Petition for Writ of Certiorari — City of Colton v. American Promotional Events, Inc.-West

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me Court, U.S.

Supren ILED

\\A No. 19-284 AMG 23 2010

OFFICE OF THE CLERK

In The

Supreme Court of the Anited States

$$ $ $$ 2

CITY OF COLTON,

Petitioner,

AMERICAN PROMOTIONAL

EVENTS, INC. — WEST, et aZ.,

Respondents.

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

PETITION FOR WRIT OF CERTIORARI

RODERICK E. WALSTON

(Counsel of Record)

XENE TANAKA

DANIELLE G. SAKAI

BEST BEST & KRIEGER LLP

2001 North Main Street, Suite 390

Walnut Creek, CA 94596

Telephone: (925) 977-3300

Facsimile: (925) 977-1870

Roderick. Walston@bbklaw.com

Attorneys for Petitioner

COCKLE LAW BRIEF PRINTING CO (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTION PRESENTED

The Ninth Circuit held that the declaratory

judgment provision in section 113(g)(2) of the Com-

prehensive Environmental Response, Compensation

and Liability Act (“CERCLA”) preempts the Declara-

tory Judgment Act as applied in the CERCLA context,

and that section 113(g)(2) does not authorize

CERCLA plaintiffs to assert declaratory relief claims

for future cleanup costs if they cannot recover past

cleanup costs. Therefore, the Ninth Circuit concluded,

the plaintiff could not assert a declaratory relief claim

under the Declaratory Judgment Act for its future

cleanup costs, because it did not have the right to

recover its past cleanup costs. The Ninth Circuit

acknowledged, however, that the plaintiff's declarato-

ry relief claim met the justiciability standards of the

Declaratory Judgment Act. The Ninth Circuit

acknowledged that a conflict exists among the federal

circuit courts concerning whether declaratory relief

claims can be asserted for future cleanup costs if past

cleanup costs cannot be recovered, and that its deci-

sion conflicts with circuit court decisions holding that

such claims can be asserted.

The question presented is:

Whether the declaratory judgment provision of

section 113(g)(2) of CERCLA preempts the Declarato-

ry Judgment Act as applied in the CERCLA context,

thus precluding CERCLA plaintiffs from asserting

declaratory relief claims for future cleanup costs if

they cannot recover past cleanup costs.

PARTIES TO THE PROCEEDINGS

The petitioner and plaintiff is the City of Colton,

a municipal corporation located in San Bernardino

County, California.

The respondents and defendants are: American

Promotional Events, Inc.-West; Apollo Manufacturing

Co.; Astro Pyrotechnics, Inc.; Atlas Fireworks Com-

pany, Inc.; Black & Decker, Inc.; California Fireworks

Display Company; County of San Bernardino; Em-

hart Industries, Inc.; Goodrich Corporation; Kwikset

Locks, Inc.; Pyro Spectaculars, Inc.; Pyrotronics

Corp.; Red Devil Fireworks Company; Thomas O.

Peters; The 1966 Thomas O. Peters and Kathleen S.

Peters Revocable Trust; Trojan Fireworks, Co.; Unit-

ed Fireworks Manufacturing Company, Inc.; and

Whittaker Corporation.

TABLE OF CONTENTS

Page

CPE CR EI TY kv cencs dencinceecannececervscvksidinicinasareess l

rs a EIS hic vnesicenieduvinesssionessresnceernasy eee 3 |

STATUTORY AND REGULATORY PROVISIONS. .... J

STATEMENT OF THE CASE. ...................cccecssseees 2

Pi, SI rerciseessitsiicktinnrer Suanacenes sdgtaeitens 2

B. Statutory and Regulatory Background....... 3

D. The Ninthr Circuit Decision ............0.0s0000005 7

REASONS FOR GRANTING THE WRIT............. 10

I Ts cc csv szccvaixexsssccindeadtontcxcdsnemaaiacnouns 10

I. THE NINTH CIRCUIT ACKNOWLEDGED

THAT THERE IS A CONFLICT AMONG

THE FEDERAL CIRCUIT COURTS CON-

CERNING THE QUESTION PRESENTED

IN THIS PETITION, AND THAT ITS DE-

CISION CONFLICTS WITH THE DECI-

SIONS OF OTHER CIRCUIT COURTS..... 14

Il. CONTRARY TO THE NINTH CIRCUIT

DECISION, CERCLA SECTION 113(g)(2)

DOES NOT PREEMPT THE DECLARA-

TORY JUDGMENT ACT AS APPLIED IN

ERs Cae GPE EIR E, ven sccncciccscocascscsesss 18

TABLE OF CONTENTS — Continued

Page

A. CERCLA Section 113(g)(2) And De-

claratory Judgment Act Apply Differ-

ently In The CERCLA Context And

Can Be Construed Harmoniously, And

Therefore Section 113(g)(2) Does Not

Preempt the Declaratory Judgment

There Are Various Legitimate Reasons

Why A Plaintiff May Need To Pursue

Declaratory Relief Under The Declara-

tory Judgment Act For Future Response

Costs Under CERCLA, Even Though

The Plaintiff Does Not Have The Right

To Recover Past Costs ...........cccccccccccccces

CONCLUSION

APPENDICES

Ninth Circuit Decision

District Court Decision

TABLE OF AUTHORITIES

CASES

Aetna Life Ins. Co. v. Haworth, 300 U.S. 22

(1937)

Arizona v. California, 530 U.S. 392 (2000)................

Bobby v. Bies, __ US. , 129 S.Ct. 2145

Branch v. Smith, 5388 U.S. 254 (2003)

Cooper Industries, Inc. v. Aviall Services, Inc.,

Ste eT CIE scskaeundckdducnssenseceaysousanepiveoaucesae 4,9

County Line Investment Co. v. Tinney, 933 F.2d

Re TA Gils BOE) ccscccccccvccvsasdececsvessoveuses 15, 16, 24

Exxon Mobil Corp. v. Allapattah Servs., Inc.,

545 U.S. 546 (2005)

Foster v. United States, 922 F.Supp. 663 (D.

D.C. 1996)

Gussack Realty Co. v. Xerox Corp., 224 F.3d 85

(2d Cir. 2000)

Hinck v. United States, 550 U.S. 501 (2007)

Kelley v. E. I. DuPont De Nemours & Co., 17

Oe Oe Te TI BED ks viinvcenteiescnsenacesarvesorssueeseces 19

Maryland Casualty Co. v. Pacific Coal & Oil

hig ee Wc ETA © bo ccncapncvanseseavaveisicnsvacniesdeeseas 28

Morton v. Mancari, 417 U.S. 535 (1974)........0..... iZ, 2

Posadas v. National City Bank, 296 U.S. 497

PIII sits inxosncaseisnrevasnines sa ceuuuescapmausigen: chistes eeeanananeee 23

TABLE OF AUTHORITIES — Continued

Reichhold, Inc. v. United States Metals Refin-

ing Co., 522 F. Supp.2d 724 (D. N.J. 2007)

State of California v. Neville Chemical Co., 358

a I oc os cco ven sennanecsveevecasacuseustess 21

Trimble v. Asarco, Inc., 232 F.3d 946 (8th Cir.

United States v. Atlantic Research Corp., 6

U.S. 128 (2007)

United States v. Davis, 261 F.3d 1 (1st Cir.

2001)

United States v. Occidental Chem. Co., 200 F.3d

143 (8d Cir. 1999)

United States v. USX Corp., 68 F.3d 811 (3d

Cir. 1995)

United States v. W.R. Grace & Co., 429 F.3d

1224 (9th Cir. 2006)

Universal Interpretative Shuttle Corp. v. Wash

ington hyp nrein Area Transit Comm’n,

393 U.S. 186 (1968

Watt v. Alaska, 451 U.S. 259 (1981).................c eee. 23

STATUTES

28 U.S.C. § 1254(1)

28 U.S.C. § 2201

42 U.S.C. § 9601

42 U.S.C. § 9607

TABLE OF AUTHORITIES — Continued

42 U.S.C. § 9607(a)....

42 U.S.C. § 9607(b)...........

42 U.S.C. §

42 U.S.C. § 9613( = . assim

OPINIONS BELOW

The Ninth Circuit decision has been certified for

publication but has not yet been officially reported,

and is reproduced at Appendix 1. The district court

decision is reproduced at Appendix 20.

JURISDICTION

The Ninth Circuit issued its judgment on August

2, 2010. This Court has jurisdiction under 28 U.S.C.

§ 1254(1).

STATUTORY AND REGULATORY PROVISIONS

Section 113(g) of the Comprehensive Environ-

mental Response, Compensation and Liability Act, 42

U.S.C. §9613(g), is reproduced at Appendix 49.

Subsection (2) thereof provides, in part:

In any such action described in this subsec-

tion, the court shall enter a declaratory

judgment on liability for response costs or

damages that will be binding on any subse-

quent action or actions to recover further re-

sponse costs or damages.

42 U.S.C. § 9613(g)(2); App. 50.

The Declaratory Judgment Act of 1934, 28 U.S.C

§ 2201, provides:

a) Inacase of actual controversy within its

jurisdiction, ... any court of the United

States, upon the filing of an appropriate

pleading, may declare the rights and other

legal relations of any interested party,

whether or not further relief is or could be

sought. Any such declaration shall have th:

full force and effect of a final judgment or de-

cree and shall be reviewable as such.

~—_— + -———— ¢@ —

STATEMENT OF THE CASE

A. General

The City of Colton (“Colton”) brought an action

against several defendants under section 107(a) of

the Comprehensive Environmental Response, Com-

pensation and Liability Act (“CERCLA”), alleging

that the defendants had caused a hazardous sub-

stance, perchlorate, to contaminate Colton’s drinking

water supply. Colton’s complaint sought (1) recovery

of Colton’s past response costs in removing the con-

taminant from its drinking water supply, and (2) a

declaratory judgment under the Declaratory Judg-

ment Act authorizing Colton to recover its future

response costs in removing the contaminant. The

district court held that Colton could not recover its

past response costs — because it had not complied

with the National Contingency Plan (“NCP”), as

required by CERCLA and that, because Colton

could not recover its past response costs, it could not

obtain a declaratory judgment authorizing recovery of

its future response costs.

On appeal, Colton conceded that it could not

recover its past response costs under CERCLA

because it had not complied with the NCP — but

argued that it was entitled to a declaratory judgment

under the Declaratory Judgment Act for its future

response costs, if it complied with the NCP in its

future response action.

The Ninth Circuit held that Colton’s declaratory

relief claim presented an “actual controversy” within

the meaning of the Declaratory Judgment Act and

thus was ripe for review. The court held, however,

that CERCLA section 113(g)(2) preempts the Declara

tory Judgment Act as applied in the CERCLA context,

and precludes a declaratory judgment for future

response costs if past response costs cannot be recov-

ered. The court concluded that since Colton cannot

recover its past response costs, it cannot obtain a

declaratory judgment for its future response costs.

B. Statutory and Regulatory Background

Under CERCLA, a party who has incurred costs

— generally referred to as “response costs” — in clean-

ing up a contaminated site may, under defined cir-

cumstances, recover its costs from parties responsible

for the contamination. Section 107(a) authorizes

recovery of (1) response costs of “removal or remedial

action” incurred by the federal government, a state,

t y g

or an Indian tribe “not inconsistent with the national

contingency plan,” and (2) “all other necessary costs

of response incurred by any other person consistent

with the national contingency plan.” 42 U.S.C.

§§ 9607(a)(4)(A), -(B). Colton’s cost recovery action in

this case falls within the second category, 1.e., a cost

recovery action by “any other person.” Under section

107(a), a cost recovery action can be brought against

any person included in the definition of “covered

persons,” who are generally referred to as “potentially

responsible parties” (“PRP”). See United States v

Atlantic Research Corp., 551 U.S. 128, 131-133

(2007); Cooper Industries, Inc. v. Aviall Services, Inc.,

543 U.S. 157, 160-163 (2004).'

Section 113(g)(2) of CERCLA provides for a

mandatory declaratory judgment in actions brought

under section 107(a) for recovery of response costs.

Section 113(¢)(2) states:

In any such action described in this subsec

tion, the court shall enter a declaratory judg-

ment on liability for response costs or damages

that will be binding on any subsequent

CERCLA lists four categories of “covered persons,” which

generally include (1) the “owner or operator” of the facility,

(2) any person who “owned or operated” the facility when the

hazardous substances were disposed of, (3) any person who

arranged for disposal, treatment or transportation of the haz

ardous substances, and (4) any person who “accepted” the haz-

ardous substances for transport to the disposal or treatment

facilities. 42 U.S.C. § 9607(a)(1)-(4)

action or actions to recover further response

costs or damages

42 U.S.C. § 9613(g)(2); App. 50.

As noted above, CERCLA section 107(a) author

izes private parties to recover costs for removal and

remedial! actions that are “consistent with” the NCP.

42 U.S.C. § 9607(a). The NCP consists of regulations

adopted by the Environmental Protection Agency

(EPA) describing procedures that parties must follow

in undertaking removal and remedial actions. /d. at

§$ 9601(31) (defining “national contingency plan”),

9601(23) (defining “removal” action), 9601(24) (defin

ing “remedial” action). See Cooper Industries, Inc. v.

Aviall Services, 543 U.S. 157, 162 n. 2 (2004); United

States v. W.R. Grace & Co., 429 F.3d 1224, 1227 n. 3

(9th Cir. 2006). “Removal” actions are generally

regarded as “time-sensitive responses” to public

health threats, and “remedial” actions are generally

regarded as “permanent remedies to threats for

which an urgent response is not warranted.” W.2?

Grace, 429 F.3d at 1227-1228.

* The Grace court recognized, however, that the distinction

between removal and remedial actions is “inescapably vague”

and that there is “overlap” between the two actions. Jd. at 1239,

1241. As the court noted, “the triggering factors [for a remedial

action] begin to sound virtually similar to the triggering factors

for a ‘removal’ action. In fact, two of the trigyveriny factors for

‘removal’ are almost identical to the factors for ‘remedy.’” Jd. at

1238

C. Procedural Background

Colton filed a complaint against several defend-

ants, alleging that the defendants had caused a

hazardous substance, perchlorate, to contaminate the

Rialto/Colton Groundwater Basin in San Bernardino

County, California, which is a major source of Colton’s

drinking water supply. App. 6, 21. The complaint

alleged that Colton had incurred past response costs

of more than $4 million in removing the contaminant

from the Basin, and that the defendants were liable

under CERCLA section 107(a) for Colton’s past re-

sponse costs in removing the contaminant. App. 6-7,

22-26. The complaint also alleged that Colton intend-

ed to incur future response costs in continuing to

remove the contaminant from the Basin, and that

Colton was entitled to a declaratory judgment under

the Declaratory Judgment Act stating that the de-

fendants are liable for Colton’s future response costs.

