EXHIBIT 9

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

SAN FRANCISCO HERRING ) Case No. 14-cv-04393-WHO

ASSOCIATION; and DAN CLARKE, )

) San Francisco, California

Plaintiffs, ) Courtroom 2, 17th Floor

) Wednesday, January 9, 2019

v. )

)

PACIFIC GAS AND ELECTRIC )

COMPANY; and PG&E CORPORATION, )

)

Defendants. )

_______________________________)

TRANSCRIPT OF MOTION HEARING

BEFORE THE HONORABLE WILLIAM H. ORRICK

UNITED STATES DISTRICT COURT JUDGE

APPEARANCES:

For Plaintiff Clarke: STUART G. GROSS, ESQ.

Gross & Klein LLP

The Embarcadero

Pier 9, Suite 100

San Francisco, California 94111

(415) 671-4628

Also Present for MATTHEW D. METZGER, ESQ.

Plaintiff Clarke: Belvedere Legal, PC

1777 Borel Place, Suite 314

San Mateo, California 94402

(415) 513-5980

DAN CLARKE, Plaintiff

Proceedings recorded by electronic sound recording; transcript

produced by transcription service.

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APPEARANCES: (Cont’d.)

For Defendants: SCOTT D. MROZ, ESQ.

JAMES L. MINK, ESQ.

Walsworth Franklin Bevins & McCall

601 Montgomery Street, 9th Floor

San Francisco, California 94111

(415) 781-7072

SANDI L. NICHOLS, ESQ.

Allen Matkins Leck Gamble

Mallory & Natis LLP

Three Embarcadero Center, 12th Floor

San Francisco, California 94111

(415) 837-1515

Transcription Service: Peggy Schuerger

Ad Hoc Reporting

2220 Otay Lakes Road, Suite 502-85

Chula Vista, California 91915

(619) 236-9325

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SAN FRANCISCO, CA WEDNESDAY, JANUARY 9, 2019 2:02 P.M.

--oOo--

THE CLERK: All rise. This court is now in session, the

Honorable William H. Orrick, presiding.

THE COURT: Good afternoon, everybody.

ALL: Good afternoon.

THE COURT: Please be seated.

THE CLERK: We are hearing Case Number 14-4393, San

Francisco Herring Association, et al. v. Pacific Gas and Electric

Company, et al.

Counsel, if you would, please come forward and state your

appearance for the record.

MR. GROSS: Good afternoon, Your Honor. Stuart Gross on

behalf of Mr. Clarke. With me at the table is Matt Metzger, who

I wrote a letter to you about.

THE COURT: Yes. I got it.

MR. GROSS: And as well as Mr. Clarke himself.

THE COURT: Mr. Clarke, welcome.

MR. MROZ: Good afternoon, Your Honor. Scott Mroz for

Pacific Gas and Electric Company and Pacific Gas and Electric

Corporation.

MS. NICHOLS: Sandi Nichols, Your Honor, from Allen

Matkins also for the PG&E Defendants.

THE COURT: Great. Welcome.

MS. NICHOLS: Thank you.

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THE COURT: All right. So let me give you my tentative

on this and then have you argue. So as I understand the positions

of the parties, the substantive concern of Mr. Clarke is the

inadequacy of the resolution of terrestrial pollution in the

affected area. That’s a broader environmental claim in which the

parties took pains to segregate out of the settlement agreement on

the known property claims. Mr. Clarke explicitly wasn’t a party

to the SFHA settlement and consent decree, which was approved by

the Federal Government.

So that claim might be able to be asserted as a citizen suit

under the -- under RCRA. It’s not pleaded that way. But given

the history of this litigation and the clearly-expressed intent of

Mr. Clarke, I’m inclined to allow him to amend to state the claim

and have the parties more directly address the issue.

But I have several concerns. First, it’s not clear the

extent to which the consent decree effectively moots the claim.

The consent decree appears to focus, though, on the Clean Water

Act issues and land within a hundred-foot band of the Bay.

Second, I believe Mr. Clarke is going to be limited to the

NOI that was filed before the suit was brought. And I’m not sure

that his current claims fall within it.

Third, civil penalties aren’t available in that kind of a

lawsuit, and all of that makes me wonder whether the pursuit of

this particular claim is in the best interest of the parties, but

I’ll leave that up to the parties. That’s not my call.

All right. So let me give you my tentative

on this and then have you argue. So as I understand the positions

of the parties, the substantive concern of Mr. Clarke is the

inadequacy of the resolution of terrestrial pollution in the

affected area. That’s a broader environmental claim in which the

parties took pains to segregate out of the settlement agreement on

the known property claims. Mr. Clarke explicitly wasn’t a party

to the SFHA settlement and consent decree, which was approved by

the Federal Government.

So that claim might be able to be asserted as a citizen suit

under the -- under RCRA. It’s not pleaded that way. But given

the history of this litigation and the clearly-expressed intent of

Mr. Clarke, I’m inclined to allow him to amend to state the claim

and have the parties more directly address the issue.

But I have several concerns. First, it’s not clear the

extent to which the consent decree effectively moots the claim.

The consent decree appears to focus, though, on the Clean Water

Act issues and land within a hundred-foot band of the Bay.

Second, I believe Mr. Clarke is going to be limited to the

NOI that was filed before the suit was brought. And I’m not sure

that his current claims fall within it.

Third, civil penalties aren’t available in that kind of a

lawsuit, and all of that makes me wonder whether the pursuit of

this particular claim is in the best interest of the parties, but

I’ll leave that up to the parties. That’s not my call.

