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Nixon-Egli Equip. Co. v. John A. Alexander Co.

ELR Citation: 27 ELR 20584
Nos. CV 95-2269, 949 F. Supp. 1435/(C.D. Cal., 08/13/1996)

The court holds that no statute of limitations applies to citizen suits under the Resource Conservation and Recovery Act (RCRA) that do not seek civil penalties and that defendants bear the burden of proof on the applicability of the petroleum exclusion under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The current owner of a contaminated site sued its prior owners and developers under CERCLA, RCRA, and the California Hazardous Substance Account Act for cleanup of contamination at the site, and under state common law for damages for future subsidence. The court first grants the current owner leave to amend its complaint to add a fraud claim and a prayer for punitive damages and to drop its negligence claims. The court next dismisses the RCRA claims against all but one of the developers due to improper pre-filing notice.

The court holds that with the exception of a RCRA suit seeking civil penalties, the line of cases applying to RCRA citizen suits 28 U.S.C. §2462's five-year statute of limitations for actions "for the enforcement of any civil fine, penalty, or forfeiture" is wrong. A RCRA action only seeking an order to compel other parties to help with cleanup is not akin to an action seeking a civil fine or penalty. Because the present action does not seek civil penalties, the court rejects the developers' argument that §2462 limits the time within which the current owner's action can be brought. The court next holds that CERCLA does not provide the applicable statute of limitations for RCRA actions, because RCRA is not a cost recovery statute like CERCLA. Given the U.S. Supreme Court's decision that RCRA only comes into play if there is a present danger, it is likely that Congress did not intend for courts to apply any statute of limitations to such actions. The court holds that there is no statute of limitations applicable to RCRA causes of action that do not seek civil penalties and that the most likely defense would be laches. Because the developers have not raised a laches defense, the court denies their motion for partial summary judgment on the RCRA claim.

The court next holds that the developers bear the burden of proof on the applicability of the CERCLA petroleum exclusion. Although the exclusion is part of the definition of "hazardous substance," and the current owner has the burden of showing that there is a hazardous substance, the exclusion is correctly characterized as a statutory exception. The court holds that expert testimony that the levels of lead on the property exceeded that found naturally in crude oil, and that the lead might be an additive, raises a genuine issue of material fact as to whether the lead contamination was from the crude oil and therefore within the exclusion.

The court next grants the developers partial summary judgment on the current owner's state-law claim for damages for future subsidence from allegedly inadequate fill material that the developers used when grading the property. The complaint did not put the developers on notice that there is a claim for nuisance or trespass arising from the fill. The court refuses to strike an expert's report on the subject, because the expert explained the basis for his opinion and the developers suffered no prejudice. California's 10-year statute of limitations for construction defects does not bar the action, because the developers owned the property when the allegedly defective grading was done. The court also holds that the claim cannot go forward because to do so would invite the jury to engage in wholesale speculation as to the amount of damages.

Counsel not available at this printing.