Jarose v. County of Humboldt

Background

The Estate of John R. Braun and the County of Humboldt asserted claims against each other concerning responsibility for hazardous-waste cleanup at property in Eureka, California. Their claims included claims under the Comprehensive Environmental Response, Compensation, and Liability Act and California’s Hazardous Substances Account Act, along with related causes of action.

The court had set June 28, 2019, as the deadline to join parties and amend pleadings. The Estate later moved to modify the scheduling order and sought permission to make two changes: (1) file a second amended complaint adding Pamela Jarose in her individual capacity and a claim alleging that the County violated the Clean Water Act; and (2) file an amended answer adding the affirmative defense of accord and satisfaction. The Estate said information supporting both changes emerged during the August 2019 deposition of the County’s witness, Hank Seemann.

Legal standard

Because the amendment deadline had passed, the Estate had to satisfy Federal Rule of Civil Procedure 16(b), which permits changing a scheduling order only for good cause and with the judge’s consent. The court explained that good cause focuses on the diligence of the party seeking the change. If that party was not diligent, the court’s inquiry should end and the motion should be denied.

Proposed second amended complaint

The Estate sought to add a Clean Water Act claim based on its assertion that the County discharged water from a courthouse sump system into storm drains flowing toward Humboldt Bay without a required National Pollutant Discharge Elimination System permit. The Estate argued that it could not have raised the claim earlier because it did not know the County’s permit status before Seemann’s deposition.

The court rejected that explanation. It found that the Estate had alleged since at least December 2018 that the County was illegally discharging contaminated water into the storm-drain system and that the system flowed toward Humboldt Bay. Those allegations put the Estate on notice to investigate a possible Clean Water Act claim before the amendment deadline. The court also took judicial notice that permit information was publicly available on the Environmental Protection Agency and California Water Board websites. It therefore found that the Estate’s lack of knowledge about the permit status resulted from its lack of diligence.

Because the Estate had not shown good cause, the court did not reach the County’s arguments that the proposed amendment would be futile or prejudicial. It denied leave to file the second amended complaint.

Proposed amended answer

The Estate also sought to add an accord-and-satisfaction defense based on information that the County had released funds set aside under an earlier judgment for cleanup costs. The Estate argued that it had limited knowledge of transactions between the County and Braun and that the issue arose during Seemann’s deposition.

The court found that the Estate had not shown diligence in pursuing this defense before the amendment deadline. Although the Estate said it had conducted discovery and obtained voluminous historical records, it provided no details about the number of records, its efforts to search or review them, or whether the records contained information about the released funds. The Estate also provided no information about what it knew or could have accessed before the deposition. The court denied leave to file the amended answer.

Disposition

The court denied the Motion to Modify the Scheduling Order and for Leave to Amend the Pleadings. The order terminated Docket 31. The court noted that the amendment issue might be revisited if the pretrial schedule were later vacated because of a stay, but it stated that no motion to stay had been filed at that time.