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With respect to the other legal issues that are presented by

the motion, the settlement agreement describes the known Clarke

property claims as Counts 4 through 7 and punitive damages as they

relate to Clarke’s property. The release is broad and Mr. Clarke

has waived his damages claims.

But I think the state law -- private nuisance, trespass,

negligence, and strict liability claims -- are released. Even if

not, I agree with the Defendants that there are no additional

remedies that would be available under them. And so I would grant

the motion on those issues.

I don’t think Mr. Clarke has a public nuisance claim because

he has no special injury under the citizen suit theory, so I would

grant the motion on that issue.

And I do think that the Clean Water Act claim is moot because

of the remediation and monitoring required under the consent

decree. There’s no realistic prospect that the Clean Water Act

violations will continue in light of my supervision over the

consent decree and, indeed, since Mr. Gross represents the SFHA

and has been aggressively pursuing this matter, I’m confident that

any issues that arise will be brought to my attention.

So I would grant the motion on that issue.

So let me start with the Defendants since it’s their motion

and ask you to speak to the RCRA issue and then, Mr. Gross, I’ll

let you take on all of the issues that I’ve laid out.

MS. NICHOLS: Thank you, Your Honor. So as I understand

With respect to the other legal issues that are presented by

the motion, the settlement agreement describes the known Clarke

property claims as Counts 4 through 7 and punitive damages as they

relate to Clarke’s property. The release is broad and Mr. Clarke

has waived his damages claims.

But I think the state law -- private nuisance, trespass,

negligence, and strict liability claims -- are released. Even if

not, I agree with the Defendants that there are no additional

remedies that would be available under them. And so I would grant

the motion on those issues.

I don’t think Mr. Clarke has a public nuisance claim because

he has no special injury under the citizen suit theory, so I would

grant the motion on that issue.

And I do think that the Clean Water Act claim is moot because

of the remediation and monitoring required under the consent

decree. There’s no realistic prospect that the Clean Water Act

violations will continue in light of my supervision over the

consent decree and, indeed, since Mr. Gross represents the SFHA

and has been aggressively pursuing this matter, I’m confident that

any issues that arise will be brought to my attention.

So I would grant the motion on that issue.

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the Court’s tentative ruling, the -- it’s the adequacy of the

terrestrial pollution -- the remediation of terrestrial pollution

that is Mr. Clarke’s current concern, and the Court is inclined to

allow Mr. Clarke to amend his RCRA claim to assert that issue.

THE COURT: To -- to allege the citizen suit -- to

allege a citizen suit and how that fits within the NOI that he’s

already filed, which I think may be a challenge. But -- but I do

think he’s got -- he was intending to preserve these broader

environmental claims. The RCRA one is the one that I could see

conceivably being alive ’cause I’m not sure that it’s covered

through -- completely through the consent decree. I just don’t

know. So that’s why I parsed that the way that I did.

MS. NICHOLS: So a couple of points, Your Honor. It was

not intended in the first amended complaint to cover the entire

terrestrial area of the Marina and Fisherman’s Wharf neighborhood,

except to the extent that the contamination in those areas was

thought or alleged to be impacting Mr. Clarke’s home. Your Honor

considered that issue, that exact issue, on the motion to dismiss.

And the Court found that "if there was an imminent and substantial

danger from Clarke’s home" -- that is a quote -- then -- then Mr.

Clarke would be able to pursue that and, at that point in time,

given that was the allegation on the motion to dismiss, the Court

permitted Mr. Clarke to proceed. But the Court also said that,

"At such time as there was not an imminent and substantial danger

from Clarke’s home, then his RCRA claim may fail."

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And so it was always the construct within the first amended

complaint that Mr. Clarke’s concern was with the damage to his

home, the diminution in value to his property. He was concerned

about areas outside the scope of his property boundary only to the

extent that they were affecting his property. Your Honor also

dealt on the motion to dismiss with the fact that PG&E challenged

Mr. Clarke’s standing under the Clean Water Act because Mr. Clarke

had -- basically had not alleged any interest in the Bay.

But Your Honor found that because he alleged that groundwater

from these other areas was flowing under his property and then

from his property, that that would be enough for him to pursue

standing under the Clean Water Act, at least on a motion to

dismiss.

So I don’t think it’s ever been as understood -- there was no

poison pill by the settlement -- that Mr. Clarke’s claims have

been about his home when it came to the land side. And, frankly,

when it came to the Clean Water Act, too. So --

THE COURT: Well, but how can you say that when he

carved out at each point along the way the broader environmental

claims? And when I was dealing with this before you went into the

extended settlement discussions and the analysis of the land, that

was -- that was quite clear.

MS. NICHOLS: You are correct, Your Honor. I’m not

disputing that at all. But the fact that Mr. Clarke and PG&E

agreed that he may carve out the broader environmental claims that

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they weren’t settled was no waiver of PG&E’s right to assert that

he no longer had standing to pursue them. Now, that is a fight

left for another day.

So the fact that Mr. Clarke did not agree to settle "broader

environmental claims" under RCRA and the Clean Water Act does not

mean that he automatically had standing because he didn’t settle

them. So that was left for this hearing -- for a motion for

summary judgment. Frankly, it was left for settlement

negotiations as well, just part and parcel of we want to get this

case resolved -- not that we admit he had standing to pursue them

-- so we did in fact continue with the mediated investigation

agreement that on its own for years investigated these areas. You

know, that’s what that was about.

