United States District Court, W.D. Washington, Seattle
ORDER ON CITY OF SEATTLE'S MOTION TO DISMISS
DEFENDANTS' COUNTER-CLAIMS AND STRIKE CERTAIN
S. LASNIK, UNITED STATES DISTRICT JUDGE
matter comes before the Court on plaintiff City of
Seattle's “Motion to Dismiss Defendants'
Counterclaims and to Strike Certain Defenses.” Dkt.
case concerns the presence of polychlorinated biphenyls
(“PCBs”) in water bodies in and around the City
of Seattle (“Seattle”). PCBs are man-made
environmental contaminants that cause harm to humans,
wildlife and the environment. Dkt. #31 (Compl.) at
¶¶ 42-53. They are used in many industrial and
commercial applications, including paint, transformers,
sealants and inks. Id. at 4. On January 1, 1979,
Congress enacted the Toxic Substances Control Act, which
banned the manufacture and most uses of PCBs. Id.
have contaminated Seattle's drainage systems, stormwater
and water bodies. Compl. at ¶¶ 5, 7. The Duwamish
River comprises the final 12 miles of Washington State's
Green River, which runs through Seattle. Id at
¶ 4; Dkt. #91 (Countercl.) at ¶ 33. Harbor Island
is located at the mouth of the Duwamish, bounded on one side
by the East Waterway and on the other side by the West
Waterway. Beginning at the upstream end of Harbor Island and
continuing for about six miles upstream is a section of the
river known as the Lower Duwamish,  also designated as the
Lower Duwamish Waterway Superfund Site (“LDW
Site”). Id. at ¶ 6; Countercl. at ¶
33. The East Waterway and the West Waterway empty into
Elliott Bay, a bay of Puget Sound. Countercl. at ¶ 33.
The Lower Duwamish and the East Waterway are listed on the
Washington State Water Quality Assessment list of impaired
water bodies, in accordance with the Clean Water Act
(“CWA”). Id. at ¶ 86; see
33 U.S.C. § 1313(d)(1). They are also listed on the
National Priorities List as Superfund sites. Id. at
¶¶ 10, 14; see 65 Fed. Reg. 75179, 75182
(Dec. 1, 2000).
King County, the Port of Seattle and the Boeing Company
entered into an Administrative Order on Consent
(“AOC”) under the Comprehensive Environmental
Response, Compensation and Liability Act
(“CERCLA”) with the EPA and the Washington
Department of Ecology (“Ecology”) in December
2000. Countercl. at ¶ 40. The AOC parties formed the
Lower Duwamish Waterway Group (“LDWG”) and
completed a Remedial Investigation in 2010 and a Feasibility
Study in 2012 (collectively, “RI/FS”).
Id. at ¶¶ 41-42. In November 2014, the EPA
issued its Record of Decision (“ROD”) for the LDW
Site. Its planned cleanup includes dredging, capping, and
enhanced natural recovery. Id. at ¶ 43;
see Ex. 6; Dkt. #76-6.
has three types of drainage systems: a municipal separated
stormwater system (“MS4”), a partially separated
system, and a combined sewer system that collects stormwater
and sewage. Compl. at ¶ 18. Heavy rains cause the
combined system to overflow through Combined Sewer Overflows
(“CSOs”). Id. Seattle's MS4 system
is subject to a Phase I Municipal Stormwater Permit
(“MS4 Permit”) issued by Ecology. Id. at
¶ 19; Countercl. at ¶ 81; see Ex. 17, Dkt.
#76-19. Seattle's other systems are subject to a Waste
Discharge Permit (“Waste Discharge Permit”)
WA0031682. Id. at ¶¶ 19-20; Countercl. at
¶ 64; see Ex. 8, Dkt. #76-10. Seattle also has
a Construction Stormwater General Permit (“Construction
Permit”) for the stormwater discharges associated with
construction activity. Countercl. at ¶ 182; see
Ex. 49, Dkt. #76-51.
April 16, 2013, the United States and the State of Washington
jointly sued Seattle for violations of the CWA, see
33 U.S.C. § 1319(b), (d) and the Washington Water
Pollution Control Act, see RCW §§
90.48.037, 90.48.144 for the discharge of pollutants of raw
sewage. Id. at ¶ 65; Ex. 11, Dkt. #76-13 at 2,
10-12. The suit was resolved by a consent decree
(“Consent Decree”) that requires Seattle to
reduce its CSOs. Id. at ¶ 66; see Dkt.
#100-1. Seattle was also required to pay a
civil penalty of $350, 000. Id.; see Ex.
10, Dkt. #76-12 at 3.
