# Petition for Writ of Certiorari — Neville Chemical Co. v. California ex rel. California Department of Toxic Substances Control > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386008_0813%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2004 - **Citation:** 543 U.S. 869 ## Text C No. 04 a 8 = JUN 2 y 2004 « IN THE Supreme Court of the United States NEVILLE CHEMICAL COMPANY, Petitioner, V. STATE OF CALIFORNIA, on behalf of the California Department of Toxic Substances Control, Respondent. On PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES CouRT OF APPEALS FOR THE NINTH CIRCUIT PETITION FOR A WRIT OF CERTIORARI THOMAS H. CLarKE, JR. Counsel of Record TERRY ANASTASSIOU Ropers MAJESKI KOHN & BENTLEY 333 Market Street Suite 3150 San Francisco, CA 94105 (415) 543-4800 Counsel for Petitioner 187183 ce} COUNSEL PRESS (800) 274-3321 * (800) 359-6859 i QUESTION PRESENTED In the decision of which Petitioner Neville Chemical seeks review, the Ninth Circuit Court of Appeals ruled that the six-year statute of limitations for a CERCLA remedial action runs from the date a government entity grants “final” approval of a remediation plan. In doing so, the Court of Appeals ignored the language of the statute and authority from other circuits, and granted government entities unfettered power to choose when, or whether, the statute begins running by choosing when, or whether, to issue that final approval. Petitioner Neville Chemical therefore requests that this Court issue a writ of certiorari to address the following question: Whether the six-year statute of limitations for CERCLA remedial actions appearing in 42 U.S.C. § 9613(g)(2) runs from the date on which construction of remedial facilities begins, or the date on which the responsible government entity grants approval of a final remedial plan. il STATEMENT PURSUANT TO RULE 29.6 Neville Chemical Company was incorporated in the State of Pennsylvania in 1925. The stock of Neville Chemical Company is privately held and not offered for public sale. Neville Chemical Company has two foreign affiliates, Neville Chemical Europe B.V. of Uithoorn, Holland, and ND Dispersions LLC, a joint venture with Les Derives Resiniques et Terpeniques of Landes, France. lil TABLE OF CONTENTS Page SI UII vk cc ck kad wan veneessceasnss 1 Statement Pursuant to Rule 29.6 ............... ll ee ee ee ill Taple of Cited Authorities .............0..0005. \ er Vil ee l emtemment GF JUTISGICHION ... 1... cece l I l eee ree ere fee eee l A. Neville Chemical Complies With DTSC Instructions And Begins Remediation At The santa Fe Springs Site ...............55. 2 B. The District Court’s Denial Of Neville Chemicals’ Motion For Summary Judgment And Entry Of Judgment In Favor Of The eee i ak k eevee tea eK awe eee Ks 5 C. The Ninth Circuit Court Of Appeals’ PUUMNOG EPOCIGION: 2... eee e ees 7 iv Contents Reasons for Granting the Petition .............. ]. The Court Of Appeals’ Decision Warrants Review By Writ Of Certiorari............ A. Conclusion The Court Of Appeals’ Decision Cannot be Reconciled With The Language Of The Statute Or Decisions Of Other ee ree rnd int See 1. On Its Face, The Statute Of Limitations Bars The DTSC’s ee er ee 2. Prior Decisional Authority Supports Applying The Statute Of Limitations To Bar The DTSC’'s Suit ........ The Ninth Circuit Decision Impermissibly Gives The Government Control Over When, Or Even Whether, The Statute Of Limitations Will Run ............... 10 _ 16 TABLE OF CITED AUTHORITIES Page Cases: ” California v. Hyampom Lumber Co., 903 F. Supp. ef AT ® A, reer rc. 12, 13, 14 Gherarty & Miller, Inc. v. Conoco, Inc., 234 F.3d Wit Ce Ue OE kha nde irene eee 10 Louisiana v. Braselman Corp., 78 F. Supp. 2d 543 ee eee ae nr 10, 14 Nyhus v. Travel Management Corp., 466 F.2d 440 pA. Go Wee sas bie ee ee 15 Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning, 228 F.3d 998 (2000) ...... 15 United States v. Atlantic Richfield, 147 F. Supp. 2d GEG CBO. DD. FOR, TOO) os cas ovine aeaeenees 10, 14 United States v. Cocoa Berkau, Inc., 990 F.2d 610 CPO: CE. ESS o's vals wietanae rece reee eee 15 United States v. Navistar Int’l Transp. Corp., 152 F.3d 702 (7th Cir. 1998) oo nn cece wsces passim United States v. Therm-All, Inc., 352 F.3d 924 CRC, BOO? 6s'6a ss et easakcse eee 15 United States v. Vanornum, 912 F.2d 1023 (8th Cir. i, a ae eee eran errs So er mes 15 VI Cited Authorities Page Statutes: yy) SOR Some Bh” |) wero rrer ee. ye ts re l 42 U.S.C. § SGO12S). oii ccc nvscwssnanussees 13 QZ USL. 6 S607 oc cian ce esae ne eee 1,9 VQUSEC. CR... ee i, 1, 8, 10 42 U.S.C. § 9613(@K2MB) .......cecseeseceees 12 Vil TABLE OFAPPENDICES Page Appendix A -—— Opinion Of The United States Court Of Appeals For The Ninth Circuit In State Of California v. Nelville Chemical Company (Ninth Circuit Docket No. 02-56506 Filed a S| Oe rer re re la Appendix B — Revised Final Judgment Of The United States District Court For The Central District Of California Filed July 31,2002 ..... 27a Appendix C — Order Granting Plaintiff’s Motion For Judgment On The Pleadings Of The United States District Court For The Central District Of California, Western Division Dated July 10, 2002 ey earners 29a Appendix D — Minute Order Of The United States District Court For The Central District Of California Issued June 19, 2002 .............. 36a Appendix E — Order Granting Plaintiff’s Motion For Summary Judgment Or In The Alternative, Partial Summary Judgment Of The United States District Court For The Central District Of California, Western Division Filed May 10, Pe reper ey ey eer nen Grae ep an 4la Vill Appendices Appendix F — Order Granting In Part Plaintiff's Motion For Summary Judgment Or In The Alternative, Partial Summary Judgment Of The United States District Court For The Central District Of California, Western Division oo 8 a: + ee re Appendix G — Tentative Minute Order Of The United States District Court For The Central District Of California Issued March 11, 2002 CO. 8 SDE St Fe eseseese COR SF RDO 64D CEE TOSS SO 4 6 CO B'S Appendix H — Minute Order Of The United States District Court For The Central District Of California Issued December 18, 2001 ......... Appendix I — Order Of The United States Court Of Appeals For The Ninth Circuit Denying Petition For Rehearing And Rehearing En Bant Filed ND Bes Ne AA cK bee ke ede we os ees Appendix J — Relevant Statute 42 USCS § 9601 SED hs thas coat Sah eee ee ee ie ee ee Appendix L — Relevant Statute 42 USCS § 9613 | pr rer oe rep rore ert ety ees Page 56a 93a 123a 140a ] Neville Chemical Company respectfully petitions for a writ of certiorari to review the judgment of the United States Court of Appeals for the Ninth Circuit in this case. OPINIONS BELOW The opinion of the Ninth Circuit Court of Appeals (Appendix A, pp. la-26a) is reported at 358 F.3d 661. The decisions of the District Court (Central District of California) are unreported. STATE MENT OF JURISDICTION The Court of Appeals entered its judgment on February 10, 2004. The Court of Appeals denied Neville Chemical’s petition for rehearing on March 31, 2004. (Appendix I, pp. 136a-137a) The jurisdiction of this Court is invoked under 28 U.S.C. § 1254(1). STATUTES INVOLVED Section 107 of the Comprehensive Environmental Response, Compensation and Liability Act provides that suit for costs incurred in a “remedial action” must be commenced “within 6 years after initiation of physical on-site construction of the remedial action... .” (42 U.S.C. § 9613(g)(2).) STATEMENT OF THE CASE The California Department of Toxic Substances Control (“The DTSC”) filed suit against Petitioner Neville Chemical Company on September 21, 2000 in United States District Court for the Central District of California. The DTSC sued pursuant to 42 U.S.C. § 9607 to recover response costs for . ae — ae ’ 2 remediation of groundwater contamination at a site in Santa Fee Springs, California. The District Court denied Neville Chemical’s motion for summary judgment brought, in part, based on the DTSC’s failure to file suit within six years of Neville Chemical’s commencement of construction of remedial facilities, granting the DTSC’s cross-motion for summary judgment and entering judgment in the DTSC’s favor. The Court of Appeals affirmed, ruling that, regardless of when Neville Chemical began construction of remedial facilities, the statute of limitations could not begin running unless and until the DTSC formally approved the final remedial plan. A. Neville Chemical Complies With DTSC Instructions And Begins Remediation At The Santa Fe Springs Site From 1952 to 1987, Neville Chemical manufactured chemicals at a site in Santa Fe Springs, California. (App. 2a.) On December 10, 1986, the DTSC issued a Remedial Action Order under California’s Health & Safety Code. (App. 2a-3a.) The order required Neville Chemical to perform a remedial investigation and feasibility study and prepare a remedial action proposal. (/d.) Once the DTSC approved Neville Chemical’s proposed remedial action, Neville was required to execute the plan until the clean-up goals were achieved. (/d.) Neville Chemical submitted the results of its investigation in August 1991 and, on October 25, 1991, the DTSC ordered Neville Chemical to prepare its “Remedial Action Plan” for clean-up of the Santa Fe Springs site: In order te expedite planning for groundwater remediation at [Neville Chemical], the Department GB nee x Beton ee ee aca a is hereby directing [Neville Chemical] to prepare and submit an RA proposal which includes, at a minimum the following items: The specific objectives of the extraction/ treatment system. Proposed locations, dimensions, and construction details for groundwater extraction wells. Technical description of selected groundwater treatment technologies including a general discussion of selection criteria, an evaluation of cost effectiveness and, if necessary, a focused feasibility study... The order specifically directed that Neville Chemical’s proposal “be consistent with a final cleanup strategy for groundwater as it may ultimately become the final remedy presented in the Remedial Action Plan. The DTSC also instructed Neville Chemical to begin remediation as soon as possible: The most recent schedule for cleanup of the [Neville Chemical] site estimates that the draft Remedial Action Plan (RAP) will not be completed until January 1993. It is not unreasonable to assume that an additional six months to a year will pass before the final [Remedial Action Plan] is approved and a remedial design for groundwater is ready for implementation. Proceeding immediately with 4 plans to extract and treat groundwater should substantially expedite remediation of groundwater contamination and thereby limit damage to potential groundwater resources. This should result in a more timely and cost effective cleanup. Thus, as of October 1991, both the DTSC and Neville Chemical were working on the assumption that investigation was essentially complete, that the plan Neville Chemical would submit in January 1993 would be for remedial action rather than “removal” (as those terms are used in CERCLA), and that extraction and treatment of the groundwater should commence as soon as possible, regardless of when a final remediation action plan would be approved. Neville Chemical submitted its proposal for remediation of groundwater contamination in a report dated September 1, 1992. (App. 4a.) The proposal was based on three extraction wells by which groundwater would be brought to the surface, treated for hazardous waste, and discharged into the sanitary sewer system. (App. 126a.) As directed by the DTSC, the proposal set forth the design and plan for implementation of an extraction well network and water treatment system that would serve as the final groundwater remedy for the Santa Fe Springs site. (/d.) The DTSC approved Neville’s September 1, 1991 proposal in January 1993. (App. 4a.) With the DTSC’s approval, Neville Chemical’s contractors installed groundwater extraction wells on April 20, 22 and 26, 1994. (App. 4a-Sa.) Following the DTSC’s approval of Neville Chemical’s proposal to begin remediation at the Santa Fe Springs site ; 4 5 (by construction of the extraction wells), the DTSC continued touching the regulatory and administrative bases required before approval of a “final” remedial action plan. (App. 4a-6a.) It elicited a feasibility study from Neville which it received and approved in December 1994. (/d.) It reviewed the alternatives which Neville examined in the feasibility study, and elicited and examined yet another analysis of possible remedies. (/d.) On March 16, 1995, the DTSC approved Neville Chemical’s draft remedial action plan and circulated it for public comment. App. 6a.) (/d.) The draft remedial action plan was composed in principal part of extraction and treatment of groundwater by the wells and other facilities installed beginning in April 1994. The DTSC finally approved the final remedial action plan on May 8, 1995. By then, the extraction wells had been in place for thirteen months. The long regulatory and administrative process and the final remedial action plan are remarkable for one consistent fact: except for “do nothing” solutions such as use restrictions or in situ treatment, every single alternative considered by the DTSC and Neville was based on the extraction wells that Neville Chemical installed in April 1994. B. The District Court’s Denial Of Neville Chemicals’ Motion For Summary Judgment And Entry Of Judgment In Favor Of The DTSC On September 21, 2000, the DTSC filed the instant lawsuit against Neville Chemical (State of California v. Neville Chemical Company, U.S.D.C., C.D. Cal., Docket No. 00-CV-10205 GHK), seeking reimbursement of costs the DTSC claimed to have incurred in “supervising” the 6 contamination that it had directed Neville Chemical to investigate and remediate, and which Neville Chemical had in fact investigated and was in fact remediating. The DTSC complaint named only Neville Chemical as a defendant, and alleged two causes of action under CERCLA, one for reimbursement and one for declaratory relief regarding Neville’s purported duty of reimbursement. (/d.) On October 22, 2001, Neville Chemical filed a motion for summary judgment based on the DTSC’s failure to file suit within six years of Neville Chemical’s initiation of on- site construction of remedial facilities on the Santa Fe Springs property. The District Court denied Neville Chemical’s motion on December 18, 2001: [P]laintiff has presented admissible evidence that diverse solutions to the groundwater contamination problem were still being discussed in [Neville’s] draft [feasibility study] in December 1994, and that the parties were still considering changes in the groundwater plan up until the [remedial action plan] was finalized in May 1995. Plaintiff has also offered evidence that the DTSC, at least as late as its October 6, 1994 letter to [Neville Chemical], was insisting that further sampling and monitoring was necessary before the wells proposed . . . could be considered the final remedial soluticn for groundwater at the site. Therefore, viewing the evidence in the light most favorable to plaintiff, the nonmoving party, the Court finds that the final remedial design was not in place, and the statute of limitations had not yet begun to accrue, on September 21, 1994 [i.e. six years before the complaint was filed]. (App. 134a-135a, footnote omitted.) 