Reports have been filed. Judicial notice can be taken not of

the truth of the content of everything that’s on those websites,

but of the fact that there are extensive reports of data that were

filed concerning investigations in these areas, whether that data

-- we’re not arguing whether it was truthful or opinions are

accurate, but the investigations were undertaken and are

continuing to be undertaken on the land side.

And, in fact, the request for judicial notice both that PG&E

offered as well as the Plaintiffs, cite to work notices that are

issued by the Department of Toxic Substances Control about the

work that PG&E is doing and going to be doing on the land side.

And that includes soil investigation, soil gas investigation,

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further groundwater investigation.

So it’s -- that is happening. PG&E never once, simply

because Mr. Clarke said, "I’m going to preserve my broader

environmental claims," intended to suggest that we conceded he

could bring them, that he could pursue them.

And I don’t -- I think the Ninth Circuit law is clear, Your

Honor, respectfully, that opposition to a motion for summary

judgment is not the time to permit amendments to the complaint.

THE COURT: Well, thank you for that argument, but that

one won’t go very far with me in light of the procedural history

in this case. So do you have another -- do you want to say

anything else with respect to that?

MS. NICHOLS: I do.

THE COURT: Okay.

MS. NICHOLS: So with respect to -- assuming the -- I

would argue, Your Honor, that even if Mr. Clarke is permitted to

amend, it would be futile for the other reasons that the Court

mentioned, which is the claims that he’s trying to pursue now in

terms of vapor intrusion or lead, those were not alleged in the

notice of intent. And especially this whole notion of alleged

vapor intrusion, which is unsupported -- by the way -- on this

motion with any admissible expert opinion, that that’s even a

concern of him.

So -- so there is nothing at this particular juncture to

support the credibility of the vapor intrusion concern.

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The vapor intrusion pathway -- as a pathway from the shallow

groundwaters -- it’s the claim that contamination in shallow

groundwater comes up, you know, through the subsurface into indoor

air. Number one, it’s not in the notice of intent. And the ERF

case makes clear that that’s a whole different pathway. You don’t

get to pursue that. The Court has no subject matter jurisdiction

over it.

The other issue, too, is that Mr. Clarke has not even offered

in his opposition here or in his declaration any testimony that he

would be exposed to any indoor air on other people’s property.

We’re now talking about third parties’ property that he wants to

pursue a claim to have PG&E go out and investigation soil gas on

their property. But he’s never said, "And I’m there all the

time." You know, "I’m exposed to that and I know they’ll let you

onto their property to come do this."

So it would be futile.

We also cited a case, Your Honor, that says, "The Court

cannot order injunctive relief as to third party properties where

those parties are not before the Court."

THE COURT: I guess my issue -- and maybe I think I’ll

turn it over to Mr. Gross -- is having an understanding of what

the citizen suit RCRA claim is, what it looks like, what issues

are raised under it, and that would be determined by the

amendment. And then we can get into the substantive issues that

you’re describing.

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So let me -- let me turn over to Mr. Gross and start with

RCRA and --

MR. GROSS: Absolutely, Your Honor. So, first let me

grab the NOI ’cause I’ll start with the NOI and we can work

logical in that way.

The first thing to be clear on is there’s no law that

requires the -- a citizen to identify in their NOI every single

chemical and every single pathway. What’s required is sufficient

information to permit the polluter to figure those things out, and

we did that. So the NOI states explicitly as to -- as to the RCRA

violations, says -- and I’ll start from the top -- "Pursuant to 42

U.S.C. 6972 of RCRA, noticers intend to sue PG&E for disposing

solid waste in the form of MGP residue in a manner that may

present an imminent and substantial endangerment to health or the

environment," citing then 6972(a)(1)(B). "Liability under RCRA is

retroactive." And then here’s the -- the money of it. "And the

ongoing contamination resulting from PG&E’s disposal of MGP

residue and the ongoing discharges therefrom into groundwater,

navigable waters, and air are illegal and subject to liability."

If you look at the other components of this NOI, it states

explicitly, as does the first amended complaint, that the concern

that Dan Clarke has as to the terrestrial areas is that they are

extensively contaminated and PG&E has known about this for 77

years and still hasn’t cleaned it in 77 years -- since 1977 -- and

still has not cleaned it up. They haven’t even done a full

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investigation.

So the NOI covers it. The -- Mr. Clarke was not required

when he submitted this NOI in April of 2014 to identify every

single chemical component of MGP waste. What he said is -- and it

states it explicitly in here -- is that there are three MGPs.

Those three MGPs are located in these locations that take up large

portions of the Marina and Fisherman’s Wharf neighborhoods. Those

cites are substantially contaminated with MGP waste. And that MGP

waste then presents an imminent and substantial endangerment

through various pathways of exposure.

He was not required at that point to say, "Oh, in those

manufactured gas plant wastes are cyanide, polymeric hydrocarbons,

certain levels of arsenic, Cadmium. He wasn’t -- nothing says

that. He put PG&E on notice to say, "PG&E, we think you’re in

violation of RCRA. Here’s enough information. We say this broad

area is contaminated by you and you need to go clean it up."

That’s all that was required.

And the first amended complaint, moving to this issue of was

it pled, what were the extent of his broader environmental claims,

they’ve always dealt with the broader extent in the Marina

neighborhood of this contamination and Fisherman’s Wharf and the

areas offshore.

The complaint -- I think there’s something like 90 paragraphs

in this. It goes in chapter and verse, "In this location in the

Marina District, this was found. In this location, this was

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found." That’s what the parties always knew was happening, which

is why we separated out the known Clarke property claims and the

broader environmental claims.