Monsanto was a manufacturer
of PCBs in the United States until the
1970's. From 1946 to 1986, Monsanto owned and
operated a plant that manufactured adhesives and vanillin on
a site adjacent to the Lower Duwamish. Ex. A, Dkt. #94-1 at
4-5. On March 25, 2008, the EPA issued a
Notice of Potential Liability Pursuant to Section 107(a) and
a Request for Information Pursuant to Section 104(e) of
CERCLA, for the LDW Site (“EPA Notice”). See
January 25, 2016, the City of Seattle (“Seattle”)
filed a complaint against Monsanto. Dkt. #1. A First Amended
Complaint (“FAC”) was filed on May 4, 2016. Dkt.
#31. Seattle alleged that Monsanto, as the sole manufacturer
of PCBs in the United States between 1935 and 1979, was
responsible for the presence of these contaminants in the
city waters. Id. at ¶ 3. It brought five claims
against Monsanto: public nuisance, defective design, failure
to warn, negligence, and equitable indemnity. Id. at
¶¶ 91-142. Monsanto filed a motion to dismiss on
May 18, 2016. Dkt. #34. The Court granted it in part,
dismissing Seattle's claims for defective design, failure
to warn and equitable indemnity. Dkt. #60. Monsanto filed an
answer to the FAC and counterclaims against Seattle on March
24, 2017. Dkt. #63.
April 28, 2017, Seattle filed a “Motion to Dismiss
Counterclaims and Strike Certain Defenses and
Allegations.” Dkt. #66. Monsanto filed a “Motion
For Leave to Amend Answer and Counterclaims” on May 22,
2017. Dkt. #76. This was granted on September 6, 2017. Dkts.
#90, #91. Seattle filed a “Motion to Dismiss
Defendants' Counterclaims and to Strike Certain Defenses,
” Dkt. #92, along with a motion requesting judicial
notice of certain documents. Dkt. #94. Seattle then filed a
“Praecipe to Substitute Corrected City of Seattle's
Motion to Dismiss Defendants' Counterclaims and to Strike
Certain Defenses, ” Dkt. #95, including a corrected
version of the motion. Dkt. #95-1. Monsanto filed a response
on October 30, 2017, Dkt. #99, along with a request for
judicial notice of certain documents. Dkt. #100. It also
filed an “Objection to Plaintiff's Request for
Judicial Notice in Support of Motion to Dismiss
Counterclaims.” Dkt. #101. On November 13, 2017,
Seattle filed a “Reply in Support of the Court Taking
Judicial Notice of Exhibits C, D and E, ” Dkt. #102,
and a reply in support of its motion to dismiss. Dkt. #103.
Monsanto's Counterclaims and Affirmative
brings six counterclaims and asserts ninety affirmative
defenses. Seattle's motion to strike is directed at
fifteen of them. Defenses 69-72, 74-79, 80-81 and 86 pertain
to provisions of CERCLA and the parallel state statute, the
Model Toxics Control Act (“MTCA”). Dkt. #31
(Answer) at ¶¶ 69-72, 74-79, 80-81, 86;
see RCW 70.105D.010 et seq. Defense 53
asserts that punitive damages are not available. Id.
at ¶ 53. Defense 62 asserts that Seattle's
contingency fee arrangement with its outside counsel violates
Washington state law. Id. at ¶62.
counterclaims are based upon Seattle's discharge of
pollutants into the Duwamish River, the East Waterway, the
West Waterway, Elliott Bay, Puget Sound and Lake Washington
(“Affected Water Bodies”). Countercl. at
¶¶ 19-20. First, Monsanto brings a CERCLA claim
for the recovery of necessary response costs and damages that
it has incurred and will incur in investigating, removing,
and/or remediating the hazardous substances released by
Seattle. Id. at ¶¶ 160-162; see
42 U.S.C. § 9607(a). Second, it brings a claim for
declaratory relief under CERCLA and the Declaratory Judgment
Act. Id. at ¶¶ 164-165, 179; see
42 U.S.C. § 9613(g)(2); see 28 U.S.C. §
2201. Monsanto argues that it is entitled to a declaration
that Seattle is jointly and severally liable to Monsanto for
future response costs and damages incurred by it in
connection with the Lower Duwamish and the East Waterway.
Third, Monsanto brings a claim alleging that Seattle has
violated the MS4 Permit, Waste Discharge Permit and
Construction Permit (collectively, “the National
Pollutant Discharge Elimination System (NPDES)
Permits”), as well as provisions of the CWA, resulting
in contingent liability and past and future injury to
Monsanto. It contends that its costs and contingent
liabilities would be reduced or would stop increasing if
Seattle fully complied with the CWA. Id. at
¶¶ 189, 196, 204-208.
