Articles Posted in Environmental Litigation

Today, the California Supreme Court resolved this issue in Ardon v. City of Los Angeles.
Last year, I wrote about the Second Appellate District case of Ardon v. City of Los Angeles.  In Ardon, the appellate court found that a public agency can waive statutory privileges that it otherwise would have if it produces privileged documents in response to a California Public Records Act (PRA) request, even if inadvertently.  However, half a year later, the First Appellate District in Newark Unified School District v. Superior Court came to the opposite conclusion in holding that a public agency cannot inadvertently waive attorney-client and work product privileges.  These contradictory holdings created what is known as a “split of authority.”  Today, the California Supreme Court resolved this issue in Ardon v. City of Los Angeles.  The Court found that a public agency cannot waive the privileges if it inadvertently releases privileged documents in response to a PRA request.

In Ardon, the plaintiff in litigation against the City of Los Angeles sought records under the PRA from the city concerning the subject matter of its complaint. After receipt of the records, Ardon’s counsel notified the city that it had obtained copies of some records that appeared to be privileged. The city responded by asserting that the documents had been inadvertently produced. The city demanded that Ardon return the documents to the city and agree not to rely upon the documents in any way. Ardon declined this request, asserting that the city had waived any privilege claim.  Citing California Government Code section 6254.5, the court found that in producing the documents, even inadvertently, the city waived any privilege claim.

The California Supreme Court characterized this issue as “one of statewide importance.”  In reaching its decision, the Court reviewed the statutory language of California Government Code section 6254.5 and the other relevant statutes pertaining to the PRA.  The Court concluded that the statutory language as a whole was ambiguous on this issue, and resolved the ambiguity by concluding that inadvertent disclosure does not waive the privileges. The Court stressed the importance of the statutory privileges and a party’s reasonable reliance that an inadvertent disclosure would not waive the privileges.  The Court further found that there was no reason to interpret California Government Code section 6254.5 differently from Evidence Code section 912 (which applies to discovery requests in litigated disputes) in this regard.  Under Evidence Code section 912, an inadvertent disclosure of privileged documents does not waive the privilege.

In January, I wrote about the Second Appellate District case of Ardon v. City of Los Angeles.  In Ardon, the court found that a public entity can waive statutory privileges that it otherwise would have if it produces privileged documents in response to a California Public Records Act (PRA) request, even if inadvertently.  Recently, the First Appellate District in Newark Unified School District v. Superior Court came to the opposite conclusion in holding that a public agency cannot inadvertently waive attorney-client and work product privileges.  These contradictory holdings have created what is known as a “split of authority.” iStock_000066888187_Full-683x1024

 

In Newark Unified School District, some parties requested documents from the Newark Unified School District (District) under the PRA.  The PRA requires public entities to make their public records open for inspection and copying upon request.  Within hours of delivering the documents in response to the request, the District’s interim superintendent discovered that the District had inadvertently included over one-hundred documents that it contended were subject to the attorney-client or attorney work product privileges.  The District immediately sent e-mails to the recipients of the documents requesting that they return the documents.

 

Citing California Government Code Section 6254.5, the document recipients argued that the District waived the privileges by its inadvertent release of the documents.  The court in Ardon had previously cited this provision in finding that a public entity waives any privilege if it discloses a privileged document pursuant to a PRA request, even if such disclosures are made inadvertently, by mistake or through excusable neglect.  However, the court in Newark Unified School District concluded that the District did not inadvertently waive the privileges.

On August 20, 2015, the California Supreme Court handed down its much anticipated decision in Fluor Corporation v. Superior Court (Hartford Accident & Indemnity Company). The court held that Insurance Code §520, a seldom cited provision of the Insurance Code dating back to 1935, bars an insurer from refusing to honor a policyholder’s assignment of policy coverage regarding injuries or damages that pre-date the assignment. In the process, the high court overruled its 2003 decision in Henkel Corp. v. Hartford Accident & Indemnity Co., 29 Cal.4th 934, which had held that when a liability policy contains a “consent-to-assignment” clause (a standard provision in pre-1985 policy forms), the policyholder may not assign its rights to policy benefits without the insurer’s consent until the claim against the insured is reduced to a judgment or settlement with the claimant.

 The decision, which deals with post-loss assignment of insurance benefits under general liability policies in the context of a corporate reorganization, has particular relevance to companies who aciStock_000017700348_XXXLarge-150x150quire companies with existing environmental or other long-tail liabilities. Before the Fluor decision, it was often necessary to structure a transaction as a stock purchase and maintain the target company as a subsidiary of the acquiring company to obtain the benefit of the target company’s legacy coverage typically dating back many years to the time period when the environmental or other liabilities for the target company’s operation arose. In Fluor, the California Supreme Court expressly recognized that its decision will protect the ability of a policyholder “in the course of transferring assets and liabilities to another business entity in connection with a corporate sale or reorganization, to assign rights to claim defense and indemnification coverage provided by prior and existing insurance policies concerning the business’s previous conduct.”

 Greenberg Glusker represents policyholders in insurance recovery litigation against insurers.  For more information regarding our insurance coverage practice, please contact Jonathan B. Sokol at 310.201.7423 or JSokol@greenbergglusker.com.

 

200146012-001California’s Public Records Act (PRA) law requires public entities to make their public records open for inspection and copying. Environmental practitioners often use PRA requests as a tool to obtain information regarding a contaminated or a potentially contaminated site. In a recent case, Ardon v. City of Los Angeles, the California Court of Appeals found that a public entity can waive statutory privileges that it otherwise would have if it produces privileged documents in response to a PRA, even if inadvertently.