7 The District Court thereafter granted the DTSC’s motions for partial summary judgment and judgment on the pleadings, ultimately entering judgment for the DTSC on July 31, 2002. C. The Ninth Circuit Court Of Appeals’ Published Decision Neville Chemical appealed the District Court’s decision to the Ninth Circuit Court of Appeals. On February 10, 2004, the Court of Appeals issued a published decision affirming the District Court judgment, holding that Neville Chemical’s construction of the remedial facilities in May 1994 did not commence the statute of limitations running because the DTSC had not yet issued a “final” approval of the remedial plan. (App. 11la-14a.) [W]e conclude that the ‘initiation of physical on- site construction of the remedial action’ can only occur after the final remedial action plan is adopted, and that, in this case, the statute of limitations, therefore, could not have begun to run until the final remedial action was approved on May 8, 1995. (App. 19a-20a.) The Court of Appeals denied rehearing on March 31, 2004. re 8 REASONS FOR GRANTING THE PETITION I. THE COURT OF APPEALS’ DECISION WARRANTS REVIEW BY WRIT OF CERTIORARI The Court should exercise its authority to review the Court of Appeals’ published decision because the decision conflicts both with the rulings of Courts in other Circuits and with the plain language of the statute of limitations. The rule embraced by the Court of Appeals also grants government entities unlimited discretion as to when, or even whether, the statute of limitations begins running, in derogation both of a settled principle of law and the legislative policy underlying the statute of limitations itself. A. The Court Of Appeals’ Decision Cannot be Reconciled With The Language Of The Statute Or Decisions Of Other Courts 1. On Its Face, The Statute Of Limitations Bars The DTSC’s Lawsuit The Ninth Circuit’s decision cannot be reconciled with the plain language of the statute because its focuses on an event on which the statute is mute (“‘final” approval of the remediation plan) and renders irrelevant the event on which the statute speaks (construction of remedial facilities). The CERCLA statute of limitations for a remedial action states that it begins running when construction begins on remedial facilities. (42 U.S.C. § 9613(g)(2).) The Court of Appeals published a decision that essentially states that the date of construction is irrelevant. (App. 11la-14a.) Instead, 9 the Court of Appeals ruled, the relevant date is whenever the government entity (in this case, the California DTSC) grants “final approval” of the remedial plan. As the Court of Appeals’ decision notes, the facts relevant to apply the statute of limitations are not at issue. (App. 7a.) The DTSC ordered Neville Chemical to prepare a remedial plan for the Santa Fe Springs site “consistent with a final cleanup strategy”; in September 1992, Neville Chemical proposed a plan which consisted, in principal part, of three extraction wells and a treatment facility; in January 1993, the DTSC ordered Neville Chemical to begin construction of the three wells and treatment facility proposed in Neville Chemical’s draft remedial plan pending final approval; Neville Chemical began this construction by installing the wells in April 1994; the DTSC issued a “final” approval on May 8, 1995 of a remedial plan that consisted, in principal part, of the same three extraction wells and treatment facility whose construction began in April 1994; and the DTSC filed suit on September 21, 2000. On its face, the statute of limitations would appear to bar the DTSC’s action. The DTSC’s suit was an action for recovery of remedial costs based entirely on 42 U.S.C. § 9607. CERCLA prescribes a six-year statute of limitations for remedial actions, stating that the six-year period begins to run when construction of remedial facilities begins: Actions for recovery of costs An initial action for the recovery of costs referred to in section 9607 of the title must be commenced... 10 (B) for a remedial action, within 6 years after initiation of physical on-site construction of the remedial action, except that, if the remedial action is initiated within 3 years after the completion of the removal action, costs incurred in the removal action may be recovered in the cost recovery action brought under this subparagraph ... (42 U.S.C. § 9613(g)(2).) Neville Chemical performed the first construction of the remedial facilities in April 1994, when it installed the three extraction wells. The DTSC did not file suit until September 2000. Application of the six-year statute of limitations should have been clear. 2. Prior Decisional Authority Supports Applying The Statute Of Limitations To Bar The DTSC’s Suit In addition to the plain language of the statute, the Ninth Circuit’s decision is inconsistent with rulings from courts in other circuits. Indeed, prior decisional authority has not hesitated to follow the plain language of the statute and reject “bright line” rules dating the statute from “final” approval. (United States v. Navistar Int'l Transp. Corp., 152 F.3d 702, 712 (7th Cir. 1998); see also United States v. Atlantic Richfield, 147 F. Supp. 2d 614, 620 (So. D. Tex. 2001); Louisiana v. Braselman Corp., 78 F. Supp. 2d 543, 548 (E.D. La. 1996); cf’ Gherarty & Miller, Inc. v. Conoco, Inc., 234 F.3d 917, 926 (Sth Cir. 2000).) In Navistar, the United States sued a property owner to recover the costs of responding to the presence of hazardous waste in a landfill on its property. (Navistar, supra, 152 F.3d at 704.) The remedial plan called, in part, for the placement 11 of a clay “cap” over much of the landfill. (Jd. at 705.) The U.S. filed its costs recovery suit six years Jess one day after the remedial plan was approved in writing, but six years plus one day after the property owner began placing clay on the property. (/d.) The District Court denied the defendant’s motion for summary judgment, but the Seventh Circuit reversed. It noted that the United States Supreme Court has instructed lower courts not to enforce statutes of limitations “in a grudging, hostile fashion .. .” (/d. at 707.) The Seventh Circuit went on to acknowledge the settled principle that statutes of limitations are enacted for a reason, and concluded by reversing the denial of summary judgment, ruling as a matter of law that the commencement of the remedial activity one day more than six years before suit was filed barred the government’s recovery. (/d. at 711, et seq.) The Ninth Circuit’s decision cannot be reconciled with Navistar. In Navistar, the Seventh Circuit rejected use of the “final” approval date to start the statute of limitations running. In this action, the Ninth Circuit’s published decision embraces using the “final” approval, essentially rendering the statute’s reference to construction meaningless. If anything, the facts of this case are more compelling than in Navistar, where it turned out that the remedy on which the property owner embarked required substantial revision and reconstruction. (/d. at 705-706.) By contrast, in this case, the three extraction wells that Neville Chemical installed in April 1994 formed the heart of the remedial plan ultimately approved by the DTSC. 12 Ironically, the Seventh Circuit’s decision in Navistar decision followed a 1995 ruling from a California District Court which rejected a “bright-line” rule that the date on which “final” approval of a remedial plan issued was the date on which the statute of limitations begins to run. (California v. Hyvampom Lumber Co., 903 F. Supp. 1389, 1392-1393 (E.D. Cal. 1995.) In Hyampom Lumber, the DTSC filed suit to recover costs from property owners which the DTSC claimed to have incurred in responding to contamination on the owner’s property. (/d. at 1390.) The DTSC issued a draft remedial action plan in June 1988 that required the property owners to excavate and remove contaminated soil. (/d.) Beginning on September 15, 1988, a subcontractor installed a lumber pole and necessary hardware to run power and water onto the site. (/d. at 1391.) When the DTSC filed suit to recover its response costs, the defendants moved for summary judgment, arguing that construction of facilities necessary for the remedial action (a power pole and some wire and pipes) had begun the six- year statute of limitations running. (/d. at 1391.) Although the power lines and water pipes had been installed in September 1988, the DTSC approved the remedial action plan in October 1988, with on-site excavation beginning on October 24, 1988. The DTSC did not file suit to recover its costs in the remedial action until September 30, 1994. (/d.) The District Court began its analysis by quoting the statute of limitations, which states that it begins running with “initiation of physical on-site construction of the remedial action...” (42 U.S.C. § 9613(g)(2)(B).) The Court noted that this language actually contained four elements: 1) the construction at issue must be “physical”; 2) it must 13 have occurred “on-site”; 3) it must be part of the “construction of remedial action”; and 4) it must constitute the “initiation” of the remedial action. (Hyampom Lumber, supra, 903 F. Supp. 1389.) The Court found that the first two elements had surely been satisfied. Installation of the pole and some wires and pipes had surely been “physical” and “on-site.” (/d.) The Court stated that whether this was “construction of the remedial action,” was a more difficult question. The Court stated that this third element actually had two of its own sub-elements: the activity must be “remedial” and part of the “construction of the remedial action.” The Court concluded that the activity in question — installing the pole, some wire and pipes — satisfied this element because it was “consistent with the permanent remedy.” (/d.) Significantly, in analyzing whether the construction at issue started the statute of limitations running, the Court in Hyampom rejected the notion that the absence of a final remediation plan meant that the construction could not be “initiation” of that plan . (/d. at 1392-1393.) To the contrary, the Court stated, any such rule “would make the lengthy definition of “remedy” and “remedial action” appearing in [42 U.S.C.] § 9601(24) meaningless — the terms would simply be defined as all response activities which occur after final approval of the permanent plan.” (/d., see App. 138a-139a.) The Court concluded that the statute of limitations began running when the pole and some wire and pipes were installed beginning on September 15, 1988. (/d. at 1394.) Thus, the State’s filing of its contribution suit on September 30, 1994 was two weeks late. (/d.) 14 As with Navistar, this case presents an even more compelling case for enforcing the statute of limitations than Hyampom Lumber. In Hyampom, the initial construction was hardly unique to remedial action; it essentially consisted of running power to the job site. (/d. at 1391.) By contrast, the three extraction wells installed by Neville Chemical are unique to remediation of groundwater treatment. In addition to the Seventh Circuit (the Navistar decision), District Courts in the Fifth Circuit also followed the Hyampom Lumber decision and rejected use of the “final” approval to begin the statute of limitations running. (See United States v. Atlantic Richfield, supra, 147 F. Supp. 2d 614, 620 (So. D. Tex. 2001); Louisiana v. Braselman Corp., supra, 78 F. Supp. 2d 543, 548 (E.D. La. 1996).) The Ninth Circuit’s decision dates the statute of limitations from an event — final approval of the remedial plan — which the statute of limitations never mentions. In - doing so, the decision ignores CERCLA’s statutory focus on initiation of construction and conflicts with decisions of other courts. Neville Chemical respectfully submits that these conflicts merit this Court’s intervention through the extraordinary writ of certiorari. B. The Ninth Circuit Decision Impermissibly Gives The Government Control Over When, Or Even Whether, The Statute Of Limitations Will Run In addition to the conflict with other courts, the Ninth Circuit decision merits this Court’s review because it gives government entities unfettered discretion over when, or even whether, the CERCLA statute of limitations begins to run. The Ninth Circuit decision states that, unless and until ahha a x < 3 a z = ¥ 3 | i fi j 15 a “final” approval of the remedial plan issues, the statute of limitations does not begin running. It follows that a government entity such as California’s DTSC can delay or even prevent commencement of the statute of limitations by the simple expedient of declining to issue final approval of a remedial plan, notwithstanding that the remedial activities have long been under way. Federal Courts do not approve endowing any parties, much less state agencies, with unlimited discretion regarding when or whether a statute of limitations operates. (United States v. Cocoa Berkau, Inc., 990 F.2d 610, 614 (Fed. Cir. 1993) [court cannot interpret the accrual of a right of action such that it “permits a single party to postpone unilaterally and indefinitely the running of the statute of limitations.”]; see also United States v. Therm-All, Inc., 352 F.3d 924 (Sth Cir. 2003); Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning, 228 F.3d 998, 1001 and n.2 (Kosinski, J., dissenting).