The opinion
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
THE BOARD OF TRUSTEES OF THE Case No. 18-cv-01199-VC
LELAND STANFORD JUNIOR
UNIVERSITY,
ORDER #2 RE CROSS MOTIONS FOR
Plaintiff, SUMMARY JUDGMENT
v. Re: Dkt. Nos. 106, 114, 120, 123
AGILENT TECHNOLOGIES, INC., et al.,
Defendants.
The parties have filed two sets of cross-motions for summary judgment: one between
Stanford and HP/Agilent, and one between HP/Agilent and Nokia. This order resolves some of
the simpler issues presented: Part I addresses those between Stanford and HP/Agilent; Part II
addresses those between HP/Agilent and Nokia. The remaining (and more challenging) issues
will be decided closer to the trial date. The trial was scheduled for August of this year, but civil
trials have been postponed because of the public health crisis. A revised schedule will be
discussed at the case management conference scheduled for 10:00 a.m. on August 12.
I.
1. Stanford’s SJ Motion, Sections 1, 7 –11, 13–17 of Part III.C (Dkt. No. 106). HP has
not opposed Stanford’s motion with respect to affirmative defenses 1, 13, 17–20, 23–26, 28–29,
31–37 raised in its answer, so those defenses are not available to HP or Agilent on Stanford’s
trespass and nuisance claims.
2. Stanford’s SJ Motion, Part III.B.8, at 9 (Dkt. No. 106). HP did not oppose summary
judgment on its act of God defense, and in any event has not identified any natural phenomena
that could have caused the contamination on the property. Stanford’s motion on this defense to
CERCLA liability is therefore granted.
3. Stanford’s SJ Motion, Part III.B.8, at 9 (Dkt. No. 106). Stanford’s motion is granted on
HP’s defense that the contamination was caused by the act or omission of Granger, a third party
who had leased and used the property before HP. CERCLA’s third-party defense is not available
if the third party’s act or omission “occurred in connection with a contractual relationship,
existing directly or indirectly, with the defendant.” 42 U.S.C. § 9607(b). HP asserts that it was
not in a qualifying contractual relationship with Granger. But HP concedes that it was assigned
Granger’s sublease, and a contractual relationship, for these purposes, “includes, but is not
limited to, . . . leases or other instruments transferring title or possession” of the property.
§ 9601(35)(A). See 1970 Assignment and Acceptance of Sublease, Dkt. No. 121-8, at 2–3.
The statute’s definition of contractual relationship excludes situations in which the
defendant acquired the property after the contamination, if the defendant can show by a
preponderance of the evidence that it neither knew of nor had reason to know of the
contamination. § 9601(35)(A)(i). In a footnote and without further support, HP says “that was
the case here.” See Agilent and HP’s Opposition, Dkt No. 145-1, at 19. But the statute requires
more: to invoke that exception, HP would have to show that it carried out appropriate inquiries
into the prior uses of the property and that it took reasonable steps to stop continuing release,
prevent future release, and prevent or limit human or environmental exposure to the previously
released substance. § 9601(35)(B). Because HP has not offered evidence from which a jury could
conclude that this exception applies, summary judgment is granted to Stanford on this defense.
4. Stanford’s SJ Motion, Part III.B.8, at 9 (Dkt. No. 106). Stanford brought this case in
February of 2018, well within the statute of limitations. CERCLA requires actions to recover
costs to be brought within three years of the completion of a removal action. 42 U.S.C.
§ 9613(g)(2)(A). HP does not dispute that Stanford’s removal costs continued through at least
2017. It argues instead that because its own removal actions “ensured protection of human health
and the environmental for commercial industrial use, it is those actions that triggered the
limitations period.” See Agilent and HP’s Opposition, Dkt No. 145-1, at 20. But HP confuses the
question whether the costs were necessary or otherwise recoverable with the question of when
they were incurred. The statute of limitations on Stanford’s claims did not start to run before
Stanford completed its removal action, which occurred no earlier than 2017. Summary judgment
is therefore granted to Stanford on this defense.
5. Stanford’s SJ Motion, Part III.C.3, at 11–12 (Dkt. No. 106). The as-is clause in the
2004 Option and Purchase Agreement applies only to Agilent (and not HP), so summary
judgment is granted to Stanford on that issue. The 2004 agreement between Agilent and Stanford
says that there are no intended third-party beneficiaries. See 2004 Option and Purchase
Agreement ¶ 13.10, Dkt. No. 86-1, at 18. Although HP and Agilent were once affiliates, they
separated in 2000, so Agilent signed the agreement with Stanford in 2004 as a fully independent
company. See Form 8-K, Dkt. No. 87-1. HP may therefore not invoke the agreement against
Stanford.