In Ardon, the plaintiff in litigation against the City of Los Angeles sought records under the PRA from the city concerning the subject matter of its complaint. After receipt of the records, Ardon’s counsel notified the city that it had obtained copies of some records that appeared to be privileged. The city responded by asserting that the documents had been inadvertency produced. The city demanded that Ardon return the documents to the city and agree not to rely upon the documents in any way. Ardon declined this request, asserting that the city had waived any privilege claim.

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cityscapeRecently, the court in Rominger v. County of Colusa found that a lead agency which approved a mitigated negative declaration for a project, can take the seemingly inconsistent position that the proposed project was not a California Environmental Quality Act (CEQA) project or was exempt from CEQA when its action is subsequently challenged.

In Rominger, real party in interest Adams Group, Inc. filed an application with the County of Colusa for the approval of a tentative subdivision map to divide 4 existing parcels into 16 parcels.  The application indicated that no specific plan for future expansion was available and that they intended to continue the existing use of the property.  The County prepared an initial study and issued a mitigated negative declaration under CEQA.

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LandfillForm over substance continues to obscure the substantive issue presented in the case of the City of Los Angeles (City) vs. Kern County (County). At its core, the dispute involves the land application of biosolids. Biosolids are organic material produced during the processing and treatment of wastewater. Historically, waste by-products like biosolids were disposed of in a landfill or were incinerated. With environmental concerns on the rise, more sustainable practices have been identified to dispose of biosolids, one of which includes land application.

The dispute between the City and County over the land application of biosolids began in the early 1990s when the City began working with County farmers to utilize biosolids in land application as fertilizer for crops. After several years of successful land application, residents of the County passed a measure banning the practice. The practice was successfully portrayed as the City disposing of its waste in the County rather than keeping the waste in the City. Residents of the County overwhelmingly passed the measure and the City sued to block implementation of the measure. Years of protracted litigation between the City and County culminated in the most recent decision by the California Supreme Court (Court).

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Earlier this month, in Latinos Unidos De Napa v. City of Napa, the California Court of Appeals upheld the city of Napa’s determination that it did not have to prepare an environmental impact report (EIR) under the California Environmental Quality Act (CEQA) when enacting minor changes to its general plan and zoning ordinances.

Napa prepared a program EIR prior to adopting its comprehensive update of its general plan in 1998.  The general plan set forth Napa’s future plans for development through the year 2020.  The program EIR analyzed the impacts of future projected growth within the city through the same time period.  Although the future housing element was not updated at that time, the program EIR analyzed the impacts of the existing housing elements.

In 2009, Napa began the process of updating its housing element and prepared an initial study under CEQA.  Among other things, the initial study analyzed the extent to which the changes contemplated by the adoption of the housing element could result in new or different environmental impacts not already analyzed with respect to the general plan.  Based on this review, the city determined that the project was within the scope of the program EIR and required no further environmental review.

gavel-150x150Recently, Solutia Inc. and Pharmacia Corporation filed a petition for writ of certiorari with the U.S. Supreme Court seeking to overturn the Eleventh Circuit’s ruling that a Potentially Responsible Party (“PRP”) conducting a cleanup pursuant to a consent decree is foreclosed from bringing a cost recovery action against other PRPs under CERCLA Section 107, and may only seek contribution from other parties under CERCLA section 113.  This ruling is significant because 1) unlike CERCLA section 107, section113 does not provide for joint and several liability against other PRPs, 2) under CERCLA section 113, PRPs that settle with the government are given contribution protection, and 3) the statute of limitations under section 107 and section 113 differs.

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gavel-250x300On August 8th, the California Supreme Court granted review of the Second District Court of Appeal’s decision in Neighbors for Smart Rail v. Exposition Metro Line Construction Authority.  As previously blogged in April, the Second District found that a lead agency’s use of projected future conditions to measure the environmental impacts that a long-term infrastructure project would have on traffic and air quality did not violate the California Environmental Quality Act (CEQA).  The Second District’s decision put it at odds with holdings of the Fifth and Sixth District Court of Appeals, making the issue of whether CEQA prohibits the use of projected future baselines ripe for review.

Public agencies have long argued that using current-conditions to measure the impacts of major infrastructure projects that will not be completed for many years to come is not helpful in determining the true traffic and air quality impacts the project will have once operational.  The California Supreme Court will now decide whether CEQA allows public agencies to have the discretion to select a future baseline for long-term projects.  Our blog will keep you updated on the court’s decision.

CVS-LOGO-150x96In a settlement reached in mid-April, CVS Pharmacy Inc. (CVS) agreed to pay almost $14 million to settle claims that it improperly stored and disposed of hazardous waste at its drugstores in California. 

In a suit brought in Ventura County Superior Court, prosecutors representing 45 cities and counties across California, alleged that CVS violated California’s Hazardous Waste Control Law (HWCL) (commencing at Health and Safety Code sections 25100 et seq.) and other laws through its improper storage and disposal of various medical, pharmaceutical and photographic waste.  California’s HWCL is California’s state counterpart to the federal Resource Conservation and Recovery Act (RCRA).  HWCL has a broad impact and regulates hazardous waste from cradle (generation) to grave (disposal).  In addition to the monetary payment, the settlement agreement also requires CVS to properly store, dispose and record hazardous waste in the future and train its employees regarding these requirements.   

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