And I think it is relevant to reference back some of the

language in the settlement agreement, which not only excluded

explicitly the broader environment claims, but actually says in

the preamble that, "The settlement agreement does not settle,

release, or otherwise affect the broader environmental claims."

Now, you know, were they being honest at that point? Are

they being honest now? I mean, come on. Like we know that there

are these claims here. I appreciate Your Honor saying that --

giving us leave to amend. I think that makes sense. This

complaint has been on ice since 2015.

So we amend. We proceed forward. Then what is it? What are

we looking for? -- what we’ve been looking for the entire time,

which is a comprehensive investigation that identifies exactly

where this contamination is and then addresses it.

Now, this question of private property owners. We have not

and do not intend to ask the Court to order individual private

property owners to do any particular thing on their properties.

I represent several of these homeowners. There are broad swaths

in these neighborhoods that are public. That is what we were

investigating as part of the mediated investigation. We were

investigating those public areas.

We can continue -- the Court can order that investigation to

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be complete. We can resolve the question of, "Is all of this lead

that’s being found at much higher levels on the footprint than

off, is that because of the manufactured gas plant or is it

because, as PG&E has claimed, there was a smelter downwind that

would cause this?"

Those issues the Court can and should resolve. And at the

end of that, the orders can say, "This area of contamination, this

needs to be cleaned up."

Now, in terms of vapor, now --

THE COURT: I wasn’t -- this sort of goes beyond the

pleading issues and the facts that were alleged by both sides.

Why wasn’t this dealt with in the -- with the agreement with the

Herring Association, who you also represented or -- and eventually

I’m going to see this, so I’m just -- I’m just curious.

MR. GROSS: Sure. So first of all, I need to get to

another one of your questions, which was where does the consent

decree start and where does it stop? Right.

So where it starts is -- and I know it’s referred to as a

"hundred-foot band." Really what that is is there’s a line of

monitoring wells right along the margin of the Bay; right? And

that’s it. So there’s monitoring wells. If there’s a trigger --

if there’s PAHs that are found above a certain level, then PG&E

has to propose some way to deal with that; right?

But beyond that narrow strip, it doesn’t proceed inland. So

the consent decree does not require PG&E to do anything beyond

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putting in those wells and then whatever is required if one of

those wells hits.

So that’s first of all. So there’s large, large swaths of

what we refer to as the terrestrial contamination that aren’t

affected at all.

Now, I think -- and this gets a little bit into another

issue, but to just sort of put a pin in it so you recognize -- the

consent decree as a compromise document does exclude certain

geographic areas offshore as well. So I don’t want to get into

that right now to blue things. But just so we’re clear.

But as to terrestrial, absolutely not included. So why

wasn’t it included? There’s limits to how much we can discuss

because --

THE COURT: Yeah. I don’t want to --

MR. GROSS: So there were --

THE COURT: I don’t want to get there.

MR. GROSS: -- settlement negotiations. Those

settlement negotiations involved all of the parties, and then they

did not, but there was an understanding I believe by both sides

that the interests of the Herring Association was limited to that

offshore area.

So in resolving the Herring Association’s claims, it was just

the offshore. And so the Herring Association never really had a

dog in the terrestrial contamination fight. That was Dan. Dan

had both of those dogs. Ultimately, Dan decided not to join the

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consent decree, as his right, but nothing was done as to the

terrestrial fights.

As to the motion to dismiss order, I think there was a couple

of points to clarify on that. It’s now been a long time ago;

right? But if you’ll recall, the gravamen of PG&E’s argument at

that point, right, was essentially another permutation of a

mootness argument. It was, "We’ve already offered to remediate

Dan’s house and that offer moots his RCRA claims."

So the reason we were fighting about -- and the focus of all

the briefing on the contamination of Dan’s house -- is because

that was their argument, was, "We’ve offered to remediate his

house. That moots his claim." Dan’s argument was, "Well, I can’t

moot an offer to remediate. I can’t moot my claims that it needs

to be remediated."

So that’s why it was there. So I think pointing to, "Oh,

this was all we were talking about" or "This was all the judge,

Your Honor, stated in the motion to dismiss order concerning

that," I don’t think that really has a lot of weight.

What has weight is Dan has a legally-cognizable interest in

this contamination, has for years, still has it. He’s got

standing to pursue this. And the evidence of the last, you know,

40-plus years indicates it makes sense to pursue it. It needs to

be pursued.

I mean, PG&E, first of all, is under absolutely no order

whatsoever -- be it an investigation order or a remediation order

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-- for any of these terrestrial areas and has gone on the record

saying it’s never going to or it doesn’t think it should ever have

to remediate manufactured gas plant tar. This is the source of an

indoor vapor threat. It’s literally what it sounds like. It is

large deposits of tar.

So PG&E, left to its own devices, has indicated explicitly it

doesn’t even want to touch that. Indoor air and lead, yeah. They

want this case dismissed so that they never have to deal with

lead. They got the DTSC to agree that they didn’t have to look

for lead. We asked the DTSC, "DTSC, why is it that you’re not

looking for lead? Where in the files is there any evidence that

you looked at this and decided this should not be a contaminant

concern?" "Couldn’t find it."

So the need for this is real. And that’s why it’s being

pursued and why it should be pursued.

THE COURT: Okay. So I understand your argument with

respect to need. With respect to the other claims, --

MR. GROSS: Uh-huh.

THE COURT: -- do you have any argument that you want to

make, or am I right in thinking that your real claim would -- if

you’ve got one -- is the RCRA claim?