Monsanto brings a negligence claim, alleging a breach of the
duties owed by Seattle to Monsanto. Id. at 211-221.
Fifth, Monsanto brings an unjust enrichment claim, arguing
that any costs incurred by Monsanto as part of a judgment
rendered by the Court would confer a benefit upon Seattle
that would be unjust and inequitable for it to retain.
Id. at ¶¶ 227-230. Finally, Monsanto
brings a contribution claim. It argues that the expenses it
has incurred and will incur to address the contamination in
the Affected Water Bodies are the result of Seattle's
conduct and that it is entitled to contribution from Seattle
for these expenses. See RCW 4.22.040. Seattle moves
to dismiss all six counterclaims under Federal Rule of Civil
Procedure 12(b)(6) for failure to state a claim upon which
relief can be granted.
survive a motion to dismiss, Monsanto's counterclaims
“must contain sufficient factual matter, accepted as
true, to “state a claim to relief that is plausible on
its face.”” Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007)). A claim has facial plausibility if
the party pleads factual content that “allows the Court
to draw the reasonable inference that [the opposing party] is
liable for the misconduct alleged.” Id.
(citing Twombly, 550 U.S. at 556). It must contain
“more than labels and conclusions, and a formulaic
recitation of a cause of action's elements will not
do.” Twombly, 550 U.S. at 545.
Court must accept all material allegations in the
counterclaims as true and construe them in the light most
favorable to Monsanto. Wickland Oil Terminals v. Asarco,
Inc., 792 F.2d 887, 889-90 (9th Cir. 1986) (citing
North Star International v. Arizona Corporation
Commission, 720 F.2d 578, 580 (9th Cir. 1983)). However,
the “tenet that a court must accept as true all of the
allegations contained in a [claim] is inapplicable to legal
conclusions.” Ashcroft, 556 U.S. at 678
(citing Twombly, 550 U.S. at 555).
Clean Water Act Counterclaims
Article III Standing
claimant must have standing to sue stems from the requirement
in “Article III, § 2, of the Constitution, [that]
the federal courts have jurisdiction over [a] dispute
… only if it is a ‘case' or
‘controversy.'” Raines v. Byrd, 521
U.S. 811, 818 (1997). The elements for Article III standing
are: (1) an injury in fact, (2) caused by the alleged
wrongful conduct (3) that is likely to be redressed by a
favorable decision. Lujan v. Defs. of Wildlife, 504
U.S. 555, 561 (1992) (internal citations omitted). The party
invoking federal jurisdiction bears the burden of
establishing these elements. Id. (citing FW/PBS,
Inc. v. City of Dallas, 493 U.S. 215, 231 (1990),
holding modified by City of Littleton, Colo. v. Z.J.
Gifts D-4, L.L.C., 541 U.S. 774 (2004)). Seattle argues
that Monsanto lacks standing for its CWA counterclaims
because it has impermissibly lumped them together and fails
to demonstrate causation and redressability.
Standing for Each Counterclaim
Seattle argues that Monsanto has lumped together
approximately 31 CWA claims. Dkt. #95-1 at 14-15. Its
counterclaims pertain to three different NPDES permits,
see Countercl. at ¶¶ 182, 188-202, and six
different water bodies. See Countercl. at
¶¶ 184-189, 197, 201, 212-221, 229, 233. “A
plaintiff must demonstrate standing for each claim that he or
she seeks to press and for each form of relief sought.”
Ctr. For Biological Diversity v. U.S. E.P.A., 90
F.Supp.3d 1177, 1186 (W.D. Wash. 2015) (citing
DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352
(2006)). Seattle argues that Monsanto has failed to do so.
the pleading stage, general factual allegations of injury
resulting from the defendant's conduct may suffice, for
on a motion to dismiss we presume that general allegations
embrace those specific facts that are necessary to support
the claim.” Maya v. Centex Corp., 658 F.3d
1060, 1068 (9th Cir. 2011) (quoting Defs. of
Wildlife, 504 U.S. at 561) (internal quotation marks
omitted). Monsanto's counterclaims address several
activities by Seattle, including the operation of its sewage
and stormwater conveyance systems and resultant CSO
discharges into the Affected Water Bodies, its treatment of
sewage, wastewater and stormwater at the West Point Treatment
Plant (“West Point”), the operation of its
separate sewer systems and resultant Separate Sewer Overflows
(“SSOs”), construction and demolition activities,
and the use of certain products containing PCBs. Countercl.
at ¶ 22; see Dkt. #103 at 9. However, it would
be unreasonable to require Monsanto to establish standing for
each claimed discharge into each Affected Water Body at this
stage. Sierra Club v. BNSF Ry. Co., No.
