Opinion
Master File No. 1:00-1898, MDL 1358 (SAS), M21-88.
March 6, 2007
Counsel for Plaintiff Orange County Water District:, Michael Axline, Esq., Tracey O'Reilly, Esq., Miller, Axline Sawyer, Sacramento, CA, Victor Sher, Esq., Todd Robins, Esq., Sher Leff LLP, San Francisco, CA.
Counsel for Defendants:, Jon D. Anderson, Esq., Latham Watkins LLP, Costa Mesa, CA.
Liaison Counsel for Plaintiffs:, Robin Greenwald, Esq., Robert Gordon, Esq., Weitz Luxenberg, P.C., New York, NY.
Liaison Counsel for Defendants:, Peter John Sacripanti, Esq., James A. Pardo, Esq., McDermott Will Emery LLP, New York, NY.
OPINION AND ORDER
I. INTRODUCTION
In this consolidated multi-district litigation, plaintiffs have sued various defendants for defendants' use and handling of the gasoline additive methyl tertiary butyl ether ("MTBE") and/or tertiary butyl alcohol ("TBA"), which is a product formed by the natural degradation of MTBE in water. The parties have already engaged in extensive motion practice, and familiarity with the Court's previous opinions is assumed.
See In re Methyl Tertiary Butyl Ether ("MTBE") Prods. Liab. Litig., No. M21-88, MDL 1358, 2007 WL 541954 (S.D.N.Y. Feb. 20, 2007); In re MTBE Prods. Liab. Litig., No. M21-88, MDL 1358, 2007 WL 102104 (S.D.N.Y. Jan. 11, 2007); In re MTBE Prods. Liab. Litig., No. M21-88, MDL 1358, 2007 WL 54587 (S.D.N.Y. Jan. 8, 2007); In re MTBE Prods. Liab. Litig., No. M21-88, MDL 1358, 2007 WL 25474 (S.D.N.Y. Jan. 3, 2007); In re MTBE Prods. Liab. Litig., No. M21-88, MDL 1358, 2006 WL 3771011 (S.D.N.Y. Dec. 18, 2006); In re MTBE Prods. Liab. Litig., 457 F. Supp. 2d 455 (S.D.N.Y. 2006); In re MTBE Prods. Liab. Litig., 458 F. Supp. 2d 149 (S.D.N.Y. 2006); In re MTBE Prods. Liab. Litig., 447 F. Supp. 2d 289 (S.D.N.Y. 2006); In re MTBE Prods. Liab. Litig., 438 F. Supp. 2d 291 (S.D.N.Y. 2006); In re MTBE Prods. Liab. Litig., 457 F. Supp. 2d 324 (S.D.N.Y. 2006); In re MTBE Prods. Liab. Litig., 457 F. Supp. 2d 298 (S.D.N.Y. 2006), motion for reconsideration denied, 2006 WL 1816308 (June 26, 2006); In re MTBE Prods. Liab. Litig., 415 F. Supp. 2d 261 (S.D.N.Y. 2005); In re MTBE Prods. Liab. Litig., 399 F. Supp. 2d 340 (S.D.N.Y. 2005); In re MTBE Prods. Liab. Litig., 399 F. Supp. 2d 325 (S.D.N.Y. 2005); In re MTBE Prods. Liab. Litig., No. M21-88, MDL 1358, 2005 WL 1529594 (S.D.N.Y. June 28, 2005); In re MTBE Prods. Liab. Litig., No. M21-88, MDL 1358, 2005 WL 1500893 (S.D.N.Y. June 24, 2005); In re MTBE Prods. Liab. Litig., 402 F. Supp. 2d 434 (S.D.N.Y. 2005); In re MTBE Prods. Liab. Litig., 399 F. Supp. 2d 242 (S.D.N.Y. 2005); In re MTBE Prods. Liab. Litig., 233 F.R.D. 133 (S.D.N.Y. 2005); In re MTBE Prods. Liab. Litig., 379 F. Supp. 2d 348, 364 (S.D.N.Y. 2005); In re MTBE Prods. Liab. Litig., No. M21-88, MDL 1358, 2005 WL 106936 (S.D.N.Y. Jan. 18, 2005); In re MTBE Prods. Liab. Litig., No. M21-88, MDL 1358, 2005 WL 39918 (S.D.N.Y. Jan. 6, 2005); In re MTBE Prods. Liab. Litig., 364 F. Supp. 2d 329 (S.D.N.Y. 2004); In re MTBE Prods. Liab. Litig., 361 F. Supp. 2d 137 (S.D.N.Y. 2004) ( "MTBE VI"); In re MTBE Prods. Liab. Litig., 341 F. Supp. 2d 386 (S.D.N.Y. 2004) ( "MTBE V"); In re MTBE Prods. Liab. Litig., 341 F. Supp. 2d 351 (S.D.N.Y. 2004) ( "MTBE IV"); In re MTBE Prods. Liab. Litig., 342 F. Supp. 2d 147 (S.D.N.Y. 2004) ( "MTBE III"); In re MTBE Prods. Liab. Litig., 209 F.R.D. 323 (S.D.N.Y. 2002) ( "MTBE II"); In re MTBE Prods. Liab. Litig., 175 F. Supp. 2d 593 (S.D.N.Y. 2001) ( "MTBE I").