MR. GROSS: So thank you , Your Honor. First of all,

moving then to the Clean Water Act and the extent of the CD, as I

just previously indicated, the consent decree doesn’t cover the

entire area that is -- that is likely contaminated here. It is a

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compromise document. So could there be -- there are areas that

simply are not covered. That’s one.

The other issue is, as we put into the briefing, there is --

there is a limited term on that consent decree. It lasts for ten

years. The contamination that we’ve been dealing with here, PG&E

has known about it since 1977. So, again, it’s a -- it’s a

compromise document. It is a -- it is what it is.

But in terms of it being so co-extensive with Mr. Clarke’s

claims, it’s not.

The other point is on penalties. Even if the -- you were to

find that the injunctive relief available to Mr. Clarke are

subsumed by the consent decree, the consent decree does not

release and doesn’t affect his penalties. Now, the only thing

that they’ve raised is the penalties. The thing that they’ve

cited in their footnote is a statement by the Assistant U.S.

Attorney that set payments are of a type which can lead to

preventing a repeat of the violation.

Well, that’s -- at the very most, that creates a material of

issue of fact about whether or not Mr. Clarke is still entitled to

penalties.

And if you go back to the Laidlaw case -- I mean, this is

what the Laidlaw case was about -- which was you have a -- you’ve

got a polluter who comes in. The polluter says, We’re all good

here. Everything’s addressed. The Supreme Court says, Well, hold

on. First of all, that’s voluntary conduct and you’ve got to meet

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a much higher standard if you’re coming in with voluntary conduct

on the injunctive component.

But then they independently said, As to penalties -- as to

penalties, that’s still live, even if we were to accept your

argument that the mess is all cleaned up.

So Mr. Clarke, even if the Court was to decide that the

consent decree basically occupies the field for injunctive relief

-- it doesn’t occupy the field for penalties -- PG&E would

certainly be free to argue that the amount that it’s paying in

these -- for these SEPs should be considered and etc., but that’s

an argument at trial. That’s not summary judgment. That’s a

material issue of fact of whether that’s sufficient.

Now, as to then these other state law claims --

THE COURT: Okay. So who assesses the penalties? Is it

the judge?

MS. NICHOLS: Yes.

THE COURT: So -- and is this -- all the issues that are

remaining will be bench issues?

MS. NICHOLS: Yes.

MR. GROSS: Liability would not. So liability --

liability is -- it depends also on which claims, and I believe

also liability -- so remedy under RCRA and Clean Water Act would

be a bench issue. Liability is a jury issue.

MS. NICHOLS: I disagree, Your Honor, and at the case

management conference, it was understood that this was going to be

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a bench trial.

MR. GROSS: Well, okay. Setting that aside, Your Honor,

I think that, you know, it is what it is.

THE COURT: All right.

MR. GROSS: Right? I mean, you know, the law is what

the law is on that. The -- in terms of -- in terms of the state

law claims -- so, first of all, as to the scope of the release, if

you look at the settlement agreement itself, what it says is these

claims, to the extent that they relate to the known Clarke

property claims. And how do you find the known Clarke property

claims? They are the ones that arise out of the environmental

conditions on the known Clarke property.

So that release does not include those claims and -- and,

thus, they’re still live. So the negligence and the strict

liability, they’re still live and were not affected by it.

THE COURT: How is -- explain that to me.

MR. GROSS: Uh-huh.

THE COURT: Explain how Mr. Clarke would have standing

on a negligence claim for PG&E’s conduct that doesn’t affect his

property.

MR. GROSS: Uh-huh. For the same reason he has standing

for RCRA.

THE COURT: Well, it’s -- aren’t they very different?

RCRA -- it seems conceivable to me that a citizen suit under RCRA

-- which happens from time to time -- allows a citizen to make

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water environmental claims.

MR. GROSS: Uh-huh.

THE COURT: A negligence claim is something different.

You don’t get to assert a negligence claim for injuries to third

parties.

MR. GROSS: And he’s not asserting it to a third party.

If you look at his declaration, his declaration states

specifically about the injuries that he himself suffers. And if

-- it matches precisely what the Ninth Circuit and the Supreme

Court have said, which is it’s not an injury to the environment.

It’s an injury to the person.

And he is injured by it. He’s injured by the diminishment of

his recreational enjoyment as well as the aesthetic enjoyment as

well as the stress and anxiety that it causes him. That’s injury.

I mean, it’s soft tissue, but it’s injury. So that’s enough on

negligence. Negligence requires harm.

And in terms of damages as -- in terms of elements, it’s not

damages that you need. You need harm. And one of the remedies

that’s available for a court under California law is injunctive

relief. So he’s there. He’s got it.

Now -- so that’s on the strict liability and the negligence.

And then on the -- on the public nuisance, he is specially

situated. He’s got harms that are different than those of the

general public -- based on his close connection to that area.

If you look at the -- there was a case we cited from the

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Ninth Circuit -- and these were folks who were suing concerning --

they were suing Glock; right? And what was their harm? They

lived in neighborhoods where they experienced additional trauma

because of gun violence. And the Ninth Circuit said, That’s

different than most people.

And Mr. Clarke has additional trauma from living in -- having

lived in the Marina neighborhood and the stress and anxiety that

arises from that both based on his exposure during that period as

well as his close connection and his knowledge and concern about

the effect that it’s having. That’s an -- that’s both an injury

that gives him standing and makes him specially situated.

