Greenfield MHP Assocs., L.P. v. Ametek, Inc.

GREENFIELD MHP ASSOCIATES, L.P., et al., Plaintiffs, v. AMETEK, INC., a Delaware corporation;SENIOR OPERATIONS, LLC, a limited liability company;and DOES 1 through 100, inclusive, Defendants.

Case No.: 3:15-cv-01525-GPC-AGS

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

April 12, 2018

ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR SUMMARY JUDGMENT

[ECF No. 135]

Before the Court is Defendant Ametek, Inc.'s motion for summary judgment. (ECF No. 135.) The motion is fully briefed. For the reasons set forth below, the Court GRANTS the motion in part, to the extent that Ametek argues that Plaintiffs cannot obtain compensatory damages based on future remediation costs under the circumstances of this case. This case will move forward, however, with the understanding that if Plaintiffs prevail at trial in establishing Ametek's liability, the Court will fashion the appropriate remedy.

I. Background

In this case, owners of three mobile home parks—Greenfield, Villa Cajon, and Starlight—sue Ametek, Inc., and Senior Operations, LLC, over contamination of Plaintiffs' property resulting from a release of toxic chemicals at a neighboring manufacturing facility. The parties have offered the following relevant evidence into the summary judgment record.

Prior to 1968, Straza Industries owned an aerospace parts manufacturing facility (the "Facility") at 790 Greenfield Drive in El Cajon, California. During that time Straza constructed a redwood-lined, subsurface storage sump tank (the "pit") at the Facility to collect and store solvents and other chemicals. (ECF No. 135-16 at 2418-19.¹) Straza did not construct anything at the bottom of the pit; rather, the pit "was placed on hardpan soil comprised of rock and decomposed granite." (ECF No. 155-23 at 581.)

Ametek purchased Straza—and the Facility—in 1968 and continued to operate the Facility until 1988. (ECF No. 135-5 at 269.) During that time, Ametek collected waste paint, paint thinners, epoxies, and solvents in the pit. (ECF No. 135-16 at 2393.) This waste contained chemicals including, but not limited to, 1,1,1-Trichloroethane (1,1,1-TCA), Tetrachloroethene (PCE), and Trichloroethylene (TCE), all of which are volatile organic compounds. (ECF No. 155-18 at 385.) In 1983, Ametek closed the sump. (ECF No. 135-6 at 389.)

Plaintiffs' properties are located west and downgradient of the Facility. Starlight is adjacent to a portion of the Facility's western border, and Villa Cajon adjoins most of Starlight's western border. Also adjoining the Facility's western border, and south of Starlight, is Magnolia Elementary School ("MES"). Greenfield adjoins the western border of MES and the southern borders of Starlight and Villa Cajon. A map showing the location of these properties can be found at ECF No. 155-35 at 1121.

At some point prior to Ametek's closing the pit, the waste breached the pit and leaked into the surrounding ground. (ECF No. 155-5 at 38; ECF No. 155-13 at 253; ECFNo. 155-14 at 275.) By 2003, more than 500,000 gallons of liquid waste had been discharged into the surrounding soil and water. (ECF No. 155-15 at 301.) This contamination produced a plume traveling downgradient (i.e., following the direction of the groundwater flow, ECF No. 155-5 at 97), extending beyond the Facility boundaries and into the soil and groundwater under MES, Greenfield, Starlight, and Villa Cajon. (ECF No. 155-17 at 343-44; ECF No. 155-18 at 387; ECF No. 155-36 at 1147-48.) One of the major risks created by the plume is "vapor intrusion," which poses health risks so severe that the school district governing MES closed MES for a year. (ECF No. 155-18 at 388-89; ECF No. 155-18 at 408.) Testing in 2017 performed inside structures on Plaintiffs' properties indicated several instances of "above-benchmark" level of cancer risks. (ECF No. 155-37 at 1176-77.) According to Plaintiffs' expert Anthony Brown, if the plume is left unremediated, it could persist beneath Plaintiffs' properties for 185 years. (ECF No. 155-24 at 632-33.)

In 1986, Ametek hired environmental consultant ERM to complete an environmental investigation into the sump. (ECF No. 155-6 at 109.) Early sampling of the surrounding area indicated that the groundwater contained up to 62,000 parts per billion TCE. (ECF No. 155-16 at 314.) In 1988, Ametek—in consultation with the San Diego County Department of Environmental Health—excavated the sump and 150 cubic yards of surrounding soil. (ECF No. 135-6 at 318-21; ECF No. 135-6 at 415.) It was observed around that time that "groundwater was draining into the disposal pit through a fracture within the bedrock" that formed the bottom of the pit. (ECF No. 155-23 at 582.) The same year, Ametek spun off a new company named Ketema, which acquired several Ametek assets including the Facility. (ECF No. 135-14 at 2035.)

