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LOS ANGELES UNIFIED SCHOOL DISTRICT v. S&W ATLAS IRON & METAL CO., INC. et al.
Proceedings: ORDER ON PLAINTIFF'S MOTION FOR A PRELIMINARY INJUNCTION, DEFENDANTS’ MOTION TO DISMISS THE FIRST AMENDED COMPLAINT, AND DEFENDANTS’ MOTION TO STAY CLAIMS
This environmental action concerns claims brought by Plaintiff Los Angeles Unified School District (“Plaintiff”) against the owners and operators of a metal salvage yard and recycling facility. The salvage yard abuts property on which Plaintiff operates a public school. Defendants S&W Atlas Iron & Metal Co., Inc., 10019 S. Alameda LLC, Gary Weisenberg, and Matthew Weisenberg (“Defendants”) own and operate the salvage yard. Dkt. No. 35, First Amended Complaint (“FAC”) ¶¶ 5-8. Three separate motions are before the Court: Plaintiff's Motion for a Preliminary Injunction (Dkt. No. 38, “PI Motion”), Defendants’ Motion to Dismiss (Dkt. No. 48, “MTD”), and Defendants’ Motion to Stay Claims (Dkt. No. 49, “MTSC”). All are fully briefed.1
Plaintiff owns David Starr Jordan High School (the “School”). The School has been operating since 1925 with a campus that typically is occupied by young students, teachers, employees, staff, and parents—many of whom spend at least eight hours a day at the School. FAC ¶ 13. Due to the COVID-19 pandemic, the School is not currently occupied by students or teachers.2 Id. ¶ 3. Defendants own and operate S&W Atlas Iron & Metal Co., Inc. (“Atlas”), a metal salvage yard and recycling facility immediately adjacent to the School. Atlas has been operating next to the School since 1949. MTD at 3.
Plaintiff alleges that—beginning as early as May 2002—there have been “multiple incidents at Atlas that could have resulted in an environmental and human disaster.” FAC ¶ 16. Plaintiff claims such incidents have been regular and ongoing. Id. ¶¶ 17-20, 22. These include the discovery of hazardous waste in May 2004 (the removal of which began in September 2006 and ended in July 2008); violations uncovered by routine inspections that resulted in Atlas receiving “Notices to Comply” in 2013 and 2018; runoff of contaminated stormwater that regularly exposed those at the School to hazardous chemicals and vector-borne diseases; and, in more recent years, the stockpiling of “wrecked or dismantled vehicles, salvage, junk, and/or other materials and wastes at heights that greatly exceed the height of the retaining wall separating the Atlas Site from the School.” Id. Plaintiff further alleges that noises and vibrations coming from Atlas are “incessant” and “greatly disruptive” and notes the “dramatic ‘eyesore’ ” Defendants’ “gigantic stockpiles and huge metal containers” present. Id. ¶ 21, 23.
Plaintiff filed its Complaint on June 15, 2020. Dkt. No. 1. That same day, Plaintiff filed an ex parte application for a temporary restraining order and order to show cause why a preliminary injunction should not issue. Dkt. No. 10. The Honorable George H. Wu, the previously assigned judge in this case, denied Plaintiff's request on June 16. Dkt. No. 22 (“June 16 Order”). In his order, Judge Wu noted that “[w]ith one exception, the activities [at issue] ․ appear to have occurred over the course of months, years, and even decades in the past ․ Plaintiff had months or years in which to present the circumstances underlying this case to the Court's attention in a normal fashion, yet elected to proceed by way of an emergency proceeding.” Id. Plaintiff subsequently sought and received leave to amend its Complaint. Dkt. Nos. 30, 32. On July 14, 2020, Plaintiff filed the FAC. After about a month, Plaintiff filed its PI Motion. Defendants filed their MTD and MTSC six days later.3
II. DEFENDANTS’ MOTION TO STAY CLAIMS
Defendants argue that Plaintiff's state law claims for future damages and injunctive relief should be stayed because the Department of Toxic Substances Control (“DTSC”) has primary jurisdiction to address any such alleged contamination. Plaintiff disagrees. Plaintiff asserts that DTSC lacks primary jurisdiction, and that to the extent DTSC is regulating Defendants, the relief sought by Plaintiff will not interfere with any active regulation by DTSC or any other agency.
A. LEGAL STANDARD
1. Stays in General
The party seeking a stay bears the burden of proving it is warranted. Clinton v. Jones, 520 U.S. 681, 708, 117 S.Ct. 1636, 137 L.Ed.2d 945 (1997). “A trial court may, with propriety, find it is efficient for its own docket and the fairest course for the parties to enter a stay of an action before it, pending resolution of independent proceedings which bear upon the case. This rule applies whether the separate proceedings are judicial, administrative, or arbitral in character, and does not require that the issues in such proceedings are necessarily controlling of the action before the court.” Leyva v. Certified Grocers of Cal., Ltd., 593 F.2d 857, 863-64 (9th Cir. 1979). The competing interests to be considered are: (1) the possible damage that may result from the granting of a stay; (2) the hardship that the party seeking the stay may suffer by being required to go forward; and (3) the orderly course of justice measured by considering whether issues will be simplified or complicated, proof, and questions of law which could be expected to result from a stay. Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir. 2005). However, “[a] stay should not be granted unless it appears likely the other proceedings will be concluded within a reasonable time in relation to the urgency of the claims presented to the court.” Id. at 1111.
2. Primary Jurisdiction
The primary jurisdiction doctrine allows courts to stay proceedings or to dismiss complaints without prejudice pending the resolution of an issue within the special competence of an administrative agency. Clark v. Time Warner Cable, 523 F.3d 1110, 1114 (9th Cir. 2008). “[T]he doctrine is a ‘prudential’ one, under which a court determines that an otherwise cognizable claim implicates technical and policy questions that should be addressed in the first instance by the agency with regulatory authority over the relevant industry rather than by the judicial branch.” Id. at 1114. Primary jurisdiction is reserved for a “limited set of circumstances” that “require[ ] resolution of an issue of first impression, or of a particularly complicated issue that Congress has committed to a regulatory agency.” Id.