} To the contrary, Federal Courts have implicitly recognized the impropriety of permitting a government entity to delay the running of a statute of limitations indefinitely. (United States v. Vanornum, 912 F.2d 1023, 1027 n.5 (8th Cir. 1990), citing Nyhus v. Travel Management Corp., 466 F.2d 440, 453 (D.C. Cir. 1972).) The principle that the government is not entitled to delay statutes of limitations forever also accords with the legislative purpose underlying the CERCLA statute of limitations itself: By implementing the [CERCLA] statute of limitations, [Congress] expressed a determination that, in order to achieve timely clean-up of affected sites and to ensure replenishment of the [Superfund], cost recovery actions must commence in a timely fashion. Therefore, although we shall construe 16 ambiguities in the statute in favor of the government in an effort to avoid frustrating the beneficial purposes of CERCLA, we must recognize that Congress has determined that that those beneficial purposes are serviced by the timely filing of recovery actions.” (Navistar, supra, 152 F.3d at 707-708, emphasis added, footnotes omitted.) The Ninth Circuit decision’s embrace of a “bright line” rule running the statute of limitations from issuance of a “final” approval permits a government entity to determine when, or whether, the statute runs by choosing when, or wither, to issue final approval of the remediation plan. The decision is therefore in derogation, not merely of a settled principle of Federal law, but of the legislative purpose underlying the statute the decision applied. Review of the decision is an appropriate use of this Court’s powers. CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted, THomas H. CLarKE, JR. Counsel of Record TERRY ANASTASSIOU Ropers MAJESKI KOHN & BENTLEY 333 Market Street Suite 3150 San Francisco, CA 94105 (415) 543-4800 Counsel for Petitioner ae SSS ; eS a. APPENDIX la APPENDIX A — OPINION OF THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT IN : STATE OF CALIFORNIA vy. NELVILLE CHEMICAL : COMPANY (NINTH CIRCUIT DOCKET NO. 02-56506 a FILED FEBRUARY 10, 2004) UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT No. 02-56506 D.C. No. CV-00-10205-CAS habia STATE OF CALIFORNIA, On behalf of the California Department of Toxic Substances Control, Plaintiff-Appellee, V. NEVILLE CHEMICAL COMPANY, a Corporation, Defendant-Appellant. Chae AT AION an AL OPM A NRE ay Se Ni ca Appeal from the United States District Court for the Central District of California Christina A. Snyder, District Judge, Presiding Argued and Submitted November 3, 2003—Pasadena, California Filed February 10, 2004 Before: Harry Pregerson, Ferdinand F. Fernandez, and Marsha S. Berzon, Circuit Judges. Before Harry Pregerson, Ferdinand F. Fernandez, and Marsha S. Berzon, Circuit Judges. 2a Appendix A OPINION BERZON, Circuit Judge: The issue before us presents a question of statutory interpretation: Under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), when does the limitations period for suing to collect remedial action costs from a party responsible for hazardous substances begin? One would expect a fairly straightforward answer to that question in the statute. Potential plaintiffs need to know when to file suit, and potential defendants would surely prefer clear notice as to when their legal liability, if any, lapses. True, in the “maze”-like structure and “baffling language” of CERCLA, clarity is rare. Carson Harbor Vill. Ltd. v. Unocal Corp., 270 F.3d 863, 880, 883 (9th Cir.2001) (en banc). The provision we grapple with today appears at first blush to be no exception. But as one works one’s way through the statute as a whole, a fairly definite answer emerges. As will appear, we conclude that the limitations period for bringing an initial suit for recovery of remedial action costs under CERCLA cannot accrue until after the final adoption of the remedial action plan required by the statute. FACTUAL BACKGROUND For 35 years, Neville Chemical Company (Neville) manufactured at its industrial facility in Santa Fe Springs, California, various chemical compounds for use in insecticides, solvents, metal working lubricants, and flame retardants. These activities contaminated the groundwater and soil at the facility. In 1986, the California Department of 3a Appendix A Toxic Substances Control’ (the Department) issued a Remedial Action Order, directing Neville to (1) begin the process of cleaning the site; (2) conduct a remedial investigation and feasibility study; (3) submit a draft remedial action plan (RAP); and, once the draft RAP was finalized, (4) implement the plan. The Department sent Neville a letter on September 29, 1989, informing Neville of its obligation to pay an “activity fee” to the Department. The letter explained that the activity fee—$46,636.38—was “to partially cover the Department’s cost of overseeing [Neville’s] actions to characterize and satisfactorily remediate this site.” At that time, the Department had a formal policy of “only collect[ing] direct program expenditures (generally laboratory or contract expenditures) beyond activity fees in cases where the responsible parties are being cooperative.” In 1992, the Department rescinded this policy in favor of pursuing the full cost recovery of overseeing a clean-up, regardless of whether the responsible party was recalcitrant or cooperative. In August 1991, Neville presented the Department with preliminary findings from the Remedial Investigation. In October 1991, the Department directed Neville to prepare a Groundwater Removal Action Proposal (the Proposal), in which Neville was to propose an expedited response to the contamination. The Department stated that the Proposal “should be consistent with a final cleanup strategy for 1. The Department of Toxic Substances Control was a division of the California Department of Health Services until it became a separate department in 1991. We will refer to this entity simply as “the Department” throughout this opinion. 4a Appendix A groundwater as it may ultimately become the final remedy presented in the Remedial Action Plan.” Neville submitted its Proposal on September 1, 1992. It included “three major components: an extraction system, a temporary on-site treatment system, and an effluent disposal system.” The Department reviewed the Proposal and, in January 1993, directed Neville to implement the extraction and treatment system. In a letter to Neville, the Department stated: “The proposed system will potentially become part of the final remedial alternative for the site,” and “[t]he ground water extraction and treatment system is envisioned as part of the final remedial alternative.... [H]owever, the Department may order the discontinuation of its use in the event it is not effective or if it enhances the migration of contaminants from the Site.” Neville submitted a Feasibility Study Technical Memorandum in August 1993, listing alternative possible remedies. In response to this memorandum, the Department stated that it: has not gathered sufficient information and public comment to require any of the alternatives to be implemented as of yet. Part of this remediation process requires that all feasible alternatives be scrutinized carefully and thoroughly prior to actual selection of the remedial alternative. The Feasibility Study is the tool that allows the Department to weigh the technical and substantial issues for all possible alternatives in order to make a sound and fair decision in protecting the public health and the environment. Sa Appendix A Additionally, the letter stated: The department reviewed and approved of the [Groundwater] Removal Action as an interim measure to prevent further migration and to protect the public health and the environment. - The [Groundwater] Removal Action is not a Department-approved final Remedial Action, and cannot be construed to be such. The - [Groundwater] Removal Action, may be included as part of the final Remedial Action depending on the results and conclusions of the Health Risk Assessment and the Remedial Action itself, which has yet to be prepared. Therefore, whether the [Groundwater] Removal Action constitutes the groundwater portion of the final Remedial Action cannot be determined at this point. Neville began to excavate three extraction wells at the site in April 1994. A month later, Neville submitted a Draft Feasibility Study, again proposing several aiternative remedies. The Department responded with comments to this draft in June of 1994, including the following: “The Department has never stated that the Ground Water Removal Activity ... is the final ground water remedy, but has to be tested to determine the efficiency of the system.” In October of the same year, the Department sent Neville a letter expressing concern because Neville had not started construction of the Groundwater Removal System. The Department also noted, “Neville will need to compare several sample results to determine the effectiveness of the System. Neville will use the information to determine whether this | 6a Appendix A or a modified System will be incorporated into the draft Remedial Action Plan.” Neville submitted a final Feasibility Study, discussing seven alternative groundwater remedial options, in December of 1994. Later that month the Department approved it. Neville then submitted a draft remedial action plan. On May 8, 1995, after having circulated the draft for public review and comment and holding a public meeting to discuss the plan, the Department approved the final remedial action plan. The groundwater containment and treatment system originally designed as an interim removal action remained part of the final RAP. ANALYSIS I. Accrual of Cause of Action Neville first argues that the district court erred in denying Neville’s summary judgment motion because the statute of limitations for bringing a cost recovery action under CERCLA barred California’s suit. A party may appeal a denial of summary judgment once a final judgment has been entered in the suit. Comsource Indep. Foodservice Cos. v. Union Pac. R.R. Co., 102 F.3d 438, 442 (9th Cir.1996). We review a denial of summary judgment de novo. 7d. (citing Warren v. City of Carlsbad, 58 F.3d 439, 441 (9th Cir.1995), and Pomerantz v. County of Los Angeles, 674 F.2d 1288, 1290 (9th Cir.1982)). California brought suit on behalf of the Department under § 107 of CERCLA, 42 U.S.C. § 9607. This statute provides | 7a Appendix A that the owner and operator of a facility “shall be held liable for—(A) all costs of removal or remedial action incurred by ...aState... not inconsistent with the national contingency plan... .” An “initial action’” for recovery of costs “must be commenced ... for a remedial action, within 6 years after initiation of physical on-site construction of the remedial action.” 42 U.S.C. § 9613(g)(2). The present suit was brought on September 21, 2000. Therefore, the suit is time-barred if and only if the “initiation of physical on-site construction of the remedial action” occurred on or before September 21, 1994. The facts of the case are not in dispute. The only question is which of the enumerated events constitutes the “initiation of physical on-site construction of the remedial action,” thereby triggering the limitafions-period. Neville maintains that the statute of limitations began to run in April 1994, when it started excavating the extraction wells. California argues that no remedial action could have occurred until the final remedial action plan was approved by the Department on May 8, 1995. This Court has yet to decide when an action is remedial for the purpose of triggering the statute of limitations in cost recovery suits under 42 U.S.C. § 9613(g)(2). A. Statutory Interpretation The purpose of a limitations period is to “clearly define the time period in which suit must be commenced.” 2. The statute divides actions for recovery of costs into initial and subsequent. The parties do not dispute that this is an “initial action.” a 8a Appendix A United States v. Colvin, 204.F.3d 1221, 1226 (9th Cir.2000). Here, the statute of limitations is invoked to bar the government from collecting the costs it expended in cleaning up a hazardous waste site, a situation in which we have been specially instructed by the Supreme Court to construe limitations periods in favor of the government. See Badaracco v. Comm'’r, 464 U.S. 386, 391-92 (1984) (“Statutes of limitation sought to be applied to bar rights of the Government, must receive a strict construction in favor of the Government.”’) (citing E.J. Dupont De Nemours & Co. v. Davis, 264 U.S. 456, 462 (1924)). Additionally, if at all possible, the statute should be interpreted to provide a clear accrual date, so that each party—but especially the State as plaintiff—knows when the time to bring suit runs out. The text of the statute, read as a whole rather than in pieces, specifies that ascertainable date. Title 42 U.S.C. § 9613(g)(2) provides that the “initiation of physical on-site construction of the remedial action” triggers the statute of limitations. CERCLA defines “remedial action” in section 9601(24): The terms “remedy” or “remedial action” means [sic] those actions consistent with permanent remedy taken instead of or in addition to removal actions in the event of a release or threatened release of a hazardous substance into the environment, to prevent or minimize the release of hazardous substances so that they do not migrate to cause substantial danger to present or future public health or welfare or the environment. The term includes, but is not limited to, such 9a Appendix A actions at the location of the release as storage, confinement, perimeter protection using dikes, trenches, or ditches, clay cover, neutralization, cleanup of released hazardous substances and associated contaminated materials, recycling or reuse, diversion, destruction, segregation of reactive wastes, dredging or excavations, repair or replacement of leaking containers, collection of leachate and runoff, onsite treatment or incineration, provision of alternative water supplies, and any monitoring reasonably required to assure that such actions protect the public health and welfare and the environment. 