In this case, plaintiff Orange County Water District ("OCWD") alleges that defendants' use and handling of MTBE has resulted in contamination and threatened future contamination of groundwater within the geographic region for which OCWD is responsible. Defendants now move, based on the doctrine of primary jurisdiction, to stay or dismiss certain of OCWD's claims. The doctrine of primary jurisdiction allows courts to stay or dismiss claims that would be better resolved by federal or state agencies with expertise in the subject matter of the litigation. In its motion, defendants assert that California's regulatory scheme has provided or will provide the relief OCWD seeks in the claims at issue. Defendants further argue that any relief ordered by this Court would overlap or interfere with the regulatory efforts of the relevant California agencies. For the reasons discussed below, defendants' motion to stay or dismiss without prejudice based on primary jurisdiction is denied.
See Memorandum of Law in Support of Defendants' Motion for Stay or Dismissal Without Prejudice Based on Primary Jurisdiction ("Def. Mem."), at 1.
See, e.g., id. at 4-6, 20.
See id. at 10-13.
II. THE DOCTRINE OF PRIMARY JURISDICTION
Primary jurisdiction is a judicially-created "prudential doctrine under which courts may, under appropriate circumstances, determine that the initial decisionmaking responsibility should be performed by the relevant agency rather than the courts." Primary jurisdiction is related to — but distinct from — the doctrine of exhaustion of remedies.
Syntek Semiconductor Co. v. Microchip Tech., Inc., 307 F.3d 775, 780 (9th Cir. 2002) (holding that deference to the Register of Copyrights is warranted when plaintiff seeks declaratory judgment of validity of a copyright which presents an issue of first impression as to copyrightability of certain types of software code).
"Exhaustion" applies where a claim is cognizable in the first instance by an administrative agency alone; judicial interference is withheld until the administrative process has run its course. "Primary jurisdiction," on the other hand, applies where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body; in such a case the judicial process is suspended pending referral of such issues to the administrative body for its views.
United States v. Western Pac. R.R. Co., 352 U.S. 59, 63-64 (1956) (citing General Am. Tank Car Corp. v. El Dorado Terminal Co., 308 U.S. 422, 433 (1940)).
"The doctrine of primary jurisdiction allows a federal court to refer a matter extending beyond the `conventional experiences of judges' or `falling within the realm of administrative discretion' to an administrative agency with more specialized experience, expertise, and insight."
National Commc'ns Ass'n, Inc. v. AT T Co., 46 F.3d 220, 222-23 (2d Cir. 1995) (quoting Far East Conference v. United States, 342 U.S. 570, 574 (1952)).
"The primary jurisdiction doctrine serves two interests: consistency and uniformity in the regulation of an area which Congress has entrusted to a federal agency; and the resolution of technical questions of facts through the agency's specialized expertise, prior to judicial consideration of the legal claims." Ordinarily, federal courts will not apply the primary jurisdiction doctrine to defer to a state agency where federal claims are involved. Nonetheless, it is entirely appropriate for federal courts to defer to state agencies in cases where the policies underlying the doctrine support such deference. Thus, primary jurisdiction ensures that "courts and agencies with concurrent jurisdiction over a matter do not work at cross-purposes."
Golden Hill Paugussett Tribe of Indians v. Weicker, 39 F.3d 51, 59 (2d Cir. 1994).
See County of Suffolk v. Long Island Lighting Co., 907 F.2d 1295, 1310 (2d Cir. 1990).
See Johnson v. Nyack Hosp., 964 F.2d 116, 122-23 (2d Cir. 1992) ("Primary jurisdiction allows an agency to pass on factual issues that require specialized, technical knowledge. Either a federal or state agency may have the requisite competence to serve this purpose."). In Johnson, physician-plaintiff Johnson alleged federal antitrust violations against a hospital that had revoked Johnson's surgical privileges after reviewing his performance. He claimed that part of the hospital's motivation for revoking his privileges was the hospital's desire to capture more of the market for thoracic surgery in the region, while defendant answered that the plaintiff's questionable record of medical competence was the cause of the revocation. The Second Circuit held that primary jurisdiction deferral by the district court to the New York state Public Health Council ("PHC") was appropriate because "[t]he medical expertise of the PHC will prove extremely helpful in sorting through these complex records, and resolving the factual questions at stake." Id. at 122.
Fulton Cogeneration Assocs. v. Niagra Mohawk Power Corp., 84 F.3d 91, 97 (2d Cir. 1996).
Although "[n]o fixed formula exists for applying the doctrine of primary jurisdiction," various federal and state courts' guidelines are similar in that they serve the principles of regulatory uniformity and judicial economy. In multi-district litigation, a transferee court's decision to afford primary jurisdiction deference is most appropriately guided by the law of the transferee circuit.
Western Pac. R.R. Co., 352 U.S. at 64.