The doctrine is properly applied when the following factors are present: “(1) the need to resolve an issue that (2) has been placed by Congress within the jurisdiction of an administrative body having regulatory authority (3) pursuant to a statute that subjects an industry or activity to a comprehensive regulatory authority that (4) requires expertise or uniformity in administration.” Syntek Semiconductor Co., Ltd. v. Microchip Tech. Inc., 307 F.3d 775, 781 (9th Cir. 2002) (internal citations omitted). Under Ninth Circuit precedent, “efficiency” is the “deciding factor” in whether to invoke primary jurisdiction. Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753, 760 (9th Cir. 2015). Efficiency is not achieved if a stay “needlessly delay[s] the resolution of claims.” Id.; see City of W. Sacramento v. R & L Bus. Mgmt., 2020 WL 4042942, at *3 (E.D. Cal. July 17, 2020).
Defendants assert DTSC “has been intimately involved with investigation and remediation activities regarding [alleged contamination of groundwater and soil] at the Atlas Site since 2003.” MTSC at 3. They express concern that this Court's decisions on certain questions might differ from or conflict with DTSC's approach. Id. at 2, 10. Accordingly, Defendants argue that Plaintiff's request for injunctive relief and future damages “should be stayed pending completion of the DTSC's investigation at the Atlas Site.” Id. at 12. Defendants have not shown that this is an appropriate case for a stay.
1. Motion to Stay Claims for Injunctive Relief
First, Defendants have not established that this is a case in which primary jurisdiction is appropriate. Defendants have not identified any new or novel questions raised in this case that would be best answered by a regulatory agency such as DTSC. They argue “the relief sought by Plaintiff requires this Court to operate at the confluence of multiple areas of technical expertise, including geology and hydrology.” Id. at 9. But this is not so complex a case. Clark, 523 F.3d at 1114. Courts can and regularly do make decisions that involve areas of technical expertise—and it is incumbent upon the parties to provide the Court with sufficient information to make those decisions. See, e.g., Radiant Servs. Corp. v. Allegheny Techs. Inc., 2013 WL 12377686, at *4 (C.D. Cal. Mar. 19, 2013) (declining to apply the primary jurisdiction doctrine in a hazardous pollution contamination case). Defendants have also failed to explain in detail (1) under what statutes these issues are properly committed to regulatory agencies and (2) which issues should be “referred” to which agency.4 Clark, 523 F.3d at 1115 (“When a district court determines that primary jurisdiction applies, it enables a ‘referral’ of the issue to the relevant agency”).
Second, Defendants have not established that the relief sought—i.e., a stay of “injunctive relief and future damages ․ pending completion of the DTSC's investigation at the Atlas Site,” MTSC at 12—would efficiently resolve Plaintiff's claims. “Common sense tells us that even when agency expertise would be helpful, a court should not invoke primary jurisdiction when the agency is aware of but has expressed no interest in the subject matter of the litigation. Similarly, primary jurisdiction is not required when a referral to the agency would significantly postpone a ruling that a court is otherwise competent to make.” Astiana, 783 F.3d at 761.
The stay sought here is clearly overbroad. Plaintiff seeks relief for a range of alleged harms and represents here that it “seeks injunctive relief primarily to stop Defendants from continuing to launch metal projectiles, metallic dust, and smoke and fumes from their metal scrap yard.” MTSC Opp. at 2. This representation is consistent with the allegations in the FAC. Granting the requested stay would therefore “needlessly delay the resolution of claims.” Astiana, 783 F.3d at 760. Even a partial stay of claims potentially within the purview of DTSC has not been shown to be warranted at this point. DTSC has recently inspected the Atlas Site and issued a notice of violations. Dkt. No. 56-1, Supplemental Declaration of Erin Poppler (“Supp. Poppler Decl.”) ¶¶ 4-9. But Defendants acknowledge that “DTSC has not initiated formal agency proceedings.” MTSC at 9. Nor have Defendants shown that DTSC's involvement necessarily triggers the application of the primary jurisdiction doctrine. See City of W. Sacramento, 2020 WL 4042942, at *2 (finding primary jurisdiction doctrine inapplicable despite DTSC's issuance of a “final Imminent and Substantial Endangerment Determination and Order and Remedial Action Order”).5
Finally, Defendants’ analogy to Santa Clarita Valley Water Agency v. Whittaker Corporation, Case No. 2:18-cv-06825-SB-RAO, is unconvincing. The case for a stay here is not “strikingly similar” to the one made there. MTSC at 1. In fact, the comparison cuts in the opposite direction. At a general level, the claims only partially overlap. In Whittaker, the hazard at issue is contaminated groundwater, whereas Plaintiff also alleges other hazards largely overlooked by Defendants in their moving papers. Compare FAC with Dkt. No. 49-3, Ex. A at 1. Nor have Defendants demonstrated the same level of regulatory involvement in the two cases. Absent a showing of substantial regulatory intervention similar to that which occurred in Whittaker, staying the litigation in this case would not be an act of prudence.
In short, although various agencies have expressed regulatory interest in Atlas, Defendants have not shown that any agency or group of agencies have done so to such a degree that would justify a stay as requested in this case. The Motion to Stay Claims for injunctive relief is therefore DENIED WITHOUT PREJUDICE to a later showing of significant changed circumstances demonstrating active regulatory intervention that is adequately addressing the claims made in this litigation warranting a stay under applicable prudential principles.
2. Motion to Stay Claims for Future Damages
In moving for a stay of future damage claims, Defendants advance an additional argument to the one under the doctrine of primary jurisdiction (rejected above). They contend that these claims should be stayed because such damages are speculative and pose a risk of double recovery. In support, Defendants cite Greenfield MHP Assocs. LP v. Ametek, Inc., 2018 WL 1757527 (S.D. Cal. Apr. 12, 2018), a case in which regulatory agencies were actively involved in directing remediation by the defendant. Id. at *14. As a result, an award of damages for future remediation costs presented a “serious risk” of a double recovery in the event that those agencies required the defendant to perform future remediation. Id. The risk here is speculative at this point, as Defendants cite to no existing remediation plan or reasonably anticipated regulatory orders.
