NINTH STIPULATION TO MODIFY DATES ESTABLISHED IN THE COURT'S EIGHTH MODIFIED STATUS ORDER; [PROPOSED] ORDER
JOHN A. MEMDEZ, District Judge.
Background
1. This case involves alleged environmental contamination at a 3.5-acre parcel of land located at the San Joaquin Delta, adjacent to the Whiskey Slough on Roberts Island in San Joaquin County, California (the "DePaoli Site").
2. The Court issued its initial Status (Pretrial Scheduling) Order for this action on December 11, 2006 ("2006 Status Order"). Thereafter, Plaintiffs and the remaining Defendants1 (collectively, the "Parties") met and conferred concerning a potential framework for resolution of this matter without further litigation. That framework is set forth in Exhibit "A" to this Stipulation and summarized below.
3. As described in Exhibit "A", the Parties previously agreed on a proposal to fund and conduct further site assessment and characterization, with the goal of achieving closure of the DePaoli Site under oversight of the California Regional Water Quality Control Board, Central Valley Region ("Regional Board"). Based on the Regional Board's determination that remedial or corrective action is required at the DePaoli Site, the Parties have agreed to: (a) utilize monies contained in an existing trust fund for that purpose; and (b) engage in good faith settlement negotiations for the purpose of funding any necessary remedial or corrective action, to the extent such costs exceed the amount contained in the trust fund (approximately $10,340.43 as of September 15, 2014). In the event good faith negotiations do not result in an agreement, the Parties are willing to engage in a court-supervised settlement conference, or mediation before Lester J. Levy or another mutually-acceptable mediator. Once site closure has been achieved, via the Regional Board's issuance of a "closure" or "no further action" letter, all Parties will dismiss their claims (and counter-claims) and this action will be terminated.
Prior Modifications to Status/Scheduling Order and Related Procedural History
4. On November 9, 2007, this Court entered an Order ("First Modified Status Order") modifying dates in the 2006 Status Order to allow, among other things, the Parties additional time to develop, submit and implement a workplan for additional site assessment.
5. Plaintiffs submitted a preliminary investigation workplan to the Regional Board on or about November 14, 2007. Subsequently, following a series of "meet and confer" discussions between the Parties' technical representatives, a revised workplan was submitted to the Regional Board on or about January 31, 2008. On March 18, 2008, the Regional Board conditionally approved the revised workplan.
6. On April 23, 2008, this Court entered a second Order ("Second Modified Status Order") modifying dates in the 2006 Status Order to allow the Parties sufficient time to implement the revised workplan and complete the site investigation.
7. Between April 2008 and August 2008, Plaintiffs undertook field investigation activities at the DePaoli Site, pursuant to the approved workplan. Following completion of this work and discussion with Defendants regarding preliminary results of the investigation, Plaintiffs submitted a Site Investigation Report to the Regional Board on October 17, 2008. In the Report, Plaintiffs proposed that an Engineering Feasibility Study be conducted to select an appropriate closure plan for the DePaoli Site, based on the Regional Board's review of various remedial alternatives (including a "no action" alternative).
8. On November 24, 2008, this Court entered a third Order ("Third Modified Status Order") modifying dates in the April 23, 2008 Second Modified Status Order to allow the Parties sufficient time to complete the further site investigation and explore closure strategies for the DePaoli Site with the Regional Board.
9. In early 2009, the Parties' technical representatives met with the Regional Board to discuss the results of the site investigation and determine what further work would be necessary in order to obtain closure at the DePaoli Site. On April 29, 2009 the Regional Board issued a letter requesting that Plaintiffs submit a detailed closure plan by August 1, 2009. On May 29, 2009 Plaintiffs again proposed conducting an Engineering Feasibility Study in order to provide a basis for developing a site closure plan.
10. On June 16, 2009, this Court entered a fourth Order ("Fourth Modified Status Order") modifying dates in the November 24, 2008 Third Modified Status Order to allow the Parties sufficient time to prepare an Engineering Feasibility Study and closure plan.
