-SMS City of Lindsay v. Sociedad Quimica Y Minera De Chile S.A. et al, No. 1:2011cv00046 - Document 27 (E.D. Cal. 2011)
Court Description: ORDER GRANTING IN PART and DENYING IN PART Plaintiff's 17 Motion to Strike Pursuant to Rule 12(f) signed by District Judge Lawrence J. O'Neill on 6/20/2011. (Sant Agata, S)
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-SMS City of Lindsay v. Sociedad Quimica Y Minera De Chile S.A. et al Doc. 27 1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE EASTERN DISTRICT OF CALIFORNIA 7 8 CITY OF LINDSAY, CASE NO. CV-F-11-0046 LJO SMS 9 ORDER ON PLAINTIFF’S MOTION TO STRIKE PURSUANT TO RULE 12(f) Plaintiff, 10 11 12 13 vs. SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.; SQM NORTH AMERICA CORPORATION; Defendant. / 14 15 By motion filed on May 23, 2011, Plaintiff City of Lindsay (“Lindsay”) moves to strike 16 defendant SQM North America Corporation’s (“SQMNA”) counterclaim pursuant to Fed.R. Civ.P. 17 12(f). Defendant SQMNA filed an opposition to the motion on June 6, 2011. Lindsay filed a reply on 18 June 13, 2011. Pursuant to Local Rule 230(g), these motions were submitted on the pleadings without 19 oral argument, and the hearing set for June 20, 2011 was VACATED. Having considered the moving, 20 opposition and reply papers, as well as the Court’s file, the Court issues the following order. The issue 21 before the court is whether the counterclaim should be stricken on the basis of redundancy. 22 23 FACTUAL BACKGROUND This is an action by Lindsay against a fertilizer manufacturer for allegedly contaminating 24 Lindsay’s groundwater. SQMNA is a manufacturer and distributor of fertilizer products. Lindsay 25 alleges that perchlorate, a toxic substance, is contained in SQMNA’s fertilizer products. Lindsay 26 contends that the defendant’s perchlorate-containing fertilizer products were applied in the vicinity 27 of certain drinking water production wells owned and operated by Lindsay, and that the perchlorate 28 in those products has migrated through the subsurface and into the groundwater. Lindsay contends 1 Dockets.Justia.com 1 perchlorate now contaminates the water supply at levels exceeding regulatory standards. Lindsay 2 alleges that perchlorate has been detected in varying amounts at varying times in water extracted 3 from Lindsay’s existing wells. 4 Lindsay filed this lawsuit to recover compensatory and other damages, including all 5 necessary funds to reimburse the City for the costs of designing, constructing, installing, operating 6 and maintaining the treatment facilities and equipment required to comply with California safe 7 drinking water laws and to remove perchlorate from its drinking water supplies. The complaint 8 alleges three causes of action (1) product liability (design defect), (2) products liability (failure to 9 warn) and (3) negligence. 10 SQMNA filed an answer on January 5, 2011, asserting a general denial and thirty-eight 11 affirmative defenses. Some of the affirmative defense go to the cause of injury and the non-defective 12 nature of the SQMNA’s product: 13 Third Affirmative Defense 14 16 The City’s damages, if any, are barred, in whole or in part, by the City’s own actions or the actions of third parties, including but not limited to the City’s agents, that contributed to or were the sole cause of damages the City allege [sic] to have suffered. 17 Fourth Affirmative Defense 15 18 19 20 21 22 23 SQMNA’s conduct was not the cause of any injuries alleged by the City. Seventh Affirmative Defense The City suffered no losses or injuries that were proximately caused by SQMNA. Fifteenth Affirmative Defense The City’s causes of action are barred, in whole or in part, because the damages and losses alleged by the City, if any exist, were created by its own acts of negligence and unreasonable conduct, and not by the acts of SQMNA. 24 Thirty-first Affirmative Defense 25 SQMNA is entitled to total or partial indemnity from those individuals or entities who are responsible for the City’s injuries or damages, if any, in an amount in direct proportion to their relative culpability. 