Accordingly, the Court DENIES WITHOUT PREJUDICE Defendants’ Motion to Stay Claims.
III. DEFENDANTS’ MOTION TO DISMISS
Defendants move to dismiss most, though not all, of Plaintiff's claims. The MTD is primarily premised on arguments related to preemption, statutes of limitations, and insufficiently pled claims for punitive damages.
A. LEGAL STANDARD
Under Rule 12(b)(6), a defendant may move to dismiss for failure to state a claim upon which relief can be granted. Dismissal is proper under Rule 12(b)(6) when the complaint either fails to allege a “cognizable legal theory” or fails to allege sufficient facts “to support a cognizable legal theory.” Caltex Plastics, Inc. v. Lockheed Martin Corp., 824 F.3d 1156, 1159 (9th Cir. 2016). To survive, a plaintiff must state “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim has “facial plausibility” if the plaintiff pleads facts that “allow[ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).
In resolving a 12(b)(6) motion, the Court follows a two-step approach. First, the Court must accept all well-pleaded factual allegations as true, but “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. Nor must the Court “accept as true a legal conclusion couched as a factual allegation.” Id. at 678-80, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955). Second, assuming the veracity of well-pleaded factual allegations, the Court must “determine whether they plausibly give rise to an entitlement to relief.” Id. at 679, 129 S.Ct. 1937. This determination is context-specific, requiring the Court to draw on its experience and common sense, but there is no plausibility “where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct.” Id.
B. DEFENDANTS’ PREEMPTION ARGUMENT FAILS
Defendants assert that Plaintiff's claims for continuing trespass, continuing private nuisance, continuing public nuisance, negligence, negligence per se, common law equitable indemnity, and declaratory judgment (“the State Law Claims”) are preempted by CERCLA because they conflict with CERCLA's liability scheme and because they constitute an impermissible “challenge to a CERCLA clean up.” Neither argument has merit.
Under the Supremacy Clause of the U.S. Constitution, state laws that “interfere with, or are contrary to the laws of Congress” are preempted and are therefore invalid. Gibbons v. Ogden, 22 U.S. 1, 82, 9 Wheat. 1, 6 L.Ed. 23 (1824). There are three kinds of preemption. Arizona v. United States, 567 U.S. 387, 399, 132 S.Ct. 2492, 183 L.Ed.2d 351 (2012). Defendants are not asserting express preemption—i.e., that Congress expressly preempted the challenged state-law claims when enacting CERCLA. They are also not asserting field preemption, which occurs when Congress has so occupied the legislative field that it leaves no room for state legislation. Any such assertion of field preemption would be unavailing under Ninth Circuit law. ARCO Envtl. Remediation, LLC v. Dep't of Health & Envtl. Quality of Montana, 213 F.3d 1108, 1114 (9th Cir. 2000) (“CERCLA does not completely occupy the field of environmental regulation. Congress expressly declared that it had no intent to do so.”). This leaves conflict preemption, which requires Defendants to show that the State Law Claims conflict with CERCLA. A conflict occurs when “compliance with both federal and state regulations is a physical impossibility” or when state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Arizona, 567 U.S. at 399-400, 132 S.Ct. 2492 (internal citations omitted).
Defendants first argue that the State Law Claims are “in direct conflict with CERCLA's liability scheme.” MTD at 10. They draw an analogy to Fireman's Fund Ins. Co. v. City of Lodi, Cal., 302 F.3d 928 (9th Cir. 2002), as amended on denial of reh'g and reh'g en banc (Oct. 8, 2002). The statute at issue in Fireman's Fund was a municipal ordinance that provided for recovery of cleanup costs from potentially responsible parties (“PRPs”), a purpose similar to the one served by CERCLA. Id. at 945. A portion of the law allowed the City—once it had incurred cleanup costs—to impose joint and several liability on PRPs for the entire amount of the City's own costs. Id. Though the court did not determine whether the City was a PRP, it held that, if it were a PRP, the municipal ordinance would be preempted to the extent it protected the City from contribution claims by other PRPs, contrary to CERCLA. Id. at 946.
Relying on Fireman's Fund, Defendants argue that tort claims imposing liability jointly and severally are preempted by CERCLA. MTD at 10-11. This argument reads too much into Fireman's Fund. In Fireman's Fund, the City enacted “a comprehensive remedial liability scheme modeled on CERCLA” that gave the City “municipal authority to investigate and remediate existing or threatened environmental nuisances affecting the City, and to hold PRPs or their insurers liable for the cost of the City's nuisance abatement activities.” 302 F.3d at 936. Even then, the Ninth Circuit did not find the city ordinance as a whole to be preempted. Rather, the court analyzed the specific sections of the law to see if any actual conflict existed. Defendants have not engaged at this specific level and have not shown a specific conflict, particularly with respect to the claims for alleged harm caused by metal projectiles, metallic dust, toxic fumes and smoke, and noise.
Defendants next assert that the State Law Claims present an “impermissible challenge” to CERCLA. MTD at 11. But Defendants point to no case holding that claims for negligence or nuisance generally conflict with CERCLA. While they claim that “Plaintiff's allegations are an assault on USEPA's and DTSC's remediation efforts at the Atlas Site,” they do not explain those remediation efforts (or even whether they exist)—much less show how specific ongoing and anticipated remediation will conflict with the specific relief sought for the alleged harm under state law. MTD at 11. Instead, they note that they implemented a Remedial Action Workplan and made a settlement payment to Plaintiff in 2008, and that the “DTSC [has visited the site] as recently as July 2020.” MTD at 11. In seeking to invalidate a state law, it is not enough to point generally to the past or to look vaguely to the future and claim a potential conflict. See Arizona, 567 U.S. at 399-400, 132 S.Ct. 2492 (“In preemption analysis, courts should assume that ‘the historic police powers of the States’ are not superseded ‘unless that was the clear and manifest purpose of Congress.’ ”) (quotation omitted); see also Fireman's Fund, 302 F.3d at 943 (examining the “specific portions” of the city ordinance in determining whether a conflict exists).