App. 7, 21.

The district court granted the defendants’ motion

for summary judgment and dismissed Colton’s action.

App. 7, 46. The district court held that Colton was not

entitled to recover its past response costs because

Colton had not established that its past costs were

necessary and consistent with the NCP. App. 8, 29-42.

The district court held that since Colton could not

recover its past response costs, it was not entitled to a

declaration under the Declaratory Judgment Act that

Colton was entitled to recover its future response

costs. App. 8, 42 n. 16.

D. The Ninth Circuit Decision

On appeal, Colton conceded that it could not

recover its past response costs under CERCLA section

107(a) because it had not complied with the NCP in

its past response action. App. 8. Colton argued, how-

ever, that it was entitled to a declaration under the

Declaratory Judgment Act that Colton could recover

its future response costs, if Colton complied with the

NCP in its future response action. App. 9.

The Ninth Circuit held that Colton’s declaratory

relief claim under the Declaratory Judgment Act was

ripe for review. App. 9-11. The court stated that a

declaratory relief claim under the Declaratory Judg-

ment Act is ripe if there :s “a substantial controversy,

between parties having adverse legal interests, of

sufficient immediacy and reality to warrant the

issuance of a declaratory judgment.” App. 9-10 (cita-

tion and quotation marks omitted). The court held

that Colton’s declaratory rehef claim met this stand-

ard because “the facts establishing Colton’s mght to

declaratory relief have already occurred because

there is no dispute that there is perchlorate contami-

nation of the Basin,” and there is “no dispute that

Colton has incurred costs in responding to the con-

tamination, and that Colton will incur additional

costs in the future.” App. 11."

* The Ninth Circuit also held that Colton’s declaratory relief

claim was not moot, App. 11-13, and that the court had subject

matter jurisdiction over the claim. App. 13-14.

The Ninth Circuit held, however, that Colton

could not assert its declaratory relief claim under the

Declaratory Judgment Act, because that Act was

preempted by the declaratory judgment provision in

CERCLA section 113(g)(2), and the latter provision

does not authorize a declaratory judgment for future

response costs if the plaintiff does not have the right

to recover past response costs. App. 14-19.

In holding that CERCLA section 113(g)(2)

preempts the Declaratory Judgment Act, the Ninth

Circuit stated:

Although Colton’s complaint referred to the

Declaratory Judgment Act rather’ than

CERCLA section 113(g)(2), the latter provi-

sion clearly governs this initial cost-recovery

action. Because “a precisely drawn, detailed

statute pre-empts more general remedies,”

Hinck v. United States, 550 U.S. 501, 506

(2007) Ginternal quotation marks omitted),

we must consider whether Colton was enti-

tled to declaratory relief under CERCLA’s

more detailed declaratory relief provision.

App. 16 (emphasis added).

In holding that CERCLA section 113(g)(2) pre-

cludes a declaratory relief claim for future response

costs if past response costs cannot be recovered, the

Ninth Circuit stated:

The declaratory judgment mandated by sec-

tion 113(g)(2) pertains to “hability for re-

sponse costs.” 42 U.S.C. § 9613(g)(2). Such

“liability for response costs” must refer to the

response costs sought in the initial cost-

recovery action, given that the sentence later

refers to “any subsequent action or actions to

recover further response costs.” Jd. (emphasis

added). Therefore, if a plaintiff successfully

establishes liability for the response costs

sought in the initial cost-recovery action, it is

entitled to a declaratory judgment on present

liability that will be binding on future cost-

recovery actions. [¥] Here, Colton has failed

to establish present liability because of its

conceded failure to comply with the NCP but

seeks a declaratory judgment on future lia-

bility. Section 113(g)(2), however, does not

provide such relief. ...[DJeclaratory relief is

available [under section 113(g)(2)] only if lia-

bility for past costs has been established un-

der section 107.

App. 16-17 (original emphasis).

In summary, the Ninth Circuit held that Colton’s

declaratory relief claim under the Declaratory Judg-

ment Act was ripe for review — because “the facts”

establishing Colton’s claim for future response costs

“have already occurred,” and there is “no dispute”

that Colton had incurred past costs and “will incur

additional costs in the future” — but that Colton could

not assert its declaratory relief claim because CERCLA

section 113(g)(2) preempted the Declaratory Judg-

ment Act as applied in the CERCLA context, and

Colton could not assert declaratory relief under sec-

tion 113(g)(2) because it could not recover past costs.

-¢

REASONS FOR GRANTING THE WRIT

INTRODUCTION

This case presents a significant question concern-

ing the relationship between two prominent, widely-

applied federal statutes — the Declaratory Judgment

Act, 28 U.S.C. § 2201, and CERCLA, 42 U.S.C. § 9607

et seq. The question is whether the declaratory relief

provision of CERCLA section 113(g)(2) preempts the

Declaratory Judgment Act as applied in the CERCLA

context, and thus precludes CERCLA plaintiffs from

asserting declaratory relief claims for future response

costs if they cannot recover past response costs, even

though their declaratory relief claims meet the

justiciability requirements of the Declaratory Judg-

ment Act. The question whether the CERCLA provi-

sion preempts the Declaratory Judgment Act is an

important question of federal law that has not been,

but should be, decided by this Court, and is appropri-

ate for this Court’s review under Supreme Court Rule

10(c).

The Ninth Circuit acknowledged that there is a

conflict among the federal circuit courts concerning

this question. The court stated that the Eighth,

Second and Third Circuits have held that CERCLA

plaintiffs cannot assert declaratory relief claims for

future response costs if they cannot recover past

response costs, and that the First and Tenth Circuits

have held that CERCLA plaintiffs can assert such

declaratory relief claims. The Ninth Circuit, stating

that the issue is one of “first impression” in the Ninth

Circuit, adopted the position of the circuit courts

holding that such declaratory relief claims cannot be

asserted, thus acknowledging that its decision con-

flicts with circuit court decisions holding that such

declaratory relief claims can be asserted. Because of

the conflict among the circuit courts, this case is

appropriate for this Court’s review under Supreme

Court Rule 10(a).

The Ninth Circuit held that plaintiff Colton’s

declaratory relief claim meets the “actual controver-

sy” requirements of the Declaratory Judgment Act

and thus is justiciable under that Act. The Ninth

Circuit held, however, that CERCLA section 113(g)(2)

preempts the Declaratory Judgment Act as applied to

declaratory relief claims under CERCLA, and that

section 113(g)(2) precludes the assertion of a declara-

tory relief claim for future response costs if the plain-

tiff cannot recover past costs. The court concluded

that — since Colton cannot recover its past response

costs because it did not comply with the NCP in its

past response action — Colton cannot assert a declara-

tory relief claim for future response costs.

Contrary to the Ninth Circuit decision, CERCLA

section 113(g)(2) does not preempt the Declaratory

Judgment Act as applied in the CERCLA context.

Section 113(g)(2) mandates a declaratory judgment on

liability for future cleanup costs if the plaintiff has

established its claim for recovery of past cleanup

costs. The purpose of the mandatory declaration is

to obviate the need for the plaintiff, after having

established its claim for past costs, to re-litigate the

liability issue in subsequent actions for future costs.

Section 113(g)(2) does not apply where, as here, the

plaintiff has not established its claim for past costs,

and therefore must establish its claim in its future

cost recovery action. If the plaintiff has not estab-

lished its past cost recovery claim, there is no basis

for precluding re-litigation of the claim and thus no

basis for the mandatory declaration authorized under

section 113(g)(2).

Thus, CERCLA section 113(g)(2) and the Declar-

atory Judgment Act apply differently in the CERCLA

context. Section 113(g)(2) mandates declaratory

judgments for plaintiffs who establish the defendant’s

liability, and the Declaratory Judgment Act authoriz-

es declaratory judgments for plaintiffs who do not

establish the defendant’s liability but whose claims

meet the justiciability requirements of the Declarato-

ry Judgment Act. CERCLA section 113(g)2) expands

the rights of plaintiffs to obtain declaratory relief, by

providing for mandatory declarations where liability

has been established, but does not reduce the existing

rights of plaintiffs to secure declaratory relief under

the Declaratory Judgment Act, where they would

otherwise qualify for such relief.

Since CERCLA section 113(g)(2) and the Declara-

tory Judgment Act apply differently in the CERCLA

context, they can be construed harmoniously so that

effect is given to each. “When two statutes are capa-

ble of co-existence, it is the duty of the courts, absent

a clearly expressed congressional intent to the con-

trary, to regard each as effective.” Morton v. Mancari,

417 U.S. 535, 549 (1974). Congress provided no

indication, in enacting section 113(g)(2), that the

provision was intended to preempt the Declaratory

Judgment Act, and the provision itself reveals no

such congressional intent. Since the CERCLA provi-

sion and the Declaratory Judgment Act can be read

harmoniously and Congress provided no indication of

a preemptive intent, the CERCLA provision cannot

properly be construed as preempting the Declaratory

Judgment Act.

The Ninth Circuit decision, by holding that

CERCLA preempts the Declaratory Judgment Act,

categorically precludes the assertion of declaratory

relief claims under the Declaratory Judgment Act for

CERCLA cost recovery, no matter how compelling the

evidence in support of the claims, and even though

the declaratory relief claims concededly meet the

“actual controversy” requirements of the Declaratory

Judgment Act. The decision obstructs the broad goal

of the Declaratory Judgment Act to provide a mecha-

nism for parties to obtain a declaration of their rights

before their actual causes of action have fully accrued

under substantive statutes. The decision creates an

exception to the broad reach of the Declaratory

Judgment Act that is not supported by the language

or purposes of either the Declaratory Judgment Act or

CERCLA. Therefore, this Court should grant the

petition and reverse.

THE NINTH CIRCUIT ACKNOWLEDGED

THAT THERE IS A CONFLICT AMONG

THE FEDERAL CIRCUIT COURTS CON-

CERNING THE QUESTION PRESENTED

IN THIS PETITION, AND THAT ITS DE-

CISION CONFLICTS WITH THE DECI-

SIONS OF OTHER CIRCUIT COURTS.

The Ninth Circuit acknowledged that there is a

conflict among the federal circuit courts concerning

whether a plaintiff can seek declaratory relief under

CERCLA for future response costs if the plaintiff has

not established its right to recover past costs, and

that its decision conflicts with the decisions of other

circuit courts. The Ninth Circuit stated:

Whether a CERCLA plaintiff’s failure to es-

tablish liability for its past costs necessarily

dooms its bid to obtain a declaratory judg-

ment as to liability for its future costs ap-

pears to be an issue of first impression in

this circuit. Our sister circuits have taken

divergent approaches to this issue. Some

have held or suggested that recoverable past

costs are a sine qua non for declaratory relief

under CERCLA. See, e.g., Trimble v. Asarco,

Inc., 232 F.3d 946, 858 (8th Cir. 2000), over-

ruled on other grounds by Exxon Mobil Corp. v.

Allapattah Servs., Inc., 545 U.S. 546 (2005);

Gussack Realty Co. v. Xerox Corp., 224 F.3d

85, 92 (2d Cir. 2000) (per curiam); United

States v. Occidental Chem. Co., 200 F.3d 143,

153-54 (3d Cir. 1999). Others have held or

suggested that declaratory relief may be

available even in the absence of recoverable

past costs. See, e.g., United States v. Davis,

261 F.3d 1, 46 (1st Cir. 2001); County Line

Inv. Co. v. Tinney, 933 F.2d 1508, 1513 (10th

Cir. 1991) (per curiam).

App. 14-15.

As the Ninth Circuit acknowledged in the above

passage, its decision conflicts with the Tenth Circuit’s

decision in County Line Inv. Co. v. Tinney, 933 F.2d

1508, 1513 (10th Cir. 1991). In Tinney, the Tenth

Circuit stated that a plaintiff can under some circum-

stances obtain declaratory relief for future response

costs under CERCLA even though the plaintiff has

not established its claim for past response costs

because of its failure to comply with the NCP. The

Tenth Circuit stated:

In holding that consistency with the NCP is

an element of a private cost recovery claim,

we recognize that there are some circum-

stances in which a CERCLA plaintiff may be

entitled to a declaration of the defendant’s li-

ability even though the plaintiff has not yet

established that all of its claimed response

costs were incurred consistent with the NCP.

These includes cases . . . in which the factual

record does not permit a determination of

consistency with the NCP at the time the

motion for summary judgment is filed [cita-

tions], and those in which the plaintiff seeks

only a declaration of the defendant’s liability

for future costs incurred consistent with the

NCP {citations |].

933 F.2d at 1513. Elaborating on this point, the court

stated:

Early determination of a defendant’s liability

for as yet unproven CERCLA-cognizable

costs ... can speed the settlement process

and thus promote Congress’ goal of encourag

ing private parties to undertake and fund

expedited CERCLA cleanups.

Id. at 1513 n. 9. Thus, while the Tenth Circuit held

that declaratory relief claims for future costs can be

maintained even though past costs are not recovera

ble, the Ninth Circuit held the opposite — that such

declaratory relief claims cannot be maintained.

As the Ninth Circuit also acknowledged in the

above passage, its decision conflicts with the First

Circuit’s decision in United States v. Davis, 261 F.3d

1, 46 (1st Cir. 2001). In Davis, the First Circuit held

that a CERCLA plaintiff was entitled to declaratory

relief for future response costs under the Declaratory

Judgment Act, as well as CERCLA section 113(g)(2).

261 F.3d at 45-47. While the Ninth Circuit held that

the Declaratory Judgment Act was preempted as

applied to declaratory relief claims under CERCLA,

the First Circuit held that the Declaratory Judgment

* The First Circuit in Davis held that declaratory relief

claims could be asserted not only for cost recovery claims under

CERCLA section 107, which is “the vehicle for an innocent parity

to recover cleanup costs,” but also for contribution claims under

CERCLA section 113, which is “the vehicle for a non-innocent

party to seek contribution from other polluters.” 261 F.3d at 46

1'/

Act authorizes such claims, thus indicating that the

Act is not preempted

Similarly, the District of Columbia district court

has held that declaratory relief claims under

CERCLA can be asserted for future response costs

even though past response costs are not recoverable

Foster v. United States, 922 F.Supp. 663, 664 (D. D.C

1996). The court stated:

Because a claim for declaratory relief seeks

to fix liability for future costs, it is nonsensi

cal to require that the plaintiff demonstrate

that he has already incurred such costs.