MR. MROZ: Your Honor, may I speak to --

THE COURT: Hold on for just a second, Mr. Mroz, and

then --

MR. GROSS: And the final point, I believe, is this

question of civil penalties under RCRA. So civil -- as we

indicated, there is a split in authority. Now, our position is

that split in authority is most likely to be resolved in favor of

-- by the Ninth Circuit, if and when it addresses this issue -- in

favor of the availability. And where that comes from is Covington

as well as other more general environmental cases where the Ninth

Circuit has recognized the very important role that penalties have

in private party RCRA cases specifically in RCRA, as well as

private party cases for environmental laws generally.

So if you look at Covington in particular, the court says,

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Look, the other reason why, you know, this is important that the

courts stay involved here and that these claims go forward is --

you know, in that case, there actually was a plan to do some

remediation. But then also the penalties -- making sure that

those penalties are there ensures that the stuff will get

addressed.

So while it hasn’t been addressed by the Ninth Circuit yet,

the wave authority in the Ninth Circuit on RCRA in particular and

federal environmental laws generally indicates that the Ninth

Circuit takes it up but they will decide that they’re available.

THE COURT: Somewhat different than the way that the

judges in this district look at that question.

MR. GROSS: There are -- there haven’t been that many

and -- but, yes.

THE COURT: Okay. Mr. Mroz?

MR. MROZ: Your Honor, on the negligence, very quickly,

Mr. Clarke released all claims for damages. And whether you look

at the cases we cited -- they are numerous -- that damages must be

pleaded and proved as an essential element of this cause of

action, or the case that Mr. Gross cited, Kesner, relied on two

other cases -- Ortega v. Kmart and Castellon -- which both said,

"Cause of action for negligence must include duty, breach,

causation, and damages."

So whether we’re talking about damage or injury or harm

semantically, at the end of the day he has no claim left for any

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compensable damage, injury, harm. He released it. It’s over. He

doesn’t live there. He cannot -- long-arm reach from Hillsborough

to make a claim for negligence when there is no damage -- and, by

the way, Mr. Gross cited no authority that in this instance Mr.

Clarke would be able to get injunctive relief on a negligence

cause of action.

THE COURT: Which is something I’ve never heard of.

Maybe there have been some, but --

MR. MROZ: Well, he said that he could, but he never

cited that. So I would ask him to cite that.

Strict liability, two things. One -- same thing -- cannot

make a prima facie case. But under Luthringer v. Moore, this is

a matter of law. So this idea that he needs to take an expert

deposition to determine -- to help the Court determine whether or

not a manufactured gas plant in 1900 was an ultra-hazardous

activity -- that’s not true.

In fact, if he thought he needed expert testimony on that, he

should have submitted a declaration. Because it’s a matter of

law. We’re not going to have an expert on this issue. But we

cited cases, including a 1906 case, that said manufactured gas

plants are as common as electrical facilities. So it’s common.

It’s not a blasting case. Luthringer was an interesting case

where there was some sort of fumigant acid that leaked from one

room to another, and no matter what they did, they couldn’t

protect the people in the adjacent building. That’s not this

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case.

And his allegations is the ultra-hazardous activity emanated

from the operation of the MGP. The MGP stopped operating in 1905.

And then on the nuisance claim, he does not -- he doesn’t

have a special injury here of any kind. He’s alleged that he has

annoyance and discomfort and fear and emotional distress and all

that. I want to remind the Court that Mr. Clarke released all

damage claims, including all claims for personal injury. Those

are gone.

So he is claiming personal injury, without any expert support

-- we could look at Potter v. Firestone where the court said --

that was a pure cancer case -- but that the medical testimony

would show that it’s more likely than not that you have a

reasonable fear, based on an exposure.

Here, he has no exposure outside of his house. He’s never

alleged an exposure outside of his house. He has -- he has

submitted his own declaration for toxicology, oncology, marine

biology, but there’s no expert. He’s not an expert. He’s not

qualified to testify under 702 on any of these.

So the question about, "Well, I can put it in a declaration

now but later I’ll submit the admissible evidence," no. It has to

be in a form that would be admissible later. He is not a

declarant that’s qualified or capable to make that declaration.

So those -- frankly, we could not believe that we had to

fight to get those -- to get Counts 4 through 7 completely

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resolved because we thought they had been at time of settlement.

THE COURT: All right.

MS. NICHOLS: Your Honor, may I respond to some of the

comments on the federal claims?

THE COURT: Please. Yes. Go ahead.

MS. NICHOLS: Thank you. So with regard to the adequacy

of the notice of intent, again, Your Honor, there is nothing.

There is a reference -- one reference to air. There is nothing --

THE COURT: Uh-huh. And what I’m planning with respect

to this -- and I’ll be thinking about this again when I get off

the bench -- is that we’re going to see an amendment -- these --

the RCRA issues were not joined in sufficient detail, as far as I

was concerned, in order to dispose of this issue one way or

another. The allegations with respect to the citizen suit aren’t

there, particularly with the cause of action, and then I need to

match that up and you need to join the issue of whether the NOI is

-- fairly notified you of the problem at the time that the lawsuit

was filed.

So all of those things I think are better saved for later as

opposed to arguing about them now because I just don’t think

there’s enough detail in the complaint to -- for me to address

them one way or another.

MS. NICHOLS: So, Your Honor, the predicate for all of

that would be -- as to whether an amendment would not be futile --

is what I understood Mr. Gross to argue just now is that Mr.

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Clarke has no intent to ask the Court to require anything on

private parties’ property, that he’s concerned with public rightsof-way. Okay. So there’s a couple of points on that.