Accordingly, the Court DENIES Defendants’ MTD with respect to the State Law Claims.6
C. STATUTE OF LIMITATIONS
Defendants next assert that Plaintiff's causes of action for negligence, negligence per se, and strict liability for ultrahazardous activities are barred by the applicable statutes of limitations.7
1. Negligence and Negligence Per Se
Generally speaking, tort claims against property are subject to a three-year statute of limitations under California Code of Civil Procedure § 338(b). This applies to Plaintiff's claims of negligence and negligence per se. The limitation period generally begins to run “when the last element essential to a cause of action occurs.” San Francisco Unified School Dist. v. WR Grace, 37 Cal. App. 4th 1318, 1326, 44 Cal.Rptr.2d 305 (1995). “If the last element to occur is the element of damage, the statute of limitation begins to run upon the occurrence of ‘appreciable and actual harm, however uncertain in amount,’ that consists of more than nominal damages.” Id. (internal citations omitted). In tortious injury to property cases, “the harm implicit in a tortious injury to property is harm to the property itself, and thus to any owner of the property once the property has been injured.” CAMSI IV v. Hunter Technology Corp., 230 Cal. App. 3d 1525, 1534, 282 Cal.Rptr. 80 (1991).
Plaintiff recognizes that the FAC refers to negligent acts that began decades ago. But Plaintiff asserts that this is a case of “continuing injury”—in essence, that Defendants have been acting negligently for years, and continue to so act to this day. MTD Opp. at 9-10. The California Supreme Court has recognized “two main branches [of continuing-wrong accrual], the continuing violation doctrine and the theory of continuous accrual.” Aryeh v. Canon Bus. Solutions, Inc., 55 Cal. 4th 1185, 1197, 151 Cal.Rptr.3d 827, 292 P.3d 871 (2013). A continuing violation is one where the “wrongful course of conduct became apparent only through the accumulation of a series of harms.” Id. at 1198, 151 Cal.Rptr.3d 827, 292 P.3d 871. On the other hand, “continuous accrual applies whenever there is a continuing or recurring obligation.” Id. at 1199, 151 Cal.Rptr.3d 827, 292 P.3d 871. The applicable doctrine controls the scope of relief. Under the continuing violation doctrine, an entire course of conduct—even conduct outside the limitations period—is actionable. But under a theory of continuous accrual, the plaintiff is limited to the statutory period for which he or she can seek damages. That is, the theory supports recovery only for damages arising from those breaches falling within the limitations period. Yamauchi v. Cotterman, 84 F. Supp. 3d 993, 1014 (N.D. Cal. 2015).
The FAC does not plead a continuing violation. Plaintiff was aware of Defendants’ allegedly negligent acts more than three years prior to filing this suit. See FAC ¶¶ 16-18 (describing incidents that occurred in 2002, 2004, 2006, 2008, 2013, and 2017). As Defendants recognize, MTD Reply at 8-9, Plaintiff's claim appears to be one of continuing accrual. For Plaintiff's negligence claim, Defendants are alleged to be “continu[ing] to breach their duty to LAUSD” by negligently owning, maintaining, controlling, managing and operating the Atlas Site.” FAC ¶¶ 77-81. Likewise, Plaintiff alleges in support of its negligence per se claim that Defendants’ “continued failure” to exercise reasonable care violates numerous state and federal statutes, and that Plaintiff has suffered, and continues to suffer, damages as a result. FAC ¶¶ 83-86. Plaintiff's claims are not barred because Plaintiff alleges that Defendants have been continually negligent within the past three years. Thus, Plaintiff has stated claims that Defendants have been negligent within the statutory period.
Defendants’ Motion to Dismiss on this ground is DENIED. Plaintiff may assert claims of negligence and negligence per se for actions occurring within the applicable limitations period.
2. Strict Liability for Ultrahazardous Activities
Defendants also argue that Plaintiff's claim of strict liability for ultrahazardous activities is barred by the statute of limitations. MTD at 13. As with Plaintiff's negligence claims, the strict liability claim involves injury to property and has a three-year statute of limitations period. Cal. Code Civ. Proc. § 338(b). And as before, though Plaintiff was apparently aware of Defendants’ activities decades ago, Plaintiff can seek redress for alleged ultrahazardous activities within the statute of limitations under the theory of continuous accrual. Plaintiff has asserted that it suffered harm from Defendants’ allegedly ultrahazardous activities on at least three occasions this year alone. FAC ¶ 104.
Defendants’ Motion to Dismiss on this ground is DENIED, and Plaintiff may assert a claim for ultrahazardous activities for actions within the applicable limitations period.
D. POSSESSORY INTEREST
Defendants argue that Plaintiff's claims for continuing trespass, continuing private nuisance, and continuing public nuisance fail because Plaintiff cannot allege a possessory interest in groundwater.
However, Plaintiff alleges multiple harms underlying these claims, of which groundwater contamination is but one. See FAC ¶ 53 (asserting trespass caused by metal projectiles, toxic smoke and fumes, metallic dust, and other debris), id. ¶ 58 (asserting private nuisance caused by metal projectiles, toxic smoke and fumes, metallic dust, and other debris), id. ¶¶ 72-73 (asserting public nuisance caused by soil contaminated by hazardous substances migrating from Atlas). Moreover, Defendants not only focus on one alleged harm, but they also rely on one case that does not necessarily support their position. MTD at 13-14 (citing Orange Cty. Water Dist. v. Sabic Innovative Plastics US, LLC, 14 Cal. App. 5th 343, 413, 222 Cal.Rptr.3d 83 (2017)) (“Contamination of subsurface soil has been held to interfere with a landowner's possessory interest in its land.”).
Defendants’ Motion to Dismiss is DENIED as to Plaintiff's claims for continuing trespass, continuing private nuisance, and continuing public nuisance.