42 U.S.C. § 9601(24) (emphasis added). “Removal,” in turn, is defined thus: The terms “remove” or “removal” means{[sic] the cleanup or removal of released hazardous substances from the environment, such actions as may be necessary [sic] taken in the event of the threat of release of hazardous substances into the environment, such actions as may be necessary to monitor, assess, and evaluate the release or threat of release of hazardous substances, the disposal of removed material, or the taking of such other actions as may be necessary to prevent, minimize, or mitigate damage to the public health or welfare or to the environment, which may otherwise result from a release or threat of release. The term includes, in addition, without being limited to, security fencing or other measures to limit access, 10a Appendix A provision of alternative water supplies, [and] temporary evacuation and housing of threatened individuals not otherwise provided for.... 42 U.S.C. § 9601(23). The plain meaning of the definition of “remedial,” read together with the statute of limitations in § 9613(g)(2) and the use of that same term in the rest of the statute, supports the conclusion that “the initiation of physical on- site construction of the remedial action” can only occur after the final remedial action plan is adopted. The first half of the definition of “remedial action” provides a general description of how such an action fits into the entire scheme of the clean-up required by the statute. Remedial actions, the statute provides, must be “consistent with permanent remedy taken instead of or in addition to removal actions.” The second half of the definition lists some activities that could constitute remedial actions. These examples, however, must be read in light of the more general description of the first half. For example, the “provision of alternative water supplies” is listed as both a type of “remedial action” and as a type of “removal.” The provision of alternative water supplies will only be “remedial,” therefore, if it is done “consistent[ly] with permanent remedy. .. .” On the other hand, if alternative water supplies are provided on a more temporary basis, the very same activity would be a “removal” action. That is, “removal actions generally are immediate or interim responses, and remedial actions generally are permanent responses.” Geraghty & Miller, Inc. v. Conoco ; af ee —“‘—C~C Wiiecsitsenans..:-. lla Appendix A Inc., 234 F.3d 917, 926 (Sth Cir.2000). In this case, therefore, even if the completed extraction wells do fall under one of the types of activities listed in the second half of the definition of “remedial action” (e.g., “onsite treatment’), the excavation of those wells must still be “consistent with permanent remedy” to have triggered the statute of limitations. For an action to be “consistent with permanent remedy,” a permanent remedy must already have been adopted. Neither party can know for sure whether a given action is consistent with permanent remedy until that permanent remedy is determined. The first point at which both parties can be certain that any construction is consistent with a permanent remedy is when the permanent remedy is actually selected. In this case, as in most cases,’ the permanent remedy was selected when the final RAP was approved. Until after the adoption of the RAP, then, California could not have brought suit to recover remedial costs. “The standard rule [is] that the limitations period commences when the plaintiff has a complete and present cause of action.” Bay Area Laundry & Dry Cleaning Pension Trust Fund v. Ferbar Corp. of Cal., Inc., 522 U.S. 192, 201 (1997) (quoting Rawlings v. Ray, 312 U.S. 96, 98 (1941)) (internal quotation marks omitted). “[U]ntil the plaintiff can file suit 3. In cases where private, non-governmental parties conduct the clean-up of a site without governmental or agency oversight and then pursue response costs under CERCLA, there will most likely still be a remedial action plan in place. See 40 CFR § 300.700 (providing that private parties should follow the public notice and comment procedures required of government actors). As no non- governmental response cost suit is before us, however, we do not address the limitation period applicable to such suits. 12a Appendix A and obtain relief,” a limitations period ordinarily does not commence. Bay Area Laundry, 522 U.S. at 201; see also Reiter v. Cooper, 507 U.S. 258, 267 (1993) (“While it is theoretically possible for a statute to create a cause of action that accrues at one time for the purpose of calculating when the statute of limitations begins to run, but at another time for the purpose of bringing suit, we will not infer such an odd result in the absence of any such indication in the statute.”’). The Department could not have brought suit for costs of remedial action at the time Neville began excavating the extraction wells.* At that time, neither party could have known if the wells would eventually be “consistent with permanent remedy,” because no final remedial action plan had been decided upon at that point. As we must assume that the limitations period did not begin to run until at least the 4. This is not to say that the Department was unable to bring any suit to recover any costs at the time Neville began excavating the extraction wells. Under 42 U.S.C. § 9613(g)(2), “an action may be commenced under section 9607 of this title for recovery of costs at any time after such costs have been incurred.” As soon as the Department expended its first dollar, it could have sued Neville for this dollar and sought a declaratory judgment of Neville’s liability for future response costs. However, the availability of the option to bring suit earlier, and thereby obtain a declaratory judgment as to liability, should not confound Congress’s clear intention that an initial action to recover remedial costs may be brought “within 6 years after initiation of physical on-site construction of the remedial action.” A suit to recover the costs of particular remedial actions, as opposed to a suit to recover removal costs and obtain a declaratory judgment on liability, can only be brought once those remedial actions have been completed. a ee” eee ee l3a Appendix A time California could have brought suit to recover remedial costs, that period could not have been triggered by the excavation of the wells. To rule otherwise would be to hold, as a practical matter, that California was required to bring suit before April 19, 2000, less than five years after its action for recovery of remedial costs first accrued, even though the statute specifies a six-year limitations period.° In the case at hand, neither party could have known before the final RAP was approved whether any particular construction projects would be “consistent with the final remedy”: Before the final remedial action plan was approved, the letters from the Department emphasized and re-emphasized that it did not know whether any of the measures already taken by Neville would or would not be 5. The legislative history of the Superfund Amendments and Reauthorization Act of 1986 (SARA), which added the statute of limitations provision to CERCLA, is consistent with our interpretation of § 9613(g)(2). When we can interpret a statute by its plain meaning, we only look to the congressional history to “ensure that there is no clearly contrary legislative intent.” Carson Harbor Village, Ltd., 270 F.3d at 884. There is none here. The House Report from the Judiciary Committee states: “The statute of limitations provided by this amendment for the initial cost recovery action for a remedial action is three years from the commencement of physical on-site construction of the remedial action, that is, after the [Remedial Investigation/Feasibility Study] and after design of the remedy.” H.R. Rep. 99-253(IID), reprinted in 1986 U.S.C.C.A.N. 3038, 3044 (emphasis added) (referring to one version of the predecessor bill, H.R. 2817, which provided a three-year statute of limitation but was otherwise identical to the final Act with regard to the pertinent limitations provision). The design of the remedy can only occur after the final remedy has been selected in the final remedial action plan. l4a Appendix A consistent with the final remedial plan. See Letter from the Department to Neville, January 1993 (stating that the Department may discontinue the use of the groundwater extraction and treatment System “in the event it is not effective or if it enhances the migration of contaminants from the Site”); Letter from the Department to Neville, August 1993 (stating that the Department “has not gathered sufficient information and public comment to require any of the alternatives to be implemented as of yet’); id. (stating that the Department “reviewed and approved of the [Groundwater] Removal Action as an interim measure” but that the Groundwater Removal Action “is not a Department- approved final Remedial Action, and cannot be construed as such.... Therefore, whether the [Groundwater] Removal Action constitutes the groundwater portion of the final Remedial Action cannot be determined at this point.”’). Section 9617 of CERCLA, which provides for public participation in selection by the President or a State of a remedial action plan, reinforces our interpretation of “remedial action” as action taken after the final remedial action plan has been approved. After mandating a public notice and comment period and a public meeting regarding the proposed remedial action plan, 42 U.S.C. § 9617(a)(1) & (2), the statute provides: “Notice of the final remedial action plan adopted shall be published and the plan shall be made available to the public before commencement of any remedial action.” 42 U.S.C. § 9617(b) (emphasis added). So, under the statute, remedial action may not commence— and therefore, the “initiation of physical on-site construction of the remedial action” cannot begin—until after a final remedial action plan is adopted. I5a Appendix A The statutory provision limiting the time in which a party may commence a suit for natural resource damages also supports this interpretation of “remedial action.” Title 42 U.S.C. § 9613(g)(1) states, “In no event may an action for damages under this chapter with respect to {a facility at which a remedial action is scheduled] be commenced ... before selection of the remedial action if the President is diligently proceeding with a remedial investigation and feasibility study. .. .” The reason for this limitation was illuminated in the House Report issued by the Committee on the Judiciary: Congress sought to integrate cost recovery and damages actions. H.R. Rep. 99-253(III), reprinted in 1986 U.S.C.C.A.N. 3038, 3044. The premise behind the Report’s reasoning is clear: natural resource damages actions and cost recovery actions could not be integrated if damages actions were brought before a remedy was selected, because cost recovery suits could not be brought before that point. Some courts have raised the concern that if one reads the statute, as we do, to provide that “initiation of physical on-site construction of the remedial action” can only take place after the final remedial action plan is approved, much of the definition of “remedial action” would become superfluous. See, e.g., United States v. Navistar Int'l Transp. Corp., 152 F.3d 702, 712 (7th Cir.1998); California vy. Hyampom Lumber Co., 903 F.Supp. 1389, 1392-93 (E.D.Cal.1995); Advanced Micro Devices, Inc. v. Nat'l Semiconductor Corp., 38 F.Supp.2d 802, 811 (N.D.Cal.1999) (citing Hyampom, 903 F.Supp. at 1393). This concern is unwarranted. First, the definition of “remedial action” has roles in the statute other than defining the onset of one l6a Appendix A limitations period. The functional aspects of the definition are critical, for example, in apportioning the percentage of the costs of any clean-up between States and the Fund. See 42 U.S.C. § 9604; see also 42 U.S.C. § 9621 (requiring that certain standards be met when implementing remedial actions). Second, even though an action can only be remedial if it is taken after the final remedial action plan 1s approved, that does not mean that a// actions taken after the final remedial action plan is approved are remedial.° In Colorado v. Sunoco, Inc., 337 F.3d 1233 (10th Cir.2003), for example, the Tenth Circuit was faced with the task of classifying certain actions, all of which took place after the EPA chose its permanent remedy, as either “remedial” or “removal” actions. After discussing the character of the various actions in light of the definitions of “remedial” and “removal,” the court determined that two of the actions were, in fact, removal 6. Because of the temporal aspect of our interpretation of “remedial action,” we do note that the government can only recover costs as “remedial” if those costs were incurred after the cause of action for such costs accrues. Any costs incurred before the remedial action plan was finally designated (such as the construction of the extraction wells in this case) may be recovered, however, as “removal” costs, and are subject to the statute of limitations for removal actions. See 42 U.S.C. § 9613(g)(2)(A) (“An initial action for recovery of the costs referred to in section 9607 of this title must be commenced ... [,] for a removal action, within 3 years after completion of the removal action. . . .”); 42 U.S.C. § 9613(g)(2)(B) (“{I]f the remedial action is initiated within 3 years after the completion of the removal action, costs incurred in the removal action may be recovered in the cost recovery action brought under this subparagraph.”). 17a Appendix A acuons, both because they were interim rather than permanent measures, taken in response to the threat of release of contaminated water, and because similar activities had been denominated “removal action” by the EPA in previous clean- ups. /d. at 1244-45. Thus, as Sunoco illustrates, our interpretation of the statute of limitations does not render any part of the definition of “remedial” superfluous. B. Decisions of Other Circuits Our conclusion that no action can be “remedial” until a final remedial action plan is in place is consistent with the results reached by every court of appeals that has considered the onset of the limitations period for recovery of remedial action costs under CERCLA, if not with all the reasoning of those cases. In Geraghty, the Fifth Circuit held that the installation of monitoring wells could not have triggered the statute of limitations because it occurred before the government agency overseeing the clean-up had issued its final approval of the remedial plan. See Geraghty, 234 F.3d at 927. The Seventh Circuit also reached the same result as we do, although some of its reasoning differed from ours. See Navistar, 152 F.3d at 711-12. In Navistar, although the final remedial design was not approved until 1990, the final remedial action plan,’ 7. Aremedial design is a term of art in CERCLA, and differs both substantively and temporally from a final remedial action plan. While there is no explicit definition of “remedial action plan” in either the statute or the regulations implementing it, the regulations do provide a detailed description of the process whereby a final (Cont'd) 18a Appendix A selecting a permanent clay cap as part of the permanent remedy, was apparently approved before that. /d. at 704 (“At the conclusion of this process[, which ended before February 1989], the EPA determined that, among other things, the landfill needed to be covered with a permanent clay cap to isolate the hazardous materials from the rest of the environment.”’). Thus, although the Seventh Circuit rejected (Cont'd) remedy is selected by the agency. In this process, the lead agency must present a proposed plan, which fits the description of the “remedial action plan” of CERCLA’s Section 9617, to the public. 