26 27 28 2 1 On May 6, 2001, SQMNA filed a counterclaim for declaratory relief. The declaratory relief 2 action seeks to adjudicate that Lindsay is the sole responsible party for the contamination and 3 SQMNA is not the legal cause of any injuries or damages Lindsay alleges to have suffered. 4 5 Lindsay moves to strike the counterclaim as redundant of SQMNA’s answer and affirmative defenses. 6 7 ANALYSIS AND DISCUSSION A. Standards for Motion to Strike 8 Fed. R. Civ. P. 12(f) empowers a court to strike from a pleading “any redundant, immaterial, 9 impertinent, or scandalous matter.” Motions to strike may be granted if “it is clear that the matter to 10 be stricken could have no possible bearing on the subject matter of the litigation.” LeDuc v. 11 Kentucky Central Life Ins. Co., 814 F.Supp. 820, 830 (N.D. Cal. 1992); Colaprico v. Sun 12 Microsystems, Inc., 758 F.Supp. 1335, 1339 (N.D. Cal. 1991). “[T]he function of a Rule 12(f) 13 motion to strike is to avoid the expenditure of time and money that must arise from litigating 14 spurious issues by dispensing with those issues prior to trial.” Sidney-Vinstein v. A.H. Robins Co., 15 697 F.2d 880, 885 (9th Cir. 1983); Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993), 16 rev’d on other grounds, Fogerty v. Fantasy, Inc., 510 U.S. 517, 114 S.Ct. 1023 (1994). “[A] motion 17 to strike may be used to strike any part of the prayer for relief when the damages sought are not 18 recoverable as a matter of law.” Bureerong v. Uvawas, 922 F.Supp. 1450, 1479, n. 34 (C.D. Cal. 19 1996). 20 B. 21 Redundancy of Counterclaim Lindsay argues that SQMNA’s counterclaim should be dismissed. The counterclaim is 22 redundant of SQMNA’s affirmative defenses. The counterclaim does not set out new claims but 23 merely reiterates SQMNA’s position that it should not be liable for Lindsay’s damages. Lindsay 24 argues that the counterclaim is wholly redundant and serves no useful purpose. 25 SQMNA argues the counterclaim is not redundant because it seeks relief that exceeds the 26 scope of the complaint. The issue of Lindsay’s sole negligence in causing the contamination of the 27 groundwater (and contamination different and separate from perchlorate) will not necessarily be 28 determined by the complaint. SQMNA further argues that unlike an affirmative defense, declaratory 3 1 relief provides more certainty and security with respect to rights, status, and other legal relations. 2 The declaratory relief will provide certainty as to whether Lindsay is responsible. In contrast, a 3 successful defense to the complaint based on the affirmative defenses alleged will only excuse or 4 limit SQMNA’s liability in the current matter. 5 A “redundant” matter consists of allegations that constitute a needless repetition of other 6 averments or which are foreign to the issue to be decided. Wilkerson v. Butler, 229 F.R.D. 166, 170 7 (E.D.Cal. 2005). “[W]here a plaintiff has alleged a substantive cause of action, a declaratory relief 8 claim should not be used as a superfluous ‘second cause of action for the determination of identical 9 issues' subsumed within the first.’” Jensen v. Quality Loan Service Corp., 702 F.Supp.2d 1183, 10 1189 (E.D. Cal.2010) (quoting Hood v. Superior Court, 33 Cal.App.4th 319, 324, 39 Cal.Rptr.2d 11 296 (1995)). Declaratory relief may be unnecessary where an adequate remedy exists under some 12 other cause of action. See Mangindin v. Wash. Mut. Bank, 637 F.Supp.2d 700, 707 (N.D.Cal.2009). 13 A dismissal of counterclaims as redundant is not warranted simply because they concern the 14 same subject matter or arise from the same transaction as the complaint. See Stickrath v. Globalstar, 15 Inc., 2008 WL 2050990, 4 (N.D.Cal. 2008). The proper inquiry is whether the counterclaims “serve 16 any useful purpose.” Pettrey v. Enterprise Title Agency, Inc., 2006 WL 3342633 at *3 (N.D.Ohio 17 2006) (citing Wright, Miller & Kane, 6 Federal Practice & Procedure 2d § 1406). A counterclaim 18 should be stricken “only when it is clear that there is a complete identity of factual and legal issues 19 between the complaint and the counterclaim.” Stickrath v. Globalstar, Inc., 2008 WL 2050990, 4. 