E. PUNITIVE DAMAGES
Defendants argue that “the FAC fails to plead sufficient factual allegations to demonstrate it is entitled to” punitive damages. They further argue that “[w]here a plaintiff fails to plead facts showing the malicious acts of employees were done with knowledge and express direction of management, there can be no recovery for punitive damages.” MTD at 14, 16.
Punitive damages require proof that the defendant has been guilty of oppression, fraud, or malice. Cal. Civ. Code. § 3294(a). Malice is specifically defined as “conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” Cal. Civ. Code § 3294(c)(1). California law requires a plaintiff to make allegations specifically concerning an officer, director, or managing agent of a corporation in order to state a request for punitive damages against that corporation. Cal. Civ. Code § 3924(b). In a motion to dismiss in California state court, conclusory assertions that a defendant has acted maliciously are not enough. Sufficient facts must be alleged to support a request for punitive damages. Smith v. Superior Court, 10 Cal. App. 4th 1033, 1042, 13 Cal.Rptr.2d 133 (1992). However, California's heightened pleading requirement on claims for punitive damages is irrelevant; such a requirement conflicts with federal procedural law. Robinson v. Managed Accounts Receivables Corp., 654 F. Supp. 2d 1051, 1066 (C.D. Cal. 2009). Plaintiffs in federal court need only “include a ‘short and plain’ prayer for punitive damages that relies entirely on unsupported and conclusory averments of malice or fraudulent intent.” Waddell v. Trek Bicycle Corp., 2016 WL 7507770, at *3 (C.D. Cal. Apr. 7, 2016) (citing Alejandro v. ST Micro Elecs., Inc., 129 F. Supp. 3d 898, 917 (N.D. Cal. 2015)).
Here, Plaintiff has named two individual actors in the FAC: Matthew Weisenberg and Gary Weisenberg. FAC ¶¶ 7-8. The FAC alleges collective conduct by all Defendants. But Plaintiff does not specifically allege that either of the two individual defendants, or any of Defendants’ officers, directors, or managing agents, engaged in conduct sufficient to support the imposition of punitive damages.
Because Plaintiff failed to allege Defendants’ officers, directors, or managing agents acted with malice, fraud, or oppression, the Defendants’ Motion to Dismiss this form of relief is GRANTED. Plaintiff's request for punitive damages is DISMISSED WITHOUT PREJUDICE.
IV. PRELIMINARY INJUNCTION
Plaintiff seeks a preliminary injunction on three of its claims: for violation of the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6972, for trespass, and for private nuisance. PI Motion at 10. Plaintiff requests that the Court order Defendants to:
(1) Prevent projectiles, debris, metallic dust, or any other objects from being launched or emitted from Defendants’ property, located at 10019 S Alameda St, Los Angeles, CA 90002, onto the David Starr Jordan High School (the “School Site”), located at 2265 East 103rd Street, Watts, Los Angeles, California;
(2) Cease activities at or near the boundary wall between Defendants’ property and the School Site that emit fumes or smoke resulting from burning, cutting, or torching of recycled materials or wastes; and
(3) Remediate and clean up the contamination and debris at the School Site caused by Defendants’ activities on the Atlas Site, pursuant to Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6972(a).
Notice of PI Motion at 1.
A. LEGAL STANDARD
A preliminary injunction is “an extraordinary remedy.” All. for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 (9th Cir. 2011) (internal citations omitted). “A plaintiff seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008). In the Ninth Circuit, a preliminary injunction is warranted where there are “serious questions going to the merits” and a “hardship balance that tips sharply toward the plaintiff,” provided the other two elements of the Winter test are also met. Cottrell, 632 F.3d at 1132. When a plaintiff seeks a mandatory injunction—that is, an injunction that requires the defendant to take specific action—the standard is demanding. As the Ninth Circuit recognizes, a “mandatory injunction ‘goes well beyond simply maintaining the status quo pendente lite [and] is particularly disfavored’ ․ The ‘district court should deny such relief “unless the facts and law clearly favor the moving party.” ’ ” Garcia v. Google, Inc., 786 F.3d 733, 740 (9th Cir. 2015) (internal citations omitted) (noting that mandatory injunctions should not issue in “doubtful cases”).
“The first factor under Winter is the most important—likely success on the merits. Because it is a threshold inquiry, when a plaintiff has failed to show the likelihood of success on the merits, we ‘need not consider the remaining three [Winter elements].” Id. (internal citations omitted). However, demonstrating a “significant threat of irreparable injury” is also a prerequisite for a party seeking a preliminary injunction. Oakland Tribune, Inc. v. Chronicle Pub. Co., 762 F.2d 1374, 1378 (9th Cir. 1985). An applicant must show that imminent harm is likely—and not just “possible.” Cottrell, 632 F.3d at 1131. A court need not analyze all four factors when a moving party cannot establish all factors as required under the Winter test. See Winter, 555 U.S. at 20, 129 S.Ct. 365 (requiring all four factors to be met); Cottrell, 632 F.3d at 1132 (all four factors must be satisfied even under a sliding-scale analysis); see also Mitchell v. Garcia, 2017 WL 10900576, at *1 (C.D. Cal. May 16, 2017) (denying preliminary injunction without examining each factor).
1. RCRA Claim
Plaintiff asserts that it is likely to prevail on its RCRA claim and seeks a mandatory injunction requiring Defendants to “[r]emediate and clean up the contamination and debris at the School Site caused by Defendants’ activities.” Notice of PI Motion at 1.
Plaintiff has filed its RCRA claim under 42 U.S.C. § 6972(a)(1)(B). To prevail on this claim, a plaintiff must establish: “(1) the defendant has been or is a generator or transporter of solid or hazardous waste, or is or has been an operator of a solid or hazardous waste treatment, storage or disposal facility; (2) the defendant has ‘contributed’ or ‘is contributing to’ the handling, storage, treatment, transportation, or disposal of solid or hazardous waste; and, (3) the solid or hazardous waste in question may present an imminent and substantial endangerment to health or the environment.” Ecological Rights Found. v. Pacific Gas and Elec. Co., 713 F.3d 502, 514 (9th Cir. 2013). Defendants do not contest the first two elements, but they dispute whether the solid or hazardous waste at Atlas presents an imminent and substantial danger to health or the environment.