40 CFR § 300.430(f)(2). The “proposed plan” must “briefly describe[] the remedial alternatives analyzed by the lead agency, propose[ ] a preferred remedial action alternative, and summarize[] the information relied upon to select the preferred alternative.” /d. The regulation continues, “The purposes of the proposed plan is to supplement the RI/FS and provide the public with a reasonable opportunity to comment on the preferred alternative for remedial action, as well as alternative plans under consideration, and to participate in the selection of remedial action at a site.” /d. The remedy chosen in the remedial action plan is only generally described in that document, leaving for a subsequent date the actual design of the plan’s physical implementation. See 40 CFR § 300.430(f)(1)- (6) (describing the process by which the lead agency chooses a final remedy and documents its selection in a record of decision); see also 42 U.S.C. § 9617 (providing publication requirements in the event that the remedial action differs from the adopted final remedial action plan). The final remedial design, on the other hand, while based on the remedy adopted in the RAP, is distinct: it is “the technical analysis and procedures which follow the selection of remedy for a site and result in a detailed set of plans and specifications for implementation of the remedial action.” 40 CFR § 300.5. a ee en 19a Appendix A a bright-line rule in which the final remedial design had to be formally approved before an action could be considered remedial, the action that it found to be remedial— installing the clay cap—occurred after the final remedial action plan was chosen. Because our holding finds the pivotal event for defining the initiation of remedial action is the adoption of a remedial action plan—not a final remedial design—the facts in Navistar would have led us to find the suit barred by the limitations period as well. Finally, the Tenth Circuit, while not expressly rejecting a bright-line rule, has distinguished “remedial actions” from “removal actions” based solely on the more “descriptive” parts of their definitions. See Sunoco, Inc., 337 F.3d at 1244-45; see also Pub. Serv. Co. of Colo. v. Gates Rubber Co., 175 F.3d 1177, 1182 (10th Cir.1999) (distinguishing “remedial actions” from “removal actions” in a context other than the triggering of the statute of limitations). In both the Tenth Circuit cases, however, it appears that the actions in question took place after a remedial action plan was in place. See Sunoco, 337 F.3d at 1237, 1244-45; Pub. Serv. Co., 175 F.3d at 1179, 1182-84. Were we faced with the same facts, we, too, would have to turn to the descriptive aspects of the definitions to determine whether the actions at issue in Sunoco Inc. and Public Service Co. were remedial or removal. For the same reasons the result in Navistar is not in conflict with our holding, then, these Tenth Circuit cases do not conflict, either. In sum, we conclude that the “initiation of physical on- site construction of the remedial action” can only occur after the final remedial action plan is adopted, and that, in this 20a - Appendix A case, the statute of limitations, therefore, could not have begun to run until the final remedial action was approved on May 8, 1995. The Department’s suit was brought within six years of the approval of the remedial action plan and is not, thus, barred by the statute of limitations. : II. Neville s Defenses on the Merits Neville raised an affirmative defense—waiver and estoppel—in the district court. The argument was that Neville cannot be liable under CERCLA for the costs of overseeing the clean-up incurred by the Department because the Department had promised that it would not sue Neville for full recovery costs if Neville conducted the research, planning, and clean-up of the site. The district court ruled that Neville could not assert equitable defenses toa CERCLA recovery action. We review the grant of summary judgment de novo. United States v. Chapman, 146 F.3d 1166, 1169 (9th Cir.1998). CERCLA section 107(a) and (b), 42 U.S.C. § 9607(a) and (b), allow for only three defenses to CERCLA liability. A covered person is liable under the statute “subject only to the defenses set forth in subsection (b) of this section.” 42 U.S.C. § 9607(a). Subsection (b) lists three defenses “(1) an act of God; (2) an act of war; [and] (3) an act or omission of a third party... .” 42 U.S.C. § 9607(b)(1)-(3). In Levin Metals Corp. v. Parr- Richmond Terminal Co., 799 F.2d 1312, 1316-17 (9th Cir.1986), we suggested that these defenses were exclusive. Congress imposed strict, but not absolute, liability under CERCLA. It provided defenses to liability 4 FS 4 i : i 21a Appendix A for causation solely by an act of God, an act of war, or acts or omissions of a third party.... Consequently, in order to state a claim for declaration of nonliability, the declaratory judgment plaintiff must base its claim of nonliability on one or more of the statutory affirmative defenses. Jd. (emphasis added) (internal quotation marks and citations omitted). Every court of appeals that has considered the precise question whether § 9607 permits equitable defenses has concluded that it does not, as the statutory defenses are exclusive. See Gen. Elec. Co. v. Litton Indus. Automation Sys., Inc., 920 F.2d 1415, 1418 (8th Cir.1990) (holding that CERCLA does not provide an “unclean hands” defense) (questioned on other grounds in Key Tronic Corp. v. United States, 511 U.S. 809 (1994)); see also Blasland, Bouck & Lee, Inc. v. City of North Miami, 283 F.3d 1286, 1304 (11th Cir.2002) (holding that CERCLA bars equitable defenses); Velsicol Chem. Corp. v. Enenco, Inc., 9 F.3d 524, 530 (6th Cir.1993) (same); Zown of Munster v. Sherwin- Williams Co., 27 F.3d 1268,-1270 (7th Cir.1994) (same). Following the implication of Levin Metals and the express holdings of these cases from other circuits, we conclude that the three statutory defenses are the only ones available, and that traditional equitable defenses are not. The district court was correct, therefore, in holding that Neville could not raise equitable defenses to liability under CERCLA. 22a Appendix A Neville argues separately that equitable defenses are at least relevant to the amount of recovery that the Department receives. Even if it is liable for some of the oversight costs, Neville asserts, that amount is limited by equitable consideration that the Department’s implied promise to pursue recovery of only a limited “activity fee,” rather than the Department’s actual recovery- oversight costs. Neville cites as support for this argument numerous cases in which courts considered equitable factors in allocating costs in suits for contribution. See, e.g., Alcan-Toyo Am., Inc., v. N. Ill. Gas Co., 881 F.Supp. 342, 346-47 (N.D.II1.1995); Akzo Coatings, Inc. v. Aigner Corp., 909 F.Supp. 1154, 1161- 62 (N.D.Ind.1995); New York v. Almy Bros., 971 F.Supp. 69, 73 (N.D.N.Y.1997). Suits for contribution, however, are entirely distinct under the statute from suits for recovery of costs. The former is governed by 42 U.S.C. § 9613(f)(1), which explicitly states, “In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate.” The provisions of CERCLA governing suits for recovery of costs, 42 U.S.C. §§ 9607(a) and 9613(g)(2), make no such reference to equitable factors. Also, “the critical distinction between [suits for contributions and suits for cos* recovery] is that under § 107 [42 U.S.C. § 9607(a)], the court merely determines whether the party is jointly and severally liable, without regard to the amount of fault; but under § 113 [42 U.S.C. § 9613(f(1)], the court also divides the fault of the parties, using equitable factors.” Catellus Dev. Corp. v. L.D. McFarland Co., 910 F.Supp. 1509, 1514 (D.Or.1995). ( 7 23a Appendix A California is not bringing suit here for contribution, so the specific language allowing the court to consider equitable factors when apportioning contribution is inapplicable. Neville makes one last defensive argument: The Department may not sue for its recovery costs, Neville contends, because those costs were not consistent with the national contingency plan. Whether a party can recover certain costs under § 9607 depends on whether or not those costs were incurred consistently with the “national contingency plan.” 42 U.S.C. § 9607(a)(4)(A){providing that a covered person who violates CERCLA “shall be liable for ... all costs of removal or remedial action incurred by the ... State... not inconsistent with the national contingency plan”) (emphasis added). The national contingency plan is promulgated by the EPA and “provide [s] the organizational structure and procedures for preparing and responding to... releases of hazardous substances.” 40 C.F.R. § 300.1. See also Wash. St. Dept of Transp. v. Wash. Natural Gas Co., 59 F.3d 793, 799 (9th Cir.1995) (“WSDOT”). To show that the Department’s actions were inconsistent with the national contingency plan, the burden is on Neville to show that the Department acted im an arbitrary and capricious manner in choosing a particular response action. See id. at 802 (citing United States v. Hardage, 982 F.2d 1436, 1442 (10th Cir.1992)). When a state is seeking recovery of response costs, consistency with the national contingency plan is presumed. /d. at 799-800. Neville has provided no evidence that the Department acted “arbitrarily and capriciously in choosing a particular response action to respond to a hazardous waste site.” 24a Appendix A Hardage, 982 F.2d at 1442 (emphasis added). Accord WSDOT, 59 F.3d at 802 (“To prove that a response action of the EPA was inconsistent with the NCP, a defendant must prove that the EPA’s response action was arbitrary and capricious.”) (emphasis added). In fact, Neville does not challenge any response action taken by the Department. Neville challenges instead the Department’s attempt to recover the full oversight costs after suggesting that, should Neville cooperate and conduct the clean-up itself, the Department would only require Neville to pay an “activity fee.” This change in policy and pursuit of the full costs of oversight cannot be “inconsistent with” the national contingency plan, as the national contingency plan does not direct the state to limit its recovery of response costs in any way. See 40 C.F.R. §§ 300.1 et seq. The district court, therefore, did not err by finding that Neville was responsible for all the Department’s response costs. Ill. Motion for Leave to Amend Finally, Neville appeals the district court’s denial of its motion for leave to amend its counterclaim. We review the district court’s denial of Neville’s motion for leave to amend for an abuse of discretion. See Griggs v. Pace Am. Group, Inc., 170 F.3d 877, 879 (9th Cir.1999). Generally, leave to amend pleadings “shall be freely given when justice so requires.” Fed.R.Civ.P. 15(a). “[T]he grant or denial of an opportunity to amend is within the discretion of the District Court,” and denial of leave to amend is appropriate if the amendment would be futile. Foman vy. Davis, 371 U.S. 178, 182 (1962). “[F]utility includes the ates fF on Delt le Ahk eh ih oe eSontatin = ° 25a Appendix A inevitability of a claim’s defeat on summary judgment.” Johnson v. Am. Airlines, Inc., 834 F.2d 721, 724 (9th ‘Cir.1987). Neville moved to amend its complaint to allege a violation of due process and equal protection under the California Constitution. The district court denied Neville’s motion for leave to amend because the court determined that amendment would be futile. The district court held that, even if Neville were to amend its complaint and allege a violation of equal protection, Neville could not point to a triable issue of material fact to support such an allegation. On appeal, Neville argues only that the district court erred by (1) holding that the California Constitution requires a showing of “invidious discrimination” to prove selective prosecution, and (2) refusing to compel discovery on the issue of selective prosecution. The district court did not abuse its discretion. First, the court was correct in its interpretation of California constitutional law in holding that Neville had to allege discrimination based on an “invidious” criterion. Baluyut v. Superior Court, 911 P.2d 1, 5 (1996), on which Neville exclusively relies, holds that a defendant must show that “he has been deliberately singled out for prosecution on the basis of some invidious criterion” in order to prove discriminatory prosecution. /d. (citation and internal quotation marks omitted). That case goes on to define “invidious” as “unrelated to legitimate law enforcement objectives.” Id. at 6. Additionally, Baluyut states that “[u]nequal treatment which results simply from laxity of enforcement or which reflects a nonarbitrary basis for selective enforcement of a 26a Appendix A statute does not deny equal protection and is not constitutionally prohibited discriminatory enforcement.” Id. at 5. | Neville fails to allege, first, that other similarly situated parties were excused from paying the full oversight costs and thus that it was “deliberately singled out for prosecution.” Even if Neville could show this, it would have to allege also that the reason for this discrepancy was not simply laxity of enforcement, but was in fact a result of invidious discrimination, i.e., unrelated to law enforcement purposes. As the record now stands, Neville has shown that the Department changed its policy about collecting oversight costs. However, this change was explained by the Department: the agency determined that the non-enforcement policy was inconsistent with state statutes. Thus, the Department has provided a non-arbitrary, law enforcement rationale for the change in policy. On the basis of this record, the district court did not abuse its discretion by denying leave to amend, or by denying discovery when no actionable injury was alleged. AFFIRMED. 