11. At the Regional Board's request, Plaintiffs' consultant submitted an Additional Groundwater Investigation Work Plan on June 24, 2009 and installed two new monitoring wells at the DePaoli Site to improve delineation of groundwater impacts. Groundwater monitoring at all monitoring wells has continued on a quarterly basis since June 2008. To accommodate the additional investigation, Plaintiffs requested that the Regional Board extend the August 29, 2009 deadline for submission of the Engineering Feasibility Study, and the Regional Board did not object.
12. On May 3, 2010, Plaintiffs submitted the Engineering Feasibility Study to the Regional Board. This Study evaluates three primary remedial options to achieve site closure and contains recommendations regarding the preferred remedial option. The Parties anticipate that a final remedial option will be negotiated and closure plan developed following the Regional Board's review of the Study.
13. On May 5, 2010, this Court entered a fifth Order ("Fifth Modified Status Order") modifying dates in the June 16, 2009 Fourth Modified Status Order to allow the Parties sufficient time to obtain Regional Board feedback to the Engineering Feasibility Study and develop a closure plan.
14. The Regional Board thereafter advised there would some be some delay in its review of the Engineering Feasibility Study due to its utilization of resources on sites deemed "higher priority" than the DePaoli Site. Pending Regional Board review of the Engineering Feasibility Study, groundwater monitoring at all monitoring wells continued.
15. On April 21, 2011, this Court entered a sixth Order ("Sixth Modified Status Order") modifying dates in the May 5, 2010 Fifth Modified Status Order to allow the Parties sufficient time to obtain and respond to Regional Board comments regarding the Engineering Feasibility Study and thereafter develop a closure plan.
16. Subsequently, upon reassignment to this Court, on September 6, 2011, this Court entered an Amended Status (Pre-trial Scheduling) Order modifying dates in the Sixth Modified Status Order.
17. Thereafter, there were a number of developments, with substantial progress being made towards regulatory approval and implementation of remedial action at the DePaoli Site. On October 6, 2011, the Regional Board responded with its comments on the Engineering Feasibility Study and determined that "clean closure" of the site is the preferred remedial option. On or about December 15, 2011, Plaintiffs submitted a draft "Landfill Remedial Action Plan" ("RAP") and "Background Soil Study Workplan" ("Soil Study Workplan") to the Regional Board for review and approval. The final version of the Soil Study Workplan was approved by the Regional Board on February 28, 2012.
18. On February 10, 2012, Plaintiffs' counsel transmitted a request to Defendants for funding of a portion of a levee stability investigation on a portion of the DePaoli Site, which Plaintiffs and the Regional Board advise is necessary prior to final approval of the RAP. Subsequently, Plaintiffs and Defendants have engaged in good faith discussions regarding the scope and funding of the levee stability investigation. The estimated cost is in an amount not to exceed $68,565. On or about June 1, 2012, Plaintiffs' counsel informed Defendants that Plaintiffs' insurers have taken the position that coverage for the levee study was not available because it is an indemnity cost, not a defense cost. In response, Defendants proposed a solution in which Defendants would fund half of the cost from the aforementioned trust account and Plaintiffs would fund the other half from insurance or other funds.
19. On June 28, 2012, this Court entered a seventh Order ("Seventh Modified Status Order") modifying dates in the April 21, 2011 Sixth Modified Status Order to allow the Parties sufficient time to conduct the levee stability investigation and soil study and to continue to work with the Regional Board to develop a final closure plan.
20. On or about April 30, 2013, Plaintiffs' counsel informed Defendants that despite continued efforts to negotiate with their insurers, Plaintiffs' insurers refuse to pay for the levee study. Plaintiffs' insurers are also refusing to pay or have delayed payment for the completion of the Soil Study Workplan. As a result, Plaintiffs' consultant stopped the soil study work.
