268 F. Supp. 3d 1029
N.D. Cal.2017Background
- Plaintiff California Sportfishing Protection Alliance sued The Shiloh Group, LLC and Thomas Nelson under the Clean Water Act (CWA), alleging the defendants own/operate a 31‑acre industrial park whose stormwater conveyances discharge polluted runoff associated with tenants’ industrial activities.
- Plaintiff alleged (1) permit‑exceedance claims under Defendants’ coverage by California’s statewide industrial General Permit and (2) alternatively that Defendants discharged stormwater associated with industrial activity without required NPDES coverage; plaintiff served two 60‑day notices before filing.
- Defendants submitted a Notice of Termination (NOT) dated November 7, 2016 and letters from regulators indicating termination/approval, arguing the suit was moot because they were no longer covered by the General Permit when suit was filed; they also argued plaintiffs failed to state a claim because defendants are passive landlords.
- The magistrate judge considered the proposed First Amended Complaint (FAC), took judicial notice of some administrative records (but not disputed facts therein), and treated the jurisdictional mootness challenge as a factual attack permitting consideration of extrinsic evidence.
- The court denied the motion to dismiss (both for mootness and for failure to state a claim) and granted plaintiff leave to file the FAC, finding disputed facts on the NOT/effective termination date and that, at the pleading stage, allegations that defendants own, operate, maintain, and control the facility are sufficient to state CWA liability theories.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Mootness (were claims based on permit noncompliance moot when NOT allegedly effective before filing?) | The NOT was invalid or, if valid, had an effective date after filing; disputes leave live controversy. | The November 7, 2016 NOT terminated permit coverage before suit, rendering permit‑based claims moot. | Denied dismissal for mootness: defendants failed to meet Gwaltney heavy burden because material facts (validity/effective date of NOT) are disputed. |
| Liability of owner/operator who does not itself perform industrial activities | Defendants own/operate/control common stormwater infrastructure and thus can be liable for discharges they convey/control. | As passive landlords, defendants cannot be held liable for tenants’ industrial discharges. | At pleading stage, FAC plausibly alleges owner/operator control; Ninth/Tenth Circuit precedent allows liability where entity controls point source conveying pollutants. |
| Sufficiency of second 60‑day notice for alternative claim (discharge without permit) | Second notice sufficiently identified alleged violations, location, dates, and responsible parties to allow correction. | The second notice was too vague and failed to match the FAC’s alternative theory. | Notice was sufficient under 40 C.F.R. § 135.3(a) and Ninth Circuit precedents; alternative pleading permitted. |
| Leave to amend to add FAC and alternative permit‑absence claim | Leave should be granted; FAC adds facts about control and an alternative theory. | Defendants argued futility, notice insufficiency, and contradictions in alternative pleading. | Leave granted: no undue prejudice or futility shown; alternative and inconsistent pleadings allowed at this stage. |
Key Cases Cited
- Nat. Res. Def. Council, Inc. v. County of Los Angeles, 673 F.3d 880 (9th Cir.) (CWA imposes liability on entities that convey pollutants; Act does not distinguish between originators and conveyers)
- Sierra Club v. El Paso Gold Mines, 421 F.3d 1133 (10th Cir.) (owners of land/point sources can be liable for discharges from those point sources even if they did not generate the pollutants)
- Gwaltney of Smithfield, Ltd. v. Chesapeake Bay Found., Inc., 484 U.S. 49 (Supreme Court) (citizen suits cannot proceed for wholly past violations; defendant bears heavy burden to show no reasonable expectation of recurrence)
- Ecological Rights Found. v. Pacific Gas & Electric Co., 713 F.3d 502 (9th Cir.) (discusses regulation of stormwater under CWA and applicability where discharge falls into enumerated categories)
- Hallstrom v. Tillamook County, 493 U.S. 20 (Supreme Court) (the 60‑day notice is a mandatory condition precedent to citizen suits under § 505)