United States v. Sierra Pacific Indus.

879 F.Supp.2d 1128

UNITED STATES of America, Plaintiff,

v.SIERRA PACIFIC INDUSTRIES; et al., Defendants.

No. CIV S–09–2445 KJM–EFB.

United States District Court, E.D. California.

June 4, 2012.

Todd A. Pickles, Francis Neil MacDonald, United States Attorney's Office, Sacramento, CA, Glen Frederick Dorgan, Govt, Kelli L. Taylor, Govt, Richard M. Elias, Govt, United States Attorney's Office, Fresno, CA, for Plaintiff.

Daniel C. Kim, Katherine Elizabeth Underwood, Richard Stone Linkert, Matheny Sears Linkert & Long, LLP, Annie Smith Amaral, William Ross Warne, Meghan M. Baker, Michael Aaron Schaps, Michael John Thomas, Downey Brand LLP, Lori J. Gualco, Gualco Law, Phillip R. Bonotto, Law Offices of Rushford & Bonotto, LLP, Sacramento, CA, Steven P. Ragland, John W. Keker, Keker & Van Nest, LLP, San Francisco, CA, Denise Jarman, The Law Office of Denise Jarman, Pasadena, CA, for Defendants.

ORDER

KIMBERLY J. MUELLER, District Judge.

This matter comes before the court on plaintiff's motion for partial summary judgment on affirmative defenses. (ECF 351.) This matter was heard on February 10, 2012; Kelli Taylor appeared for plaintiff and William Warne appeared for defendants. For the following reasons, plaintiff's motion is hereby granted in part and denied in part.

I. PROCEDURAL HISTORY

Plaintiff filed the original complaint in this case on August 31, 2009. (ECF 1.) On May 26, 2010, plaintiff filed the operative second amended complaint against defendants Sierra Pacific Industries (“SPI”); W.M. Beaty and Associates, Inc. (“Beaty”); Eunice E. Howell individually and doing business as Howell's Forest Harvesting Company (together, “Howell”); and Landowners. ¹ (ECF 53 ¶¶ 5–8.) The second amended complaint alleges seven (7) causes of action: 1) negligence against all defendants; 2) liability under the Fire Liability Law, California Health & Safety Code §§ 13007– 13009.1 & Civil Code §§ 3287 & 3288 against all defendants; 3) negligence and negligence per se under 14 Cal.Code Regs. § 938.8 & the Fire Protection Plan against all defendants; 4) trespass by fire against all defendants; 5) negligent supervision against SPI, Beaty, landowners, and Eunice Howell; 6) negligent hiring against SPI, Beaty, and landowners; and 7) interest and penalties against all defendants. ( Id.)

Beaty and Landowners filed their answers to the second amended complaint on June 10, 2010 (ECF 54 & 55 respectively); Howell and SPI filed their answers to the second amended complaint on June 15, 2010 (ECF 56 & 57 respectively).

Plaintiff filed the present motion for partial summary judgment on January 12, 2012. (ECF 351.) Defendants filed their joint opposition on January 27, 2012. (ECF 384.) ² Plaintiff filed its reply on February 3, 2012. (ECF 392.)

II. ANALYSISA. Standard

A court will grant summary judgment “if ... there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The “threshold inquiry” is whether “there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).³

The moving party bears the initial burden of showing the district court “that there is an absence of evidence to support the nonmoving party's case.” Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The burden then shifts to the nonmoving party, which “must establish that there is a genuine issue of material fact ....” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). In carrying their burdens, both parties must “[cite] to particular parts of materials in the record [or show] that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support that fact.” Fed. R. Civ. P. 56(c)(1); see also Matsushita, 475 U.S. at 586, 106 S.Ct. 1348 (“[the nonmoving party] must do more than simply show that there is some metaphysical doubt as to the material facts”). Moreover, “the requirement is that there be no genuine issue of material fact.... Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson, 477 U.S. at 247–48, 106 S.Ct. 2505.

In deciding a motion for summary judgment, the court draws all inferences and views all evidence in the light most favorable to the nonmoving party. Matsushita, 475 U.S. at 587–88, 106 S.Ct. 1348;Whitman v. Mineta, 541 F.3d 929, 931 (9th Cir.2008). “Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.’ ” Matsushita, 475 U.S. at 587, 106 S.Ct. 1348 (quoting First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 289, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968)).