20 Here, SQMNA’s declaratory relief counterclaim alleges the following issues in controversy: 21 a. Chilean fertilizer imported by SQMNA is not a defective product; 22 b. SQMNA has no liability to Lindsay for damages, response costs, or other costs 23 claimed in this action for defective product design arising out of the presence of 24 perchlorate in the groundwater; 25 c. SQMNA has no liability to Lindsay for damages, response costs, or other costs 26 claimed in this action for failure to warn arising out of the presence of perchlorate in 27 the groundwater; and 28 d. The direct cause, if any, of Lindsay’s damages are the actions and inactions of 4 1 Lindsay itself, and therefore Lindsay should be ordered to cleanup all groundwater 2 contamination to the extent any remediation is required. 3 e. The direct cause, if any, of Lindsay’s damages is the conduct of third parties whose 4 behavior Lindsay has permitted and condoned and whom Lindsay has sought not to 5 join in this litigation. To the extent that any damages have been suffered, the 6 proportionate share of those third parties costs should not be borne by SQMNA, 7 whose liability is severable. 8 The Court finds that the declaratory relief action contains some redundancy, but also 9 contains allegations that “serve a useful purpose.” Redundancy exists as to the first issue in 10 controversy: whether the fertilizer product is defective. The defective nature of the fertilizer will be 11 determined in the main complaint, because Lindsay claims strict liability based upon SQMNA’s 12 defective product. Therefore, the Court strikes this redundant issue from the declaratory relief 13 counterclaim. 14 Redundancy also exists as to the second and third issues in controversy: SQMNA has no 15 liability for damages. SQMNA’s liability for damages will also be determined in the main 16 complaint, because Lindsay seeks damages and SQMNA denies its product caused groundwater 17 contamination. Therefore, the Court strikes these redundant issues from the declaratory relief 18 counterclaim. 19 The fourth and fifth issues in controversy, however, are not redundant: whether Lindsay’s or 20 third parties’ conduct or products are responsible for the groundwater contamination. These issues 21 seek a declaration and determination that Lindsay and/or others caused the contamination. SQMNA 22 seeks an affirmative declaration that plaintiff caused the contamination. This determination is 23 different from that which possible in the main action. In the main action, if SQMNA prevails, the 24 result is that SQMNA will have been found not liable. The judgment will not determine who is the 25 responsible party for the groundwater contamination. SQMNA seeks such a determination, whether 26 Lindsay or third parties were the cause of the contamination. Thus, the Court finds that the 27 counterclaim is not entirely redundant and the non-redundant parts serve a useful purpose in this 28 5 1 litigation.1 These allegations will not be stricken. 2 C. 3 Prayer for Attorneys’ Fees Lindsay asks the Court to strike the SQMNA’s request for attorneys fees and costs on the 4 ground that the request is deficient as a matter of law. Lindsay argues that the request under 5 Cal.Code Civ.Proc §1021.5 is improper because there is not any benefit to the general public. 6 Lindsay argues that SQMNA’s individual financial stake in the litigation is motivating its 7 counterclaim. Lindsay argues that the counterclaim seeks to deprive the city of recovery of funds to 8 implement a treatment facility. 9 SQMNA requests attorney’s fees pursuant to Cal.Code Civ.Proc §1021.5, the private 10 attorney general statute. California Code of Civil Procedure § 1021.5 authorizes an “award of 11 attorneys’ fees to a successful party” in an action “which has resulted in the enforcement of an 12 important right affecting the public interest if: (a) a significant benefit, whether pecuniary or 13 nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity 14 and financial burden of private enforcement . . . are such as to make the award appropriate, and (c) 15 such fees should not in the interest of justice be paid out of the recovery, if any.” 16 