Plaintiff's expert states that “there is reasonable cause for concern that [Defendants’ operations] may present an imminent and substantial endangerment.” Dkt. No. 41, First Declaration of Jonathan W. Rohrer (“Rohrer I Decl.”) ¶ 25. In support of this assertion, Mr. Rohrer initially cited a DTSC finding from June 30, 2016. Id. ¶ 23. But after Plaintiff filed the PI Motion, DTSC issued a Statement of Violations (“SOV”) for Atlas's operations, which Mr. Rohrer cites in a second declaration. Dkt. No. 57-1, Second Declaration of Jonathan W. Rohrer (“Rohrer II Decl.”) Ex. 2. The SOV charges Atlas with five Class I violations. California defines a Class 1 violation as a deviation from an applicable rule, regulation, or permit that (1) “represents a significant threat to human health or safety or the environment” because of the volume or relative hazardousness of the waste or its proximity to the population at risk; or (2) “is significant enough that it could result in a failure to accomplish” certain specified objectives (e.g., “[e]nsure that hazardous waste is destined for, and delivered to, an authorized hazardous waste facility” or “[e]nsure early detection of releases”). Cal. Health & Safety Code § 25110.8.5. DTSC does not specify in its SOV the basis for the classification for each violation. In their reply, Plaintiff cites the SOV as new evidence of Defendants’ liability under RCRA. PI Reply at 8-9. Defendants object, asserting that Mr. Rohrer is serving as a conduit to otherwise inadmissible hearsay. Dkt. No. 64, Defendants’ Objections to Evidence at 10-11.
Objections aside, the SOV does not, by itself, support a finding of imminent harm. See Birch Corp. v. Nev. Inv. Holding, Inc., 152 F.3d 924, at *2 (9th Cir. 1998) (letter stating the “product may pose a significant threat to public health/safety” is not evidence of imminent harm). While the SOV alleges violations that could substantially endanger the public health if not remedied, Plaintiff offers no evidence that resulting harm is imminent absent remedy. Plaintiff's Director of the Office of Environmental Health and Safety states that he is generally “aware of the risks posed ․ when exposed to particles of metallic dust containing harmful chemicals that can be inhaled or ingested.” Dkt. No. 40, Declaration of Carlos A. Torres (“Torres Decl.”) ¶ 15. But he does not evaluate the specific risk and its imminence in this case, as Defendants’ public health expert notes. Dkt. No. 67-1, Second Declaration of Robert Scofield (“Scofield II Decl.”), ¶ 9 (“It is simply not the case that the mere presence of metals, oil, or PCBS, for example, on the premises of a facility poses an imminent and substantial endangerment to the environment or to people in adjacent facilities.”).
Moreover, even if Plaintiff could show that it is likely to prevail on its RCRA claim or that it has raised serious questions on the merits, it still has to satisfy the other Winter factors. An “imminent and substantial endangerment claim,” when established, does not necessarily translate into likely imminent harm. A plaintiff asserting such a claim must show that the defendant's conduct “may present an imminent and substantial endangerment.” 42 U.S.C. § 6972(a)(1)(B) (emphasis added); see Simsbury-Avon Pres. Club, Inc. v. Metacon Gun Club, Inc., 575 F.3d 199, 210 (2d Cir. 2009) (noting that “the ‘imminent and substantial endangerment’ standard is a broad one” that authorizes a court to “eliminate any risk” (internal quotation and citation omitted)). “A finding of ‘imminency’ does not require a showing that actual harm will occur immediately so long as the risk of threatened harm is present.” Price v. U.S. Navy, 39 F.3d 1011, 1019 (9th Cir. 1994).
Here, Plaintiff has not shown, under the Winter standard as interpreted in Cottrell, that DTSC is not adequately protecting public health and safety by its ongoing oversight and proposed remedies in the SOV. In the absence of such evidence, a mandatory injunction of the type proposed here—“[r]emediate and clean up the contamination and debris at the School Site caused by Defendants’ activities”—for alleged RCRA violations is not warranted.8
2. Trespass and Nuisance Claims
Plaintiff's claims of trespass and nuisance are based on overlapping facts. Compare PI Motion at 16 (citing issues related to metal projectiles, fumes, smoke, and metallic dust in support of trespass claim) with id. at 18 (citing issues related to metal projectiles, fumes, smoke, and metallic dust in support of nuisance claim). Plaintiff requests that Defendants be ordered to: (a) “[p]revent projectiles, debris, metallic dust, or any other objects from being launched or emitted” from Atlas onto Plaintiff's property; and (b) “[c]ease activities at or near the boundary wall between Defendants’ property and the School Site that emit fumes or smoke resulting from burning, cutting, or torching of recycled materials or wastes.” Notice of PI Motion at 1.
a. Likelihood of Success on the Merits
Plaintiff alleges that metal projectiles, metallic dust, fumes, and smoke originating on Defendants’ property constitute a trespass and are a serious obstruction to Plaintiff's use and comfortable enjoyment of the School. PI Motion at 16, 18. As California courts have recognized, “many activities will give rise to liability both as trespass and a nuisance, if they result in the violation of a person's right of exclusive possession of land, and also constitute an unreasonable and substantial interference with the use and enjoyment of the land.” Rancho Viejo LLC v. Tres Amigos Viejos LLC, 100 Cal. App. 4th 550, 561, 123 Cal.Rptr.2d 479 (2002). The elements of a trespass claim are: (1) the plaintiff's ownership or control of the property; (2) the defendant's intentional, reckless, or negligent entry onto the property; (3) lack of permission for the entry or acts in excess of permission; (4) harm; and (5) the defendant's conduct was a substantial factor in causing the harm. Ralphs Grocery Co. v. Victory Consultants, Inc., 17 Cal. App. 5th 245, 262, 225 Cal.Rptr.3d 305 (2017). Though trespass requires a physical invasion of the plaintiff's land, the invader need not be a person. California courts have found that a trespassory invasion may take the form of lint, dust, or even invisible particles. See Elton v. Anheuser-Busch Beverage Group, Inc., 50 Cal. App. 4th 1301, 1306, 58 Cal.Rptr.2d 303 (1996) (collecting cases). The elements of a private nuisance claim are: (1) interference with use and enjoyment of plaintiff's property that is (2) substantial and (3) unreasonable. Mendez v. Rancho Valencia Resort Partners, LLC, 3 Cal. App. 5th 248, 262-63, 207 Cal.Rptr.3d 532 (2016).