Mr. Clarke has not established any standing with regard --

under Lujan -- with respect to any concrete and particularized

injury that he has suffered as a consequence of anything that’s

under a public street or a public right-of-way. What he’s argued

in his opposition, in an attempt to save this case, is "I want the

data because I think that data may help me decide if I should be

stressed and anxious, if I should take certain precautions for my

health."

Your Honor, the best data to inform Mr. Clarke as to whether

he should reasonably have any health concerns are the 95 samples

that were taken at the Clarke property -- where he lived, where he

would be exposed. He has not set forth anything in his opposition

-- no admissible testimony at all to show that he would have any

concrete and particularized injury with respect to a public rightof-way. He’s not a ditch-digger. He’s not going out there as a

construction worker. It just makes no sense.

So Mr. Gross made the leap to say, "Mr. Clarke has a legally

cognizable interest." No, he doesn’t. He has an interest -- I’ll

grant him that. I absolutely believe Mr. Clarke has this concern,

but he does not have a concrete and particularized injury so as to

establish injury in fact under Lujan. And that’s his burden.

That is always a plaintiff’s burden to establish his standing, and

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he has failed.

But he also fails in that respect on another ground, which is

lack of redressability. PG&E, as evidenced by the documents in

the request for judicial notice, is already well underway in

investigating the public rights-of-way in the Marina and

Fisherman’s Wharf. It’s in the work plans for which we requested

judicial notice. It’s in the work notices issued by DTSC

notifying the public work’s going to be undertaken in all of these

various rights-of-ways. Mr. Clarke does not need to be involved.

He has no legal basis to be involved. There’s no legitimate

reason for him to be involved in a citizen suit. The citizen suit

is intended to be -- to supplement the regulatory agency

involvement. DTSC is all over that. So, in fact, one of the

documents we don’t think is admissible but that Mr. Clarke offered

was a transcript of a public hearing that the -- public meeting

that the Regional Board and DTSC attended, along with PG&E, and

any members of the public who were interested.

There’s nothing that PG&E is trying to hide here or trying to

sneak by. This is not a situation -- what it is, it’s an --

frankly, it’s an opportunistic smear campaign against PG&E.

THE COURT: So that so doesn’t help your argument.

MS. NICHOLS: Well, I apologize, Your Honor. But the

fact is PG&E is vigorously investigating the public rights-of-way

already. This Court could not grant more injunctive relief than

is already being undertaken because the investigations are

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ongoing. Some are completed. Some are still to be done. But

that is work that Mr. Clarke doesn’t need the Court to say, "I

want you to go do what you’re already doing."

So we would disagree that he has established standing either

on the grounds of concrete and particularized harm or on

redressability.

With respect to the offshore areas, I don’t think Mr. Gross

has made any arguments today that should change this Court’s mind

in terms of the extensive scope in the 98-page consent decree and

the rigorous protocol that Mr. Clarke’s consultant actively

participating in designing, with PG&E’s consultants. The fact

that he wishes there were a couple more things in there does not

make his case.

Let’s see. I want to make sure I cover everything here. By

the way, a ten-year consent decree is actually quite a long

consent decree, in my experience. I’ve handled quite a few of the

environmental consent decrees and, frankly, it’s rare that they go

as long as ten years. If the Court’s willing to say, Yeah, I’m

willing to oversee this for ten years, so I disagree that that’s

somehow skimpy. It is not.

With regard to penalties, again, as we discuss in our papers,

Your Honor, the penalties claim is also moot. The SEP -- the

Supplemental Environmental Project -- that are included at over $4

million for the -- addressing creosote pilings, for addressing

eelgrass habitat, that the EPA, DOJ -- both -- found acceptable to

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address the claims in the complaint and, in fact, they were

coextensive. There is no difference between the RCRA and Clean

Water Act claims made by Mr. Clarke and by SFHA. They are

coextensive. And the DOJ and EPA in fact did say these

Supplemental Environment Projects do serve the purpose of

deterring, you know, wrongful behavior.

Here -- Laidlaw is not our case. This is not a case where

PG&E is coming in and saying, "Mea culpa. We were wrong. It’s

not going to happen ever again. We’re voluntarily complying, Your

Honor." That’s not our argument. Our argument is we have a 98-

page enforceable CD and two Regional Board orders and perhaps more

to come. If investigation warrants remediation, we can expect

those to be forthcoming.

So there is absolutely no basis for the civil penalty claims.

They also -- one ground that was not raised -- the claim should be

barred in its entirety under the statute of limitations. Because

the statute of limitations in any claim seeking civil penalties

under 2462 is that it -- that the statute of limitations begins to

run when the alleged wrongful behavior first accrues.

And the Gabelli court in -- U.S. Supreme Court in Gabelli

made that clear.

The more recent case in Oklahoma Gas by the Tenth Circuit

applied it in the Clean Air Act context. And they -- the court

there rejected the exact same argument that is made by Mr. Clarke,

that, Well, there’s a continuing violation. And what the court

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said is, No. The first accrued doesn’t mean it accrues every

single time.

THE COURT: And I understand this argument.

MS. NICHOLS: So -- so, Your Honor, with respect, we

would say that the Clean Water Act claim is barred by the statute

of limitations as well.

THE COURT: All right. Mr. Gross, last words.

MR. GROSS: Last words. Okay. First, Mr. Mroz asked if

there were cases that would stand for the proposition of

injunctive relief for negligence claims. Art Movers, Inc. v. NIW,

Inc., 3 Cal.App. 4th, 640, 646 (1992), states, "A permanent

injunction is a determination on the merits when a plaintiff has

prevailed on a cause of action for a tort or other wrongful act

against a defendant and that equitable relief is appropriate." It

stands for the general proposition that injunctive relief is

available under California law for tort.

