Orange Co. Water Dist. v. Sabic Innovative Plastics
D070553
| Cal. Ct. App. | Aug 4, 2017Background
- Orange County Water District (District) sued multiple current and former site owners/operators in the South Basin for VOCs and perchlorate contamination, seeking relief under the HSAA, the OCWD Act, and common-law negligence, nuisance, trespass, and declaratory relief.
- District conducted investigations and installed monitoring wells (Phase 1) and spent ~$1.5 million developing the South Basin Groundwater Protection Project but had not constructed or operated a treatment system by trial.
- Defendants obtained various rulings on summary judgment / adjudication and a limited bench trial; the trial court dismissed many claims, concluding (inter alia) the District could not sue under HSAA and lacked property/possessory interests for trespass and nuisance.
- On appeal the court (1) held the HSAA permits statutory indemnity claims even when plaintiff is not itself a liable party, (2) treated OCWD Act recoverable costs broadly to include investigatory costs integral to remediation planning, (3) applied continuous-accrual to the negligence claim, and (4) analyzed whether the District’s asserted groundwater interests (state delegation, regulatory powers, or recharge-based appropriation) supported trespass and nuisance.
- Key factual disputes relevant on remand: causation/site-specific contributions to contamination for several defendants; whether District’s recharge/importation activities create appropriative water rights (intent to reappropriate); and whether certain defendants’ evidence established absence of liability.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| HSAA: ability to sue for "contribution or indemnity" | District: HSAA authorizes statutory indemnity/reimbursement for any person who has incurred response/corrective costs, even if not jointly liable. | Defendants: HSAA permits only traditional equitable indemnity/contribution (requires joint liability or judgment against plaintiff). | Court: Affirmed Alcoa interpretation — HSAA allows statutory indemnity; District may sue for reimbursement without proving traditional equitable indemnity. |
| OCWD Act recoverable costs (§8) | District: investigatory and planning costs (monitoring wells, feasibility/design) are part of remedial action and recoverable under §8(c). | Defendants: §8(c) limits recovery to actual cleanup/remediation; investigatory costs are excluded. | Court: Reversed narrow view — investigatory/planning costs integral to remediation can be recoverable; triable issues exist. |
| Negligence: statute of limitations / continuous accrual | District: negligence alleged as a series of continuing/recurring wrongful acts; continuous accrual applies so later wrongful acts within 3 years preserve claims. | Defendants: District had actual/inquiry notice well before suit; claims are time-barred. | Court: Continuous-accrual applies to negligence here; defendants failed to show all actionable wrongs occurred outside limitations (except GE Aviation, whose facts established a complete defense). |
| Trespass / Nuisance: property interest in groundwater | District: asserts property/usufructuary rights in groundwater via (a) state delegation under OCWD Act, (b) District regulatory powers, and (c) recharge/importation (appropriative) rights — supporting trespass and nuisance. | Defendants: State/delegated/regulatory rights are non-proprietary; District lacks possessory interest to support trespass; nuisance fails for lack of property interest/special injury. | Court: State delegation/regulatory powers do not create proprietary possessory rights; recharge-based appropriative rights remain triable (intent to reappropriate not developed), but even if appropriative rights exist they do not establish a possessory interest sufficient for trespass on these facts; nuisance claim may proceed (property-like interest suffices). |
Key Cases Cited
- Alcoa Global Fasteners, Inc. v. Orange County Water Dist., 12 Cal.App.5th 252 (Cal. Ct. App.) (statutory indemnity under HSAA; OCWD Act costs analysis)
- Carson Harbor Village, Ltd. v. Unocal Corp., 270 F.3d 863 (9th Cir.) (elements of private cost‑recovery action under CERCLA/analogous state statute)
- United States v. Alcan Aluminum Corp., 964 F.2d 252 (3d Cir.) (CERCLA liability categories are site‑based; plaintiff need not prove defendant caused release)
- United States v. Bestfoods, 524 U.S. 51 (U.S. Supreme Court) (definition of "operator" for CERCLA liability)
- Aryeh v. Canon Business Solutions, Inc., 55 Cal.4th 1185 (Cal. 2013) (continuous‑accrual doctrine explained)
- State of California v. Superior Court, 78 Cal.App.4th 1019 (Cal. Ct. App.) (State’s interest in groundwater is regulatory, not proprietary)
- City of Barstow v. Mojave Water Agency, 23 Cal.4th 1224 (Cal. 2000) (confirming State’s role and water‑rights frameworks)
- Voggenthaler v. Maryland Square LLC, 724 F.3d 1050 (9th Cir.) (definition of "disposal" under CERCLA includes acts that may lead to environmental entry)