This Court recently held that a multi-district transferee court should apply the law of the transferor circuit for a class-certification analysis. See In re MTBE Prods. Liab. Litig., 2007 WL 541954, at *2-4 (district court in Second Circuit applying Fourth Circuit's class-certification law to case transferred from Maryland). OCWD initiated the present case in California; the case is before this Court for pretrial proceedings, and it will eventually be remanded to a California court for trial. See Lexecon, Inc. v. Milberg Weiss Bershad Hynes Lerach, 523 U.S. 26, 40 (1998) (cases transferred for multi-district pretrial proceedings must be remanded to transferor court for trial). Primary jurisdiction decisions, however, are pretrial decisions; they are not "inherently enmeshed" with trial considerations. See In re MTBE Prods. Liab. Litig., 2007 WL 541954, at *4. A decision to certify a class for trial results in a trial of a class action, as opposed to an individual action. Because the transferor court will eventually try the case, it is appropriate that the transferor court's law should guide the transferee court's decision to certify a class. See id. ("The requirements of class certification are inherently enmeshed with considerations of the trial, and under Lexecon the authority of the transferee court in multi-district proceedings ends once the pretrial proceedings are completed."). A primary jurisdiction decision, by contrast, is not a decision based on trial considerations. Primary jurisdiction deferral is a pretrial decision to suspend proceedings to allow an agency to make determinations that frame factual or legal issues or dispose of the case entirely. Thus, the law of the transferee circuit applies to primary jurisdiction decisions. As a result, this Court's primary jurisdiction decision will not impinge on the California trial court to which this case will be remanded.
Accordingly, this Court will review defendants' motion using the Second Circuit's primary jurisdiction analysis, which has generally focused on four factors:
(1) whether the question at issue is within the conventional experience of judges or whether it involves technical or policy considerations within the agency's particular field of expertise;
(2) whether the question at issue is particularly within the agency's discretion;
(3) whether there exists a substantial danger of inconsistent rulings; and
(4) whether a prior application to the agency has been made.
Ellis v. Tribune Television Co., 443 F.3d 71, 82-83 (2d Cir. 2006) (citing National Commc'ns Ass'n, 46 F.3d at 222).
Additionally, courts frequently "`balance the advantages of applying the doctrine against the potential costs resulting from complications and delay in administrative proceedings.'" Once a district court has determined that primary jurisdiction deference is warranted, a district court must either stay the case or dismiss it without prejudice to allow the parties to proceed before the agency. "Referral" to an agency is a term of art under the primary jurisdiction doctrine, not a formal transfer. Accordingly, a primary jurisdiction "referral" accomplished through a stay (rather than a dismissal) does not deprive the court of subject matter jurisdiction. Once a district court has found that primary jurisdiction deference is warranted, the decision of which procedure to employ — a stay or a dismissal without prejudice — is discretionary.
MTBE I, 175 F. Supp. 2d at 616 (quoting National Commc'ns Ass'n, 46 F.3d at 223). Accord American Auto. Mfrs. Ass'n v. Massachusetts Dep't of Envtl. Prot., 163 F.3d 74, 81-82 (1st Cir. 1998) ("In cases where the potential for delay is found to be too great to justify a straightforward referral, the court may, in its discretion, either choose not to refer the matter to the agency, or take such other action as it deems appropriate.").
See Syntek, 307 F.3d at 782 n. 3 (after finding that an agency has primary jurisdiction, appropriate action is either to stay the case or to dismiss it without prejudice).
See id.
See id. (citing Reiter v. Cooper, 507 U.S. 258, 268 n. 3 (1993)).
See Davel Commc'ns v. Qwest Corp., 460 F.3d 1075, 1091 (9th Cir. 2006) (citing Reiter, 507 U.S. at 268-69).
III. BACKGROUND
OCWD stands in a unique position compared to other plaintiffs in this multi-district proceeding. As a result, the primary jurisdiction analysis here differs from other cases in this litigation. I turn now to certain relevant facts about OCWD, the relief it seeks, and the regulatory context in which it operates.
See In re MTBE Prods. Liab. Litig., 2007 WL 54587 (denying primary jurisdiction motion in New York cases).
A. OCWD's Unique Position as a Regulatory Agency
OCWD is not a private entity. Rather, it is a "special water agency," created by statute and charged with the responsibility to "maintain, replenish, and manage groundwater resources" within a specified geographic area (its "service area"). By its enabling Act, OCWD is statutorily authorized to "prevent interference [with] . . . [or] diminution . . . [or] pollution or contamination" of the water supply within its service area. The Act also empowers OCWD to "conduct any investigations of the quality of the surface and groundwaters within [OCWD's service area] . . . to determine whether those waters are contaminated or polluted" and to "expend available funds to perform any cleanup, abatement, or remedial work required under the circumstances." Notably, OCWD's statutory powers include a broad right of eminent domain, which allows OCWD to "condemn property at any place within the Santa Ana River watershed for rights-of-ways . . . [upon] which to construct [structures] necessary or convenient for any of the purposes of the district. . . ."
OCWD's Second Amended Complaint ("Compl.") ¶ 4. See also OCWD Act, California Water Code § 40- 2(6).
OCWD Act, California Water Code § 40- 2(9).