While a claim for recovery of past costs is

logically antecedent to a claim for future

costs, it is not a prerequisite

F.Supp. at 664 (original emphasis).

Thus, as the Ninth Circuit acknowledged, there

is a conflict among the federal circuit courts concern

ing whether CERCLA section 113(g)(2) preempts the

Declaratory Judgment Act as applied in the CERCLA

context, and whether CERCLA plaintiffs can assert

declaratory relief claims for future costs if they can

not recover past costs, and the Ninth Circuit’s deci

sion conflicts with the decisions of the First and

Tenth Circuits. This Court should grant the petition

in order to resolve the intercircuit conflict

Il. CONTRARY TO THE NINTH CIRCUIT

DECISION, CERCLA SECTION 113(g)(2)

DOES NOT PREEMPT THE DECLARA-

TORY JUDGMENT ACT AS APPLIED IN

THE CERCLA CONTEXT.

A. CERCLA Section 113(g)(2) And The De-

claratory Judgment Act Apply Differ-

ently In The CERCLA Context And Can

Be Construed Harmoniously, And There-

fore Section 113(g)(2) Does Not Preempt

The Declaratory Judgment Act.

As noted above, the Ninth Circuit held that

CERCLA section 113(g)(2) preempts the Declaratory

Judgment Act as appled here because “‘a precisely

drawn, detailed statute pre-empts more general

remedies.” App. 16, quoting from IHinck v. United

States, 550 U.S. 501, 506 (2007). The Ninth Circuit

cited nothing in the language of section 113(g¢)(2)

indicating that the provision preempts, or was in

tended to preempt, the Declaratory Judgment Act

Although it is true that a precisely-drawn, de

tailed statute preempts more general remedies, a:

the Ninth Circuit held, this principle applies only

where the two statutes apply to the same subject and

cannot be construed congruently. Here, CERCLA

section 113(g)(2) and the Declaratory Judgment Act

apply differently in the CERCLA context and can be

construed harmoniously

Section 113(g)2) provides that a declaratory

judgment is mandatory 1.e., that the court “shall”

prant declaratory rehel, 42 U.S.C. § 9613(g2)(2) on

the issue of liability, if the plaintiff has established

the defendant’s liability for the plaintiff’s past re

sponse costs. United States v. USX Corp., 68 F.3d 811,

819 (3d Cir. 1995); Kelley v. Ek. 1. DuPont De Nemours

& Co., 17 F.3d 886, 844 (6th Cir. 1994). The purpose

of the mandatory declaration is to ensure that a

plaintiff who has prevailed on its past cost recovery

claim will not be required to re-litigate the defend

ant’s liability when the plaintiff seeks recovery of its

future response costs in subsequent litigation. As the

Third Circuit and Sixth Circuit have explained, in

describing section 113(2)(2)

In providing for the recovery of response

costs, Congress included language to ensure

that a responsible party's liability, once e:

tablished, would not have to be” re

litigated The entry of [a] declaratory

judgment as to hability is mandatory

USX Corp., 68 F.3d at 819; Kelley, 17 F.3d at 844

Thus, if a plaintiff has established the defendant’

liability for past response costs, section 113(g\2)

mandates the court to grant declaratory relief for

future response costs, so that the defendant's liability

will not have to be “re-litigated” when the plaintiff

seeks future cost recovery

Since the mandatory declaration provided in se

Lion 113(¢)(2) applies where the plaintiff has previously

established the defendant’s liability, the provision

does not apply where, as here, the plaintiff has not

previously established the defendant's hability. If the

defendant’s liability has not been previously estab-

lished, there is no basis for precluding re-litigation of

the liability issue and thus no basis for a mandatory

declaration. Section 113(g)(2) simply has no applica-

tion or meaning where the plaintiff has not estab-

lished its past cost recovery claim.

Since section 113(g)(2) does not apply where the

defendant’s liability has not been previously estab-

lished, section 113(g)(2) cannot properly be interpret-

ed as preempting the Declaratory Judgment Act as

applied in such situations. If the plaintiff’s declarato-

ry relief claim meets the “actual controversy” re-

quirements of the Declaratory Judgment Act in such

situations, the plaintiff has the right to pursue its

declaratory relief claim under the Declaratory Judg-

ment Act, even though the plaintiff has not estab-

lished its right to recover past costs. Cf. Reichhold,

Inc. v. United States Metals Refining Co., 522

F.Supp.2d 724, 728 (D. N.J. 2007) (holding that since

plaintiff cannot seek declaratory judgment under

CERCLA section 113(g)\(2) for contribution costs,

plaintiff has right to seek declaratory judgment for

contribution costs under Declaratory Judgment Act).

Here, the Ninth Circuit held that Colton’s declaratory

relief claim met all the justiciability requirements of

the Declaratory Judgment Act. Thus, Colton should

have been allowed to pursue its declaratory relief

claim under the Act.

The declaratory relief provision of section

113(g)(2) is included in a provision establishing the

limitation period for bringing an action to recover

response costs; under the provision, a cost recovery

action must be brought within six years after “initia-

tion” of a remedial action. 42 U.S.C. § 9613(g)(2); App.

50. Since the limitations period is triggered by the

initiation of the remedial action rather than its

completion, Congress was evidently concerned that a

plaintiff may be required to bring its cost recovery

action before its remedial action is completed, and

resolved the problem by allowing plaintiffs to obtain a

mandatory declaratory judgment of liability that

would allow future cost recovery once the future costs

were incurred. See State of California v. Neville

Chemical Co., 358 F.3d 661, 668 n. 4 (9th Cir. 2004).

By allowing plaintiffs to obtain mandatory declarato-

ry judgments of liability where their past costs were

NCP-compliant, Congress did not thereby preclude

plaintiffs from obtaining declaratory judgments under

the Declaratory Judgment Act in situations where

their past costs were not NCP-compliant, assuming

that their claims otherwise meet the justiciability

requirements of the Declaratory Judgment Act.

It is thus clear that CERCLA section 113(g)(2)

and the Declaratory Judgment Act apply differently

and address different subjects in the CERCLA con-

text. Section 113(g)(2) mandates a declaratory judg-

ment where the plaintiff has established its right to

recover past costs, and the Declaratory Judgment Act

authorizes a declaratory judgment where the plaintiff

has not met this burden but is able to meet the “actu-

al controversy” requirements of the Declaratory

Judgment Act. Contrary to the Ninth Circuit decision,

section 113(g)(2) does not provide a “detailed” remedy

that “pre-empts” the “general” remedy of the Declara-

tory Judgment Act, but instead addresses an entirely

different situation in the CERCLA context.

Stated differently, CERCLA section 113(g)(2)

expands the rights of plaintiffs to obtain declaratory

relief, by mandating such relief for plaintiffs who

establish the defendant’s hability, but does not reduce

the rights of plaintiffs to obtain declaratory relief

under the Declaratory Judgment Act, by denying

such relief for plaintiffs who do not establish the

defendant’s liability but meet the requirements of the

Declaratory Judgment Act. Section 113(g)(2) creates

greater rights for declaratory relief claimants but

does not preempt their existing rights.

The Ninth Circuit’s decision, in holding that

CERCLA preempts the Declaratory Judgment Act,

violates the well-established rule of statutory con-

struction that repeals by implication are not favored,

and that statutes should be construed harmoniously,

to the extent possible, so that effect is given to each

statute. As this Court has stated:

(TJhe cardinal rule is that repeals by impli-

cation are not favored.... In the absence

of an intention to repeal, the only permissi-

ble justification for a repeal by implication

is when the earlier and later statutes are ir-

reconcilable. ... When two statutes are ca-

pable of co-existence, it is the duty of the

courts, absent a clearly expressed congres-

sional intent to the contrary, to regard each

as effective. When there are two acts upon

the same subject, the rule is to give effect to

both if possible. ... The intention of the leg-

islature to repeal must be clear and mani-

fest.

Morton v. Mancari, 417 U.S. 535, 549 (1974) (cita-

tions and quotation marks omitted). See also Branch

v. Smith, 538 U.S. 254, 273 (2003) (plurality opinion);

Watt v. Alaska, 451 U.S. 259, 267 (1981); Universal

Interpretative Shuttle Corp. v. Washington Metropoll-

tan Area Transit Comm’n, 393 U.S. 186, 194 (1968):

Posadas v. National City Bank, 296 U.S. 497, 503

(1936).

Here, the two statutes — the Declaratory Judg-

ment Act and CERCLA section 113(g)(2) — can be read

harmoniously so that effect is given to each, because

the CERCLA provision provides for mandatory de-

claratory judgments in certain situations and the

Declaratory Judgment Act provides for declaratory

judgments in different situations. Nothing in the

language of CERCLA section 113(g)(2) suggests that

it preempts the Declaratory Judgment Act as applied

in the CERCLA context, and Congress provided no

indication of any preemptive intent in enacting

section 113(g)(2). Under traditional rules of statutory

construction, section 113(g)(2) cannot properly be

construed as preempting the Declaratory Judgment

Act, contrary to the Ninth Circuit decision.

B. There Are Various Legitimate Reasons

Why A Plaintiff May Need To Pursue

Declaratory Relief Under The Declara-

tory Judgment Act For Future Re-

sponse Costs Under CERCLA, Even

Though The Plaintiff Does Not Have

The Right To Recover Past Costs.

As the Tenth Circuit explained in County Line

Investment Co. v. Tinney, 933 F.2d 1508 (10th Cir.

1991), there are various reasons why a plaintiff may

need to obtain a declaratory judgment under the

Declaratory Judgment Act for recovery of future

response costs under CERCLA, “even though the

plaintiff has not yet established that all of its claimed

response costs were incurred consistent with the

NCP.” Tinney, 933 F.2d at 1513. For example, the

“factual record” may “not permit a determination of

consistency with the NCP at the time the motion for

summary judgment is filed.” Jd. Also, the plaintiff —

without having incurred any past costs — may “seek{ ]

only a declaration of the defendant’s liability for

future costs incurred consistent with the NCP.” /d.

As Tinney recognized, a CERCLA plaintiff may

need to seek a declaration of the defendants’ liability

for future costs even though the plaintiff has not

incurred NCP-compliant past costs. For example, the

plaintiff may need to determine the defendants’

potential lability before undertaking a future re-

sponse action, in order to determine whether the

response action should be undertaken. The declarato-

ry relief action may determine various aspects of the

defendants’ liability, such as whether the defendants

caused the contamination, whether they are “covered

persons” within the meaning of CERCLA, 42 U.S.C.

§ 9607(a), whether the defendants have available

defenses under CERCLA,’ whether the statute of

limitations bars the cost recovery action, and other

such matters. The determination of these issues may

guide the plaintiff in deciding whether to commence a

response action.

The instant case presents an example of precisely

why a plaintiff may need to secure a declaratory

judgment for future response costs even though the

plaintiff has not established its right to recover past

costs. If Colton is unable to obtain a declaratory

judgment for future cost recovery because it cannot

recover past costs, Colton may be unable to recover

its future costs from all defendants potentially re-

sponsible for the contamination of Colton’s drinking

water supplies. As the Ninth Circuit stated, “Colton

faces a potential statute of limitations bar with

>”

respect to its claims against certain defendants. .

App. 12. More specifically, some defendants argue

that Colton cannot initiate a new cost recovery action

against them because any such action is time-barred.”

* Under CERCLA, defendants are not liable for response

costs if the contamination was caused by an act of God, an act of

war, or the acts or omissions of third parties. 42 U.S.C.

§ 9607(b).

* The basis of the defendants’ argument that a new action

would be time-barred is explained more fully in Colton’s reply

brief in the Court of Appeals, at pages 27-28, and note 8. The

(Continued on following page)

If their argument is correct, Colton’s only basis for

recovering its future response costs from them is by

assertion of its declaratory relief claim in this case.

The Ninth Circuit, by precluding Colton from assert-

ing this claim, may preclude Colton from obtaining

future cost recovery from these defendants, even

though they are allegedly responsible for the contam-

ination of Colton’s drinking water supplies.

Conversely, a CERCLA plaintiff would always

prefer to obtain a declaratory judgment under

CERCLA section 113(g)(2) rather than under the

Declaratory Judgment Act, if the remedy is available

to the plaintiff, because a declaratory judgment under

section 113(g)(2) affords a stronger remedy than under

the Declaratory Judgment Act. Section 113(g)(2)

provides that “the court svall enter a declaratory

judgment on liability for response costs or damages

that will be binding on any subsequent action or

actions.” 42 U.S.C. § 9613(g)(2) (emphasis added).

Since the mandatory declaratory judgment establish-

es “liability” that is “binding” in the subsequent

action, the defendant must raise all available defens-

es in the initial action or lose them in the subsequent

action. By contrast, a declaratory judgment under the

Declaratory Judgment Act is collateral estoppel in the

subsequent action only on issues that are “actually

litigated and determined” by a valid judgment. Bobby

relevant portions of the reply brief are included in the Appendix,

at pages 54-55.

v. Bies, _ U.S. __, 129 S.Ct. 2145, 2152 (2009);

Arizona v. California, 530 U.S. 392, 414 (2000).

Therefore, the defendant in such an action is free to

raise and litigate issues in the subsequent action that

it did not raise in the initial action. Nonetheless,

although the mandatory declaration provided in

section 113(g)(2) provides a stronger remedy for the

plaintiff, the plaintiff should have the right to pursue

the lesser remedy provided in the Declaratory Judg-

ment Act, if the stronger remedy of section 113(g)(2)

is not available.

It is thus clear that CERCLA section 113(g)(2)

and the Declaratory Judgment Act establish different

sets of rights and obligations concerning the plain-

tiff’s ability to seek declaratory relief in the CERCLA

context. Section 113(g)(2) allows the plaintiff to ob-

tain a mandatory declaratory judgment of liability

that is binding in the subsequent action, and the

Declaratory Judgment Act allows a plaintiff who

cannot qualify for declaratory relief under section

113(g)(2) to nonetheless obtain a declaratory judg-

ment that will have a collateral estoppel effect on the

actually-adjudicated issues. Contrary to the Ninth

Circuit’s view, the statutes do not impose conflicting

requirements applicable to the same situation, but

instead provide complementary remedies in different

situations. Thus, there is no basis for the Ninth

Circuit’s conclusion that the CERCLA provision

preempts the Declaratory Judgment Act.

The Ninth Circuit decision categorically pre-

cludes all such plaintiffs in the foregoing situations

from obtaining declaratory relief for future cost

recovery under the Declaratory Judgment Act, no

matter how compelling the evidence in support of

such relief, and even though the claims concededly

meet the “actual controversy” requirements of the

Declaratory Judgment Act. Under the Ninth Circuit

decision, all that matters is that the plaintiff cannot

recover its past costs. In fact, there is no inherent

nexus between the right to recover past costs and the

right to recover future costs in terms of NCP compli-

ance; a plaintiff who has failed to comply with the

NCP in its past response action may fully comply

with the NCP in its future response action. See Unit-

ed States v. USX Corp., 68 F.3d 811, 819 n. 17 (3d Cir.

