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City of Seattle v. Monsanto Co.

United States District Court, W.D. Washington, Seattle

February 22, 2017

CITY OF SEATTLE, a municipal corporation located in the County of King, State of Washington, Plaintiff,
v.
MONSANTO COMPANY, et al., Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT

          ROBERT S. LASNIK UNITED STATES DISTRICT JUDGE.

         This matter comes before the Court on defendants' motion to dismiss. Dkt. # 34. Plaintiff, the City of Seattle (“Seattle”), alleges that defendant Monsanto Company (“Monsanto”) contaminated city water with toxic chemicals and argues that Monsanto - along with its successor corporations, also named as defendants - should bear the cost of cleaning up that contamination. Defendants move to dismiss, contending that Seattle's claims are procedurally and substantively deficient. Having reviewed the materials submitted by the parties, [1] and having heard oral argument on the motion, the Court finds as follows.

         BACKGROUND

         Polychlorinated biphenyls (“PCBs”) are synthetic chemical compounds that were used in the production of a wide variety of industrial and commercial products - ranging from capacitors to paint to potato chip fryers - until January 1979, when Congress banned their manufacture and use through the Toxic Substances Control Act. Dkt. # 31, ¶¶ 1, 3, 4, 76-77. By that time, PCBs were known to be toxic to humans and animals and known to contaminate the environment by readily leaching into surrounding materials, as well as air, soil, and water. Dkt. # 31, ¶¶ 3, 4, 41, 61-67, 72-75.

         Since then, evidence of PCBs' toxicity has only increased: PCBs appear to affect the immune system, the nervous system, the reproductive system, and the endocrine system; most recently, research has linked PCBs to human cancer. Dkt. # 31, ¶¶ 42-53. Humans are exposed to PCBs by eating, breathing, or touching contaminated matter. Dkt. # 31, ¶ 43. Children are particularly vulnerable to the toxic effects of PCBs. Dkt. # 31, ¶ 52.

         From 1935 to 1979, Monsanto[2] was the sole manufacturer of PCBs in the United States. Dkt. # 31, ¶¶ 3, 29, 38. Monsanto trademarked its PCBs as “Aroclor, ” Dkt. # 31, ¶¶ 3, 38, and promoted them for use in a wide range of industrial and household goods, including electrical equipment, paint, sealants, food cookers, furnaces, floor wax, insecticides, lubricants, moisture-proof coatings, papers, asphalt, leather adhesive, and stucco. Dkt. # 31, ¶¶ 39, 76-78. Though Monsanto was aware of PCBs' toxicity and propensity to leach, it denied or misrepresented those facts to government investigators. Dkt. # 31, ¶¶ 80-83. Monsanto continued to manufacture, promote, and profit from its PCBs. Dkt. # 31, ¶¶ 54-72, 76-78.

         Today, PCBs contaminate streets, drainage systems, and waterways within Seattle. Dkt. # 31, ¶¶ 5-14. In particular, PCBs have been detected in the drainage systems connected to the East and Lower Duwamish Waterways; due to their contamination, those waterways are listed on the U.S. Environmental Protection Agency's (“EPA”) National Priorities List as Superfund Sites. Dkt. # 31, ¶¶ 10-14. Since the late 1990s, the EPA, the Washington Department of Ecology, King County, private entities, and Seattle itself have conducted a number of investigations to determine the extent of the contamination. In December 2000, several of these entities voluntarily entered into an Administrative Order on Consent requiring investigation and development of remedial alternatives. Dkt. # 35-2, Ex. 11 at 4. To date, Seattle has already dredged 10, 000 cubic yards of PCB-contaminated sediment from the Lower Duwamish Waterway, and additional clean-up and remedial construction is underway. Dkt. # 35-2, Ex. 11 at 5.

         In March 2013, pursuant to a consent decree with the EPA and the Washington Department of Ecology, Seattle agreed to construct an improved storm- and wastewater treatment facility to reduce sewer overflows into its waterways. Dkt. # 31, ¶ 9; Dkt. # 35-8, Ex. 21 at 4. This consent decree aims to reduce contamination from a number of pollutants, including PCBs. Dkt. # 35-8, Ex. 20, ¶ 49; Dkt. # 35-8, Ex. 21 at 19.

         In November 2014, the EPA issued a Record of Decision selecting a remedy for the Lower Duwamish Waterway Superfund Site; that remedy will require Seattle to take further steps to reduce contamination in the waterway. Dkt. # 31, ¶¶ 10-11; Dkt. # 35-2, Ex. 11.

         Seattle filed this lawsuit in January 2016. Dkt. # 1. The city claims that Monsanto's production and promotion of a chemical that it knew to be toxic and that now contaminates Seattle's drainage systems and waterways renders Monsanto liable under the tort theories of public nuisance, defective design, failure to warn, negligence, and equitable indemnity. Monsanto moves to dismiss all claims on the grounds that they are preempted by Washington's Product Liability Act, time-barred, and insufficiently pled. Dkt. # 34.