Id. § 40-8(a), (b).
Id. § 40-2(10). This power is also acknowledged in the Memorandum of Understanding between OCWD and the Santa Ana Regional Water Quality Control Board. See Memorandum of Understanding ("MOU"), Ex. 1 to Declaration of Michael D. Axline, counsel for OCWD ("Axline Decl."), at 2.
In contrast to the many water-provider plaintiffs in this multi-district litigation, OCWD does not own water wells, nor does it sell water to customers. OCWD does, however, regularly replenish underground basins beneath its service area with millions of gallons of water (pursuant to its statutory duty), an activity that gives rise to certain usufructuary and statutory rights.
See In re MTBE Prods. Liab. Litig., 457 F. Supp. 2d at 460-62, 466.
B. The Nature of the Relief OCWD Seeks
The relief OCWD seeks also informs the primary jurisdiction analysis. Broadly stated, OCWD seeks (1) compensatory damages for expenses it has already incurred while investigating and remediating MTBE contamination in its service area; (2) injunctive relief as necessary to effect future remediation; (3) a declaratory judgment of liability for defendants' use and handling of MTBE; and (4) additional compensatory damages for reasonably foreseeable future costs of investigation, remediation, and containment of MTBE in its service area. The instant motion asks the Court to stay or dismiss the claims that seek the relief described in items (2), (3), and (4) above. Defendants are not requesting a stay or dismissal of claims for the relief described in item (1) above, i.e., compensatory damages for expenses that OCWD has already incurred.
The October 10, 2006 decision dismissed OCWD's declaratory relief cause of action (Compl. ¶¶ 109-15) as duplicative of OCWD's other causes of action. This is appropriate because declaratory relief was not intended "`to furnish a litigant with a second cause of action for the determination of identical issues.'" In re MTBE Prods. Liab. Litig., 457 F. Supp. 2d at 466-67 (quoting General of Am. Ins. Co. v. Lilly, 258 Cal. App. 2d 465, 470 (Cal.Ct.App. 1968)). Nonetheless, declaratory judgment is a flexible remedy that might be useful in this case. See Lortz v. Connell, 273 Cal. App. 2d 286, 301 (Cal.Ct.App. 1969) ("The salutary purpose of the declaratory relief provisions is to permit a prompt adjudication of the respective rights and obligations of the parties in order to relieve them from uncertainty and insecurity with respect to rights, status and other legal relations. . . . It enables a party to get a prompt adjudication without a dispute over the damages suffered."). If any of OCWD's remaining causes of action, such as those for nuisance or trespass, are determined to require declaratory relief, such relief remains available under those causes of action. For example, OCWD might wish to delay a determination of the amount of its foreseeable future damages in order to expedite adjudication of the narrower issue of defendants' liability. Such a declaration of liability could clarify the parties' relations sufficiently to obviate further proceedings as to damages, or at least provide OCWD with the benefit of knowing who has liability and who does not so that OCWD can plan its remediation activities accordingly.
See Compl., Prayer for Relief ¶¶ 1, 3-5, 8. OCWD also seeks punitive damages, declaratory judgment that defendants' MTBE handling constitutes a public nuisance, injunctive relief ordering defendants to abate that nuisance, attorneys' fees, costs with interest, and a broad prayer for "such other relief as the court may deem just and proper." Id. ¶¶ 2-8.
See Def. Mem. at 1 n. 1.
Unlike other plaintiffs in this litigation, OCWD does not seek monetary damages for remediation of particular wells nor damages for the value of water lost to contamination. The injunctive relief OCWD seeks is to compel abatement by defendants, not by other agencies. Though defendants claim that their motion is brought to prevent conflicting judicial and regulatory decisions, it may be that defendants are hoping that regulatory relief will solve the problem before a court finds defendants liable and orders significantly broader relief.
See Letter from Michael D. Axline to the Court dated November 28, 2006, at 3.
It is important to understand that there are various stages at which remediation may be undertaken. When a contaminant such as MTBE has been released, for example, by a spill or leaking underground storage tank ("UST") at a service station, the contaminant escapes into the area beneath the release. This area is referred to in these proceedings as the "spill site." Some amount of this contaminant may linger beneath the surface of the spill site, creating a "lozenge" of the contaminant in the soil. As rain and other water move through the soil, water-soluble contaminants may be carried along with the moving water. The region of contamination created by such a water flow is called a "plume." Plumes vary in size and shape based on, inter alia, the terrain, the qualities of the local soil, and the speed and volume of water flowing through the soil. To determine the size and direction of a plume is to "delineate" the plume. Eventually, if a plume reaches an underground basin or other aquifer from which water is drawn, the water in that aquifer will become contaminated by the plume. Thus, any wells drilled into that aquifer would produce contaminated water.
Remediation may be undertaken at the spill site, along the plume, or at the well site. The specific remediation tactics suitable to a contaminant release vary with the circumstances of the release and the point of remediation. By way of illustration, spill-site remediation might include excavation of contaminated soil, while plume remediation might include drilling recovery wells to attempt to recover contaminated water and filter out or neutralize the contaminant therein before returning (or "injecting") the water to the ground. "Well-head" remediation might include fitting existing production wells with filtration or treatment systems which clean the water before pumping it to water providers and/or consumers. Remediation at any point might include drilling of monitoring wells to observe the underground movement of contaminants.