C13-0967-JCC, 2014 WL 12029092, at *5 (W.D. Wash. Mar. 12,
2014). Monsanto has alleged multiple violations of the CWA,
but it ultimately asserts “one central claim”:
that Seattle is responsible for the discharge of various
pollutants into the Affected Water Bodies through its
conveyance systems and other sources. Id. While not
ideal, at the pleading stage, these generalized allegations
suffice. Defs. of Wildlife, 504 U.S. at 561.
injury-in-fact is an invasion of a legally protected interest
which is (a) concrete and particularized, and (b) actual or
imminent, not conjectural or hypothetical. Id. at
560. A claimant must allege an injury that is ‘distinct
and palpable,' as opposed to merely
‘abstract.'” Whitmore v. Arkansas,
495 U.S. 149, 155 (1990) (internal citations omitted).
alleges that it has suffered injuries in the form of
contingent liabilities, response costs and defense costs.
Countercl. at ¶¶ 23, 139, 204. It argues that the
contingent liability arises from lawsuits, including this one
and an action instituted by the State of Washington, see
State of Washington v. Monsanto Company et al., No.
2:17-cv-53 (W.D. Wash.),  as well as potential
future federal, state, or local regulatory actions.
Id. at ¶¶ 139-140; see Clinton v. City
of New York, 524 U.S. 417, 430-31 (1998); San Diego
Unified Port Dist. v. Monsanto Co., 309 F.Supp.3d 854,
866 (S.D. Cal. 2018) (“The Supreme Court has held that
a contingent liability is sufficient to confer Article III
standing where it presents a ‘significant immediate
injury.'”) (quoting Clinton, 524 U.S. at
430-31). The response costs arise in connection with CERCLA
cleanup processes at the Lower Duwamish, the East Waterway,
and neighboring uplands outside the scope of the EPA's
ROD and AOC. Id. at ¶¶ 46-52, 141-143.
Monsanto contends that these response costs are consistent
with the National Contingency Plan (“NCP”), meet
CERCLA's goals for cost-effective remedial action, and
are not costs of litigation. Id. at ¶ 53;
see Maya, 658 F.3d at 1069 (finding that the
allegation that “plaintiffs spent money that, absent
defendants' actions, they would not have spent …
[was] a quintessential injury-in-fact.”). Finally,
Monsanto alleges that it has incurred defense costs in
defending this lawsuit. Id. at ¶ 147. The
lawsuit would not have been brought but for Seattle's
discharge of contaminants into the Affected Water Bodies.
Id. Alternatively, Seattle's activities have
increased Monsanto's potential liability in this case and
the State of Washington's lawsuit even if it would have
been brought independent of the City's own conduct.
Id. at ¶¶ 147-49.
Seattle's motion to dismiss focuses on causation and
redressability, it briefly argues that potential future
regulatory action is speculative and cannot support Article
III standing. Dkt. #95-1 at 15-16. The City points out that
in San Luis & Delta-Mendota Water Auth. v.
Haugrud, the Ninth Circuit found that an
“allegation that third-party agencies [would]
eventually impose more regulations on [a party] [was]
speculative at best.” 848 F.3d 1216, 1233 (9th Cir.
2017), as corrected (Mar. 23, 2017). The only
evidence offered in that case was a declaration regarding
past regulations, which the Court found “insufficient
to show a ‘credible threat' that third-party
agencies [would] increase regulations … at some point
in the future.” Id. (quoting Hall v.
Norton, 266 F.3d 969, 977 (9th Cir. 2001)). Similarly,
Monsanto relies only on this lawsuit to argue that the City
will be subjected to “more stringent future
regulation” for its discharges that it may in turn seek
to recover from Monsanto. Dkt. #99 at 19 n.8. That is not
sufficient to show standing. An alleged harm must be actual
or imminent, not conjectural or hypothetical. Whitmore v.
Arkansas, 495 U.S. 149, 155 (1990) (citing Los
Angeles v. Lyons, 461 U.S. 95, 101-102 (1983)).
also argues that Monsanto's alleged response costs
pertain only to the Lower Duwamish. Dkt. #95-1 at 15. Most of
them do. However, Monsanto does contend that it incurred
costs in connection with “neighboring uplands
properties (outside of the EPA in-water sediment cleanup area
in the LDW Site), including but not limited to the CERCLA
cleanup process associated with the LDW Site and uplands
source control.” Countercl. at ¶ 46. This
included costs incurred from the “analysis of ...