Contra Costa City v. Pinole Point Props, LLC, 235 Cal.App.

4th 914, 941 (2015), affirming a trial court injunction based on

negligence and nuisance claims.

To the -- let me just address quickly a couple of the points

here related to the public right-of-ways in that public right-ofways are large portions. There’s also parks. There’s also PG&Eowned property. When we say "private properties," we’re not going

to seek -- compelling its -- we’re not going to go to the private

homeowner.

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Relief. If there is a vapor intrusion there, a lot of the

vapor intrusion could well be coming from large coal tar deposits

that are in public property, so it would affect that.

And the role of a citizen suit certainly should be -- is not

that you cannot seek relief that has a general public benefit.

That’s the reason for a citizen suit in and of itself.

To the necessity of Mr. Clarke doing this, again, this has

been going on for -- since 1977. There wouldn’t even have been

groundwater testing if it hadn’t been for us bringing this

lawsuit.

THE COURT: Right. But the real question -- the real

question is now that you have obtained substantial relief as a

result of bringing this lawsuit, is that enough or is there more

that somebody’s entitled to? That’s the thing that I’m looking

at.

MR. GROSS: Absolutely, Your Honor. And as to the

terrestrial side of things, that answer is very easy -- yes.

There is a large swath of area that is not covered by that consent

decree whatsoever.

As to the offshore areas, there are smaller areas and there

are certain elements -- and we do believe and we think it’s an

issue that we would fight about as we -- when we get to that stage

of trial to say, "Look, we’ve proven that this is an issue.

Here’s the consent decree. This is the extent of the relief it

is. It is a known fact, obviously, but there is this further that

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needs to be done." That’s an issue of material fact.

The -- on the -- on this issue of strict liability being

decided as a matter of law, being decided as a matter of law, as

the Court well knows, means it’s an issue for the judge. It

doesn’t mean the judge decides it only based on case law. When

you’re looking at whether or not the operations of a facility

hundreds of years ago, whether that meets the standard of strict

liability, the idea that you would not have expert testimony on

that, that you would simply say, "Oh, here’s a couple cases where

they mentioned manufactured gas plants," no. You’d look at that

standard and you’d have evidence that would come before the court

from an expert who’d say, "Actually, yeah. It meets these

standards for strict liability" and theirs would say it would not.

And the idea that we should have -- a declaration, I did what

was required under 56(d). It’s an attorney declaration, not an

expert declaration. I don’t have to put in an expert declaration

to say I need the evidence. I’m the one who knows I need the

evidence.

Statute of limitations, final point. The Tenth Circuit case,

OG&E, is in conflict with Ninth Circuit decision in Borden. What

it’s based on is the idea that when you have an ongoing -- what it

calls "ongoing violation," there’s one violation. The Ninth

Circuit looks at this as being separate violations. If they’re

separate violations, they accrue each time they occur. That’s

what Borden decides and that’s what all Ninth Circuit cases have

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decided based on penalties because people bring these fights.

"Hey, why am I getting tagged for all these penalties on each of

these days?" And the Ninth Circuit says because it’s each

violation, each -- where you have continuous violations, each one

is separate. Each one of those separate violations thus accrues

when it happens. That says, "The D.C. District held the statute

of limitations goes five years back from the NOI as long as there

are continuous violations that occurred up to that point."

So OG&E -- OG&E is based on a premise that’s in conflict with

Ninth Circuit law.

The Supreme Court case, that is a case which deals

fundamentally with whether the discovery rule is available to the

Government when it prosecutes security fraud cases. It certainly

does not have any precedential barring of claims or wiping out

Ninth Circuit law as to the Clean Water Act. It just doesn’t

address it. It talks about first accruing, sure. Where the first

accrual that occurs when you have separate violations is when that

separate violation occurs. That’s how the Ninth Circuit looks at

continuous violations. That’s Borden.

THE COURT: Okay.

MR. GROSS: Thank you very much, Your Honor.

THE COURT: All right. Thank you, all. I will try to

get an order out pretty quickly. And if we -- and I will deal

with the issue of whether there’s any substantive work that should

go on in this case until the pleadings are actually set because I

All right. Thank you, all. I will try to

get an order out pretty quickly. And if we -- and I will deal

with the issue of whether there’s any substantive work that should

go on in this case until the pleadings are actually set because I

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do want clarity about the RCRA claim and how it works. And so if

I stuck with my tentative, I might very well suggest that until

the pleadings are resolved, that no further discovery occur and

then we’ll get that done and then move forward in a way that makes

sense.

MR. MROZ: Your Honor, one housekeeping issue.

THE COURT: Yes.

MR. MROZ: PG&E would request that to the extent any

part of the transcript discusses the settlement agreement, that

that would be sealed.

THE COURT: Okay. I don’t --

MR. MROZ: I’m not sure we got into any of the

particulars.

THE COURT: Okay. So talk about this with Ms. Davis

after I sign the order.

MR. MROZ: Thank you, Your Honor.

MS. NICHOLS: Thank you very much, Your Honor.

THE COURT: Okay.

MR. GROSS: Thank you very much, Your Honor.

//

//

//

//

//

//

do want clarity about the RCRA claim and how it works. And so if

I stuck with my tentative, I might very well suggest that until

the pleadings are resolved, that no further discovery occur and

then we’ll get that done and then move forward in a way that makes

sense.

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