In 1998, with the approval of the California Regional Water Quality Control Board² (the "RWQCB") Senior Flexonics, Inc. acquired the Facility. (ECF No. 135-16 at2379-90.) At the same time, the RWQCB issued a Cleanup and Abatement Order (the "1998 CAO") naming Ametek and Ketema as the "responsible parties" of the contamination plume. (ECF No. 135-5 at 203-07.) The 1998 CAO ordered Ametek and Ketema to submit, inter alia, a final groundwater site assessment, a feasibility study, a groundwater management plan, and a remedial action plan ("RAP"). (Id. at 204-05.) Finding Ametek and Ketema's³ submissions inadequate and unsatisfactory, the RWQCB issued another CAO in 2002 (the "2002 CAO"). (ECF No. 155-13 at 268-72.) At the same time, Ametek also engaged in mediation with the RWQCB. (ECF No. 155-18 at 467.) In 2004, the RWQCB issued notices of violation against Ametek and Ketema asserting that the two companies failed to adhere to their obligations under the RWQCB's orders. (ECF No. 155-19 at 471-505.) In 2008, the RWQCB filed an Administrative Civil Liability Complaint against Ametek.⁴ (ECF No. 155-20 at 507-08.) The following year, the RWQCB and Ametek reached a settlement in which Ametek agreed to pay a total of $1,095,000.00 for its violations of the 2002 CAO. (ECF No. 155-21 at 548.) According to the agreement, Ametek would pay $600,000 immediately, but could satisfy the remaining portion of its obligation by adhering to a new Cleanup Abatement Order (the "2009 CAO")—which named Ametek as the only responsible party—and implementing a RAP. (Id.)

In 2012, Ametek began remedial activities by constructing pump-and-treat ("P&T") systems "utilizing existing groundwater monitoring wells as extraction wells along the western property line separating the Ametek Facility from MES and []Starlight." (ECF No. 155-24 at 610.) Ametek expanded the P&T system in 2015 "to include extraction wells on the MES property along the western and northern property lines separating MES from" Greenfield at Starlight, respectively. (Id.) The P&T system is intended to address the "core-strength" of the plume. (Id.) In 2015, Ametek conducted an in-situ chemical oxidation ("ISCO") remediation test by injecting a potassium permanganate solution into the groundwater at monitoring well locations at the Facility. (Id.) An expansion of the ISCO system to other areas of the Facility to address the core-strength of the plume is currently in progress. (Id.) There has been no remediation action taken to address groundwater contamination that is less than 1,000 ug/L TCE, which is roughly 200 times greater than the 5 ppb maximum contaminant level for drinking water set by the RWQCB. (Id. at 611, 638.)

The RWQCB confirmed in a letter to Ametek in May 2017 that Ametek had completed its RAP implementation obligations under the settlement. (ECF No. 155-36 at 1132.) The RWQCB therefore waived the remainder of Ametek's financial liability under the settlement agreement. (Id.) In that letter, the RWQCB stated that it was "transferring lead regulatory oversight of this project to the Department of Toxic Substances Control (DTSC),"⁵ but that "Ametek is still required to comply with all directives" set forth in the 2009 CAO. (Id.) According to Brown, groundwater remediation between 2012 and 2016 using a P&T system has removed between 3.4% and 6.7% of the total contaminant mass of the plume. (ECF No. 155-23 at 603.)

As described in his expert report, Brown prepared a feasibility study "to evaluate various remedial alternatives to address groundwater contamination beneath the MHPs [mobile home parks]." (ECF No. 155-24 at 622.) He concluded that P&T "withtreatment using GAC [granular activated carbon] for chlorinated VOCs and AOP [advanced oxidation process] for 1,4-dioxane" was the preferred remedial approach. (Id.) Brown proposes P&T systems for each park property "to allow the MHP owners to control the remediation at their property." (Id.) Under this approach, "active groundwater pumping would proceed for between 11.7 and 13.6 years . . . followed by five years of post-remediation monitoring and three years of post-closure monitoring." (Id.) In all, according to Brown, full remediation under this approach could occur in approximately 20 years. Under an approach using separate P&T systems at each property, full remediation at Greenfield would cost $8,464,264; at Villa Cajon $7,441,965; and at Starlight $7,934,907—a total of $23,841,136. (Id. at 623, 637.) If the parks implemented a collective remedy, however, the total cost could be approximately five to six million dollars cheaper. (ECF No. 155-17 at 382.)

Plaintiffs assert that Ametek's current remediation plan "does not include any remediation activities on Plaintiffs' MHP properties" or address the contamination of Plaintiff's properties. They also assert that Ametek has "never proposed remediation measures on Plaintiff's [MHP] properties." (ECF No. 155-1 at 110.) The relevant evidence in the record Plaintiffs cite for these propositions consists of the following. Hydrogeology expert Thomas Johnson testified at his deposition that he was not aware of any plans to...