27a APPENDIX B — REVISED FINAL JUDGMENT OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA FILED JULY 31, 2002 IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA CASE NO.: 00-10205 CAS (Ex) STATE OF CALIFORNIA, on behalf of the California Department of Toxic Substances Control, Plaintiff, V. NEVILLE CHEMICAL COMPANY, a corporation; and DOES 1-10, Defendants. REVISED FINAL JUDGMENT In orders dated March 26, 2002, and May 10, 2002, the Court granted Plaintiff's Motion for Summary Judgment, Or In The Alternative, Partial Summary Judgment. On July 11, 2002, the Court granted Plaintiff’s Motion for Judgment | on the Pleadings. On the basis of these rulings, and having : reviewed and considered the papers submitted in support of ! said motions and in support of Plaintiff’s costs, including attorneys’ fees, and oral argument of counsel, IT IS ORDERED AND ADJUDGED that: 28a Appendix B Defendant Neville Chemical Company is liable under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) section 107(a), 42 U.S.C. § 9607(a) for Plaintiff’s response costs, including interest and reasonable attorneys’ fees, in the amount of $1,097,402.60, which the Plaintiff has incurred responding to the release or threatened release of hazardous substances from the Neville Chemical Company facility, located in 12800 East Imperial Highway, Santa Fe Springs, California (“Neville facility”). Furthermore, pursuant to CERCLA section 113(g)(2), 42 U.S.C. § 9613(g)(2), Defendant Neville Chemical Company is liable for all future response costs incurred by the Plaintiff in responding to the release or threatened release of hazardous substances from the Neville facility. Dated: July 30, 2002 By: s/ Christina A. Snyder CHRISTINA A. SNYDER United States District Judge 29a APPENDIX C — ORDER GRANTING PLAINTIFF’S MOTION FOR JUDGMENT ON THE PLEADINGS OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION DATED JULY 10, 2002 AND FILED JULY 11, 2002 UNITED STATES DISTRICT COURT | CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION Case No. CV 00-10205 CAS (Ex) STATE OF CALIFORNIA, Plaintiff, V. NEVILLE CHEMICAL CO., Defendant. ORDER GRANTING PLAINTIFF’S MOTION FOR JUDGMENT ON THE PLEADINGS The Court finds plaintiff’s motion appropriate for decision without oral argument. Fed. R. Civ. P. 78; Local Rule 7-15. I. INTRODUCTION This case is a cost-recovery action brought by plaintiff State of California on behalf of the Department of 30a Appendix C Toxic Substances Control (“DTSC”) against defendant Neville Chemical Company pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), 42 U.S.C. §§ 96011 et seg. In an order dated May 16, 2002, the Court granted plaintiff’s motion for summary judgment on the issue of defendant’s liability for response costs incurred by plaintiff pursuant to the CERCLA while supervising the cleanup of hazardous materials at defendant’s chemical manufacturing facility. In granting summmary judgment, the Court found that defendant’s affirmative defense of equitable estoppel was not available under CERCLA, butt did not explicitly address defendant’s counterclaim for equitablle estoppel. May 16, 2002 Order Granting Plaintiff's Motion For Summary Judgment (“May 16, 2002 Order”). Defendant communicated to plainuff that it intended to proceed with its counterclaim. On May 22, 2002, plaintiff filed an ex parte application for “clarification re counterclaims,” and on May 31, 2002, plaintiff filed a motion for judgment on the pleadings. In both its ex parte application and its motion, plaintiff argued that: (1) the Court has already determined the equitable estoppel issue in plaintiff’s favor; (2) a party found to be liable pursuant to CERCLA cannot escape liability by claiming equitable estoppel, whether that claim is characterized as an affirmative defense or a counterclaim; (3) California law does not provide for an independent claim for equitable estoppel; and (4) even if defendant were to properly state a counterclaim for equitable estoppel, that claim would fail as a matter of law because defendant cannot establish that DTSC, a government agency, engaged in affirmative misconduct, or that the injury caused to defendant by DTSC’s alleged wrongful acts outweighs the damage to the public of imposing liability on DTSC. On June Z | 3la Appendix C 19, 2002, the Court rejected defendant’s counterclaim to the extent it was based on a theory of equitable estoppel because it was merely an attempt to relitigate issues that had already been decided by the Court, and because under California law equitable estoppel acts defensively only and cannot form the basis for an independent claim. June 19, 2002 Order on Plaintiff’s Ex Parte Application For Clarification Re: Counterclaim and Plaintiff's Motion For Judgment on the Pleadings (“June 19, 2002 Order’) at 3. However, the Court found that ‘““defendant’s memoranda appear to suggest that its counterclaim is actually based on alleged due process or equal protection violations stemming from plaintiff’s alleged disparate treatment of defendant in relation to other CERCLA responsible parties.” /d. The Court construed defendant’s allegations of due process and equal protection violations as a request for leave to amend the counterclaim, and requested additional briefing as to whether defendant should be permitted to amend the counterclaim. The parties timely submitted supplemental briefs. Defendant attaches a proposed amended complaint to its supplemental brief. The proposed amended complaint contains the following new allegation: On information and belief Neville alleges that it has been the victim of a selective enforcement action in violation of Neville’s rights to due process and equal protection under the law as guaranteed by Article 1, Section 7 of the California Constitution.' Proposed Amended Counterclaim 4 15. 1. Article I, Section 7 of the California Constitution states, in relevant part, that “a person may not be deprived of life, liberty, or property without due process of law or denied equal protection of the ns 32a Appendix C Il. LEGAL STANDARD Fed. R. Civ. P. 15(a) provides for the amendment of pleadings by leave of court and notes that such leave “shall be freely granted when justice so requires.” See Morongo Band of Mission Indians v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990). Leave to amend is within the sound discretion of the district court, but denial is proper if the amendment would be futile, if there has been any undue delay, bad faith or dilatory motive on the part of the movant, or if allowing the amendment would result in undue prejudice to the opposing party. Foman vy. Davis, 371 U.S. 178, 182 (1962); Lockman Found. v. Evangelical Alliance Mission, 930 F.2d 764, 772 (9th Cir. 1991). Ill. DISCUSSION Plaintiff argues that leave to amend should be denied because defendant’s proposed amendment is futile. A proposed amendment is futile if the new claim could be defeated by a motion to dismiss or a motion for summary judgment. Johnson v. American Airlines, Inc., 834 F.2d 721, 724 (9th Cir. 1987). Plaintiff argues that there is no basis in law or fact for defendant’s due process or equal protection claims brought pursuant to the California constitution. In order to show a violation of due process rights under federal law, defendant would have to demonstrate that plaintiff treated it in a manner that is “clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare.” Patel v. Penman, 103 F.3d 868, 874 (9th Cir. 1996). Where, as in this case, a 33a Appendix C party is alleging deprivation of a defined property right, the scope of the California constitution’s due process protection is virtually the same as that of the federal constitution. Traverso v. People ex rel. Dept. of Transportation, 6 Cal. 4th 1152, 1163 (1993); see also People v. Ramirez, 25 Cal. 3d 260, 268 (1979) (“the touchstone of due process is the protection of the individual against the arbitrary action of government’). Furthermore, “selective enforcement of valid laws, without more, does not make [a particular enforcement] action irrational.” Freeman vy. City of Santa Ana, 68 F.3d 1180, 1188 (9th Cir. 1995) (citing Bordenkircher v. Hayes, 434 U.S. 357, 364 (1978)). As plaintiff correctly points out, the Court has already ruled that plaintiff’s conduct in seeking cost recovery, which forms the basis for defendant’s proposed counterclaim for due process violations, was not arbitrary and capricious. June 19, 2002 Order at 3, March 26, 2002 Order Granting in Part Plaintiff's Motion for Summary Judgment at 23. As a result, the Court finds that there is no basis upon which defendant can state a claim for violations of due process. Defendant’s proposed equal protection claim is founded on its allegation that it is the “victim of a selective enforcement action.” However, under both the federal and California constitutions, selective enforcement of the law does not constitute an equal protection violation unless it is “the deliberate product of invidious discrimination based upon some improper criterion.” People v. Superior Court of Los Angeles County, 70 Cal. App. 3d 341, 343 (1977); see also United States v. Kidder, 869 F.2d 1328, 1335 (9th Cir. 1989) (“‘the conscious exercise of some selectivity in enforcement is not in itself a federal constitutional violation’ 34a Appendix C so long as ‘the selection was [not] deliberately based upon an unjustifiable standard such as race, religion, or other arbitrary classification.) (quoting Bordenkircher, 434 U.S. at 364); Murgia v. Municipal Court, 15 Cal. 3d 286, 290 (1975) (“Neither the federai nor state Constitution countenances the singling out of an invidiously selected class for special prosecutorial treatment, whether that class consists of black or white, Jew or Catholic, Irishman or Japanese, United Farm Worker, or Teamster. If an individual can show that he would not have been prosecuted except for such invidious discrimination against him, a basic constitutional principal has been violated, and such a prosecution must collapse upon the sands of prejudice.”’). Accordingly, in order to maintain a claim for equal protection violations based on selective enforcement, defendant must show that it was selected for enforcement “on the basis of an impermissible ground such as race, religion or exercise of [] constitutional rights.” Kidder, 869 F.2d at 1336. Furthermore, defendant must show that the selective prosecution was “motivated by a discriminatory purpose.” Id. (quoting Wayte v. United States, 470 U.S. 598, 608 (1985)) (emphasis added in Kidder). Here, defendant has not alleged, much less shown, facts which suggest that it was selected fora CERCLA cost- recovery action on any impermissible ground such as race, religion or the exercise of constitutional rights. In fact, at a earlier stage of the litigation, Neville’s counsel stated at oral argument that “[w]e have not alleged that we were treated differently from other people. . . .” Appendix to Pl’s. Supp. Brief in Opp’n to Def’s. Request to Amend Counterclaim (Transcript of March 11, 2002 hearing) at 12:10-12. In addition, defendant has failed to point to any facts which would indicate that the government had a discriminatory 35a Appendix C motive in choosing to prosecute him. For these reasons, the Court finds that defendant has stated no basis for going forward with its equal protection claim.’ IV. CONCLUSION For the reasons discussed above, defendant’s request to amend the counterclaim is DENIED. Plaintiff’s motion for judgment on the pleadings in therefore GRANTED. Plaintiff shall submit a revised form of judgment to reflect its current attorneys’ fees and costs. IT IS SO ORDERED. Dated: July 10, 2002 s/ Christina A. Snyder CHRISTINA A. SNYDER United States District Judge 2. Defendant appears to argue that further discovery as to plaintiff’s cost-recovery practices may reveal evidence of discriminatory motive. However, defendant does not support this argument with any showing whatsoever which would tend to suggest invidious discrimination. The Court finds that because on the record before it defendant’s discrimination theory is wholly speculative, it would be inappropriate to allow further discovery. See People v. Superior Court of Los Angeles County, 70 Cal. App. 3d at 344 (holding that the office of the Attorney General was not compelled to answer interrogatories from a defendant in a civil enforcement action concerning its enforcement policies where that defendant had made no preliminary showing of invidious discrimination). 36a APPENDIX D — MINUTE ORDER OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA ISSUED JUNE 19, 2002 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA MINUTE ORDER Case No.: CV 00-10205 CAS (Ex) June 19, 2002 Title: STATE OF CALIFORNIA v. NEVILLE CHEMICAL CO. et al. PRESIDING: HONORABLE CHRISTINA A. SNYDER, U.S. DISTRICT JUDGE Maynor Galvez, none present, Deputy Clerk Court Reporter PLAINTIFF COUNSEL PRESENT DEFENDANT COUNSEL PRESENT PROCEEDINGS: (1) PLAINTIFF’S EX PARTE APPLI- CATION FOR (1) CLARIFICATION RE COUNTERCLAIM; (2) STAY OF DISCOVERY; (3) CORRECTION OF CLERICAL MISTAKE IN MAY 16, 2002 ORDER (filed May 22, 2002) (2) PLAINTIFF’S MOTION FOR JUDGMENT ON THE PLEAD- INGS (filed May 31, 2002) RE NA RA Ia DOS ie is 37a Appendix D The Court finds plaintiff's motions appropriate for decision without oral argument. Fed. R. Civ. P. 78; Local Rule 7-15. Accordingly, the hearing date of June 24, 2002, is hereby vacated and the matter taken under submission. I. INTRODUCTION This case is a cost-recovery action brought by plaintiff State of California on behalf of the Department of Toxic Substances Control (“DTSC’)' under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), 42 U.S.C. §§ 9601 et seq. In an order dated May 16, 2002, the Court granted plaintiff’s motion for summary judgment on the issue of defendant’s liability for response costs incurred by plaintiff pursuant to the CERCLA while supervising the cleanup of hazardous materials at defendant’s chemical manufacturing facility. In granting summary judgment, the Court found that defendant’s affirmative defense of equitable estoppel was not available under CERCLA, but did not explicitly address defendant’s counterclaim for equitable estoppel. May 16, 2002 Order Granting Plaintiff's Motion For Summary Judgment (“May 16, 2002 Order’). On May 22, 2002, plaintiff filed an ex parte application for (1) clarification re counterclaim, (2) stay of discovery, and (3) correction of a clerical mistake in the May 16, 2002 Order.’ 1. The Court will refer to plaintiff as DTSC. 2. Page 11 of the May 16, 2002 Order mistakenly states that Neville, rather than DTSC, “is entitled to interest on those costs and its reasonable attorneys’ fees.” The Court hereby corrects that error pursuant to Fed. R. Civ. P. 60(a). 