1995). If the plaintiffs in these situations fully comply

with the NCP in their future response actions and are

able to meet the stringent “actual controversy” re-

quirements of the Declaratory Judgment Act — which

requires the existence of an immediate and actual

controversy, and not a hypothetical or abstract one,

Maryland Casualty Co. v. Pacific Coal & Oil Co., 312

U.S. 270, 273 (1941); Aetna Life Ins. Co. v. Haworth,

300 U.S. 227, 242 (1937) — the plaintiffs should be

allowed to assert their declaratory relief claims under

the Declaratory Judgment Act, even though they

cannot recover past response costs.

Nothing in the Declaratory Judgment Act sug-

gests that declaratory relief claims for future cost

recovery under CERCLA cannot be maintained before

the work is actually performed and the costs actually

incurred, assuming that the Act’s “actual controversy”

requirements are met. On the contrary, the Act specif-

ically authorizes parties to obtain judicial declara-

tions of their rights, “whether or not further relief

is or could be sought.” 28 U.S.C. § 2201. Similarly,

nothing in CERCLA section 113(g)(2) suggests that

it preempts, or was intended to preempt, the Declara-

tory Judgment Act as applied to such declaratory

relief claims. Therefore, under traditional rules of

statutory construction, the proper conclusion is that

CERCLA section 133(g)(2) does not preempt the

Declaratory Judgment Act as applied in the CERCLA

context, and the Ninth Circuit erred in concluding

otherwise.

CONCLUSION

For the foregoing reasons, the Court should grant

the petition for writ of certiorari.

Respectfully submitted,

RODERICK E. WALSTON

(Counsel of Record)

GENE TANAKA

DANIELLE G. SAKAI

BeEsT BEST & KRIEGER LLP

Attorneys for Petitioner

App. 1

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CITY OF COLTON, a California

municipal corporation,

Plaintiff-Appellant,

AMERICAN PROMOTIONAL EVENTS,

INC.-WEST; APOLLO MANUFACTUR

ING Co.; ASTRO PYROTECHNICS,

INc.; ATLAS FIREWORKS COMPANY, No. 06-56718

INC.; BLACK & DECKER, INC.;

CALIFORNIA FIREWORKS D.C. No.

DIsPpLAY COMPANY; COUNTY OF CV-05-01479-J FW

SAN BERNARDINO; EMHART INDUS OPINION

TRIES, INC.; GOODRICH CORPORA

TION; KWIKSET LOCKS, INC.;

PyRO SPECTACULARS, INC.; Pyro

TRONICS CORP.; RED DEVIL FIRE-

WORKS COMPANY; THOMAS O.

PETERS; THE 1966 THOMAS O.

PETERS AND KATHLEEN S. PETERS

REVOCABLE TRUST; TROJAN FIRE-

WORKS, Co.; UNITED FIREWORKS

MANUFACTURING COMPANY INC.;

WHITTAKER CORPORATION,

Defendants-Appellees.

App. Z

Appeal from the United States District Court

for the Central District of California

John F. Walter, District Judge, Presiding

Argued and Submitted

January 11, 2010 — Pasadena, California

Filed August 2, 2010

Before: Alfred T. Goodwin, William C. Canby, Jr., and

Diarmuid F. O’Scannlain, Circuit Judges

Opinion by Judge O’Scannlain

COUNSEL

Roderick E. Walston, Best Best & Krieger LLP, Wal

nut Creek, California, argued the cause and filed

briefs for plaintiff-appellant. With him on the briefs

were Gene Tanaka, Cynthia Germano, and Danielle

G. Sakai, Best Best & Krieger LLP, Walnut Creek,

California.

James L. Meeder, Allen Matkins Leck Gamble Mal-

lory & Natsis LLP, San Francisco, California, argued

the cause and filed a brief for defendants-appellees

American Promotional Events, Inc.-West, Astro

Pyrotechnics, Inc., Black & Decker, Inc., County of

San Bernardino, Emhart Industries, Inc., Kwikset

Locks, Inc., Thomas O. Peters, The 1996 Thomas O.

Peters and Kathleen S. Peters Revocable Trust,

Trojan Fireworks, and Whittaker Corp. With him on

the brief were Ruth E. Stringer, Maxine M. Morisaki,

Robert L. Jocks, Office of the County Counsel, County

of San Bernardino, San _ Bernardino, California;

Timothy V.P. Gallagher, Martin N. Refkin, Thomas A.

App 3

Bloomfield, and Thomas S. Sites, Gallagher & Gal

lagher, P.C., Los Angeles, California; John E. Van

Vlear and Daniel S. Kippen, Voss Cook & Thel LLP,

Newport Beach, California; Richard A. Dongell,

Matthew Clark Bures, and Christopher T. Johnson,

Dongell Lawrence Finney, Los Angeles, California;

Robert D. Wyatt and Gary A. Slodoba, Allen Matkins

Leck Gamble Mallory & Natsis LLP, San Francisco,

California; Steven H. Goldberg, Daniel J. Coyle, and

Amilia Glikman, Downey Brand LLP, Sacramento,

California; Steven J. Renshaw, Renshaw & Asso

ciates, PLC, Torrance, California; Philip Hunsucker

and Allison McAdam, Resolution Law Group, P.C.,

Lafayette, California; David C. Solinger and Erik

Mroz, Resolution Law Group, P.C., Woodland Hills,

California.

Jeffrey D. Dintzer, Gibson, Dunn & Crutcher LLP,

Los Angeles, California, filed a brief on behalf of

defendant-appellee Goodrich Corporation. With him

on the brief were Denise G. Fellers, Gibson, Dunn &

Crutcher LLP, Los Angeles, California, and Michael]

K. Murphy, Gibson, Dunn & Crutcher LLP, Washing

ton, D.C.

Philip C. Hunsucker, Resolution Law Group, P.C.,

Lafayette, California, filed a brief on behalf of defen-

dant-appellant Pyro Spectaculars, Inc. With him on

the brief were Brian L. Zagon and Allison E. McA

dam, Resolution Law Group, P.C., Lafayette, Califor

nia.

App 1

OPINION

O’SCANNLAIN, Circuit Judge

We must decide, among other things, whether the

City of Colton, California, can recover response cost:

under the Comprehensive Environmental Response,

Compensation, and Liability Act allegedly incurred a

a result of perchlorate contamination inst wile!

supply

The Comprehensive Environmental Response,

Compensation, and Liability Act of 1980 (“CERCLA”)

“is a comprehensive statute that grants the President

broad power to command government agencies and

private parties to clean up hazardous waste sites

Key Tronic Corp. v. United States, 511 U.S. 809, 814

(1994). Under CERCLA section 107(a), 42 U.S.C

§ 9607(a), a private party may “recover expenses

associated with cleaning up contaminated sites

United States v. Atl. Research Corp., 551 U.S. 128,

131 (2007)

To establish a prima facie claim for recovery of

response costs under section 107(a), a private-party

plaintiff must demonstrate

(1) the site on which the hazardous sub

stances are contained is a “facility” under

CERCLA’s definition of that term, Section

101(9), 42 U.S.C. § 9601(9): (2) a “release” or

App. 5

“threatened release” of any “hazardous sub-

stance” from the facility has occurred, 42

U.S.C. § 9607(a)(4); (3) such “release” or

“threatened release” has caused the plaintiff

to incur response costs that were “necessary”

and “consistent with the national contingen-

cy plan,” 42 U.S.C. §§9607(a)(4) and

(a)(4)(B); and (4) the defendant is within one

of four classes of persons subject to the liabil-

ity provisions of Section 107(a).

Carson Harbor Village, Ltd. v. Unocal Corp., 270 F.3d

863, 870-71 (9th Cir. 2001) (en banc) (“Carson Harbor

I”) (internal quotation marks omitted). Only the third

element — whether the response costs were necessary

and consistent with the national contingency plan

(“NCP”) — is at issue in this appeal.

Response costs are considered necessary when

“an actual and real threat to human health or the

environment exist[s].” Jd. at 871. Response costs are

considered consistent with the NCP “if the action,

when evaluated as a whole, is in substantial com-

pliance” with it. 40 C.FLR. § 300.700(c)(3)(i). The NCP

“specifies procedures for preparing and responding to

contaminations and was promulgated by the Env-

ronmental Protection Agency (EPA) pursuant to

CERCLA § 105.” Cooper Indus., Inc. v. Aviall Servs.,

Inc., 543 U.S. 157, 161 n.2 (2004); see also 40 C.E.R.

Pt. 300 (codifying the NCP). “It is designed to make

the party seeking response costs choose a cost-

effective course of action to protect public health and

the environment.” Carson Harbor Village Ltd. uv.

County of Los Angeles, 433 F.3d 1260, 1265 (9th Cir.

App. 6

2006) (“Carson Harbor IT’) (internal quotation marks

omitted).

The City of Colton (“Colton”) draws its water

supply from the Rialto-Colton groundwater basin

(“Basin”) in San Bernardino County, California. In

1997, Colton began monitoring its municipal supply

wells for perchlorate contamination. By 2002, Colton

had detected perchlorate in three of its wells in

concentrations ranging from about 4 to 10 micro-

grams per liter (“ug/L”). At the time, the California

Department of Health Services (“CDHS”), which

regulates water quality, had an “advisory action level”

for perchlorate of 4 pg/L. CDHS informed Colton that

because “the perchlorate action level is an advisory

action level, and thus, not enforceable,” the three

impacted wells “may continue to be used to supply

the system.” Nevertheless, in a closed-session meet-

ing between its City Council and City Attorney,

Colton adopted a policy of prohibiting the use of

water with perchlorate levels above 4 pg/L. Pursuant

to this policy, Colton took the impacted wells out of

service and instituted a wellhead treatment program

to eliminate the perchlorate in 2003.

In 2005, Colton filed suit against numerous

entities that had engaged in industrial activities in

the Basin over the years, alleging that they caused

App. 7

the release of perchlorate into the groundwater. In its

third amended complaint, filed in December 2005,

Colton alleged that it had spent $4 million to investi-

gate the contamination and to implement the well-

head treatment program. Colton asserted claims for

cost recovery and contribution under CERCLA, 42

U.S.C. §§ 9607(a), 9613(f); a claim for declaratory

relief as to liability for future costs under the Decla-

ratory Judgment Act, 28 U.S.C. §§ 2201-2202; and

various claims under state law.

Numerous defendants filed a motion for sum-

mary judgment, arguing that Colton could not recover

its wellhead treatment program costs under CER-

CLA.’ In its opposition, Colton argued that the defen-

dants were liable for not only its wellhead treatment

program costs, but also costs associated with a future

Basin-wide cleanup estimated to cost between $55

and $75 million. The district court granted summary

judgment for the defendants on Colton’s federal

claims and declined to exercise supplemental jurisdic-

tion over Colton’s state law claims.” The district court

t - ‘ue ° ‘ . ‘ ‘

The defendant entities which joined in the motion were

the County of San Bernardino, the 1996 Thomas O. Peters and

Kathleen S. Peters Revocable Trust, Thomas O. Peters, Ameri-

can Promotional Events, Inc.-West, Pyro Spectaculars, Inc.,

Astro Pyrotechnics, Inc., Emhart Industries, Inc., Kwikset

Locks, Inc., Black & Decker, Inc., Whittaker Corp., and Trojan

Fireworks Co.

* Although not all the defendants joined in the motion for

Summary judgment, the distmct court sua sponte granted

summary judgment in favor of the non-moving defendants.

App. 8

held that Colton could not recover its costs associated

with the wellhead treatment program because it

failed to show that such costs were necessary and

consistent with the NCP; furthermore, because

Colton could not show that it was entitled to recover

any of its past costs, its claim for declaratory relief as

to its future costs necessarily failed. Colton timely

appealed.”

Colton first seeks reversal of the district court’s

summary judgment denying recovery of its past

response costs. Colton challenges the district court’s

conclusion that the wellhead treatment program was

unnecessary because there was no immediate threat

to the public health or environment. See 42 U.S.C.

§ 9607(a)(4B). Colton concedes, however, that it

failed to comply with the national contingency plan in

its past response action. Because Colton’s concession

is a sufficient ground upon which to affirm the sum-

mary judgment with respect to past response costs,

we decline to review the merits of the district court’s

conclusion that such costs were unnecessary. See

* The district court also dismissed all counterclaims and

cross-claims. Both Goodrich and Pyro Spectaculars, Inc. cross-

appealed from the district court’s dismissal of these counter-

claims and cross-claims. We address the cross-appeals in a

memorandum disposition filed concurrently with this opinion

App. 9

Dorsey v. Nat'l Enqutrer, Inc., 973 F.2d 14381, 1438

(9th Cir. 1992).*

Colton also contends that the district court erred

in granting summary judgment denying its claim for

declaratory relief as to its future response costs.

Before addressing the merits of the claim, we

turn to the parties’ various jurisdictional arguments.

The parties dispute whether Colton’s claim for

declaratory relief is ripe. “The constitutional ripeness

of a declaratory judgment action depends upon

* Colton contends that if the district court’s holding on the

necessity of the response action is allowed to stand, such holding

could have a preclusive effect in subsequent litigation. We note,

however, that in a future action, Colton could argue that our

reliance on the NCP comphance holding alone vitiates any

preclusive effect of the district court’s necessity holding. See, e.g.,

Niagara Mohawk Power Corp. v. Tonawanda Band of Seneca

Indians, 94 F.3d 747, 754 (2d Cir. 1996) (“It is a well-established

principle of federal law that if an appellate court considers only

one of a lower court’s alternative bases for its holding, affirming

the judgment without reaching the alternative bases, only the

basis that is actually considered can have any preclusive effect

in subsequent litigation.”); see also Restatement (Second) of

Judgments § 27, cmt. o (1982).

App. 10

whether the facts alleged, under all the circums-

tances, show that there is a substantial controversy,

between parties having adverse legal interests, of

sufficient immediacy and reality to warrant the

issuance of a declaratory judgment.” Jn re Coleman,

560 F.3d 1000, 1005 (9th Cir. 2009) (internal quota-

tion marks omitted).