C. OCWD's Regulatory Context
OCWD is one of several agencies with concurrent oversight of the water supply in and around its service area. California's State Water Resources Control Board comprises nine regional water boards, one of which is the Santa Ana Regional Water Quality Control Board ("Regional Board"). The Regional Board's territory encompasses several water districts, including OCWD. The Orange County Health Care Agency ("OCHCA") is a regional public health agency tasked with, inter alia, investigation and remediation of certain MTBE spill sites. Both the Regional Board and OCHCA have been active in remediation of MTBE at spill sites within OCWD's service area, but neither agency has undertaken MTBE remediation efforts beyond those spill sites. Several other local, regional, and state environmental and health agencies also participate in spill-site remediation.
The parties disagree as to the nature of the relationship among the various agencies. For reasons discussed below, the details of the relationship among those agencies are not pivotal in deciding this motion.
See Deposition of Roy L. Herndon, chief hydrogeologist at OCWD, on December 10, 2005 ("Herndon 12/10/05 Dep."), Ex. 1 to Declaration of Jon D. Anderson, counsel for defendants ("Anderson Decl."), at 236:1-22.
See id. at 236:1-22; Deposition of Roy L. Herndon on January 10, 2006 ("Herndon 1/10/06 Dep."), Ex. 2 to Axline Decl., at 406:14-19; Transcript of October 11, 2006 Oral Arguments on Primary Jurisdiction Motion ("Tr."), at 107:16-108:8
See Def. Mem. at 7; Table of California's Groundwater Statutes Regulations, Ex. 5 to Anderson Decl., at 4 (collecting and summarizing state statutes and regulations and identifying several agencies involved with water protection).
IV. THE PRIMARY JURISDICTION FACTORS DO NOT FAVOR STAYING OR DISMISSING OCWD'S CLAIMS
Defendants argue that this Court should stay this litigation to allow California's regulatory agencies the opportunity to resolve OCWD's MTBE problems. Defendants claim that California's regulatory agencies are competent to handle remediation of MTBE contamination, that these agencies are actively remediating now, and in many cases, have already dealt with the contamination. Defendants assert that any action taken by a court would be ill-advised and would necessarily interfere with the mechanisms of California's regulatory scheme. Therefore, they claim, this Court should stay or dismiss certain claims to allow the regulatory scheme to run its course.
See infra Part IV.A.
See infra Part IV.A.; supra Part III.C.
See infra Part IV.C.
As further discussed below, however, staying OCWD's claims is unwarranted: none of the four primary jurisdiction factors weighs heavily in favor of deference to California's regulatory agencies. Moreover, there are no significant advantages to be gained by waiting for the conclusion of an informal administrative process that is unlikely to offer OCWD the relief it seeks.
A. The Questions Raised Here Are Not Particularly Within Any Agency's Discretion
The parties' characterizations of California's water-regulatory framework differ. Nonetheless, all parties appear to agree that no single agency is responsible for providing all of the relief OCWD seeks. Thus, while several agencies might be competent to address OCWD's MTBE problems, none has the sole authority to do so.
See United States v. Culliton, 328 F.3d 1074, 1082 (9th Cir. 2003) ("[S]imply because the FAA has the competence to deal with false statements on its applications does not mean that Congress has conferred upon it sole responsibility to penalize false statements, thereby suspending the operation of a criminal statute of general application.").
No party asserts that either the Regional Board or OCHCA (or any other single agency, for that matter) is the agency with clearly superior authority for groundwater cleanup. By contrast, in United States v. Western Pacific Railroad, the Supreme Court held that deference to the Interstate Commerce Commission was appropriate because "the agency had the exclusive power to pass on the rate in the first instance."
Nor has any party shown that the California legislature has committed groundwater regulation to one agency's discretion to the exclusion of others. In fact, it appears that the legislature intended the agencies to cooperate as peers rather than to operate as a chain of command. While defendants argue that OCWD's claims would be better handled within California's regulatory framework, they ignore the fact that as a statutory entity under California law, OCWD is undeniably a part of that framework.
See, e.g., MOU at 2; Herndon 1/10/06 Dep. at 406; State Resources Control Board Water Quality Enforcement Policy ("State Enforcement Policy"), Ex. 3 to Axline Decl., at 1, 3; OCWD Groundwater Quality Protection Policy, Ex. 4 to Axline Decl., at 4 ("[OCWD] shall work cooperatively and in conjunction with the Federal, State, and local regulatory agencies responsible for implementing and enforcing laws and regulations directed at groundwater quality protection."); OCWD Act, California Water Code § 40- 8(b) ("[Remedial] action may be taken in default of, or in addition to, remedial work by the person causing the contamination or pollution, or other persons. The district may perform the work itself, by contract, or by or in cooperation with any other governmental agency.").