6. HP’s Cross SJ Motion, Part V.A, at 16–18 (Dkt. No. 145-1). Agilent’s summary
judgment motion is denied with respect to its argument that the as-is clause bars Stanford’s
CERCLA claims. A release clause can bar CERCLA claims when it is clear that the parties
intended CERCLA claims to fall within its scope—for example, when a clause releases a party
for any and all claims “in any way connected” to the purchase of a property. See Mardan Corp.
v. C.G.C. Music, Ltd., 804 F.2d 1454, 1461 (9th Cir. 1986). But as a general matter, an as-is
clause does not release a seller of CERCLA liability. Wiegmann & Rose International Corp. v.
NL Industries, 735 F. Supp. 957, 962 (N.D. Cal. 1990); Southfund Partners III v. Sears, Roebuck
& Co., 57 F. Supp. 2d 1369, 1375 (N.D. Ga. 1999) (collecting cases). Here, the agreement says
that Stanford “shall purchase the Property in its ‘AS IS’ condition WITH ALL FAULTS as of
the date of the closing.” See 2004 Option and Purchase Agreement ¶ 9.4, Dkt. No. 86-1, at 14.
That standard as-is clause does not operate to release Agilent of liability under CERCLA.
7. HP’s Cross SJ Motion, Part VI, at 24–26 (Dkt. No. 145-1). HP’s motion to disqualify
Stanford’s expert Susan Gallardo is denied. Although Gallardo has consulted for Stanford for
many years and was involved in some of the decisions relating to the property, that experience
does not prevent her from testifying as an expert. The Federal Rules of Evidence permit an
expert to “base an opinion on facts or data in the case that the expert has . . . personally
observed.” Fed. R. Evid. 703. Thus, Gallardo’s extensive knowledge of relevant facts does not
disqualify her. Her relationship with Stanford could be a source of bias, but that goes to the
weight of her testimony and not to its admissibility. United States v. Bonilla-Guizar, 729 F.3d
1179, 1185 (9th Cir. 2013).
II.
1. HP’s SJ Motion, Part III.B, at 9–12 (Dkt. No. 114-1). HP seeks partial summary
judgment only on the issue of Nokia’s liability as Granger’s successor. Nokia admits that it is
responsible for Granger’s liability as Granger’s corporate successor, so the motion is granted.
2. Nokia’s SJ Motion, Part III.B, at 10–14 (Dkt. No. 120). Nokia’s motion for summary
judgment on the basis of the text of the Acceptance of Assignment of Granger’s sublease is
denied. The agreement contains a clause saying that HP “[a]ssumes all of the obligations of the
sublessee under said sublease commencing May 1, 1970 and agrees to pay and perform all of the
obligations of the sublessee thereunder.” 1970 Assignment and Acceptance of Sublease, Dkt. No.
121-8, at 3. As Nokia would have it, the phrase “commencing May 1, 1970” means that on that
date, HP became responsible for any and all claims against Granger that might arise from
Granger’s prior use of the property. A more natural reading of the clause is that HP became
responsible for all obligations as the sublessee of the property starting May 1, 1970. And the
agreement contains no release clause or indemnification clause suggesting that the parties
intended for HP to assume liability for all claims that could arise from Granger’s prior use of the
property. Accordingly, there is (at the very least) a factual dispute about the scope of the clause.
* * *
One final note. The Court is concerned about the approach that HP and Agilent are taking
to this litigation. They are taking positions that range from borderline frivolous to outright
frivolous—for example, the statute of limitations argument and the motion to disqualify the
expert. They asserted countless boilerplate defenses that obviously have no bearing on this case,
requiring Stanford to incur unnecessary costs and legal fees fighting against them. Stanford never
should have needed to move for summary judgment on those defenses; HP and Agilent should
have dropped them long ago (indeed, the defenses never should have been asserted). This case is
difficult and expensive enough already. HP and Agilent, as well as their lawyers, are on notice
that any further litigation conduct along these lines will result in sanctions. Counsel for HP and
Agilent are ordered to read this paragraph to their clients, and to attest in the soon-to-be-filed
case management statement that they did so.
IT IS SO ORDERED.
Dated: July 17, 2020 =
VINCE CHHABRIA
United States District Judge