. In essence, Plaintiff concedes that its requests for fees under the state law

claims are improper. Therefore, Texaco’s motion to strike Plaintiff’s fee requests is granted as to the

state law claims.

With regard to the CERCLA claim, Plaintiff points out that although attorney’s fees are not

ordinarily recoverable, certain specified costs – that might include such fees – are recoverable.

(Opposition to Mot. Strike at 1.) In support, Plaintiff cites Key Tronic Corp. v. United States, 511 U.S.

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 This Court indicated at oral argument that it would defer setting trial dates until all PRPs

have been served and have entered their appearance. After further consideration, the Court concludes

the interests of justice are better served by setting trial dates sooner rather than later. It is uncertain

whether additional PRPs will be added. If additional PRPs are added by Plaintiff or Defendants, such

PRPs may move to amend the scheduling order for good cause shown.

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809, 819-20 (1994), which holds that while litigation-related fees are not recoverable, legal fees

incurred from “work that is closely tied to the actual cleanup may constitute a necessary cost of

response” under section 107(a)(4)(B) and may be recoverable. In its reply, Texaco requests that the

Court strike Plaintiff’s fee request to the extent it seeks litigation-related attorney’s fees. Because

Plaintiff acknowledges that CERCLA does not provide for such fees, this Court grants Defendants’

motion to strike Plaintiff’s request for litigation-related fees under CERCLA. Plaintiff, however, may

recover fees under this claim consistent with Key Tronic Corp., 511 U.S. 809.

IV.

CONCLUSION

Accordingly, Defendants’ motions to dismiss are GRANTED-IN-PART and DENIED-INPART. Defendants’ motions are DENIED as to Plaintiff’s third claim for relief under the California

Hazardous Substances Account Act. Defendants’ motions are GRANTED with leave to amend as to

Plaintiff’s second claim for relief under CERCLA and seventh claim for relief for negligence; and

GRANTED without leave to amend as to Plaintiff’s fourth claim for relief for Reimbursement for

Costs of Abatement (California Water Code § 13304); fifth claim for relief for unjust enrichment; and

sixth claim for relief for equitable indemnity and contribution. Defendants’ motion to strike is

GRANTED. 

Plaintiff shall file its Third Amended Complaint within 20 days of this Order being stamped

“filed.” The Magistrate Judge shall set all dates, including a trial date, either at the next scheduled

hearing or at such earlier time as she deems appropriate.3

DATED: September 27, 2006

HON. DANA M. SABRAW

United States District Judge

cc: Judge Major

 All parties

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