38a Appendix D Plaintiff argues that the Court’s holding on summary judgment to the effect that defendants do not have an affirmative defense of equitable estoppel under CERCLA also operates to compel summary judgment in plaintiff’s favor on defendant’s counterclaim for equitable estoppel. Plaintiff further argues that the issues surrounding defendant’s counterclaim for equitable-estoppel were fully briefed and argued in the context of defendant’s claimed affirmative defense. In its opposition to the ex parte application, defendant argues that its counterclaim for equitable estoppel differs from its affirmative defense of equitable estoppel because it is governed by state law, rather than CERCLA. On May 29, 2002, the Court issued an order staying discovery, and requested supplemental briefing on the question of whether Neville’s counterclaim should be denied on the basis of the Court’s earlier grant of summary judgment. May 29, 2002 Order on Plaintiff’s Ex Parte Application. On May 31, 2002, plaintiff filed a motion for judgment on the pleadings. In its motion, plaintiff argues that: (1) the Court has already determined the equitable estoppel issue in plaintiff’s favor: © (2) a party found to be liable pursuant to CERCLA cannot escape liability by claiming equitable estoppel, whether that claim is characterized as an affirmative defense or a counterclaim; (3) California law does not provide for an independent claim for equitable estoppel; and (4) even if defendant were to properly state a counterclaiin for equitable estoppel, that claim would fail as a matter of law because defendant cannot establish that DTSC, a government agency, engaged in affirmative misconduct, or that the injury caused to defendant by DTSC’s alleged wrongful acts outweighs the damage to the public of imposing liability on DTSC. ny ee ae er Oe ee _—— oer? ke 39a Appendix D Il. DISCUSSION Defendant’s counterclaim alleges that according to representations made to it by plaintiff, and according to plaintiff’s policy at the time, its payment of an activity fee in 1989 in the amount of $46,636 operated as a full settlement of its obligation to plaintiff to reimburse it for additional response costs. Defendant argues that due to this justifiable reliance, plaintiff should be equitably estopped from collecting further response costs. The Court has already held that equitable estoppel is not a valid affirmative defense to CERCLA lhiability. The Court has also previously determined that the specific conduct on the part of plaintiff which forms the basis for defendant’s counterclaim is not arbitrary and capricious. Based on what is alleged in the counterclaim, the Court finds that defendant’s counterclaim is simply an attempt to relitigate issues that have already been decided by the Court by recasting its affirmative defenses as a counterclaim. Further, California does not recognize an affirmative claim for equitable estoppel. See Money Store Corp. v. Southern California Bank, 98 Cal App. 4th 722 (2002) (equitable estoppel cannot form the basis for a separate claim because “[t]he doctrine acts defensively only”). See also Pacific Gas & Electric v. Zuckerman, 189 Cal. App. 3d 1113, 1144 (1987); Peskin v. Phinney, 182 Cal. App. 2d 632, 636(1960). For these reasons, defendant’s counterclaim for equitable estoppel must fail. Although :t does not appear on the face of the counterclaim, defendant’s memoranda appear to suggest that its counterclaim ts actually based on alleged due process or equal protection violations stemming from plaintiff's alleged = A ee ee Sn: i. _ ate ee eS oe Zl ) _ = eee eee eae 40a Appendix D disparate treatment of defendant in relation to other CERCLA responsible parties. The Court will construe defendant’s allegations of due process and equal protection violations as a request for leave to amend its counterclaim. The Court finds that additional briefing is necessary in order to evaluate this request. The Court therefore directs defendant to file a supplemental brief, not to exceed 10 pages, explaining the nature and basis of the due process and equal protection claims they seek to advance. Defendant’s brief shall be filed no later than June 26, 2002. Plaintiff is directed to file a response, also not to exceed 10 pages, explaining why defendant should not be permitted to amend its counterclaim. Plaintiff’s response shall be filed no later than July 3, 2002. The matter will thereafter be taken under submission. IT IS SOQ ORDERED. x z 3 3 4 3 2 4la APPENDIX E — ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT OR IN THE ALTERNATIVE, PARTIAL SUMMARY JUDGMENT OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION FILED MAY 10, 2002 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION Case No. CV-00-10205 (Ex) STATE OF CALIFORNIA, on behalf of the California Department of Toxic Services, Plaintiff, VS. NEVILLE CHEMICAL COMPANY, a corporation; and DOES 1-10, Defendant. ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT OR IN THE ALTERNATIVE, PARTIAL SUMMARY JUDGMENT I. INTRODUCTION This case is a cost-recovery action brought by plaintiff State of California on behalf of the Department of Toxic 42a Appendix E Substances Control (“DTSC”)' under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), 42 U.S.C. §§ 9601 et seg. DTSC seeks to recover costs associated with the cleanup of hazardous substances at a chemical manufacturing plant owned and operated by defendant Neville Chemical Company (“Neville”). In an Order dated March 26, 2002, the Court granted in part plaintiff’s motion for summary judgment that Neville was liable for all recovery costs not inconsistent with the National Consistency Plan (“NCP”), but permitted supplemental discovery and briefing on the issue of whether DTSC’s recovery costs were inconsistent with the NCP. Order Granting in Part Plaintiff's Motion For Summary Judgment (“March 26, 2002 Order’) at 16, 25.? Both parties submitted supplemental briefing, and the Court heard oral argument at an April 29, 2002 status conference. Il. LEGAL STANDARD Summary judgment is appropriate where “there is no genuine issue as to any material fact” and “the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). The moving party has the initial burden of identifying relevant portions of the record that demonstrate the absence of a fact or facts necessary for one or more essential elements of each cause of action upon which the moving party seeks judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). 1. The Court will refer to plaintiff as DTSC. 2. The factual background to this case is set forth in the March 26, 2002 Order. Dot EL GLIAL AAD Lahn tithetndne i 43a Appendix E If the moving party has sustained its burden, the nonmoving party must then identify specific facts, drawn from materials on file, that dentonstrate that there is a dispute as to material facts on the elements that the moving party has contested. See Fed.R.Civ.P. 56(c). The nonmoving party must not simply rely on the pleadings and must do more than make “conclusory allegations [in] an affidavit.” Lujan y. National Wildlife Fed'n, 497 U.S. 871, 888 (1990). See also Celotex Corp., 477 U.S. at 324. Summary judgment must be granted for the moving party if the nonmoving party ‘fails to make a show’ng sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” /d. at 322. See also Abromson v. American Pacific Corp., 114 F.3d 898, 902 (9th Cir.1997). In light of the facts presented by the nonmoving party, along with any undisputed facts, the Court must decide whether the moving party is entitled to judgment as a matter oflaw. See T.W. Elec. Serv., Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 631 & n.3 (9th Cir.1987). When deciding a motion for summary judgment, “the inferences to be drawn from the underlying facts ... must be viewed in the light most favorable to the party opposing the motion.” Matsushiia Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation omitted); Valley Nat'l Bank of Ariz. v. A.E. Rouse & Co., 121 F.3d 1332, 1335 (9th Cir.1997). Summary judgment for the moving party is proper when a rational trier of fact would not be able to find for the nonmoving party on the claims at issue. See Matsushita, 475 U.S. at 587. 44a Appendix E III. DISCUSSION CERCLA holds responsible parties liable for “all costs of removal or remedial action incurred by the United States Government or a State or an Indian tribe not inconsistent with the national contingency plan.” 42 U.S.C. § 9607(a)(4)(A) (emphasis added). Under CERCLA, a party may recover costs related to actions necessary to effectuate cleanup or removal from the environment of released hazardous substances, actions taken in the event of the threat of release of hazardous substances, actions to monitor, assess and evaluate the release or threatened release of hazardous substances, the disposal of removed material, and actions consistent with a permanent remedy. 42 U.S.C. § 9601(23)- (24). Response costs recoverable under CERCLA include oversight costs incurred by a government agency in an effort to ensure that a site is being adequately investigated and remediated by responsible parties. State of California v. Celtor Chemical Corp., 901 F.Supp. 1481, 1489-90 (N.D.Cal.1995); State of California v. SnyderGeneral Corp., 876 F.Supp. 222, 224-25 (E.D.Cal.1994). Recoverable response costs also include reasonable attorneys’ fees for bringing cost-recovery litigation, as well as indirect costs, or overhead. Chapman, 146 F.3d at 1175 (attorneys’ fees); United States v. R.W. Meyer, 889 F.2d 1497, 1503 (6th Cir.1989) (indirect costs). DTSC contends that its employees have spent thousands of hours since 1985 responding to the releases of hazardous substances at the Neville site. DTSC also contends that attorneys in the California Attorney General’s Office have spent more than one thousand hours litigating the present case. Declaration of Laurie Pearlman In Support of Plaintiff’s Motion For f DB $ A ss hisipi bi AOD iin nO tN CANE L LAG RIEL AOI AE SIS 6 ai Svcd 4Sa Appendix E Summary Judgment (“Pearlman Decl.”) §7, Declaration of Harrison Pollak In Support of Plaintiff’s Motion For Summary Judgment (“Pollak Decl.) 45. Neville concedes “that DTSC has incurred costs 1n overseeing the investigation and remediation of environmental contamination associated with the Neville site.” Pearlman Decl., Ex. A at 30:3-4, but argues that DTSC is not entitled to recover those costs because they are inconsistent with the NCP. A. Inconsistency with the NCP Response actions undertaken by a federal or state governmental entity, or an Indian tribe, are presumed to be consistent with the NCP. Washington State Dept. of Transportation v. Washington Natural Gas Co., (“WSDOT”), 59 F.3d 793, 799-800 (9th Cir.1995). Thus, when a governmental body such as DTSC seeks to recover its costs, it is the defendant’s burden to prove that a particular government action is inconsistent with the NCP in order to preclude the government from recovering the costs of taking that action. /d. at 800. In order to meet this burden of proof, the defendant must show that the government’s particular action was arbitrary and capricious. /d. at 803; 42 U.S.C. § 9613(j)(2). In opposition to DTSC’s motion for summary judgment, Neville argues that DTSC’s actions are inconsistent with the NCP because: (1) DTSC acted in an arbitrary and capricious manner when it allegedly represented that it would not seek cost recovery against Neville, but later did so; and (2) DTSC has offered insufficient documentary evidence to support the recovery of some of its claimed costs. In its March 26, 2002 46a Appendix E Order, the Court held that Neville had not raised a material question of fact to support its first argument. Therefore, the only question remaining is whether there is a material question of fact that DTSC’s alleged failure to document its claimed costs properly was arbitrary and capricious. The NCP provides that: During all phases of response, the lead agency shall complete and maintain documentation to support all actions taken under the NCP and to for the basis for cost recovery. In general, documentation shall be sufficient to provide... accurate accounting of federal, state, or private party costs incurred for response actions... 40 C.F.R. § 300.160(a)(1). The regulation does not further define “accurate accounting” or elaborate on what is meant by “sufficient.” United States v. Chrysler Corp., 168 F.Supp.2d 754, 769 (N.D.Ohio 2001). Neville argues that DTSC’s documentation is not sufficient to provide for accurate accounting, and is thus arbitrary and capricious, in the following respects: (1) DTSC’s documentation of employee labor costs does not provide a specific description of the duties of particular employees who worked at the Neville site; (2) DTSC’s documentation of travel expenses fails to explain what necessitated the travel; (3) three invoices issued by DTSC contain discrepancies; (4) DTSC failed to explain fluctuations in the calculation of indirect cost ratios between 1989 and 1995; and (5) DTSC failed to explain why some direct labor costs were funded using bond funds, while others were not. The Court will consider each of these arguments below. betes ail edllar Nig hc el TRE AE ti a Wee cet cd il cba AAT AEA ch SS IER Ae BNI SA I DARN AR AA ob Be he Milets) 47a Appendix E 1. Employee Labor Costs Neville argues that DTSC’s employee labor costs are inconsistent with the NCP because the timesheets prepared by DTSC employees: “fail to provide an adequately detailed explanation of the actual services performed by the employees [because] [p]roject activity codes (‘PCA’) used to designate DTSC site related functions are too general to allow one to determine what specific employee activity a given [Summary By Activity (‘SBA’)] entry documents. Without more specific information regarding the actual work performed by an employee, the labor charges cannot be verified as to their reasonableness, necessity and/ or association with environmental activities associated with the Neville property.” Declaration of Peter Johnson in Support of Defendant’s Supplemental Brief in Opp’n to Plaintiff’s Motion For Summary Judgment (“Johnson Suppl. Decl.) 43.* DTSC has provided Neville with employee time sheets documenting all the time which DTSC employees allegedly spent on the Neville project dating back to 1985. According to a declaration filed by Jeffrey Mahan, who served as DTSC’s 3. DTSC objects to the Johnson declaration on the grounds that he is not qualified as an expert. Johnson declares that he has been engaged in the environmental engineering and cost analysis field since 1981. Johnson Suppl. Decl. §1. The Court finds that Johnson is sufficiently qualified by knowledge, skill, experience, training or education to testify as an expert pursuant to Fed.R.Evid. 701. eer BR 48a Appendix E Chief of Audits Unit from 1989 to 1997 and is -currently DTSC’s Special Assistant for Cost Recovery and Reimbursement Policy, DTSC’s time sheets are attested to by the employee and then reviewed and certified by the employee’s direct supervisor. Declaration of Jeffrey Mahan in Support of Plaintiff’s Motion For Summary Judgment (“Mahan Decl.”) 4 2, 3, 11. The time sheets require that every hour worked by a DTSC employee be allocated to an activity code, or PCA, and a site code. /d. 49. The PCAs correlate to relatively broad activity categories, such as “Remedial Investigations/Feasibility Study,” “Removal Actions,” “Public Participation Plan Development and Implementation,” and “Cost Recovery.” DTSC periodically issues a coding manual, available to the public, that provides information about what specific activities fall into each PCA category. The site codes correlate to specific DTSC projects. The thrust of Neville’s argument is that DTSC’s time sheets do not provide a specific description of exactly what task an employee was engaged in at a particular time on the Neville site. However, Neville has not cited any case where a specific description of exactly what task the employee performed at a particular time was held to be required by 40 C.F.R. § 300.160(a)(1). Several courts, including the Ninth Circuit, have accepted documentation such as that presented by DTSC as adequate for the purposes of 40 C.F.R. § 300.160(a)(1). See Chapman, 146 F.3d at 1171 (government agency’s documentation of costs was consistent with the NCP where the agency “kept extensive records of recovery costs in the form of timesheets, cost estimates, and accountant and attorney declarations”); United States v. Chromalloy American Corporation, 158 F.3d 345, 352 (Sth Cir.1998) (government agencies documentation of costs was sufficient peach i atc ai ARSE RA WARRIOR I NEES SS 49a Appendix E where it submitted “detailed cost summaries of its oversight expenses”); Chrysler Corp., 168 F.Supp.2d at 769 (contractor’s invoices, which broke down expenses into eight general categories such as labor, travel and subsistence, were sufficiently specific standing alone to meet the requirements of 40 C.F.R. § 300.160(a)(1), in spite of contractor’s failure to provide “project daily summaries, project daily details, reimbursable travel and subsistence logs, contractor personnel reports, equipment usage logs, and subcontractor reports... .”).