A litigant’s personal interest must not be significant in the litigation. Fees are recoverable 17 “‘when the cost of the claimant's legal victory transcends his personal interest, that is, when the 18 necessity for pursuing the lawsuit placed a burden on the plaintiff ‘out of proportion to his individual 19 stake in the matter.’” Bowman v. City of Berkeley, 131 Cal.App.4th 173, 181, 31 Cal.Rptr.3d 447, 20 454 (2005), citing Woodland Hills Residents Assn., Inc. v. City Council, 23 Cal.3d 917, 941, 154 21 Cal.Rptr. 503 (1979). See Protect Our Water v. County of Merced, 130 Cal.App.4th 488, 496, 30 22 Cal.Rptr.3d 202 (2005) (significant public benefit where litigation prompted agency to improve 23 methods of creating and managing its CEQA records.) “A party can thus be denied fees where the 24 primary purpose in bringing suit was to pursue and protect its own property rights rather than to 25 further a significant public interest.” Bowman v. City of Berkeley, 131 Cal.App.4th at 181. “It is 26 1 27 28 In its reply, Lindsay argues SQMNA lacks Article III standing to assert a claim that other contaminants, and not percholorate, caused the contamination. (Doc. 23, Reply p. 2-3.) This Court does not address this argument. The motion currently before the Court is one made pursuant to Rule 12(f). The motion does not involve deficiencies pursuant to Rule 12(b). 6 1 within the trial court's discretion to deny attorneys' fees pursuant to section 1021.5 on the ground 2 that the plaintiff's personal stake in the outcome was not disproportionate to the burden of private 3 enforcement, even where the litigation enforced an important right and conferred a significant 4 benefit upon the public.” Satrap v. Pac. Gas & Elec. Co., 42 Cal.App.4th 72, 78, 49 Cal.Rptr.2d 348 5 (1996). 6 Here, SQMNA’s personal interest is the significant interest in the litigation. SQMNA seeks 7 to adjudicate, as between itself and others, the responsible party for perchlorate contamination. 8 Undoubtedly, there is a side public interest in the litigation. The public may learn who is 9 responsible. Nonetheless, the litigation is premised upon absolving SQMNA from liability, finger 10 pointing to Lindsay, and as candidly stated by SQMNA, force Lindsay to take responsibility so that 11 SQMNA will not be sued again. (Doc. 21, Opposition p. 8-9.) The declaratory relief action does 12 not seek enforcement of environmental laws, or seek any affirmative action as to Lindsay’s conduct, 13 other than the declaration of respective liabilities between Lindsay and SQMNA. This declaratory 14 relief action is motivated by SQMNA’s own pecuniary interests and opportunity for SQMNA to 15 leverage its position against Lindsay by claiming attorney’s fees. See e.g., Whitaker v. Countrywide 16 Financial Corp., 2010 WL 4537098, 4 (C.D. Cal. 2010) (striking plaintiffs' prayer for attorneys' fees 17 pursuant to Cal.Code Civ. Proc. § 1021.5); Medical Development Intern. v. California Dept. of 18 Corrections and Rehabilitation, 2010 WL 2077143, 8 (N.D.Cal. 2010) (striking claim for attorney 19 fees pursuant to 1021.5 where claims were more than sufficient financial interest “to encourage 20 private litigation to enforce the right.”) 21 The Court finds that the claim for attorney’s fees pursuant to Cal.Code Civ.Proc §1021.5 22 should be and is hereby stricken. This is based on this Court’s finding that the primary purpose in 23 bringing the countersuit was to pursue and protect SQMNA’s own property rights rather than to 24 further a significant public interest. 25 ///// 26 ///// 27 ///// 28 7 1 CONCLUSION AN ORDER 2 3 For the foregoing reasons, the Court GRANTS in part and DENIES in part the motion to strike: 4 1. 5 The Court STRIKES the redundant allegations in the declaratory relief claim as more fully set forth in this order. 6 2. 7 The Court STRIKES the claim for attorney’s fees pursuant to Code Civ.Proc. §1021.5. 8 3. The Court DENIES the motion as to all other allegations. 9 10 IT IS SO ORDERED. 11 Dated: b9ed48 June 20, 2011 /s/ Lawrence J. O'Neill UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8
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