Northern California Judge trims massive CERCLA case

KFD Enterprises, Inc. v. City of Eureka is an environmental cleanup action under the Comprehensive Environmental Conservation and Liability Act (CERCLA). KFD owned and operated a dry cleaner in a contaminated lot in Eureka, California. Presently in the action, are plaintiff KFD, cross–claimant City of Eureka, cross-claimant Winzler & Kelly, defendant and cross-defendant Firbimatic SpA, defendant and cross-defendant RR Street & Co., third-party defendant Environmental Resolutions, Inc., (ERI), third-party plaintiff Unocal Corp, cross-claimant Union Oil of California and their corporate parent Chevron Corp. Basically, everyone thinks someone other than themselves is liable for the mess at the dry cleaners.

Particularly, KFD has sued eight manufacturers of dry cleaning machines, voluntarily dismissed three from the action, three have answered, Firbimatic moved to dismiss and I’m not sure what happened to the eighth defendant. Nonetheless, at this stage Firbimatic is moving to dismiss KFD’s third amended complaint and the City’s third amended counter-claim and cross-claim. RR Street is also moving to dismiss the City’s third amended counter-claim and cross-claim. At the same time ERI is moving to dismiss claims, third party claims and cross claims against it filed by KFD, the City and Winzler & Kelly.

In that order, KFD’s claims against Firbimatic failed because KFD failed to allege any viable theory for liability. As Judge Maxine M. Chesney explains:

Indeed, KFD’s CERCLA and HSAA claims contain no factual allegations as to how Firbimatic can be held liable as a “covered person.” See Ascon Properties, Inc. v. Mobil Oil Co., (9th Cir. 1989) (holding, to avoid dismissal, plaintiff must allege “defendants are within one of four classes of persons subject to CERCLA’s liability provisions”).

Similarly, the City’s claims against Firbimatic fail because they are based on theories of indemnification and contribution premised on the City’s liability to KFD. Since KFD’s claims against Firbrimatic are subject to dismissal, Fibtimatic can have the City’s claims dismissed as well. However, RR Street did not seek dismissal on those claims and its motion to dismiss was denied.

In a second order, ERI’s liability is premised on an entirely different theory. According to the Third Amended Complaint (by both KFD and the City), ERI drilled wells to test the soil for contaminants on behalf of the petroleum defendants. When it did so, it broke an impermeable membrane, which caused contaminants to flow onto the property at issue. That is sufficient to plead operator liability under CERCLA. Judge Chesney largely denied ERI’s motion to dismiss.