B. Application

Plaintiff seeks summary judgment on the affirmative defenses of recoupment, contributory negligence, and failure to mitigate pleaded in the second amended answers by defendants SPI (ECF 57 at 16 (failure to mitigate, comparative fault, and recoupment)), Beaty (ECF 54 at 12 (contributory negligence) & 14 (failure to mitigate)), and Howell (ECF 56 at 10 (comparative negligence) & 11 (failure to mitigate)). Plaintiff assumes for purposes of this motion that the facts alleged by defendants in pleading their affirmative defenses are true: specifically that the Forest Service's policy of suppressing fires led to an accumulation of fuels and the Forest Service did not take reasonable steps to reduce excessive fuel loads, and that the lookout at the Red Rock Lookout tower was distracted and did not spot and report the fire when it became visible. (Mot. at 3–4.)

1. Recoupment

Plaintiff argues that sovereign immunity protects it from defendants' affirmative defense of recoupment flowing from the United States Forest Service's forest mismanagement. (Mot. at 15–17.) It concedes that the Federal Tort Claims Act (“FTCA”) operates as a waiver of sovereign immunity for counter-claims, but argues the discretionary function exception shields it from liability. ( Id. at 15–16). Defendants counter that the affirmative defense of recoupment is authorized under a waiver of sovereign immunity completely independent of the FTCA. (Opp'n at 5.) Defendants recognize that recoupment must arise from the same transaction or occurrence as implicated by plaintiff's suit, among other things. ( Id.) In reply, plaintiff argues that neither forest mismanagement nor the failure of the Red Rock Lookout to spot the fire arise out of the same transaction or occurrence as the genesis of the Moonlight Fire. Reply at 2–3. The court approves this observation; this finding resolves the question without a resort to the doctrine of sovereign immunity.

“In modern practice, the recoupment has been replaced by the compulsory counterclaim.” Black's Law Dictionary (9th ed.2009); see also F.D.I.C. v. F.S.S.S., 829 F.Supp. 317, 320 (D.Alaska 1993) (“claims for recoupment are compulsory counterclaims under Fed. R. Civ. P. 13(a)”). Under Federal Rule of Civil Procedure 13(a)(1)(A), a compulsory counterclaim is one that “arises out of the transaction or occurrence that is the subject matter of the opposing party's claim ....” The Ninth Circuit has adopted a “flexible approach” to evaluating whether the claims arise out of the same transaction or occurrence, which calls on the court “ ‘to analyze whether the essential facts of the various claims are so logically connected that considerations of judicial economy and fairness dictate that all the issues be resolved in one lawsuit.’ ” Pochiro v. Prudential Ins. Co. of America, 827 F.2d 1246, 1249 (9th Cir.1987) (quoting Harris v. Steinem, 571 F.2d 119, 123 (2d Cir.1978)); see Hunt v. Bankers Trust Co., 689 F.Supp. 666, 672 (N.D.Tex.1987) (“recoupment is a demand arising out of the same transaction as the plaintiff's claim”). One consideration is whether “ ‘the facts necessary to prove the two claims substantially overlap ....’ ” Competitive Techs. v. Fujitsu Ltd., 286 F.Supp.2d 1118, 1135 (N.D.Cal.2003) (quoting Pochiro, 827 F.2d at 1251). If the counterclaim “arises from the same aggregate set of operative facts as the initial claim, in that the same operative facts serve as the basis of both claims,” it is a compulsory counterclaim. In re Pegasus Gold Corp., 394 F.3d 1189, 1196 (9th Cir.2005).

None of the bases defendants assert for their affirmative defense of recoupment are logically connected to the origin of the Moonlight Fire, nor have defendants explained how the facts underlying their defenses “substantially overlap” with the facts surrounding the origins of the Moonlight Fire. As it is undisputed that the fire began on private land (Statement of Undisputed Facts ¶ 15, ECF 392–1), defendants' claims arising from plaintiff's acts or omissions after the fire began or years before it ignited are not compulsory counter-claims. As they are not compulsory counter-claims, there has been no waiver of sovereign immunity.

2. Comparative Negligence ⁴

“ ‘Contributory negligence is the conduct on the part of the plaintiff which falls below the standard to which he should conform for his own protection, and is a legally contributing cause co-operating with the negligence of the defendant in bringing about the plaintiff's harm.’ ” Gyerman v. U.S. Lines Co., 7 Cal.3d 488, 500, 102 Cal.Rptr. 795, 498 P.2d 1043 (1972) (quoting Restatement (Second) of Torts § 463). “A plaintiff is required to exercise only that amount of care which would be exercised by a person of ordinary prudence in the same circumstances.” Id. at 500–01, 102 Cal.Rptr. 795, 498 P.2d 1043 (citation omitted).

Plaintiff contends defendants' affirmative defense of comparative negligence fails because...