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October 2016

Gordon & Rees San Diego Team Secures Dismissal of CERCLA-Based Contamination Claims at the Pleading Stage

Gordon & Rees San Diego partner Kristin Reyna, senior counsel Rosie Badgett, and associate Brian Selogie, recently secured dismissal of entity and individual clients in relation to claims arising out of an allegedly negligent Phase I Environmental Site Assessment of the plaintiff’s contaminated commercial property in Long Beach, California.

The plaintiff, the current owner of the subject commercial property, filed a complaint in the United States District Court for the Central District of California on February 23, 2016. The complaint alleged 14 causes of action for violations of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and California state laws against 13 defendants, including multiple former owners and operators at the property, as well as owners and operators of adjacent properties. The plaintiff alleged the former owners and adjacent property owners had caused or contributed to contamination of the subject property by, primarily, perchloroethylene (“PCE”), trichloroethylene (“TCE”) and benzene. The plaintiff claimed that remediating the contamination at the property would cost in excess of $1 million.

In addition, the plaintiff’s complaint advanced claims for declaratory relief, professional negligence, and breach of contract against the Gordon & Rees entity and individual clients. Specifically, the plaintiff alleged that the firm’s clients had been retained to perform a Phase I Environmental Site Assessment of the property as part of due diligence investigation prior to the plaintiff’s purchase in December of 2011.

The gravamen of the plaintiff’s claims was that the firm’s clients failed to identify existing contamination at the subject property, and that the plaintiff would not have purchased the property had the Phase I Site Assessment properly identified the contamination. Nevertheless, the complaint also alleged that the firm’s clients had not completed the Phase I Site Assessment until July of 2012—approximately seven months after the plaintiff had already taken possession of the property. Investigation into real property records regarding the purchase of the property confirmed the inconsistent timeline pled in the plaintiff’s complaint and that they had indeed completed the property purchase before the Phase I was performed.

After repeated and unsuccessful attempts to persuade the plaintiff to dismiss its claims informally, Gordon & Rees’s attorneys filed a motion for judgment on the pleadings on July 18, 2016. The motion identified a variety of deficiencies in the complaint, including the fact that the inconsistent timeline surrounding the purchase of the property and the performance of the Phase I Site Assessment rendered the plaintiff’s allegations impossible.

Following the conclusion of briefing on the motion, the court issued an order granting Gordon & Rees’s motion for judgment on the pleadings and dismissing the complaint with leave to amend. The plaintiff’s counsel has now filed a first and second amended complaint, neither of which name Gordon & Rees’s clients as defendants, resulting in a complete victory.

Melissa R. Badgett
Kristin N. Reyna DeHart
Brian T. Selogie



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