Though Plaintiff has certainly alleged ill effects—piles of metallic dust, smoke, and nauseating fumes, Dkt. No. 45, First Declaration of Andrew Modugno (“Modugno I Decl.”) ¶¶ 5, 8—it is not clear that Plaintiff is likely to succeed in proving this particular claim. Defendants’ expert notes that there are several possible sources of the metallic dust, fumes, and other particles that support Plaintiff's claims for trespass and nuisance. Dkt. No. 50-3, Declaration of Shari Beth Libicki, PhD (“Libicki Decl.”) ¶¶ 8-14. Dr. Libicki identifies a number of other facilities, as well as a busy traffic corridor, that could plausibly be causing the entry of dust, smoke, and fumes onto Plaintiff's property. Id. These additional potential sources of harm are relevant to showing whether Defendants’ conduct was a substantial factor in causing the harm. Plaintiff, on the other hand, asserts that Defendants’ activities are the “sole causal factor,” PI Motion at 16, but relies primarily on the beliefs of lay witnesses. Id. at 8.
However, Plaintiff is likely to succeed on its claim that Defendants are responsible for metal objects being released onto Plaintiff's property. Plaintiff has cited multiple instances of metal projectiles from Defendants’ property landing onto Plaintiff's property. Some of these objects have been observed in flight, see Dkt. No. 40-6, Incident Report at 6 (“Piece of steel projectile flung over from the neighboring recycling yard on the south side of the school behind the main gym narrowly missing one of our construction employees”), while others were discovered lying mere feet from the retaining wall that separates the two properties, see Dkt. No. 57-2, Second Declaration of Andrew Modugno (“Modugno II Decl.”) ¶¶ 4-6 (identifying multiple metal objects within 10 feet of the wall). Though Defendants assert that Plaintiff's evidence is “wholly circumstantial,” PI Sur-Reply at 6, this assertion neglects to credit the direct evidence and understates the value of the circumstantial evidence.9 Plaintiff provided the Court with numerous declarations, photographs, and maps in support of the contention that the metal projectiles came from Atlas. Metal objects falling off piles or otherwise being sent onto school property could cause harm and are likely to interfere with Plaintiff's use and enjoyment of the property.
The Court finds that Plaintiff has shown that it likely would succeed on its trespass and nuisance claims caused by the metal objects and now turns to the other Winter factors.
b. Likelihood of Irreparable Harm
Plaintiff alleges “that if no action is taken to immediately abate the danger, occupants at the School are likely to suffer serious injury or even death,” and “it is only a matter of time until someone gets seriously injured or killed.” PI Motion at 8, 20. There can be no dispute that serious injury or death constitutes irreparable harm. The question is whether Plaintiff has demonstrated a likelihood of its occurrence.
Plaintiff alleges that the potential harm has been present for almost two decades. Dkt. No. 44, Declaration of Patrick A. Schanen (“Schanen Decl.”) ¶¶ 6-8. Despite this danger, Plaintiff did not seek injunctive relief for nearly twenty years. As the Ninth Circuit has recognized, such a delay undermines a party's claim of urgency and irreparable harm. Garcia, 786 F.3d at 746. The first metal object allegedly entered onto Plaintiff's property in 2002. It was such a significant event that school officials evacuated over 2,500 students, and it was covered by the media. Dkt. No. 44-2 (December 11, 2002 article from The Los Angeles Times). Plaintiff does not allege that anyone has been injured by a metal object in the nearly 18 years since the first one appeared.
Plaintiff's decision to seek preliminary relief at this time is confounding. While Plaintiff suggests that the metal piles have grown and the incidents have increased of late, the type of danger Plaintiff describes—with images of metal “projectiles” being “launched” to cause “serious injury or even death”—would seem less alarming when school is out for the COVID-19 pandemic. Cerda Decl. ¶ 8. If the potential danger is what Plaintiff describes, it is difficult to understand how Plaintiff has allowed it to occur for decades, even if the piles were smaller and the incidents fewer, without seeking relief. It is likewise difficult to understand how Plaintiff would allow construction or other nonessential activity to occur at the School currently if Plaintiff's position is genuine.
This is not to say that the prospect of falling metal debris is of no concern. On the contrary, the Court views this issue as quite serious and would expect the parties to conform their conduct accordingly. But Plaintiff is requesting extraordinary, urgent relief and “must establish a likelihood of irreparable harm that is grounded in evidence.” Pom Wonderful LLC v. Hubbard, 775 F.3d 1118, 1132-33 (9th Cir. 2014) (citing Herb Reed Enters., LLC v. Fla. Entm't Mgmt., Inc., 736 F.3d 1239, 1250-51 (9th Cir. 2013)). The claim of urgency is undermined by the timing of this request: Plaintiff knew about the metal objects since 2002 and only sounded the alarm nearly twenty years later when school is out and the risk of harm lessened. This factor therefore weighs against granting preliminary relief.
c. Public Interest
To the extent that an injunction would prevent harm to students, staff, or visitors at the School, it would undoubtedly be in the public interest—and strongly so if school were in session. Defendants do not argue to the contrary and instead maintain that there are “no facts that justify forcing Atlas to engage in cleanup activities, or curtail or halt its operations.” PI Opp. at 20. Plaintiff has demonstrated that metal objects entering the School could cause injury or harm, the extent of which would depend on the size and velocity of the object and where it hit. This factor weighs in favor of Plaintiff.
d. Balance of the Hardships
Plaintiff argues that “LAUSD, its students, teachers, and members of the public are suffering serious hardships, which will continue to escalate if an injunction is not issued.” PI Motion at 21.
