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Fireman's Fund Ins. Co. v. Lodi, Cal., City of

ELR Citation: 29 ELR 21161
Nos. No. S 98-1489 JFM, 41 F. Supp. 2d 1100/(E.D. Cal., 02/25/1999)

The court holds that the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) does not preempt a California city's comprehensive municipal environmental response and liability ordinance. An insurer challenged the constitutionality of the ordinance. The court first dismisses the insurer's claims against municipal officers, municipal attorneys, and a law firm working for the city because the claims are duplicative of the insurer's claims against the city. In addition, the court dismisses the remaining claims against the municipal officers, municipal attorneys, and the law firm because the defendants are entitled to qualified immunity as government officials performing discretionary duties. The court next holds that the insurer's claims are ripe for adjudication. The court also holds that the insurer has alleged a direct threat of injury sufficient to confer standing. The city's unconcealed plan to target insurers under the ordinance demonstrates the imminence of the threat. Further, the ordinance's specific provisions and their applicability to the insurer, the ordinance's recent enactment, the enforcement of the ordinance against parties whose status under the ordinance is identical to the insurer's, and indications that the ordinance will be enforced in the future are indicative that an actual controversy exists.

The court then holds that CERCLA does not preempt the field of state environmental regulation. CERCLA explicitly provides that it does not preempt any state from imposing additional liability or requirements with respect to the release of hazardous substances. The word "states" does not exclude municipalities, and CERCLA does not preclude states from explicitly or implicitly redelegating their authority to their political subdivisions. The court also holds that the ordinance and CERCLA do not conflict with each other because it is not physically impossible for the insurer to comply with the provisions of each. The court then abstains from ruling on whether the California Hazardous Substance Account Act (HSAA) preempts the ordinance. The state preemption question, which requires the interpretation of a local ordinance that enables the city to pay for hazardous waste remediation, is an area of serious local concern into which federal intrusion is undesirable. Further, if a state court determines that the ordinance is preempted by the HSAA, the ordinance would be void, and a federal court would not have to decide the insurer's federal Due Process, Equal Protection, and Contract Clause claims.

Counsel for Plaintiff
Terry J. Houlihan
McCutchen, Doyle, Brown & Enerson
Three Embarcadero Center, Ste. 1800, San Francisco CA 94111
(415) 393-2000

Counsel for Defendants
Adam Babich
Zevnik Horton Guibord McGovern Palmer & Fognani
77 W. Wacker Dr., Chicago IL 60601
(312) 977-2500