City of Los Angeles v. San Pedro Boat Works
635 F.3d 440
| 9th Cir. | 2011Background
- Berth 44 is owned by the City of Los Angeles and operated by its Board of Harbor Commissioners; City issued revocable permits for Berth 44 to operate a boatworks.
- Pacific American held Revocable Permits 936 and later 1076 for approximately ten months in 1969-1970; San Pedro Boat Works operated the boatworks during that period.
- Pacific American remained the named permittee for a time, but San Pedro Boat Works held the possessory interest and operated the facility; ownership of assets rested with San Pedro Boat Works and later transfers.
- In 1993, Pacific American’s assets and liabilities were acquired by BCI Coca-Cola; BCI Coca-Cola thus stood in Pacific American’s shoes for purposes of liability.
- Environmental contamination at Berth 44 was discovered starting in 1995, with remediation activities continuing into the early 2000s; City sought CERCLA and nuisance relief against BCI Coca-Cola and related parties.
- District court granted summary judgment for BCI Coca-Cola on CERCLA owner liability, nuisance, and denied leave to amend a contract claim; City appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Pacific American was an CERCLA owner of the Berth 44 boatworks | City contends Pacific American owned the facility via title or permits. | BCI Coca-Cola argues permittees possess only a possessory interest, not ownership. | No; permittee not an owner under CERCLA. |
| Whether Pacific American was an CERCLA operator through its subsidiary | City argues derivative operator liability via alter-ego theory. | Court had already held no operator liability due to lack of control; not appealed on this point. | Not reached; operator liability not established. |
| Whether holder of revocable permits can be an ‘owner’ under CERCLA | City urges that possession and control of assets via permits equate to ownership. | Permit holders have only a possessory interest; ownership remains with fee title owner. | Owner liability does not extend to permittees with only possessory interests. |
| Whether nuisance claims against Pacific American were properly dismissed | City contends knowledge or notice of contamination by Pacific American could support nuisance. | No evidence of actual knowledge or notice imputable to Pacific American; no alter-ego finding. | Summary judgment proper; no evidence of knowledge by Pacific American. |
| Whether the district court abused its discretion in denying leave to amend a contract claim | City sought to add breach of contract claim against Pacific American/BCI Coca-Cola. | Amendment would cause undue prejudice and require re-deposition and extensive discovery. | No abuse of discretion; denial affirmed. |
Key Cases Cited
- Long Beach Unified Sch. Dist. v. Dorothy B. Godwin Cal. Living Trust, 32 F.3d 1364 (9th Cir. 1994) (easement holder not an owner; look to common law for ownership in CERCLA.)
- United States v. Bestfoods, 524 U.S. 51 (S. Ct. 1998) (ownership and operator concepts; broad CERCLA liability framework.)
- Commander Oil Corp. v. Barlo Equip. Corp., 215 F.3d 321 (2d Cir. 2000) (five-factor de facto ownership test for lessees.)
- Auerbach v. Assessment Appeals Bd. No. 1., 137 P.3d 951 (Cal. 2006) (leasehold not ownership; distinction between possessory and fee simple estates.)
- Cal. v. Pacific Coast Joint Stock Land Bank of San Francisco v. Roberts, 108 P.2d 439 (Cal. 1940) (owner term; general notion of ownership in property law.)