         DISCUSSION

         Federal pleading rules require a complaint to include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). This requirement serves to “give the defendant fair notice of what the claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007) (internal marks and citation omitted). Although the complaint's factual allegations need not be detailed, they must sufficiently state a “plausible” ground for relief. Id. at 544. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The plausibility standard is met when a complaint alleges “more than a sheer possibility that a defendant has acted unlawfully.” Id. “Dismissal is proper only where there is no cognizable legal theory or an absence of sufficient facts alleged to support a cognizable legal theory.” Taylor v. Yee, 780 F.3d 928, 935 (9th Cir. 2015).

         When deciding a Rule 12(b)(6) motion to dismiss, the Court may not consider any materials other than the pleadings, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). All well-pleaded allegations of material fact are accepted as true and construed in the light most favorable to the non-moving party. Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).

         I. Preemption

         Monsanto argues that all of Seattle's claims are preempted by Washington's Product Liability Act, RCW 7.72, et seq. (“WPLA”). The WPLA “creates a single cause of action for product-related harms that supplants previously existing common law remedies.” Wash. Water Power Co. v. Graybar Elec. Co., 112 Wn.2d 847, 860 (1989). The WPLA's statutory cause of action preempts all product-related common-law claims based on any substantive legal theory except fraud, intentionally caused harm, or claims under Washington's Consumer Protection Act. RCW 7.72.010(4). The WPLA does not, however, preempt common-law claims that arose before the WPLA's effective date of July 26, 1981. Macias v. Saberhagen Holdings, Inc., 175 Wn.2d 402, 408 (2012) (citing RCW 4.22.920(1)). As explained below, none of Seattle's claims are preempted.

         Seattle's claims for public nuisance and equitable indemnity are not preempted because they are not common-law product liability claims. Seattle's public nuisance claim is grounded on statutory causes of action, see RCW 7.48.010, -.130, not common law, so it is not preempted by the WPLA. See Graybar, 112 Wn.2d at 853. Seattle's indemnity claim is a common-law claim predicated on Monsanto's equitable duty to Seattle, see Fortune View Condo. Ass'n v. Fortune Star Dev. Co., 151 Wn.2d 534, 539 (2004); Seattle grounds this duty in Monsanto's liability for Seattle's other claims, see Dkt. # 31, ¶¶ 138-42. Though this piggybacking arguably converts Seattle's equitable indemnity claim into a “product-related” claim, it just as arguably saves the indemnity claim from preemption by virtue of the nuisance claim's statutory basis. Viewing the allegations in the complaint in the light most favorable to Seattle, the Court concludes that Seattle's equitable indemnity claim is not preempted.

         Seattle's claims for product liability and negligence, however, are common-law claims based on allegations of “product-related harms” - here, harm to Seattle caused by Monsanto's chemical products. See Dkt. # 31, ¶¶ 113-17 (defective design), 121-28 (failure to warn), 132-36 (negligence). Accordingly, those claims appear to fall within the WPLA's definition of “product liability claim[s], ” RCW 7.72.010(4), which are preempted, Graybar, 112 Wn.2d at 860.

         Seattle argues that its product liability claims are exempted from the WPLA's preemptive scope because they are based on allegations of intentional conduct. RCW 7.72.010(4) (carving out exception for claims based on a substantive legal theory of “intentionally caused harm”). It is true that the WPLA does not preempt claims based on allegations of intentional conduct. Bylsma v. Burger King Corp., 176 Wn.2d 555, 560 (2013) (acknowledging that the WPLA “does not preempt claims based on intentional conduct”); see also Louisiana-Pacific Corp. v. ASARCO Inc., 24 F.3d 1565, 1584 (9th Cir. 1994) (same). Seattle's first amended complaint plausibly alleges that Monsanto knew that its chemical products were toxic, yet chose not to modify its toxic chemical products, or to warn of their toxicity, in order to maximize its profits. Dkt. # 31, ¶¶ 54-83. Such a conscious decision constitutes intentional wrongdoing. See Bradley v. Am. Smelting & Refining Co., 104 Wn.2d 677, 682-83 (1985) (holding that an “intentional” tort encompasses “an act that the actor undertakes realizing that there is a high probability of injury to others and yet the actor behaves with disregard of those likely consequences”); cf. Birklid v. Boeing Co., 127 Wn.2d 853, 865 (1995) (holding that employer who knowingly exposed workers to toxic chemical fumes had “deliberate intention” to harm employees where employer had “actual knowledge that an injury was certain to occur and willfully disregarded that knowledge”).

         But Seattle seeks relief for this conduct through product liability causes of action for “defective design” and “failure to warn, ” Dkt. # 31 at 23-25, common-law claims which sound in either strict liability or negligence, see Novak v. Piggly Wiggly Puget Sound Co., 22 Wn.App. 407, 410-12 (1979). Both claims are now clearly contemplated by the WPLA's “liability of manufacturer” cause of action. RCW 7.72.030(1) (“A product manufacturer is subject to liability . . . if . . . the product was not reasonably safe as designed or not reasonably safe because ...


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