Unlike the plaintiffs in the New York cases, OCWD is not a water provider. OCWD is first and foremost a state environmental agency that may well have the best knowledge of what efforts are most likely to remediate MTBE plumes in its service area. Indeed, OCWD's credentials are impressive. OCWD's personnel include a Hydrogeology Department employing eight hydrogeologists, a water resources engineer, and analysts who maintain a groundwater database and mapping system; an Engineering Department with seven civil engineers who have overseen large-scale water projects; a Water Quality Department including a team of environmental scientists and technicians responsible for collecting samples, interpreting laboratory results, and reporting those results to California's Department of Health Services; and a laboratory with fifteen chemists and seven laboratory technicians. OCWD's staff is experienced and well-acquainted with the characteristics of OCWD's service area.
See Declaration of Roy L. Herndon ("Herndon Decl.") ¶ 4 ("Investigations of groundwater contamination plumes containing volatile organic chemicals (`VOC') throughout the basin . . . spanning several years or more and involving interpretation of data from dozens of monitoring wells, have provided [OCWD's] hydrogeology staff with a knowledge of the characteristics of the entire basin aquifer system that is unsurpassed.").
See id. ¶¶ 3-7.
See id.
Further, OCWD's eminent domain power — unique among the water agencies — may make it more suited to the task of remediation than any other agency. Inability to physically access private lands has been a barrier to remediation in at least one instance. In November 2001, OCHCA required ExxonMobil to install a monitoring well. ExxonMobil and OCHCA spent twenty-six months trying — to no avail — to gain access to a nearby property to install the well. Eventually, OCHCA required ExxonMobil to propose an alternate location for the well. OCWD's eminent domain power could have provided rapid access to that property.
See OCWD Act, California Water Code § 40- 8(10) (vesting OCWD with eminent domain power to enter on land and claim rights-of-way); MOU at 2 (acknowledging OCWD's "duty to manage and protect the quantity and quality of the water resources within the Groundwater Basin" and OCWD's authority "to participate in proceedings to prevent, correct, and clean-up pollution of or contamination to the Groundwater Basin, and to enter on to all lands within its boundaries to carry on any investigations necessary to determine the nature and extent of actual or threatened surface water and groundwater contamination or pollution."); Tr. at 108-09 (discussing OCWD's eminent domain power).
See Declaration of Marla D. Guensler, Global Remediation Project Manager for ExxonMobil, Regarding ExxonMobil Service Station #18-668 ¶ 26.
In short, it appears that there is no single agency to which this matter is particularly committed. Moreover, OCWD appears to be at least as competent as any other agency to oversee the remediation efforts it seeks.
B. The Questions Raised Are Within the Conventional Experience of This Court and Do Not Involve Technical Considerations Within the Agencies' Field of Expertise
Defendants suggest that courts are ill-suited to make technical decisions. Defendants place primary reliance on two cases, New Mexico v. General Electric, and Friends of Santa Fe County v. LAC Minerals, both of which are inapposite. The General Electric court found that deference to the New Mexico Department of the Environment ("NMED") was necessary because the New Mexico Supreme Court had previously determined that New Mexico's statutory scheme committed claims like the General Electric plaintiffs' claims to NMED's primary jurisdiction. Plaintiffs in that case were the State of New Mexico and the State Attorney General on behalf of the citizens of New Mexico. By contrast, plaintiff in the present case — OCWD — is an agency with statutory powers and technical expertise "to perform any cleanup, abatement, or remedial work required under the circumstances." OCWD will not require technical input from this Court to implement remediation. In Friends of Santa Fe County, the court was asked to decide whether acid mine drainage from a certain mine "pose[d] an imminent and substantial endangerment to human health or the environment — an inquiry which . . . [could] only be described as second-guessing the [New Mexico Department of the Environment]." This case presents no such question. Rather, OCWD asks for "current and reasonably foreseeable future costs to investigate and remediate contamination . . . as well as declaratory relief as to defendants' liability for future costs."
See Def. Mem. at 2, 11-13.
322 F. Supp. 2d 1237 (D.N.M. 2004).
892 F. Supp. 1333 (D.N.M. 1995).
322 F. Supp. 2d at 1265-66. The General Electric court further noted that those statutes designated NMED as the "agent of the State in matters of environmental management." Id. at 1266 (quoting N.M. Stat. Ann. § 74-1-6(E)).
Id. at 1239 n. 1.
OCWD Act, California Water Code § 40- 8(b).
Pl. Mem. at 16.
While OCWD's requests for relief present legal issues that pertain to technical subject matter, they do not require the court to decide technical questions outside its competence and experience. It remains to be seen what specific plume remediation or containment plans OCWD will ask defendants to fund in the future, but the issues now before the Court pertain mainly to tort law, a field that the Court is well-suited to address.