* In the instant case, the time sheets provided by DTSC show in detail how much time individual employees spent at the Neville site, as well as their billing rate and the general category of activity in which they were engaged. Furthermore, Neville has submitted no evidence suggesting that DTSC’s decision not to document precisely what activity employees were engaged in at the Neville site at any particular time led to any accounting problems during the Neville site cleanup.° Accordingly, the Court finds that the time sheets utilized by DTSC provide sufficient documentation to permit accurate accounting, and DTSC’s procedures for accounting for employee labor costs are not arbitrary and capricious, 4. The Chrysler Corp., court held that summary judgment was inappropriate on some of the contractor’s expenses, due to mistakes and inconsistencies in the invoices themselves. Chrysler Corp., 168 F.Supp.2d at 769-70. 5. The activities necessary to effectuate the Neville site cleanup are described in detail in several documents, most notably the Remedial Action Order and Final Remedial Action Plan. See Declaration of Harlan Jeche in Support of Plaintiff’s Motion For Summary Judgment, Exs. A and B. Neville has not alleged that the cleanup was not performed, or that DTSC failed to oversee the cleanup. aa | S0a Appendix E because the time sheets clearly allocate costs by site and by category of activity. 2. Travel Expenses Neville argues that DTSC’s documentation of site-related travel is inadequate, because “no specific information is provided [on travel expense reports] as to what site related activities necessitated the particular travel expense.” Johnson Suppl. Decl. 44. According to Neville, this may result in its being charged for travel expenses unrelated to the Neville site. As evidence that this has in fact occurred, Neville offers a memo dated April 14, 2000, documenting an attorney’s trip from Sacramento to Glendale to meet with DTSC staff. Declaration of Dennis Byrne in Support of Neville’s Supplemental Brief in Opp’n to Motion for Summ. Judg., Ex. D. The memo states that the purpose of the trip was to “meet with staff’ regarding “Neville,” “El Toro,” “El Centro,” “Angeles,” and “Western Lead Products.” Jd. The full cost of the trip was apparently charged to Neville. Neville argues that the memorandum demonstrates the shortcomings of DTSC’s accounting for travel, as well as documenting costs which were improperly allocated to it. DTSC responds that regardless of which projects were discussed at the Glendale office, there is no evidence that the disputed travel was occasioned by anything other than the Neville discussion. DTSC also offers the declaration of its expert, Jeffrey Mahan, that when travel is occasioned by more than one site, DTSC allocates the costs among the different sites. Declaration of Jeffrey Mahan in Support of DTSC’s Supplemental Brief in Support of Motion for Summ. cot De Sla Appendix E Judg. (“Mahan Suppl. Decl.) §6. The Court finds that a single alleged misailocation of travel expenses is not sufficient to create a material question of fact that DTSC’s accounting practices with regard to travel expenses were so inadequate as to be arbitrary and capricious.° 3. Invoices Neville argues that DTSC’s charges between 1985 and 1996 are suspect because of “discrepancies ... in different invoices DTSC issued for work performed during a given time period.” Johnson Suppl. Decl. 4 5. In particular, Neville argues that invoice No. 12687, dated March 17, 1994, invoice No. 13058, dated August 23, 1996, and a Summary By Activity (“SBA”) dated April 17, 1997, reflect different amounts for the same period of time. DTSC argues that the discrepancy in the amounts shown by the three documents is due to revisions in its calculation of indirect cost rates, and that the later dated invoices explicitly state that they supersede the earlier dated invoices. DTSC submits a letter, sent to Neville in conjunction with invoice No. 13058, which explains that the new invoice reflects revised indirect cost rates for the fiscal periods July 1987 through June 1996, and which explicitly instructs Neville to disregard invoice No. 12687 “since it .as been superseded by enclosed invoice No. 13058.” Mahan Decl., Ex. B at 56. Similarly, when DTSC provided the April 17, 1997 SBA to Neville, it enclosed a letter explaining that there had been adjustments 6. However, DTSC is instructed to properly allocate the travel expenses with regard to the trip described in the April 14, 2000 memorandum. “4. Jaa Appendix E “which modify the previous SBA sent to you on August 26, 1996.” Mahan Suppl. Decl. 910, Ex. G The April 17, 1997 SBA itself states that it “supersedes any previously issued SBA for the time periods noted.” /d. The Court finds that Neville has not demonstrated a material question of fact that the discrepancies it points to in the invoices demonstrate that DTSC is improperly accounting for its costs. 4. Indirect Costs Neville argues that DTSC has not adequately explained significant fluctuations in the indirect cost ratios (“ICRs”’) used to calculate the indirect costs charged to Neville. Neville’s expert Johnson states that: t appears the indirect cost pool used in calculating the ICR ha[{s] nearly doubled during the years 1989 through 1995. This ICR cost-pool inflation increased DTSC’s overhead costs, which were used to calculate the ICR. DTSC provided no documentation to account for the significant fluctuations noted in ICR used to calculate the indirect costs charged to Neville. Johnson Suppl. Decl. { 6. DTSC responds that the NCP does not require it to speculate as to why the indirect cost pool has increased, but merely to document its methodology for calculating the ICR. DTSC calculates ICRs by dividing DTSC’s indirect costs (i.e. overhead) by its total direct labor costs. ICRs are derived in accordance with “Indirect Cost 7. These adjustments consisted mainly of revisions to the rate for calculating indirect costs. ‘Nn Appendix E Rate Proposals” prepared by DTSC which set forth the data, formulas, and calculations used to arrive at every ICR. Mahan Suppl. Decl. 97, Ex. E (example of an ICRP). DTSC’s methodology is in turn based on federal guidelines. See id. Ex. E (stating that the ICRP 1s prepared “in accordance with the requirements of the State and Federal OMB Circular A-87, ‘Principles for State and Local Governments’ ”’). The Court finds that Neville has not provided any evidence to support its claim that DTSC’s indirect cost rates are not properly documented. Cf Chrysler Corp., 168 F.Supp.2d at 770 (conditioning government’s recovery of indirect costs on its ability to produce “any formula supporting the calculation of indirect costs”). 5. Bond Expenditures Neville challenges two aspects of DTSC’s costs related to its use of bond funds to pay for part of the Neville cleanup.* First, Neville argues that DTSC did not sufficiently explain why some direct labor costs were funded using bond funds while others were not. However, Neville provides no authority for its argument that DTSC must explain its decision to fund particular aspects of cleanup projects from bond funds as opposed to non-bond funds. DTSC has provided ample documentation of its use of bond funds, and of its 8. DTSC has the option of funding part of its site mitigation costs through bonds issued by the State Treasurer’s Office. Because interest on the bond funds must be paid to holders of the bonds, state law directs DTSC to recover this expense as a response cost. See Cal. Health & Safety § 25360.1. Accordingly, DTSC charges responsible parties for the bond interest on that portion of a site cleanup for which bond funds are utilized. 54 Appe methodology for calculating bond interest, and the Court finds this sufficient to meet the requirements of 40 C.F.R. § 300.160(a)(1). Second, Neville argues that there are discrepancies in different DTSC documents showing the bond principal amount, from which bond interest 1s calculated. However, even according to Neville’s calculations, these discrepancies are in the nominal amounts of $2.94 and $133.39. Johnson Suppl. Decl. 48. DTSC states that these discrepancies appear to be due to data-entry errors, and that the most recent SBA, which forms the basis for DTSC’s present cost recovery claim, shows fhe correct amount. Mahan Supp. Decl. 412. The Court finds that these minor discrepancies, which appear to have been corrected, do not create a material question of fact as to the propriety of DTSC’s accounting practices. In sum, the Court finds that there is no material question of fact as to the proper documentation of DTSC’s costs. B. DTSC’s Request For Interest and Attorneys’ Fees In its March 26, 2002 Order, the Court held that DTSC was entitled recover all properly documented cleanup costs, as well as interest on those costs, but did not grant summary judgment because there were outstanding issues concerning documentation of costs. Based on the conclusion set forth herein, the Court finds that Neville is entitled to interest on those costs and its reasonable attorneys’ fees. See Chapman, 146 F.3d at +175 (recoverable response costs include reasonable attorneys’ fees for bringing cost-recovery litigation). Bo Liga eee eed Soot DL IDE intern se E CAO | che A tel tal AE eh ghee: Got ad, Oe ON Gy ee ee Eh ae ln tl a en hen init S5a Appendix E IV. CONCLUSION For the reasons discussed above, plaintiff's motion for summary judgment is GRANTED as to defendant’s liability for all disputed recovery costs. Piaintiff is also entitled to recover interest and reasonable attorneys’ fees. The Court hereby orders plaintiff to prepare and file a form of judgment, consistent with this order, setting forth the exact amount of its recovery costs, and substantiating its claim for interest and attorneys’ fees. IT IS SO ORDERED. Dated: May 8, 2002 s/ Christina A. Snyder CHRISTINA A. SNYDER United States District Judge S6a APPENDIX F — ORDER GRANTING IN PART PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT OR-IN THE ALTERNATIVE, PARTIAL SUMMARY JUDGMENT OF THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION FILED MARCH 26, 2002 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVSION Case No. CV-00-10205 CAS (Ex) STATE OF CALIFORNIA, on behalf of the California Department of Toxic Services, Plaintiff, VS. NEVILLE CHEMICAL COMPANY, a corporation; and DOES 1-10, Defendant. ORDER GRANTING IN PART PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT OR IN THE ALTERNATIVE, PARTIAL SUMMARY JUDGMENT I. INTRODUCTION This case is a cost-recovery action brought by plaintiff State of California on behalf of the Department of Toxic anak inh ia ant AN iI RL a BA WA Tae en NA 57a Appendix F Substances Control (“DTSC”)' under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), 42 U.S.C. §§ 9601 et seg. DTSC seeks to recover costs associated with the cleanup of hazardous substances at a chemical manufacturing plant owned and operated by defendant Neville Chemical Company (“Neville”). The parties are now before the Court on DTSC’s motion for summary judgment. II. FACTS A. Background Neville is the owner and operator of a 3.5 acre industrial facility in Santa Fe Springs, California (the “site”). Compl. 4/6. From 1952 to approximately 1987, Neville manufactured chemical compounds for use in insecticides, solvents, metalworking lubricants and flame retardants at the site. Id. 48. Investigations at the site found that the soil and groundwater were significantly contaminated with hazardous substances from Neville’s past handling, storage and disposal practices. Jd. §11. In 1986, DTSC? ordered Neville to clean up the site pursuant to a Remedial Action Order (“RAO”). Declaration of Harlan Jeche in Support of Pl’s. Mot. for Summ. Judg. (“Jeche Decl.”) 49. The RAO required Neville to prepare a remedial investigation and feasibility study 1. The Court will refer to plaintiff as DTSC. 2. DTSC was a division of the California Department of Health Services (“DHS”) until it became a separate department sometime in 1991. For ease of reference, the Court will utilize the term DTSC throughout. 58a Appendix F (“RI/FS”), and a remedial action proposal (“RAP”), both in accordance with the National Contingency Plan (“NCP”). Id., Ex. B at 174 (RI/FS), 181(RAP). According to the terms of the RAO, Neville would then have to implement the RAP, and would be responsible for all operation and maintenance requirements of the RAP until the remediation goals of the RAP were met. /d., Ex. B at 182. The RAO contains a provision for recovery of certain costs pursuant to state law. Id., Ex. B at 188. DTSC alleges that its employees have spent thousands of hours since 1985 responding to releases and threatened releases of hazardous substances at the Neville facility, and overseeing Neville’s own response measures. Jeche Decl. 410. The response measures undertaken at the Neville facility include: the removal of twenty one drums containing dichlorobenzenes, carbon tetrachloride, and chlorinated paraffins that had been illegally buried at the site; recontouring the soil and capping it with asphalt; installing a groundwater extraction-and-treatment system; and recording a deed restriction to prevent future uses of the site which would be harmful to humans and the environment. Id. 411. DTSC alleges that as of September 30, 2001, its response costs for the Neville facility total $759,368.29, exclusive of interest and attorneys’ fees.’ [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386008_0813%3A1. Public record. Not legal advice.