In Wickland Oil Terminals v. Asarco, Inc., 792

F.2d 887 (9th Cir. 1986), we held that a claim for

declaratory relief as to CERCLA liability is ripe when

the “essential fact establishing [the plaintiff’s] right

to declaratory relief — the alleged disposal of hazard-

ous substances ... — has already occurred.” Id. at

893. Later, in In re Dant & Russell, Inc., 951 F.2d 246

(9th Cir. 1991), we held that a claim for cost recovery

and declaratory relief under CERCLA becomes ripe

only after plaintiffs “spend some money responding to

an environmental hazard.” Jd. at 249. Finally, in

Boeing Co. v. Cascade Corp., 207 F.3d 1177 (9th Cir.

2000), we held that a claim for declaratory relief for

contribution under CERCLA section 113 is ripe when

“(t]he pollution has been carefully studied, the parties

litigated a genuine controversy about millions of

dollars they had already spent, and the facts bringing

about their relative responsibility have already

occurred.” Jd. at 1192.

None of these cases imposed any requirement

that a party incur recoverable — 1.e., necessary and

NCP-compliant — response costs before its claim for

declaratory relief is ripe. Indeed, our cases make

clear that so long as there has been a release of

App. ll

hazardous substances, and the plaintiff spends some

money responding to it, a claim for declaratory relief

is ripe for review. Accord Cal. ex rel. Cal. Dep’t of

Toxic Substances Control v. Neville Chem. Co., 358

F.3d 661, 668 n.4 (9th Cir. 2004) (explaining in dicta

that “[aJs soon as [the plaintiff] expended its first

dollar, it could have sued [the defendant] for this

dollar and sought a declaratory judgment of [defen-

dant’s] liability for future response costs”).

Here, the facts establishing Colton’s right to

declaratory relief have already occurred because

there is no dispute that there is perchlorate contami-

nation of the Basin. Moreover, there is no dispute

that Colton has incurred costs in responding to the

contamination, and that Colton will incur additional

costs in the future. The only dispute is whether

Colton is entitled to recover these costs, which goes to

the merits, not justiciability. Because this controversy

cannot be deemed “remote and hypothetical,” Wick-

land Oil, 792 F.2d at 893, we conclude that Colton’s

claim for declaratory relief is ripe.

We next turn to the argument that Colton has

mooted this appeal by filing a substantially new

. ° * . 5 « °

action in the same district court.” “A case is moot on

* The second action filed by Colton, No. 06-01319, was

eventually dismissed without prejudice. Colton then filed a third

(Continued on following page)

App. 12

appeal if no live controversy remains at the time the

court of appeals hears the case.” NASD Dispute

Reso. ution, Inc. v. Judicial Council of State of Cal.,

488 F.3d 1065, 1068 (9th Cir. 2007). The test for

mootness is “whether the appellate court can give the

appellant any effective relief in the event that it

decides the matter on the merits in his favor.” Jd.

(internal quotation marks omitted).

The defendants argue that Colton has effectively

redressed the injury it seeks to remedy with this

appeal — namely, the district court’s dismissal of its

declaratory relief claim — by filing a new action

seeking the same relief. Therefore, our reinstatement

of such claim would be superfluous. However, “[t]here

is a recognized defense to a claim of mootness in the

appellate context when a party can demonstrate that

a lower court’s decision, if allowed to stand, may have

collateral consequences adverse to its interests.”

ConnectU LLC v. Zuckerberg, 522 F.3d 82, 88 (1st Cir.

2008). Here, Colton faces a potential statute of limita-

tions bar with respect to its claims against certain

defendants, an argument these defendants have

pressed in the later-filed action. A reversal by this

court could put Colton on better footing with regard

to limitations defenses, which “is a collateral conse-

quence of the type that suffices to defuse a claim of

action, No. 09-01864, which is currently pending in the district

court. It is this third action to which we refer.

App. 13

mootness.” /d. at 89. We cherefore conclude that this

appeal is not moot.

Finally, we consider whether the district court’s

disposal of Colton’s CERCLA past response cost-

recovery claims deprived the court of subject matter

jurisdiction over the declaratory relief claim.”

“It is well settled that the Declaratory Judgment

Act does not itself confer federal subject matter

jurisdiction but merely provides an additional remedy

in cases where jurisdiction is otherwise established.”

Staacke v. U.S. Sec’y of Labor, 841 F.2d 278, 280 (9th

Cir. 1988) (internal quotation marks and citation

omitted). “Any non-frivolous assertion of a federal

claim suffices to establish federal question jurisdic-

tion, even if that claim is later dismissed on the

merits.” Cement Masons Health & Welfare Trust Fund

for N. Cal. v. Stone, 197 F.3d 1003, 1008 (9th Cir.

1999).

Here, Colton’s declaratory relief claim is predi-

cated on CERCLA, a federal statute providing a

private right of action. Colton’s nonfrivolous assertion

of a CERCLA declaratory relief claim is therefore

° We reject the argument that Colton is judicially estopped

from arguing that there is subject matter jurisdiction. It is well

established that subject matter jurisdiction cannot be expanded

or contracted “by prior action or consent of the parties.” Am. Fire

& Cas. Co. v. Finn, 341 U.S. 6, 17-18 (1951).

App. 14

sufficient to confer federal subject matter jurisdiction,

regardless of the district court’s conclusion that

Colton’s CERCLA past response cost-recovery claims

lacked merit.

Turning to the merits, we note that the district

court held that because it was granting summary

judgment on the section 107 cost-recovery claims,

“Defendants are entitled to summary judgment in

their favor on Plaintiff’s ... claim for [declaratory]

relief as well.” Colton argues that its failure to incur

recoverable response costs in the past has no bearing

on whether it will incur such costs in the future.’

Therefore, Colton contends that it should still be

allowed to seek declaratory relief as to liability for its

future costs.

Whether a CERCLA plaintiff’s failure to estab-

lish lability for its past costs necessarily dooms its

bid to obtain a declaratory judgment as to liability

for its future costs appears to be an issue of first

' Contrary to the defendants’ assertion, Colton did not

waive this argument by failing to raise it below. In opposition to

summary judgment, Colton argued that “it was not required to

complete all tasks required by the NCP prior to the filing of the

complaint,” and that “so long as [it] has incurred at least

nominal response costs,” it could “invoke the declaratory relief

provision of CERCLA to recover its future costs,” even if “it is

still too early to know how Colton will comply with the NCP.”

This is the same argument it now makes on appeal.

App. 15

impression in this circuit. Our sister circuits have

taken divergent approaches to this issue. Some have

held or suggested that recoverable past costs are a

sine qua non for declaratory relief under CERCLA.

See, e.g., Trimble v. Asarco, Inc., 232 F.3d 946, 958

(8th Cir. 2000), overruled on other grounds by Exxon

Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546

(2005); Gussack Realty Co. v. Xerox Corp., 224 F.3d

85, 92 (2d Cir. 2000) (per curiam); United States v.

Occidental Chem. Co., 200 F.3d 143, 153-54 (3d Cir.

1999). Others have held or suggested that declaratory

relief may be available even in the absence of reco-

verable past costs. See, e.g., United States v. Davis,

261 F.3d 1, 46 (1st Cir. 2001); County Line Inv. Co. v.

Tinney, 933 F.2d 1508, 1513 (10th Cir. 1991) (per

curiam).

]

The text of the Declaratory Judgment Act pro

vides, in relevant part, that “[iJn a case of actual

controversy within its jurisdiction, ... any court of

the United States, upon the filing of an appropriate

pleading, may declare the rights and other legal

relations of any interested party seeking such decla

ration, whether or not further relief is or could be

sought.” 28 U.S.C. § 2201(a). CERCLA also contains a

provision for declaratory relief. Section 113(g)(2)

provides that in any initial cost-recovery action under

section 107, “the court shall enter a declaratory

judgment on liability for response costs or damages

that will be binding on any subsequent action or

App 16

actions to recover further response costs or damage:

42 U.S.C. § 9613(g)(2).

Although Colton’s complaint referred to the

Declaratory Judgment Act rather than CERCLA

section 113(¢)(2), the latter provision clearly governs

this initial cost-recovery action. Because “a precisely

drawn, detailed statute pre-empts more general

remedies,” Hinck v. United States, 550 U.S. 501, 506

(2007) (internal quotation marks omitted), we must

consider whether Colton was entitled to declaratory

relief under CERCLA’s more detailed declaratory

relief provision. See A. Shapiro & Sons, Inc. v. Rut

land Waste & Metal Co., 76 F. Supp. 2d 82, 88 (D

Mass. 1999) (declining “to permit an indirect ap

proach to declaratory relief [under the Declaratory

Judgment Act] when the direct CERCLA-based

approach is unavailable”)

The declaratory judgment mandated by section

113(g)(2) pertains to “liability for response costs.” 42

U.S.C. § 9613(g)(2). Such “hability for response costs”

must refer to the response costs sought in the initial

cost-recovery action, given that the sentence later

refers to “any subsequent action or actions to recover

further response costs.” /d. (emphases added). ‘There

fore, if a plaintiff successfully establishes liability for

the response costs sought in the initial cost-recovery

action, it is entitled to a declaratory judgment on

present liability that will be binding on future cost

recovery actions

App. 17

Here, Colton has failed to establish present

liability because of its conceded failure to comply with

the NCP but seeks a declaratory judgment on future

hability. Section 113(g)(2), however, does not provide

for such relief. “|I|t is an elemental canon of statutory

construction that where a statute expressly provides

a particular remedy or remedies, a court must be

chary of reading others into it.” Jransam. Mortgage

Advisors, Inc. v. Lewis, 444 U.S. 11, 19-20 (1979). In

section 113(g)(2), Congress specified a mechanism

whereby a declaration of liability for costs already

incurred has preclusive effect in future proceeding

as to costs yet to be incurred. If Congress had in

tended for a declaration of future liability to be avail

able, it could have provided that “the court shal]

enter a declaratory judgment on liability for further

response costs.” That it did not leads us to conclude

that declaratory relief is available only if liability for

past costs has been established under section 107

Colton would have us bypass the initial lability

determination to further “CERCLA’s goal of encourag

ing private parties to clean up hazardous site:

According to Colton, denying declaratory relief “would

discourage private parties from taking future action:

to clean up hazardous sites if they failed to comply

with the NCP in taking past cleanup actions.” CER

CLA’s goal, however, is not simply to encourage

private response, but rather to “make the party

seeking response cCOStS choose a cost effective COUTSe

olf action to protect publi health and the environ

ment” and to achieve “a CE RCLA-quality cleanup.’

Carson Harbor I, 433 F.3d at 1265 (internal quota

tion marks omitted). Providing declaratory relief

based on mere assurances of future compliance with

the NCP would create little incentive for parties t

ensure that their initial cleanup efforts are on the

right track. See Dant & Russell, 951 F.2d at 250

(noting that premature rellef under CERCLA can

create perverse incentive

Moreover, awarding declaratory relief before a

plaintiff has incurred any recoverable costs would

undermine the very purpose of declaratory relief

which is to “economize| | on judicial time.” PMC, Ini

v. Sherwin-Williams Co., 151 F.3d 610, 616 (7th Cir

1998). A court would have to make complicated ae

terminations as to which defendants are responsible

lor what proportion of the release, without any assut

ance that the plaintiff would ever “meet its burden of

proving 1n an adversary proceeding that it: expense

were necessary and incurred in a manner consistent

with the national contingency plan.” Stanton Road

ASSOC: [ Lohrey Knters 44 Yd 1015 1O2Z] (9th

Cir. 1993)

We conclude that CERCLA purpost would be

better served by encouraging a plaintiff to come t

court only after demonstrating its commitment to

comply with the NCP and undertake a CERCLA

quality cleanup. Upon establishing hability unde

ection 107, the plammtifl can “obtain reimbursement

for fits] initial outlays, as well as a declaration that

Lhe re: pon: bh party will have continuing liability for

App. 19

the cost of finishing the job.” Dant & Russell, 951 F.2d

at 249-50. Such a declaration would allow the plain-

tiff to avoid costly and time-consuming relitigation of

liability once it has already been established. See

Kelley v. EJ. DuPont de Nemours & Co., 17 F.3d 836,

844 (6th Cir. 1994) (“Congress included language [in

section 113(g)(2)] to insure that a responsible party’s

liability, once established, would not have to be

relitigated....”). Where, as here, the plaintiff fails to

establish section 107 liability in its initial cost-

recovery action, no declaratory relief is available as a

matter of law.

Colton also appeals from the dismissal of its

pendent state law claims. Having disposed of Colton’s

federal claims, the district court declined to exercise

supplemental jurisdiction over the state law claims.

See 28 U.S.C. § 1367(c)(3). “Because the district court

did not err in granting summary judgment on the

federal claims, it did not abuse its discretion in dis-

missing the state-law claims.” Bryant v. Adventist

Health Sys./W., 289 F.3d 1162, 1169 (9th Cir. 2002).

For the foregoing reasons, the district court’s

summary judgment is AFFIRMED.

* We grant the outstanding motions for judicial notice

App. 20

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No. CV 05-1479-JFW (SSx) Date: October 31, 2006

Title: CITY OF COLTON -v- AMERICAN PRO

MOTIONAL EVENTS, INC. —- WEST, et al.

PRESENT:

HONORABLE JOHN F. WALTER,

UNITED STATES DISTRICT JUDGE

Shannon Reilly None Present

Courtroom Deputy Court Reporter

ATTORNEYS PRESENT ATTORNEYS PRESENT

FOR PLAINTIFFS: FOR DEFENDANTS:

None None

PROCEEDINGS ORDER GRANTING DEFEN-

(IN CHAMBERS): DANTS’ MOTION FOR SUM-

MARY JUDGMENT, OR IN

THE ALTERNATIVE, FOR

PARTIAL SUMMARY JUDG-

MENT [filed 8/14/06; Docket

No. 461}

On August 14, 2006, Defendants County of San

Bernardino, 1996 Thomas O Peters and Kathleen S.

Peters Revocable Trust, Thomas O. Peters, American

Promotional Events, Inc. ~ West, Pyro Spectaculars,

Inc., Astro Pyrotechnics, Inc., Emhart Industries,

Inc., Kwikset Locks, Inc., Black & Decker, Inc.,

Whittaker Corporation, and Trojan _ Fireworks

App. 21

(“Defendants”) filed a Motion for Summary Judg

ment, or in the alternative, for Partial Summary

Judgment (“Motion”). On September 6, 2006, Plaintiff

City of Colton (“Plaintiff”) filed its Opposition. On

September 25, 2006, Defendants filed a Reply. Pur-

suant to Rule 78 of the Federal Rules of Civil Proce-

dure and Local Rule 7-15, the Court found the matter

appropriate for submission on the papers without oral

argument. The matter was, therefore, removed from

the Court’s October 2, 2006 hearing calendar and the

parties were given advance telephonic notice. After

considering the moving, opposing, and reply papers,

and the arguments therein, the Court rules as fol-

lows:

I. FACTUAL SUMMARY

This action was originally filed on February 28,

2005. On December 138, 2005, Plaintiff filed its Third

Amended Complaint (“TAC”) alleging claims for relief

for (1) Recovery of Response Costs Pursuant to CER-

CLA (42 U.S.C. § 9607(a)): (2) Contribution Pursuant

to CERCLA (42 U.S.C. § 9607(a)); (3) Recovery of

Response costs Pursuant to Carpenter-Presley-

Tanner Hazardous Substances Account Act (Cal.

Health & Safety Code §§ 25300-25395.45); (4) Recov-

ery of Response Costs Pursuant to Porter-Cologne

Water Quality Control Act (Cal. Water Code §§ 1300-

13365); (5) Nuisance; (6) Public Nuisance; (7) Tres-

pass; (8) Declaratory Relief Pursuant to the Declara-

tory Judgment Act (28 U.S.C. §§ 2201, 2202); and (9)

App. 22

Declaratory Relief under State Law (Cal. Civ. Proc.

Code § 12060).

Defendants move for summary judgment on

Plaintiff’s CERCLA claims on the grounds that the

response costs allegedly incurred in connection with

the remediation of three wells (Well Nos. 15, 17 and

24) in which perchlorate was detected (the “Impacted

Wells”) were not necessary and consistent with the

National Contingency Plan (“NCP”). Defendants

argue that Plaintiff cannot recover its response costs

and Defendants are entitled to judgment in their

favor on Plaintiff’s CERCLA claims.’ Plaintiff con-

tends that Defendants are not entitled to summary

judgment because the response costs it has already

incurred in connection with the treatment of the

Impacted Wells were incurred as part of a removal

action which satisfied the requirements of the NCP

and because Plaintiff has begun the NCP compliance

process required for remedial actions with respect to

the Rialto-Colton basin-wide clean-up (“Basin-wide

Cleanup”).

The undisputed material facts establish the

following: In 1997, Plaintiff began monitoring the

Impacted Wells for percnlorate. Declaration of Daniel

Defendants argue, alternatively, that even if the Court

finds that they are not entitled to judgment on Plaintiff’s

CERCLA claims, the Court should find that they are entitled to

partial summary judgment barring Plaintiff from recovering its

past or future response costs in connection with the treatment of

the Impacted Wells

App. 23

S. Kippen in Support of Defendants’ Motion (“Kippen

Decl.”), Exhibit (“Exh.”) Exh. 5A at 6996. In the Fall

of 1997 and 2001, perchlorate levels above the detec-

tion limit of 4 pg/L’ were detected in two of the Im-

pacted Wells (Well Nos. 15 and 24). Jd. In February

2002, Plaintiff took one of the Impacted Wells (Well

No. 24) out of service after detecting a perchlorate

level of 4.5 pg/L. Kippen Decl., Exh. 5 at 254:14-19;

Exh. 5A at 6995-6996. In March, 2002, perchlorate

levels of 5.7 pg/L and 9.2-9.5 pg/L, respectively, were

detected in the remaining two Impacted Wells (Wells

Nos. 15 and 17). Kippen Decl., Exh. 5A at 6996. In

April 2002, Plaintiff removed from service the re-

maining two Impacted Wells (Wells Nos. 15 and 17).

Kippen Decl. Exh. 5 at 253:17-20; 254; Exh. 5A at

6994-6996. In April 2002, Plaintiff advised the Cali-

fornia Department of Health Services (“DHS”, the

state agency responsible for regulating domestic

water quality, that it had removed the Impacted

Wells from service. Kippen Decl., Exh. 5 at 6996.

Plaintiff removed the Impacted Wells from service

even though no DHS requirement compelled it to do

so. Kippen Decl., Exh. 5 at 253:17-25; 254:2-23.

On August 12, 2002, apparently in response to

Plaintiff’s request for more information regarding the

use of water that exceeded the DHS “Action Level” for

perchlorate, Plaintiff was advised by the DHS that

“ pg/L symbolizes microgram per liter. One microgram per

liter equals one part per billion.

App. 24

the perchlorate level in some of Plaintiff’s wells

exceeded the “current Action Level of 4 pg/L (with a

range from 5.7 to 9.5 pp/L for Well Nos. 15, 17 and

24).” Kippen Decl. Exh. 5D. The DHS advised Plain-

tiff that the “perchlorate action level is an advisory

action level, and thus, not enforceable.” Jd. The DHS

further advised Plaintiff that “[a]n exceedance of the

perchlorate action level in drinking water is not a

violation of any standard” and that “a source exceed-

ing the perchlorate action level may continue to be

used to supply the system ... [h]lowever any source,

which exceeds ten time the action level, should be

taken cut of service.” Jd.

Although advised by the DHS that the City’s

drinking water was potable despite the presence of

perchlorate, Plaintiff established a policy prohibiting

the use of water with detectable levels of perchlorate.

Kippen Decl., Exh. 3 at 146:20-147:12. Plaintiff made

its decision not to serve water with detectable levels

of perchlorate during a closed session meeting be-

tween its City Council and City Attorney. Kippen

Decl. Exh. 5 at 305:24-306:2. Neither Plaintiff’s staff

nor its Water Director, Eric Fraser (“Fraser”), alone

or in collaboration with any consultants, prepared

any written memoranda analyzing Plaintiff’s policy

to serve only perchlorate-free water or the rationale

for such a policy. Kippen Decl. Exh. 5 at 305:16-21,

306:3-8. Plaintiff implemented its decision not to

serve water with detectable levels of perchlorate

by taking the Impacted Wells out of service until it

could install an “ion exchange system” (“Treatment

Avp. 25

System”) to make the water free from perchlorate.

Kippen Decl., Exh. 4 at 34:8-23; Exh. 5 at 260:3-19,

313:7-12.

At its October 25, 2002 meeting, the California

Regional Water Quality Control Board (“Regional

Board”) considered adoption of a resolution request-

ing an allocation of $3 million from Cleanup and

Abatement Account funds (“CAA”) from the State

Water Resources Control Board (“State Board”) to

support certain water purveyors, including Plain-

tiff’s, wellhead treatment projects to clean up per-

chlorate pollution. Evidence in Support of Plaintiff’s

Opposition (“Plaintiff’s Evidence”), Exh. V, Exh. W.

The Minutes of the Regional Board meeting reflect

that the resolution was adopted without public com-

ment. Jd. at Ex. X. The Regional Board Resolution

requested that the water purveyors seeking CAA

funds submit a project plan by November 15, 2002.

Id. at Exh. Y. On November 14, 2002, Fraser wrote to

the Regional Board explaining that Plaintiff was

reviewing proposals from three vendors to install the

Treatment System to remove perchlorate from Im-

pacted Wells (“Wellhead Treatment Program”).

Plaintiff’s Evidence, Exh. BB. In the Summer of

* The CAA was created by state statute and is funded by

“[mJonies received from court judgments and the assessment of

administrative civil liabilities.” Plaintiff’s Evidence, Exh. W.

“Monies from the CAA are available for contract services to

clean up a waste or abate the effects of a waste discharge and to

remedy an actual or potential unforeseen public health threat.”

Id.

App. 26

2003, the installation of the Treatment System was

completed. Deposition of Eric Fraser, Volume II, April

12, 2006, 295:17-296:21; Exh. 1778.

In January, 2006, Plaintiff hired DPRA, an

environmental research and consulting firm, which

began working on a Workplan for Installation and

Sampling of Goundwater Monitoring Wells Near the

City of Colton, County of San Bernardino, California

(“Workplan”). Plaintiff’s Evidence, Declaration of

Gary Vargas (“Vargas Decl.”) 4 5. According to Gary

Vargas (“Vargas”), the DPRA consultant working

with Plaintiff, “[t]he Workplan describes [Plaintiff’s]

plans to investigate perchlorate contamination within

the groundwater at two locations near [its] municipal

supply wells.” Jd. In the Spring of 2006, DPRA pre-

pared a Community Involvement Plan for Workplan

for Installation and Sampling of Groundwater Moni-

toring Wells Near the City of Colton, County of San

Bernardino, California (“Community Involvement

Plan”). Id. at 4 4. The Community Involvement Plan

was delivered to Fraser on or about May 4, 2006. Jd.

According to Vargas, “(t]he Community Involvement

Plan provides for public involvement in a workplan

for groundwater monitoring wells that are part of

[Plaintiff’s] preliminary remedial investigation of

contamination in the _ Rialto/Colton Groundwater

Basin.” Id.

App. 27

i. LEGAL STANDARD

Summary judgment is proper where “the plead-

ings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any,

show that there is no genuine issue as to any materi-

al fact and that the moving party is entitled to a

judgment as a matter of law.” Fed. R. Civ. P. 56(c).

the moving party has the burden of demonstrating

the absence of a genuine issue of fact for trial. See

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256

(1986). A party opposing a properly made and sup-

ported motion for summary judgment may not rest

upon mere denials but “must set forth specific facts

showing that there is a genuine issue for trial.” Fed.

R. Civ. P. 56(e); see also Taylor v. List, 880 F.2d 1040,

1045 (9th Cir. 1989) (“A summary judgment motion

cannot be defeated by relying solely on conclusory

allegations unsupported by factual data.”). In particu-

lar, when the non-moving party bears the burden of

proving an element essential to its case, that party

must make a showing sufficient to establish a ge-

nuine issue of material fact with respect to the exis-

tence of that element or be subject to summary

judgment. See Celotex Corp. v. Catrett, 477 U.S. 317,

322 (1986). “An issue of fact is not enough to defeat

summary judgment; there must be a genuine issue of

material fact, a dispute capable of affecting the

outcome of the case.” American International Group,

Inc. v. American International Bank, 926 F.2d 829,

833 (9th Cir. 1991) (Kozinski, dissenting).

App. 28

An issue is genuine if evidence is produced that

would allow a rational trier of fact to reach a verdict

in favor of the non-moving party. Anderson, 477 U.S.

at 248. “This requires evidence, not speculation.”

Meade v. Cedarapids, Inc., 164 F.3d 1218, 1225 (9th

Cir. 1999). The Court must assume the truth of direct

evidence set forth by the opposing party. See Hanon

v. Dataproducts Corp., 976 F.2d 497, 507 (9th Cir.

1992). However, where circumstantial evidence is

presented, the Court may consider the plausibility

and reasonableness of inferences arising therefrom.

See Anderson, 477 U.S. at 249-50; 7'W Elec. Serv., Inc.

v. Pacific Elec. Contractors Ass’n, 809 F.2d 626, 631-

32 (9th Cir. 1987). Although the party opposing

summary judgment is entitled to the benefit of all

reasonable inferences, “inferences cannot be drawn

from thin air; they must be based on evidence which,

if believed, would be sufficient to support a judgment

for the nonmoving party.” American International

Group, 926 F.2d at 836-37. In that regard, “a mere

‘scintilla’ of evidence will not be sufficient to defeat a

properly supported motion for summary judgment;

rather, the nonmoving party must introduce some

‘significant probative evidence tending to support the

complaint.’” Summers v. Teichert & Son, Inc., 127

F.3d 1150, 1152 (9th Cir. 1997).

App 29

it. DISCUSSION

A. Plaintiff’s Response to the Detection

of Perchlorate in its Drinking Water

Wells Was Not a Removal Action.

l. Plaintiff Did Not Properly Initiate a

Removal Action

Defendants contend that Plaintiff’s Wellhead

Treatment Program was a remedial action that did

not comply with the requirements of the NCP. Plain

tiff does not argue that its Wellhead Treatment

Program complied with the NCP requirements for a

remedial action, rather, Plaintiff argues that it:

Wellhead Treatment Program was a removal action

and Plaintiff complied with the NCP requirements for

a removal action. Accordingly, there are no disputed

issues of material fact that Plaintiff did not conduct a

remedial action or comply with the NCP require

ments for a remedial action when it initiated and

installed its Wellhead Treatment Program. Therefore

unless Plaintiff can establish that it properly in

itiated a removal action in compliance with the

requirements of the NCP and that Plaintiff’s action:

in establishing the Wellhead Treatment Program are

properly characterized as removal activities, Defen

dants are entitled to judgment on Plaintiff’s CERCLA

claims. See United States v. W.R. Grace & Co., 429

F.3d 1224, 1233-1234 (9th Cir. 2005) (setting forth a

two-step analysis for determining whether a response

action is a removal or remedial action; requiring

plaintiff to first show that it properly initiated the

removal action and then, that “the steps actually

taken are properly characterized a removal

action.”

“Whether a party response 1S a removal action

| |

or a remedial action 1s a question of law that can be

decided on summary judgment.” Carson Harbor

Village, Ltd. % Unocal Corp 287 &| Supp 2d 111&

‘1157 (C.D.Cal. 2003). Additionally, “the classifica

tion of the activity [whether removal or remedial} |

determined as a matter of law.” United States v. W I

Grace & Co., 429 F.3d at 1234

Although “removal action” is not expre

fined in CERCLA, CERCLA defins the tern re

foll VM

move’ and “removal” a:

jhe cleanup or removal of released hazard

ous substances from the environment icn

actions as may be necessary taken tin thi

event of the threat of release of hazardou

substances into the environment, such action

as may be necessary to monitor, asse and

evaluate the release or threat of release of

hazardous substance the disposal of r

moved material, or the taking of such other

actions as may be necessary to prevent, Mm

nimize, or mitigate damage to the publi

health or welfare or to the environment

which may otherwise result from a release or

threat of release. The term includes, in add}

tion, without being limited to, security fen¢

ing or other measures to limit acce

provision of alternative water supplies, tem

porary evacuation and housing of threatened

individuals not otherwise provided for

action taken under ection 9Y604(b if thi

title, and any emergency assistance whicl

may be provided under the Disaster Relief

and Emergency Assistance Act

i2 U.S.C. 8 960]

Kemova! ACLIOT) are LyYpically it ripoed i

ensitive re ponse LO public nealth threa (jy

Slate [ WR Czrace wv ( (J 29 Ke Sd t [22 1 [22a 13

contrast rilemedial action ire often d cribe

permanent remedies to threats for

garyt r’é er rm r } rycyl A irr ry? ; / »*)

I NA ? pI 1a Ln {

n determining the appropriate exte!

LIOI to be taken | response Lo a ey! !

least the ead agency ll first revi L!

removal Lé ey uatllIon i Iniormatli

produced through a reme lla ibe ¢ ualh

| } f } er rie¢ [DOT ae ; i |

their Kepl Dele ant e th t} Dal list

hethe verchniorat i iZara ] DSLance ind a e |

(Court that it may look torward to ruling on a motion on tl

ue Reply it 24:8-15. Dre pit tne fact that 1 dcterminat!

that perchlor ile | not a hazardou ubstance could be d) po

tive of the } ue present iin thi Motion ind per!) ip th

entire action, in the absence of bnefing on this issue, the Cour

must presume for purpost of th Motion that percniorate }

hazardou ubstance or at least a pollutant or contaminal

otherwise whether Plaintiff undertook a remova on OI

remedial action would likely be irrelevas

’ LO! Prop!

‘ | a I ;

hye J 4 }? | ' ' 4 j rs } |

i] Le WuUuALION et OO Clr. \)

c*rrie Lé ( ual I ;mould I pude I mo '

preliminal ISS ment al f warrant 1 remova

preliminal mie be |

" i, ‘

‘ }

ent | ‘

1O |

r pl t; ‘ ! rs ert | ‘ | ‘ i il

mit] n hi a | t 9 ( ’ } i

pi mons of 40 C.F I () 4 ‘ it | ert ’ ary

re ipp i é tA I } ‘ i ( mbLiogl / i lA

int er 1 Chef (O00 JOO , houvh the ter

lea rene efined in Chk ‘ a Cney

overnment ave! the tern 1 here to reler

Pla tiff the lead tor in the 1 pon t !

tain the inteprity of statutory quota

eit provision of 40 CF I ‘ : [ I

pal ivraph ire Applic ible ft ect mi

Le parti eP AOC HK I (4)

App. 33

Gi) Evaluation by ATSDR’ or by other

sources, for example, state public health

agencies, of the threat to public health;

Gui) Evaluation of the magnitude of the

threat;

Gv) Evaluation of factors necessary to make

the determination of whether a removal is

necessary; and

(v) Determination of whether a nonfederal

party is undertaking proper response.

40 C.F.R. § 300.410(c)(1).

“A removal site inspection may be performed if

more information is needed.” 40 C.F.R. § 300.410 (d).

“The results of the removal site evaluation shall be

documented.” 40 C.F.R. § 300.410(g). Finally, “{tJhe

... lead agency shall ensure that natural resources

trustees are promptly notified in order that they may

initiate appropriate actions. ... The ... lead agency

shall coordinate all response activities with such

affected trustees.” 40 C.F.R. § 300.410(h).°

Once the lead agency has reviewed the removal

site evaluation, if it makes the determination that

' The ATSDR is the Agency for Toxic Substances and

Disease Registry. See 40 C.F.R. § 300.4.

* Natural resources trustees are federal officials who act on

behalf of the public as trustees for natural resources. See 40

C.F.R. § 300.600(a).

App. 34

there is a threat to public health or welfare as a

result of “{a]Jectual or potential contamination of

drinking water supplies.” It may take “any appropri-

ate removal action.” 40 C.F.R. § 300.415(b)(1) and

(b)(2)(ii).”

Plaintiff offers no evidence at all to establish that

it conducted a removal site evaluation and “first

reviewled]” the removal site evaluation § before

“mak[ing] the determination that there [was] a threat

to public health or welfare as a result of “[a]ctual or

potential contamination of drinking water supplies.”

40 C.F.R. § 300.415(b)(1) and (b)(2)Gi). This is not

surprising given that it is undisputed that Plaintiff

made its decision not to serve any water with detect-

able levels of perchlorate behind closed doors in

meeting between Plaintiff’s City Council and its City

Attorney and that neither Plaintiff’s staff nor its

Water Director, alone or in collaboration with any

consultants, prepared any written memoranda ana-

lyzing its decision or the rationale for its decision.

Given the complete absence of evidence that

Plaintiff complied with any of the statutory require-

ments for initiating a removal action, summary

judgment is appropriate on Plaintiff’s CERCLA

claims on this basis alone. But, even if Plaintiff had

complied with the requirements for initiating a

removal action, summary judgment would still be

* 40 C.F.R. § 300.415(e) sets forth a list of generally appro-

priate removal actions. See note 13 infra.

App. 35

appropriate because Plaintiff offers no evidence that

it complied with any NCP requirements once it

initiated a removal action.

Even if Plaintiff Had Property Deter-

mined that a Removal Action Should Be

Initiated, Plaintiff Did Not Comply with

Any of the NCP Requirements Once it

Initiated a Removal Action.

The NCP provides that if the lead agency deter-

mines that a removal action is appropriate, removal

activities shall begin as soon as possible, but, the lead

agency must “at the earliest possible time ... make

any necessary determinations pursuant to paragraph

b(4) of this section.” 40 C.F.R. § 300.415(b\(3).

Paragraph (b)(4) provides that:

Whenever a planning period of at least six

months exists before on-site activities must

be initiated, and the lead agency determines

based on a site evaluation, that a removal

action is appropriate:

Gi) The lead agency shall conduct an engi-

neering evaluation/cost analysis (EE/CA) or

its equivalent. The EE/CA is an analysis of

removal alternatives for a site.

(ii) If environmental samples are to be col-

lected, the lead agency shall develop sam-

pling and analysis plans that shall provide

a process for obtaining data of sufficient

quality and quantity to satisfy data needs.

App. 36

Sampling and analysis plans shall be re-

viewed and approved by EPA. The sampling

and analysis plans shall consist of two parts:

(A) The field sampling plan, which describes the

number, type, and location of samples and the

type of analyses; and

(B) The quality assurance project plan, which

describes policy, organization, and functional ac-

tivities and the data quality objectives and

measures necessary to achieve adequate data for

use in planning and documenting the removal ac-

tion.

40 C.F.R. § 300.415(b)(4).

The NCP also demands compliance with certain

community relations requirements, includiny that a

spokesperson be designated to inform the community

of actions taken, to respond to inquiries, and to

provide information concerning the hazardous sub-

stance release. See 40 C.F.R. § 300.415(n)\(1).” The

spokesperson must also notify, at a minimum, imme-

diately affected citizens and state and local officials.

Id.

Additionally, where on-site activities are ex-

pected to last more than 120 days from the time they

are commenced, before the conclusion of that 120 day

Most but not all of the community relations requirements

set forth in 40 C.F.R. § 300.415(n) are applicable to private party

response actions. See 40 C.F.R. § 300.410(c)(6).

App. 37

period, the lead agency must conduct interviews with

local officials, members of the community, public

interest groups or other interested parties to solicit

their concerns and to determine whether they need

any additional information and how they might like

to be involved in the cleanup process. 40 C.F.R.

§ 300.415(n)(3). The lead agency must then prepare a

formal community relations plan based on the inter-

views and must specify the community relations

activities to be undertaken. /d.

Finally, where, based on the removal site evalua-

tion, the lead agency determines that a removal

action is appropriate and a planning period of at least

six months exists prior to initiation of on-site removal

activities, the lead agency must publish a notice of

availability and brief description of the EE/CA in a

local newspaper, must provide not less than thirty

days for public comment after completion of the

EE/CA and must prepare a written response to

significant comments. See 40 C.F.R. § 300.415(n)(4).

Plaintiff offers no evidence te establish that it

complied with any of the NCP requirements once it

determined that a removal action should be initiated.

Plaintiff first began monitoring for perchlorate in its

wells in 1997. In 1997, again in 2001 and again in

2002, Plaintiff detected perchlorate in the Impacted

Wells. In February and April of 2002, Plaintiff took

the Impacted Wells out of service. In Movember 2002,

Plaintiff was reviewing proposals for the installation

of the Treatment System. In the Summer of 2003

installation of the Treatment System was complete.

App. 38

Plaintiff had months, if not years, to comply with the

NCP requirements once it determined that a removal

action shouid be initiated.’ Yet, it did nothing to

comply with the NCP. “

Even if Plaintiff had properly initiated a removal

action, the complete absence of evidence that Plaintiff

complied with the NCP after it made a decision to

initiate a removal action warrants summary judg-

ment on Plaintiff’s CERCLA claims.

" Regardless of exactly when Plaintiff formally decided to

initiate a removal action — when perchlorate was first detected

in the Impacted Wells, when the Impacted Wells were taken out

of service, or when the decision to install the Treatment System

was made, Plaintiff had ample time to comply with the NCP

requirements.

* The NCP also requires that a removal action “result in a

level of cleanup ... that at least meets the legally applicable or

otherwise relevant and appropriate federal (or stricter state)

requirements.” State of Ohio v. U.S. E.P.A. 997 F.2d 1520, 1526

(D.C. Cir. 1993) (citing 42 U.S.C. § 9621(d)(2)(A)). See aiso 40

C.F.R. § 300.415() (applicable to section 107(s) cost recovery

actions by a= private party pursuant to 40. C.F.R

§ 300.700(cX5)(vi), and requiring that removal actions “attain

applicable or relevant and appropriate (ARARs) under federal

environmental or state environmental... laws.”). Since Plaintiff

was never legally required to stop serving water from the

Impacted Wells, Plaintiff would never be able to satisfy this

standard.

App. 39

Even If Plaintiff Had Property Deter-

mined That a Removal Action Should

be Initiated and Had Complied with the

NCP Requirements, the Steps Actually

taken by Plaintiff cannot Be Characte-

rized as a Removal Action.

Even if Plaintiff had properly determined that a

removal action should be initiated and even if Plain-

tiff had complied with the NCP requirements for a

removal action, the steps Plaintiff actually undertook

cannot properly be characterized as a removal action.

“[RJemoval actions encompass interim, partial time-

sensitive responses to take to counter serious threats

to public health.” United States v. W.R. Grace & Co..,

429 F.3d at 1245. The NCP provides a list of general-

ly appropriate removal actions, including “provision

of alternative water supply — where necessary imme-

diately to reduce exposure to contaminated household

water until such time as local authorities can satisfy

the need for a permanent remedy.” 40 C.F.R.

§ 300.415(e).”

‘* The NCP list of generally appropriate removal activities

also includes, constructing fences, installing warning signs or

other security or site control precautions, installing drainage

controls, stabilizing berms, dikes, or impoundments or drainage

or closing of lagoons, capping of contaminated soils or sludges,

using chemicals and other materials to retard the spread or

mitigate the effects of release, excavating, consolidating, or

removing highly contaminated soils, removing drums, barrels,

tanks, or other bulk containers that contain or may contain

hazardous substances or pollutants or contaminants and

(Continued on following page)

App. 40

Plaintiff may have provided an alternative water

supply after it removed the Impacted Wells from

service when it “purchased replacement water from

the City of San Bernardino to make up for loss of

water from these wells.” TAC 4 44C. However, the

clear purpose of Plaintiff’s installation of its Well-

head Treatment Program was to treat its own water

supply to remove detectable levels of perchlorate.

Additionally, the hallmark of a removal action is

the need for immediate action. United States v. W.R.

Grace & Co., 429 F.3d at 1244 (noting that Courts

stress “the immediacy of a threat in deciding whether

or cleanup is a removal action.”) See also Carson

Harbor Vill., Ltd. v. Unocal Corp., 287 F.Supp.2d

1118, 1157 (C.D.Cal. 2003) (finding private party’s

response action was remedial where “[t]here is no

evidence in the record that the materials posed the

type of threat to human health and welfare that

required immediate action.”). Since there was no

legal requirement compelling Plaintiff to remove the

Impacted Wells from service, Plaintiff can hardly be

said to have acted in response to an immediate

. . 14 ’

threat to public health or the environment.” See

containing, treating, disposing, or incinerating hazardous

materials. See 40 C.F.R. § 300.415(e).

‘“ The Ninth Circuit has held that agency action is not a

prerequisite to a determination that “contamination presents an

environmental risk worthy of response.” Carson Harbor Village,

Ltd. v. Unocal Corp, 270 F.3d 863, 872 (9th Cir. 2001). However,

there must be some evidence in the record that before initiating

and undertaking a removal action, the lead agency made a

(Continued on following page)

App. 41

Metropolitan Serv. Dist. v. Oregon Metal Finishers,

Inc., 32 Env’t. Rep. Cas. (BNA) 1102, 1990 WL

134537, *2-3 (D.Or. Sept. 11, 1990) (concluding that

the response actions taken by plaintiff were remedial

rather than removal actions because there was no

evidence that contamination at the site posed an

immediate threat to public health or the environ-

ment); Sherwin-Williams Co. v. City of Hamtramck,

840 F.Supp. 470, 475-476 (i%.D.Mich. 1993) (finding

that the City was engaged in a remedial action be-

cause it did not establish that there an imminent

threat to health or safety, and because of the ex-

tended and protracted nature of the cleanup. ).

There is no evidence in the record that the per-

chlorate detected in the Impacted Wells posed an

immediate threat to public health or the environ-

15 bd . x

ment.’ Given the complete absence of evidence of an

immediate threat to public health or the environ-

ment, the activities undertaken by Plaintiff cannot be

determination that the release of a hazardous substance posed

an immediate threat to public health or the environment. See

United States v. W.R. Grace & Co., 429 F.3d at 1247 (finding

that “[c]rucial to our determination [that the EPA initiated and

undertook a removal action] is the documented evidence that,

absent immediate attention, the airborne toxic particles would

continue to pose a substantial threat to public health.”)

* Plaintiff offers the declaration of Court D. Sandau, a

chemist, who opines that the levels of perchlorate “at concentra

tions of 5 to 10 ppb... . pose a threat to human health.” Declara

tion of Court Sandau 4 10. There is no evidence that Plaintiff

consulted Mr. Sandau or anyone else (except its own City

Attorney) prior to initiating a response action.

App. 42

characterized as a removal action. Accordingly,

because Plaintiff concedes that it did not undertake a

remedial action in compliance with the NCP and

because the Court finds that Plaintiff did not conduct

a removal action in compliance with the NCP, sum-

mary judgment in favor of Defendant on Plaintiff’s

CERCLA claims in GRANTED.”

B. Plaintiff May Not Seek to Recover its

Costs for the Activities it is Currently

Undertaking to Effect a Basin-wide

Cleanup of Perchlorate When None of

Those Costs Were Incurred until Long

after this Action Was Filed.

Plaintiff contends that summary judgment is not

warranted because it seeks not just past response

costs incurred in connection with the Wellhead

Treatment Program, but also future response costs in

connection with its Basin-wide Cleanup. Plaintiff

contends that it is presently undertaking a remedial

action on compliance with the NCP in connection

with the Basin-wide Cleanup, that it has incurred

* Plaintiff’s eighth claim for Declaratory Relief pursuant to

the Declaratory Judgment Act (28 U.S.C. § 2201, 2202) seeks a

declaration of the parties legal rights and obligations in connec-

tion with Plaintiff’s first and second claims for relief for recov-

ery of response costs and contribution, respectively. Because the

Court grants summary judgment in Defendants’ favor on

Plaintiff’s first and second claims for relief, Defendants are

entitled to summary judgment in their favor on Plaintiff’s

eighth claim for relief as well.

App. 43

over $100,000 in costs so far, and that it anticipates

incurring between $55 and $75 million dollars in the

future. However, the insurmountable problem for

Plaintiff is that, unless the costs incurred in connec

tion with its Wellhead Treatment Program constitute

recoverable response costs, the costs it has incurred

in connection with its Basin-wide Cleanup cannot, by

themselves, form the basis of Plaintiff’s CERCLA

action.

Plaintiff filed this action on February 28, 2005

The evidence in the record establishes that Plaintiff

did not begin to undertake any activities, or incur any

costs, in connection with its Basin-wide Cleanup until

January, 2006, when DPRA began preparing the

Workplan.” Thus, Plaintiff did not incur any poten

tially recoverable response costs in connection with

the Basin-wide Cleanup until almost one year after

filing this action.’ Because the Court has determined

that Plaintiff’s Wellhead Treatment Program was not

a removal action in compliance with the NCP, and

Plaintiff’s concedes that its Wellhead ‘Treatment

Program was not a remedial action in compliance

Because it is not necessary to the resolution of Defer

dant’s Motion, the Court does not decide whether Plaintiff ha

initiated a remedial action in compliance with the NCP in

connection with its Basin-wide Cleanup or whether the

Workplan and the other activities currently being conducted are

recoverable response costs

Even Plaintiff’s TAC — the extant pleading in this action

was filed in December, 2005, before Plaintiff incurred an

response costs in connection with the Basin-wide Cleanup

App 4 '

with the NCP, none of the costs Plaintiff incurred in

connection with the Wellhead Treatment Program i:

recoverable as a response cost. As a result, at the

time Plaintiff filed this action it had not incurred any

recoverable response Cost:

Kven assuming arguendo that the activiti

currently being undertaken by Plaintiff in connection

with the Basin-wide Cleanup are recoverable re

sponse costs, none of the costs were incurred until

almost one year after Plaintiff filed this action. Be

cause none of the costs incurred in connection with

the Basin-wide Cleanup were incurred prior to Plain

tiff’s filing suit, these costs cannot form the basis of

Plaintiff’s CERCLA action. See In re Dant & Russell,

Inc., 951 F.2d 246, 249-250 (9th Cir. 1991) (noting

that CERCLA requires plaintiffs to actually incur

response costs before they can sue to recover them.);

Ascon Properties, Inc. v. Mobil Oil Co. 866 F.2d 1149,

1154 (9th Cir. 1989) (confirming that a CERCLA

claim does not arise until at least some cleanup cost

have been incurred.); Levin Metals Corp. v. Parr

Richmond Terminal Co., 799 F.2d 1312, 1316 (9th

Cir. 1986) (determining

that a private action under

CERCLA cannot be commenced prior to incurrence of

cleanup costs); Bulk Distribution Centers, Inc. °

Monsanto Co., 589 F Supp. 1437, 1450-1452 (S.D.Fla

1984) (same). Thus, although Plaintiff may be able to

recover its costs in connection with the Basin-wide

Cleanup it may not attempt to do so here

App

The Court Declines to Exercise Sup-

plement Jurisdiction over Plaintiff’s

State Law Claims.

In its TAC, Plaintiff as

1Or re hef

he ct court hall hay upplemental

jurisdiction over all other claims that are so related t

the claims in the action within such original jurisdi

tion that they form part of the same case or contro

versy under Article IT] of the LJ nited State

Constitution.” 28 U.S.C. § 1367(a). Once supplemer

tal jurisdiction has been established under section

1367(a), the district court can decline to assert

supple rie ntal puT) diction Over a pendant claim only

if one of the four categorie pecifically enumerated in

ection 1367(c) apphe " Kexrecutive Software Nort!

imerica | oS. Dist. Court for Cent. Dist f Calife

56 (Sth Cir. 1994)

n under

Or complex ] ue (

tially predominats the

court ha original juri

original jurisdiction, See Bm US. bso ley

Accordingly, Plaintiff's upplemental Late iM

claims are dismissed without prejudice

IV.§ CONCLUSION

based on the foregoing Lhe (Court tind that

there are no pvenuine issue of material tact in

dispute, and Defendant are entitled to summary

judgment in their favor on Plaintiff first, second

and eighth claims for relief. Accordingly, Defendant

Motion for Summary Judgment GRANTED

Additionally, the Court decline to exercise supple

mental jurisdiction over Plaintiff 1) tate law

claims. Accordingly, Plaintiff's state law claims are

DISMISSED without prejudice

The Court finds that it ruling granting Deten

dants’ Motion for Summary Judgment “is cqually

effective in barring the claim|: avainst the non

moving| defendants, and the plaintiff? had an ade

quate opportunity to argue in opposition to the mi

LION Ke nned [ (‘hAildre fi §s S/ roi Socres

Wisconsin, 17 F.3d 980, 983 n.1 (7th Cir. 1994) (cita

on omitted ee a Ilubbard / en. di i

' t) a | cit thi t | | ity it !

for any claim 3 erted under ubsection (Cu nd for ai ther

claim in the ime action that voluntarily Sth he it tlne

ime time i ol itter the dism i} of the claim under TLE

mn (a hall be tolled hile the lim iS pend nd f

period ol Ud rhe | Lisi Purl tial

App. 47

F.Supp. 2d 1134, 1149-1150 (S.D. Cal. 2006) (grant-

ing summary judgment were equally applicable to

non-moving defendant and plaintiff had an adequate

opportunity to address the issues.). Accordingly, the

Court sua sponte enters summary judgment in favor

or all non-moving defendants.

In light of the Court’s granting summary judg-

ment on all of Plaintiff’s CERCLA claims, the Coun-

terclaims and/or Cross-claims filed by Defendants

seeking contribution and declaratory relief pursuant

to CERCLA and/or the Declaratory Judgment Act are

dismissed. The Court declines to exercise jurisdiction

over the state law claims alleged in the Counter-

claims and Cross-claims and dismisses those claims

without prejudice. See 28 U.S.C. § 1367(c)(3).”

The Court shall enter Judgment in this action

against Plaintiff and in favor of all Defendants on

Plaintiff’s First, Second and Eighth claims for relief.*'

* See note 18 supra.

* On November 18, 2005, defaults were entered against

defendants Apollo Manufacturing Co., Atlas Fireworks Compa-

ny, Inc., California Fireworks Display Company, Pyrotronics

Corp., Red Devil Fireworks Company, and United Fireworks

Manufacturing Company, Inc. (“Defaulting Defendants”).

Default judgment has not been entered against any of the

Defaulting Defendants. In light of the Court’s ruling granting

Defendants’ Motion for Summary Judgment which precludes

Plaintiff from obtaining a default judgment against the Default-

ing Defendants on its CERCLA claims, and in light of Plaintiff's

failure to diligently move for default judgment, the Court

dismisses the Defaulting Defendants. Additionally, on January

(Continued on following page)

App. 48

Counsel shall make arrangements with the

Courtroom Deputy to retrieve any original exhibits

filed in connection with this Motion.

IT IS SO ORDERED.

The Clerk shall serve a copy of this Minute Order

on all parties to this action.

27, 2006, default was entered against cross-defendant Denova

Environmental, Inc. (““Denova”) on Pyro Spectaculars, Inc.,

(“PSI”) Cross-claim. In lght of the Court’s dismissal of all

Counterclaims and/or Cross-claims filed by Defendants seeking

contribution and declaratory relief pursuant to CERCLA and/or

the Declaratory Judgment Act, and declining to exercise juris-

diction over any state law claims, PSI’s Cross-claim against

Denova is dismissed.

42 U.S.C. § 9613(g)

(g) Period in which action may be brought

(1) Actions for natural resource damages

Except as provided in paragraphs (3) and (4), no

action may be commenced for damages (as defined in

section 9601(6) of this title) under this chapter, unless

that action is commenced within 3 years after the

later of the following:

(A) The date of the discovery of the loss and

its connection with the release in question.

(B) The date on which regulations are

promulgated under section 9651(c) of this title.

With respect to any facility listed on the National

Priorities List (NPL), any Federal facility identified

under section 9620 of this title (relating to Federal

facilities), or any vessel or facility at which a remedial

action under this chapter is otherwise scheduled, an

action for damages under this chapter must be com-

menced within 3 years after the completion of the

remedial action (excluding operation and mainten-

ance activities) in lieu of the dates referred to in

subparagraph (A) or (B). In no event may an action

for damages under this chapter with respect to such a

vessel or facility be commenced (i) prior to 60 days

after the Federal or State natural resource trustee

provides to the President and the potentially respon-

sible party a notice of intent to file suit, or (ii) before

selection of the remedial action if the President is

App. 50

diligently proceeding with a remedial investigation

and feasibility study under section 9604(b) of this

title or section 9620 of this title (relating to Federal

facilities). The limitation in the preceding sentence on

commencing an action before giving notice or before

selection of the remedial action dees not apply to

actions filed on or before October 17, 1986.

(2) Actions for recovery of costs

An initial action for recovery of the costs referred

to in section 9607 of this title must be commenced —

(A) for a removal action, within 3 years

after completion of the removal action, except

that such cost recovery action must be brought

within 6 years after a determination to grant a

waiver under section 9604(c)(1)(C) of this title for

continued response action; and

(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 com-

pletion of the removal action, costs incurred in

the removal action may be recovered in the cost

recovery action brought under this subpara-

graph.

In any such action described in this sub-section, the

court shall enter a declaratory judgment on liability

for response costs or damages that will be binding on

any subsequent action or actions to recover further

response costs or damages. A subsequent action or

actions under section 9607 of this title for further

App. 51

response costs at the vessel or facility may be main-

tained at any time during the response action, but

must be commenced no later than 3 years after the

date of completion of all response action. Except as

otherwise provided in this paragraph, an action may

be commenced under section 9607 of this title for

recovery of costs at any time after such costs have

been incurred.

(3) Contribution

No action for contribution for any response costs

or damages may be commence ore than 3 years

after —

(A) the date of judgment in any action

under this chapter for recovery of such costs or

damages, or

(B) the date of an administrative order

under section 9622(g) of this title (relating to de

minimis settlements) or 9622(h) of this title (re-

lating to cost recovery settlements) or entry of a

judicially approved settlement with respect to

such costs or damages.

(4) Subrogation

No action based on rights subrogated pursuant to

this section by reason of payment of a claim may be

commenced under this sub-chapter more than 3 years

after the date of payment of such claim.

App. 52

(5) Actions to recover indemnification

payments

Notwithstanding any other provision of this

subsection, where a payment pursuant to an indemni-

fication agreement with a response action contractor

is made under section 9619 of this title, an action

under section 9607 of this title for recovery of such

indemnification payment from a potentially responsi-

ble party may be brought at any time before the

expiration of 3 years from the date on which such

payment is made.

(6) Minors and incompeients

The time limitations contained herein shall not

begin to run —

(A) against a minor until the earlier of the

date when such minor reaches 78 years of age or

the date on which a legal representative is duly

appointed for such minor, or

(B) against an incompetent person until the

earlier of the date on which such incompetent’s

incompetency ends or the date on which a legal

representative is duly appointed for such incom-

petent.

App. 53

Appeal No. 06-56727, 06-56718, 07-55027

IN THE

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CITY OF COLTON,

Appellant,

VS.

AMERICAN PROMOTIONAL EVENTS, INC.-

WEST, et al.,

Respondents.

On Appeal From the United States

District Court for the Hon. John F. Walter

Case No. CV 05-01479 JFW (Ex)

REPLY BRIEF OF APPELLANT

CITY OF COLTON

RODERICK E. WALSTON,

Bar No. 32675

GENE TANAKA,

Bar No. 101423

CYNTHIA M. GERMANO,

Bar No. 151360

DANIELLE G. SAKAT,

Bar No. 210316

App. 54

BEST BEST & KRIEGER LLP

2001 North Main Street,

Suite 390

Walnut Creek, California 94596

Telephone: (925) 977-3300

Facsimile: (925) 977-1870

Attorneys for Appellant

CITY OF COLTON

* *K *

* * * Colton may have the right to obtain future

cost recovery against some defendants pursuant to its

declaratory claim in this case, but may not have the

same right pursuant to its claims in its new action.

One of the major defendants in both Colton’s original

action and new action is Black & Decker, Inc. (B&D),

which a successor to defendant Emhart Industries

(Emhart), a Comnecticut corporation, which in turn is

a successor to defendant Kwikset Locks, Inc. (Kwik-

set). ER 4-5 (original complaint); Goodrich Supple-

mental Excerpts of Record (“Goodrich SER”) 134 (new

complaint). Emhart was dissolved as a Connecticut

corporation on March 12, 2002, and, under Connecti-

cut law, an action against a dissolved corporation

must be brought within three years after dissolution.”

* Under Connecticut Jaw, a claim against a dissolved

corporation is barred unless brought “within three years after

the publication date of the newspaper notice” announcing the

dissolution. Conn. Gen. Stat., Corp. Code § 33-887(b), -(c). The

publication date of the newspaper notice announcing Emhart’s

dissolution was March 12, 2002. Kwikset and Emhart have

asserted, in their answers to Colton’s complaint in the new

(Continued on following page)

App. 55

Colton’s original complaint was filed on February 28,

2005, ER 160, and its new complaint was filed on

November 22, 2006. Goodrich SER 171. Therefore,

the original complaint was filed within three years

after corporate dissolution, and the new complaint

more than three years after dissolution. Based on

these facts, Kwikset and Emhart have asserted as a

defense to Colton’s new action that they lack the

capacity to be sued, see note 8, supra, and, since B&D

is also a successor in interest, presumably the same

defense is available to B&D. These de‘endants did

not, however, assert the same defense in Colton’s

original action. Thus, some major defendants assert a

statute of limitation defense to Colton’s new action

that they did not, and could not, assert to its original

action. Colton’s declaratory relief claim in this case is

not moot for this additional reason.

action, that Kwikset and Emhart lack the capacity to be sued

because of Emhart’s dissolution as a Connecticut corporation in

2002. Kwikset Answer, Twenty-Third Aff. Defense, p. 27; Emhart

Answer, Twenty-Third Aff. Defense, p. 26. Colton has filed a

request that the court grant judicial notice of the relevant

portion of the Connecticut statute, the publication date of the

newspaper notice announcing Emhart’s dissolution, and Kwik-

set’s and Emhart’s pleadings alleging lack of capacity to be sued.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.