21. Subsequently, Plaintiffs' counsel and Defendants met and conferred in order to develop a strategy to fund the work and obtain final approval of the RAP from the Regional Board. On August 13, 2013, Plaintiffs' and Defendants' respective environmental consultants met with the Regional Board for the purpose of establishing a clear path forward for site closure. On August 22, 2013, the Regional Board issued an order requiring Plaintiffs to submit a Feasibility Study Addendum ("FS Addendum") by November 15, 2013.
22. On November 4, 2013, this Court entered an eighth Order ("Eighth Modified Status Order") modifying dates in the June 28, 2012 Seventh Modified Status Order to allow the Parties sufficient time to continue efforts with the Regional Board to develop a final closure plan.
23. Subsequently, Defendants agreed to authorize their joint consulting firm, ERM, to assume primary responsibility for completing certain remaining tasks necessary to achieve regulatory closure for the site, including preparation of the FS Addendum and RAP. Pursuant to approved extensions by the Regional Board, Plaintiffs and Defendants jointly submitted a draft FS Addendum to the Regional Board on January 15, 2014. The FS Addendum included, among other things, the completed soil study and an engineering feasibility study (which includes the levee stability investigation), as well as a revised project schedule establishing milestones and deadlines with the goal of implementing remedial work in 2014.
24. On February 6, 2014, Plaintiffs' and Defendants' respective environmental consultants met with Regional Board staff to discuss comments to the FS Addendum, as well as site-specific cleanup requirements necessary to achieve "clean closure." On March 14, 2014, Defendants' environmental consultants from ERM again met with Regional Board staff to discuss the results of background soil sampling results for the site, and their proposal for a "risk-based approach" to achieving "clean closure" for the site, based on the voluminous data collected for the site. In these meetings Regional Board staff expressed, for the first time, their preference for cleanup to "background" levels. The issue of finalizing site-specific cleanup levels for this site is of critical importance to establishing the scope of required remedial work, estimated costs, and, ultimately, the Parties' ability to fund clean up costs pursuant to the stipulated framework attached hereto. By ERM's estimate, the requirement to clean the site to background levels could increase overall cleanup costs by over one hundred twenty percent (120%) in comparison to the environmentally protective, risk-based cleanup proposed by the Parties.
25. Since then, the Parties have continued to engage in good faith efforts to resolve this issue with the Regional Board. On May 15, 2014, Defendants jointly submitted a letter to the Regional Board, attached hereto as Exhibit "B", further explaining the basis for seeking risk-based site closure criteria, and proposing a meeting of all Parties with the Regional Board to seek a final resolution.
26. On June 4, 2014, counsel for all Parties met with Regional Board staff and counsel to further discuss these issues in detail. This is the first ever such "all-hands" meeting, and allowed for a productive dialogue. At the meeting's conclusion, counsel for the Regional Board committed to prepare a written legal opinion, for the benefit of Regional Board staff and the Parties, addressing the scope of the Regional Board's discretion in approving site-specific cleanup requirements for this site. At present, the parties have not yet received this letter. However, after several inquiries by the parties, the Regional Board has recently advised that it will be forthcoming soon.
27. The Parties desire to continue good faith efforts to work cooperatively to achieve an approved closure plan from the Regional Board, at the earliest feasible date. Unfortunately, due to ongoing negotiations, it is no longer feasible to obtain the requisite approvals needed to start remediation work in 2014. The Parties believe that 12 months is a reasonable time estimate to reach a final agreement with the Regional Board on cleanup goals, submit a final RAP, and complete remedial work, assuming the Parties do not need to expend time and resources on litigation during that time period.
28. To allow the Parties reasonable time to work with the Regional Board to achieve site closure, as well as to avoid undue litigation expense that would otherwise be required to comply with the deadlines established in the Eighth Modified Status Order, the Parties respectfully seek an order pursuant to Federal Rule of Civil Procedure 16(b) modifying and extending the deadlines set forth within the Eighth Modified Status Order as follows:
Current Date Proposed Date
Expert Designation November 19, 2014 November 19, 2015
Supplemental Expert Designation December 10, 2014 December 10, 2015
Discovery Completion February 10, 2015 February 10, 2016
Last Day for Dispositive Motions April 17, 2015 April 18, 2016
to be Heard
Last Day to file Joint Pretrial June 19, 2015 June 20, 2016
Statement
Final Pretrial Conference June 26, 2015 June 27, 2016 at
10:00 a.m.
at 10:00 a.m.
