Orange Cnty. Water Dist. v. Sabic Innovative Plastics United States, LLC
222 Cal. Rptr. 3d 83
Cal. Ct. App. 5th
2017

Background

  • Orange County Water District (District) investigated VOCs and perchlorate in the South Basin after detections in IRWD drinking well IRWD-3 (PCE/TCE in 1998; perchlorate in 2001); District spent ~ $1.5M and planned a multi‑phase remediation project costing millions more.
  • District sued numerous current/former site owners/operators alleging HSAA (Hazardous Substance Account Act), OCWD Act (Orange County Water District Act) costs, negligence, nuisance, trespass, and declaratory relief; many claims were resolved on summary judgment/bench trial for defendants.
  • Key legal disputes: (1) whether HSAA §25363(d) permits the District to seek indemnity/contribution when it is not itself a responsible party; (2) whether OCWD Act §8(c) permits recovery of investigatory costs as remediation costs; (3) statute of limitations for negligence (continuous accrual); and (4) whether the District has property/possessory rights in South Basin groundwater sufficient to support trespass or private nuisance.
  • Trial court: rejected District’s HSAA standing, held OCWD investigatory costs not recoverable, found negligence time‑barred, and ruled District lacked exclusive possessory property rights to maintain trespass/nuisance; judgments entered for many defendants.
  • Court of Appeal: reverses in part and affirms in part — holds HSAA allows statutory indemnity (following Alcoa), OCWD Act can cover investigatory/remediation‑planning costs, continuous accrual applies to negligence (so statute‑of‑limitations defense largely fails), and nuisance claims survive in most instances; trespass fails because District lacks the necessary possessory interest in the specific corpus of contaminated water.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
HSAA (§25363(d)) private indemnity standing District may seek contribution/indemnity for response costs even if not itself a responsible party (statutory indemnity) HSAA permits only traditional equitable indemnity requiring showing District is jointly liable Court: HSAA allows statutory indemnity; District can sue for reimbursement without proving it was a responsible party (follows Alcoa)
OCWD Act (§8(c)) recoverable costs District’s investigatory, planning, feasibility and interim‑treatment design costs are part of remedial action and therefore recoverable Defendants: recoverable costs are limited to physical cleanup; investigatory costs not recoverable Court: subdivision (b)/(c) include investigation/planning as remedial costs when tied to cleanup; triable issues remain as to many claimed costs
Negligence statute of limitations Continuous accrual: each wrongful/negligent act within series accrues its own limitations period; later negligent remediation acts can revive claims Defendants: District had actual/constructive knowledge >3 years before suit; claim time‑barred Court: continuous accrual applies; defendants failed to show complete time‑bar defense except GE Aviation (affirmed as to GE Aviation)
Trespass — possessory interest in groundwater District asserts usufruct/appropriative rights from recharge activities (and OCWD Act delegation) confer property/possession to sue for trespass Defendants: District lacks exclusive possession or ownership of groundwater; no possessory right to specific contaminated corpus Court: State’s/ District’s regulatory or delegated interests are non‑proprietary; even if District may have appropriative rights from recharge, those rights do not create a possessory interest in the specific contaminated water—trespass fails
Nuisance — property interest and special injury District’s appropriative / usufructuary water rights (from recharge) are property interests and support private (and public) nuisance claims Defendants: District lacks sufficient property interest or special injury; contamination not substantial/unreasonable Court: triable issues exist on appropriative rights and substantial/unreasonable interference; nuisance survives against most defendants (UCI exception on causation)

Key Cases Cited

  • Orange County Water Dist. v. Alcoa Global Fasteners, Inc., 12 Cal. App. 5th 252 (Cal. Ct. App. 2017) (statutory indemnity under HSAA; OCWD Act cost scope)
  • Carson Harbor Village, Ltd. v. Unocal Corp., 270 F.3d 863 (9th Cir. 2001) (elements of CERCLA private cost‑recovery)
  • United States v. Alcan Aluminum Corp., 964 F.2d 252 (3d Cir. 1992) (liability categories under CERCLA do not require defendant‑specific causation)
  • Kalamazoo River Study Group v. Menasha Corp., 228 F.3d 648 (6th Cir. 2000) (plaintiff need not show particular defendant caused release to recover)
  • United States v. Bestfoods, 524 U.S. 51 (U.S. 1998) (definition of "operator" under CERCLA)
  • Aryeh v. Canon Business Solutions, Inc., 55 Cal.4th 1185 (Cal. 2013) (continuous accrual doctrine for recurring wrongs)
  • State of California v. Superior Court, 78 Cal. App. 4th 1019 (Cal. Ct. App. 2000) (State's interest in groundwater is regulatory/nonproprietary)
  • City of Barstow v. Mojave Water Agency, 23 Cal.4th 1224 (Cal. 2000) (state/agency water interests distinguished between proprietary and regulatory)
  • Voggenthaler v. Maryland Square LLC, 724 F.3d 1050 (9th Cir. 2013) ("disposal" under CERCLA may occur even if material has not yet entered environment)
  • Boeing Co. v. Cascade Corp., 207 F.3d 1177 (9th Cir. 2000) (causal overdetermination doctrine under CERCLA)
  • Fullerton v. State Water Resources Control Bd., 90 Cal. App. 3d 590 (Cal. Ct. App. 1979) (elements of appropriation: intent, physical act, beneficial use)
  • City of Los Angeles v. City of San Fernando, 14 Cal.3d 199 (Cal. 1975) (re‑appropriation/recapture of imported water doctrine)
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