Even assuming that this Court (or another court) will be asked at a later stage in this litigation to compel defendants to fund particular remediation programs, the relief OCWD seeks would be unlikely to require a level of technical or policy analysis for which this Court is ill-suited. This case does not require a judge to opine on geological matters, but rather requires the judge to make legal determinations as to the appropriateness and costs of remedies. To do that, the court will not need to decide where and how deep to drill wells, but rather whether plaintiff's proposed plan is warranted by defendants' conduct and whether it will interfere with the efforts of other agencies. Courts routinely make legal decisions involving technical subject matter and have vast experience in weighing evidence relating to damages and deciding whether to make an award. For example, products liability cases frequently require courts to evaluate whether an alternative product design would have been technically or economically feasible at the time a defendant-manufacturer produced the allegedly-defective product. Similarly, patent infringement cases require courts to determine whether a defendant's product or process is within the meaning of the claims of a plaintiff's patent. In addressing issues of alternative feasible designs or patent infringement, parties organize the technical matters into legal propositions, and experts — to the extent they pass muster under the Federal Rules of Evidence — aid the judge in evaluating the evidence.
See, e.g., Rypkema v. Time Mfg. Co., 263 F. Supp. 2d 687, 692 (S.D.N.Y. 2003) ("Under New York law, in a design defect case a plaintiff is required to prove the existence of a feasible alternative which would have prevented the accident. . . . There are two means of satisfying this burden: 1. Plaintiff's expert can show, through testing and construction of a prototype, that such an alternative design is within the realm of practical engineering feasibility, thereby demonstrating the utility, cost, safety, sanitation and other characteristics of the proposed alternative; and/or 2. Plaintiff's expert can identify makers of similar equipment who have already put into use the alternative design that has been proposed.").
See, e.g., Guardian Indus. v. AFG Indus., No. 03-73722, 2006 WL 2691387, at *1 (E.D. Mich. Sept. 19, 2006) (deciding summary judgment motion pertaining to "use of silicon rich silicon nitride layers" as a "solution to common problems involved with layer coatings placed on glass which seek to reflect infrared radiation while enabling a high amount of visible light transmittance").
See, e.g., id. ("The expert claims that both of AFG's products, the 36TC and 40TC, have a silver layer (AG) sandwiched between the zinc-oxide layer (ZnO) and an "oxidation graded" nickel chromium oxide layer (NiCrOx). The testimony supports the contention that the products infringe Guardian's `349 patent. Guardian also argues and their experts agree that AFG has the necessary equipment to create an oxidation graded contact layer.").
C. The Relief Requested Does Not Pose a Substantial Danger of Inconsistent Rulings
Defendants contend that this Court's continued exercise of jurisdiction "guarantees inconsistent results that will jeopardize the ability of the regulatory system effectively to investigate and remediate groundwater contamination." Defendants note that they are currently funding many remediation projects in OCWD's service area, with their funding obligations being "adjudicated through [an] iterative, ongoing dialogue with the agencies" and argue that "OCWD's remedy would amount to a static sum of money or set of orders that would be substantially inconsistent with this [dialogue]." Defendants suggest that this static relief would be inferior to the more adaptable dialogue with the agencies.
Def. Mem. at 22-23.
Id. at 23. Leaving aside the issue of whether these proceedings can properly be termed "adjudicative," defendants do not clarify why this Court's potential imposition of "funding obligations" owing to OCWD would interfere with the "ongoing" arrangements with other agencies. Because multiple agencies are responsible for remediation efforts within a geographic area, and because a defendant's conduct in handling MTBE often has effects that cross water district boundaries, it is perfectly reasonable that even a single MTBE release could subject a defendant to the concurrent oversight of several agencies. If defendants' concern is that they might be "double-charged" for redundant remediation efforts, that is an issue of damages, not primary jurisdiction, and defendants will have the opportunity to be heard on that issue at the appropriate time.
OCWD responds that other agencies have not and generally do not provide the types of remediation it seeks to fund. While other agencies such as the Regional Board or OCHCA may engage in spill-site remediation, they do not attempt remediation or containment of MTBE plumes that may have escaped the spill site before remediation efforts began (or may persist despite such efforts), which is in part what OCWD seeks here. OCWD asks this Court for monetary relief necessary to proactively identify and remediate or contain MTBE plumes that have already escaped a spill site and may eventually make their way into the groundwater basins served by OCWD. Defendants characterize OCWD's plans to address plumes rather than spill sites as "second-guessing" the decisions of other agencies. The record suggests, however, that OCWD's proposal would complement, not negate, the other agencies' efforts, and that the other agencies might welcome the additional assistance. Further, the agencies' regulatory decisions and remediation plans are guided at least in part by the availability of resources, such that lack of remedial action by an agency cannot be taken as a decision that no further remediation is necessary. Thus it is inappropriate to classify OCWD's supplemental efforts as "second-guessing."
Pl. Mem. at 16-17.
See Tr. at 107:16-108:8.
See MOU at 2-3; State Enforcement Policy at 1 ("It is important to note that enforcement of the State's water quality requirements is not solely the purview of the [regional boards] and their staff.").
See State Enforcement Policy at 3 ("[B]ecause resources are limited, the [regional boards] must continuously balance the need to complete non-enforcement program tasks with the need to address violations.").
See id.; Tr. at 103:14-15.
Essentially, OCWD argues — persuasively — that its planned remediation efforts are different from and independent of other agencies' efforts. The necessity and cost of these additional efforts remains to be proven, but there is no reason at this stage to believe that OCWD's intended efforts would interfere with the efforts of other agencies. Moreover, OCWD's claims ultimately seek recompense for remediation efforts such as water sampling or installing monitoring or recovery wells.