Trial September 14, 2015 September 19, 2016
at 9:00 a.m. at 9:00 a.m.
(estimated 14-21 (estimated 14-21
days) (days)
All other pre-trial deadlines shall comply with applicable Federal Rules of Civil Procedure and Local Rules, based on the modified trial schedule set forth above.
THEREFORE, IT IS HEREBY STIPULATED by and between the Parties hereto that the deadlines established by the Court in the Eighth Modified Status Order (Docket, Doc. 408) may be modified as set forth above, and that the Stipulated Framework for Resolving Litigation, attached as Exhibit A to the First Modified Status Order, the Second Modified Status Order, the Third Modified Status Order, the Fourth Modified Status Order, the Fifth Modified Status Order, the Sixth Modified Status Order, the Seventh Modified Status Order, and the Eighth Modified Status Order and to this Stipulation, shall continue to be binding on the Parties.
ORDER
Based on the foregoing Stipulation, and good cause existing therefor, IT IS HEREBY ORDERED, that the dates set forth in this Court's Amended Status (Pre-trial Scheduling) Order entered on June 28, 2012, are further modified consistent with the dates listed above, and that the Stipulated Framework for Resolving Litigation, attached as Exhibit A to the First through Eighth Modified Status Orders, and to this Stipulation, shall continue to be binding on the Parties. No further modifications to the Status Order will be granted by the Court.
EXHIBIT A
STIPULATED FRAMEWORK FOR RESOLVING LITIGATION
Plaintiffs and Defendants (collectively, "Parties") have agreed on and stipulate to the following framework for resolving Reclamation District No. 2116, et al. v. Arcady Oil Company, et al., E.D. Cal. Case No. CIV S 96-1473, in a manner that is cost-effective, expeditious, and will conserve judicial resources.
1) The Parties agree to an eight-month continuance of all dates provided in the Court's Pretrial Scheduling Order, subject to Court approval.
2) Plaintiffs agree to timely perform the remaining DePaoli site investigation work and prepare a closure plan for the DePaoli site (such work to be funded by Plaintiffs' insurers) and to:
a) provide Defendants with copies of all existing consultant documents and correspondence with the Regional Board and other regulators involved with this site;
b) provide Defendants' consultant an opportunity to review and comment on future documents submitted to the regulators;
c) provide Defendants' consultant an opportunity to participate in investigation work, including presence during site visits, observation of sampling and, if requested, taking of split samples.
3) Defendants agree to apply the contents of the existing trust fund — approximately $75,000 as of October 31, 2007 — to the reasonable remedial costs, if any, necessary to implement a site closure plan acceptable to all Parties and approved by the regulators. If the approved site closure plan is estimated to cost more than $75,000, the Parties agree that, prior to implementation of the site closure plan, they will:
a) participate in informal, good-faith negotiations, with the goal of reaching an agreement to fully fund implementation of the site closure plan, and, if needed,
b) participate in a court-supervised settlement conference, or mediation before Lester J. Levy (or another mutually-acceptable mediator).
4) When regulatory closure of the DePaoli site is achieved — via a "closure letter," "no further action" letter, or similar directive — the parties will mutually dismiss all claims against each other with prejudice, and Plaintiffs will be entitled to any proceeds remaining in the trust fund.
5) If at any time it becomes clear that the Parties that regulatory closure of the DePaoli site cannot be achieved within the time provided by the eight-month continuance, the Parties will immediately notify the Court of this fact, provide the Court with an estimated timetable for reaching site closure, and seek the Court's guidance as to scheduling of further proceedings in this action.
EXHIBIT B
May 15, 2014 Letter to the Regional Water Quality Control Board