In opposition, Defendants assert that, should the company be forced to halt its operations or otherwise shut down, they would have to immediately cease operations and lay off their employees. Dkt. No. 50-4, First Declaration of Matthew Weisenberg (“Weisenberg I Decl.”) ¶ 22. But Plaintiff does not seek a complete halt of Atlas's operations. Defendants have already indicated they are able to take actions that, if properly implemented, should accomplish at least some of Plaintiff's stated objectives. Defendants note that they have taken some remedial measures since the commencement of this action. Dkt. No. 67-2, Second Declaration of Matthew Weisenberg (“Weisenberg II Decl.”) ¶¶ 3-8. Specifically, Defendants are in the process of “installing a thirty foot net” between the two properties “to mitigate the risk of projectiles leaving the Atlas facility”; adding a 30,000 square foot “asphalt ‘cap’ ” to “provide further dust mitigation”; and “working with consultants and its dirt and debris removal vendors to ensure any dirt and debris collected on site are securely stored and disposed of compliantly with safe handling and disposal practices.” Id. Defendants make no claim of hardship with respect to undertaking such activities. As such, the balance of the hardships tips in favor of Plaintiff.
* * *
The Court finds that Plaintiff is likely to succeed on the merits of its trespass and nuisance claims related to the entry of the metal objects onto its property and that an evaluation of the other Winter factors favors granting preliminary relief.
The Court hereby finds and orders as follows:
1. Defendants’ Motion to Stay Claims is DENIED.
2. Defendants’ Motion to Dismiss is DENIED in part and GRANTED IN PART. The Motion to Dismiss is GRANTED WITHOUT PREJUDICE as to Plaintiff's claim for punitive damages.
3. Plaintiff's PI Motion is DENIED in part and GRANTED in part.
a. Plaintiff's request that Defendants be ordered to remediate and clean up the contamination and debris at the School Site pursuant to the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6972(a) is DENIED.
b. Defendants are ORDERED to prevent metal objects from being launched or emitted from Defendants’ property onto Plaintiff's property.
1. Opposition to MTD (Dkt. No. 53, “MTD Opposition”); Reply in Support of MTD (Dkt. No. 58, “MTD Reply”); Opposition to MTSC (Dkt. No. 54, “MTSC Opposition”); Reply in Support of MTSC (Dkt. No. 56, “MTSC Reply”); Opposition to PI Motion (Dkt. No. 50, “PI Opposition”); Reply in Support of PI Motion (Dkt. No. 57, “PI Reply”); Sur-Reply in Opposition to PI Motion (Dkt. No. 67, “PI Sur-Reply”) (Plaintiff included new allegations in the PI Reply, and the Court ordered Defendants to file a Sur-Reply. Dkt. No. 66).
2. Dkt. No. 42, Declaration of Lucia Cerda (“Cerda Decl.”) ¶ 8 (“there are currently no students or teachers at the School, but LAUSD employees and construction workers still work at the School on a regular basis.”).
3. In both of their briefs, Defendants submitted requests for judicial notice. Facts subject to judicial notice are those which are either “(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b). A court may not take judicial notice of a matter that is in dispute. Lee v. City of Los Angeles, 250 F.3d 668, 690 (9th Cir. 2001). Plaintiff did not file objections to these requests.
4. In the MTSC, Defendants argue that Plaintiff's request should be stayed “pending completion of the DTSC's investigation at the sites.” MTSC at 2. But in their Reply Defendants expand the scope of potential regulatory intervention, arguing for a stay “until DTSC, the SCAQMD, and the Los Angeles City Attorney conduct investigations and determine the appropriate remedies, if any ․” MTSC Reply at 12. Aside from depriving Plaintiff of an opportunity to respond, this belated change of position suggests that the extent of regulatory intervention is uncertain both in terms of time and scope.
5. Less persuasive still is Defendants’ reliance on historic regulatory involvement. In the last decade or so, DTSC apparently had minimal involvement with the Atlas Site, amounting to six or seven inspections. MTSC at 4 & n.3 (noting that DTSC requested that Los Angeles County inspect the site once in 2013 and that DTSC itself inspected Atlas three times in 2016 and once in each 2017, 2019, and 2020). The mere fact that agencies have been involved in some capacity over the years does not—without more—suggest that resolution is imminent or even expected. At this point, DTSC and Defendants have merely “engaged in ongoing discussions regarding [DTSC's] investigation.” Supp. Poppler Decl. ¶ 7. Defendants have not demonstrated that DTSC is likely to take any specific regulatory action that would render the claims pursued here unnecessary, inefficient, or counter-productive. See MTSC at 10 (“DTSC could easily take formal action and mandate investigation and remediation”) (emphasis added); see also Dkt. No. 49-4, Ex. K (DTSC declines to act on 2019 complaint about scrap pile height and refers Plaintiff to the City of Los Angeles instead).
6. At the hearing, defense counsel requested leave to brief whether the Court should decline supplemental jurisdiction over state-law claims, noting that Judge Wu previously suggested he might seek party input on this issue at some point. June 16 Order at 2. This Court is not requesting such input at this time.
7. Defendants also argue that Plaintiff's claim for violation of Proposition 65 is time barred, MTD at 13, but this argument rests on a typographical error in Plaintiff's FAC. Compare FAC ¶ 115 (alleging Proposition 65 Notice was issued on February 13, 2019) with FAC, Ex. A (Proposition 65 Notice to Defendants, dated February 13, 2020).
8. A court need not analyze all four factors when denying a motion for a preliminary injunction. See Mitchell, 2017 WL 10900576, at *1 (denying preliminary injunction without examining each factor).
9. Defendants do not address the merits of these claims beyond stating that they are preempted by CERCLA (a position the Court has rejected).
STANLEY BLUMENFELD, JR., U.S. District Judge
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Docket No: Case No.: 2:20-cv-5330-SB-SK
Decided: November 16, 2020
Court: United States District Court, C.D. California.
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