California Department of Toxic Substances Control v. Dee M. McLemore Trust
- William Alsup
- 3:19-cv-01116
- U.S. District Court · Northern District of California
- 7
California Department v. Dee M. McLemore Trust: Judge Alsup granted default judgment against Hard Chrome, awarding $2,459,409 and future cleanup costs.
The ruling directly affects the California Department of Toxic Substances Control and Hard Chrome Engineering, Inc. The Department received $2,459,409, and Hard Chrome was held jointly and severally liable for that amount and specified future cleanup costs. The order states that the separate consent decree limits the future liability of the other parties.
What happened
In California Department of Toxic Substances Control v. Dee M. McLemore Trust, the Department sought repayment of costs for cleaning up hazardous contamination at an Oakland property where Hard Chrome Engineering operated a metal-plating business from 1972 to 2005. Hard Chrome did not appear in the case, and the Department sought default judgment against it under the federal Superfund law, known as CERCLA.
The court found that it had jurisdiction, that Hard Chrome had been properly served, and that the Department’s allegations established its two CERCLA claims. The court ruled that the property was a covered cleanup site, hazardous substances had been released, the cleanup costs were not inconsistent with federal requirements, and Hard Chrome was a legally responsible party.
Judge William Alsup granted the Department’s default-judgment motion, awarded $2,459,409 for cleanup costs, and held Hard Chrome jointly and severally liable for later response costs or damages related to the site. That future-cost ruling was subject to the order’s conditions and did not impose additional liability on parties covered by a separate consent decree.
The detailed version
- California Department of Toxic Substances Control v. Dee M. McLemore Trust · No. 3:19-cv-01116
- William Alsup
- Aug. 3, 2021
Background
The California Department of Toxic Substances Control brought this civil action to recover costs incurred in cleaning up contaminated real property in Oakland. Hard Chrome Engineering, Inc. operated a metal- and chromium-plating business at the property from 1972 through 2005. The opinion states that the business deposited hazardous substances into the ground and emitted them into the air.
The Department had issued an Imminent and Substantial Endangerment Determination and Consent Order in 2005 requiring the Dee M. McLemore Trust to investigate and remediate the contamination. In 2008, Cheryl Plato McLemore informed the Department that the trust could no longer comply, allegedly because it lacked sufficient assets. The Department then took over the investigation and remediation. As of September 30, 2020, it had spent $3,541,975.74, including interest and legal fees.
The Department sued under the Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA, in February 2019. Hard Chrome did not appear. The Clerk entered default against Hard Chrome in February 2021, and the Department moved for default judgment seeking $2,459,409 for cleanup costs incurred through September 30, 2018. The other defendants engaged in limited motion practice and later reached an agreement that was addressed in a separate consent-decree order.
Court’s analysis
Before entering default judgment, the court considered subject-matter jurisdiction, personal jurisdiction, and service of process. It found subject-matter jurisdiction because the action arose under federal law and found personal jurisdiction because Hard Chrome was a suspended California corporation that had operated in Oakland. The court also found that substituted service on the California Secretary of State was adequate.
The court applied the seven factors used in the Ninth Circuit to evaluate default-judgment requests. It concluded that the factors supported judgment for the Department. The court treated the well-pleaded factual allegations as admitted, while recognizing that damages and legally insufficient allegations are not established merely because a defendant defaults.
For the first CERCLA claim, the court applied the elements of a cost-recovery action. It found that the property qualified as a CERCLA facility; hazardous substances had been released; the release required a response; the Department’s costs were not inconsistent with the national contingency plan; and Hard Chrome was a covered person because it operated a facility where hazardous substances were disposed of. The court also found that the Department adequately stated its second claim, seeking a declaration that Hard Chrome was jointly and severally liable for later response costs or damages.
Ruling
The court granted the Department’s default-judgment motion to the extent explained in the order. It awarded $2,459,409 for the first CERCLA claim and declared that Hard Chrome was jointly and severally liable for further response costs or damages in later actions concerning the site.
The declaration was expressly subject to the order’s conditions and limitations. In particular, the court stated that the separate consent decree foreclosed future response-cost liability for the other parties and warned that the Department could not use this default judgment to seek further remedies from anyone other than Hard Chrome Engineering, Inc.
Read the full 7-page opinion on CourtListener, the free public archive maintained by the Free Law Project.