See Herndon 12/10/05 Dep. at 263:18-264:3.
Contrary to defendants' prediction, there is no "guarantee" that this Court will grant relief that will conflict with the efforts of state agencies. Indeed, such conflicts are unlikely given the nature of the remediation sought by OCWD in this lawsuit compared to that currently undertaken by the other state agencies and OCWD's cooperative relationship with those agencies. Additionally, the agencies whose groundwater protection efforts arguably could be impacted by OCWD's remediation plans have had the opportunity to be heard but have remained silent. These agencies will continue to have the opportunity to be heard — indeed, their input would be welcomed by this Court. Finally, in the unlikely event that a conflict were to arise, this Court is cognizant of the participation of other agencies in various aspects of remediation and would fashion relief that would take into account the role of the other state agencies.
See Far East Conference v. United States, 342 U.S. 570, 572 (1952) (primary jurisdiction deference was appropriate in shipping rate dispute in which the Federal Maritime Board intervened to join the primary jurisdiction motion).
D. Prior Application to Agencies Does Not Favor Either Side
Prior applications to relevant agencies to remediate MTBE contamination does not weigh heavily for or against primary jurisdiction deference in this case. The parties dispute which agencies have authority and power to remediate at various points in the contamination process. Defendants assert that there is a formal regulatory hierarchy of "established regulatory procedures" through which OCWD must seek remediation before turning to litigation. Defendants further assert that in the past, when the appropriate agencies were notified (presumably by entities other than OCWD) of the need for remediation, the regulatory scheme adequately addressed the situation. Defendants note in support of this position that both the Regional Board and OCHCA are now actively engaged in remediation at spill sites.
Def. Mem. at 23. Defendants refer to the agencies that they see as superior to OCWD as "lead" agencies. See id.
See id. at 20-22.
OCWD, however, portrays the regulatory structure as parallel and cooperative, with local agencies such as OCWD having significant discretion to act without the approval of the Regional Board or other agencies. OCWD claims that its mandate does not require it to wait for the approval of other agencies before taking action, and points out that it is most clearly able to act independently where the Regional Board or other agencies' efforts have failed to contain a contaminant plume.
See MOU at 2-3, 6. While OCWD asserts that it may act independently of other agencies, OCWD does not assert that it may take actions that contradict those agencies' policies.
See Pl. Mem. at 6 ("Defendants . . . assume that the mere existence of remedial efforts eliminates the need for [OCWD] to exercise its own powers to address contamination . . . when MTBE either escapes remedial efforts ordered by other agencies or never becomes subject to such remedial efforts.").
The deposition of OCWD's chief hydrogeologist is illustrative on this point:
Q. And have you determined from any agency any action that you're seeking to accomplish by this lawsuit that they have told you they don't intend to accomplish through their oversight of the responsible parties?
A. That is almost an accurate statement. And I will just say that they (the RWQCB) have told me on numerous occasions that in cases where a plume has moved off site or has commingled with another plume, they feel very inadequate in being able to deal with those situations.
Q. And have they told you that, therefore, they are not going to pursue that result, the result of cleaning up those plumes?
A. They have told me they concede that's an area where the Orange County Water District may be better able to deal with those issues.
Herndon 1/10/06 Dep. at 406:3-19.
Further, OCWD notes that while the Regional Board does engage in spill-site remediation, no agency routinely remediates beyond spill sites. This last point effectively neutralizes the fourth primary jurisdiction factor. Whether or not OCWD were to apply to the Regional Board or other agencies, such application would not result in OCWD obtaining much of the relief that it seeks from this Court. Accordingly, it is of no import whether OCWD has made prior application to the agencies.
See Tr. at 107:16-108:8; Pl. Mem. at 9.
V. CONCLUSION
Based on my review of the unique facts applied to the Second Circuit's four primary jurisdiction factors, I am not persuaded that deference to state agencies is required or warranted in this instance. I therefore deny defendants' request to stay or dismiss certain of OCWD's claims. Defendants have presented no proof that the relief this Court may order will be substantially likely to "work at cross-purposes" with the relief that may be provided by state agencies.
Further, the issue of interference with the potential relief that might be ordered by state agencies should be addressed at the damages stage after a finding of liability. By that time, OCWD will have proposed concrete plans for relief, and defendants' concerns will be heard and reviewed in light of OCWD's specific proposals. In the meantime, nothing precludes defendants from cooperating with the state agencies to provide the type of remediation OCWD seeks — which remediation defendants argue the agencies are more than capable of providing.
As discussed in the briefs and at oral arguments, California law requires that OCWD's request for relief be specific and reasonably quantifiable. See Transwestern Pipeline Co. v. Monsanto Co., 46 Cal. App. 4th 502, 532-33 (Cal.Ct.App. 1996); Tr. at 105:8-23, 109:12-25.
For the foregoing reasons, defendants' motion is denied. The Clerk of the Court is directed to close this motion (docket #953).
SO ORDERED: