CERCLA does not completely preempt state law causes of action arising from contamination, holds California District Court

CERCLA does not completely preempt state law causes of action arising from contamination, holds California District Court

Plaintiff California Water Service Company is a public utility water corporation that owns and operates public drinking water systems. The complaint alleges that PCE and its degradation products ("PCE") are contaminating and damaging plaintiff's drinking water supply wells in dispersed locations throughout the state. Plaintiff alleges that defendants are manufacturers, distributors, and retailers of PCE and/or PCE-containing products that caused the contamination of plaintiff's wells. The complaint alleges eight state law causes of action: (1) strict products liability (design defect); (2) strict products liability (failure to warn); (3) nuisance; (4) trespass; (5) negligence; (6) negligence per se; (7) California Civil Code violations; and (8) equitable indemnity. Plaintiff seeks to recover compensatory and all other damages, including but not limited to all necessary funds to reimburse plaintiff for "the costs of designing, constructing, installing, operating and maintaining the treatment facilities and equipment required to comply with state and federal safe drinking water laws and to remove PCE from the drinking water it supplies to the public and/or for the costs of securing alternative sources of water as a result of the PCE contamination ...".
 
Defendant PPG Industries, Inc., filed a timely notice of removal. Defendant's notice of removal states that the eighth cause of action for equitable indemnity is actually a claim for contribution under CERCLA. Defendant noted that the eighth cause of action for "equitable indemnity" alleged that the California Department of Toxic Substance Control ("DTSC") pursued an enforcement action against plaintiff arising from PCE contamination in Chico, California, and that a settlement between DTSC and plaintiff was approved by a court on May 23, 2007. In contrast, the eighth cause of action alleged that plaintiff "is in no way legally responsible for the events giving rise to the Settlement, nor legally responsible in any manner for the damages allegedly sustained by DTSC" and that defendants' acts "were the direct and proximate cause of the PCE contamination that was the subject of DTSC's complaint and action against Plaintiff."
 
Plaintiff moved to remand, contending that the eighth cause of action arises under state law, not CERCLA, and also contending that PPG's notice of removal is procedurally defective because defendant MW Equipment did not join in the removal.
 
In Cal. Water Service Co. v. Dow Chem. Co. et al, 2008 U.S. Dist. LEXIS 109675 (N.D.CA. 2008), the District Court considered the issue. The Court noted that “It is well-established that CERCLA does not completely preempt state law claims. See generally ARCO Environmental Remediation, L.L.C. v. Montana, 213 F.3d 1108 (9th Cir. 2000). Defendants do not contend otherwise, but instead argue that because the DTSC's lawsuit against plaintiff, and the resulting settlement, were under CERCLA, that the eighth cause of action necessarily also arises under Section 113(f)(3)(B) of CERCLA. As an initial matter, the Court notes that on its face, the eighth cause of action does not plead the elements of a Section 113(f) claim for contribution…”. The Court also found that the cases cited by Defendants were not applicable to the issue at hand. Further, “Defendants argue that because plaintiff settled the CERCLA action with the DTSC, plaintiff is a liable party under CERCLA. While that is correct, the Court finds that it is defendants' status, not plaintiff's, that is relevant for purposes of analyzing the nature of plaintiff's equitable indemnity claim. Here, defendants were not parties to the DTSC CERCLA action, and have never been alleged to be PRPs under CERCLA. Although not directly on point, the Court finds persuasive Edward Hines Lumber Company v. Vulcan Materials Company, 685 F. Supp. 651 (N.D. Ill. 1998), aff'd 861 F.2d 155 (7th Cir. 1988), where the court held that a defendant who was not a PRP under CERCLA could be subject to liability under state law… Here, although there has been no judicial determination that defendants are not PRPs under CERCLA as there was in Edward Hines, there has been no allegation either in the DTSC action or the instant lawsuit that defendants are PRPs under CERCLA. Accordingly, the Court finds that defendants' authority, which all addresses claims within a CERCLA context, to be inapposite. In light of the general principle that CERCLA does not completely preempt state law, and in the absence of any cases holding that a plaintiff may not pursue an equitable indemnification claim under state law against defendants who are not alleged to be PRPs under CERCLA, the Court holds that plaintiff's eighth cause of action arises under state law, not CERCLA. Because the Court finds that there is no basis for federal jurisdiction, the Court does not address the parties' arguments regarding the procedural defect in removal. Accordingly, the Court GRANTS plaintiff's motion for remand.”