SAN JOSE, Calif. (CN) – After a spirited hearing on Thursday, a federal judge will decide whether agrochemical giant Monsanto will face claims it’s responsible for pollution in the San Francisco Bay and city stormwater systems.
U.S. District Court Edward Davila, as is his wont, gave no indication of how he will rule on Monsanto’s attempt to dismiss the claims of three Bay Area cities – Oakland, Berkeley and San Jose.
The three cities say Monsanto developed, marketed and distributed polychlorinated biphenyls, or PCBs, beginning in the 1950s, despite knowing the widespread use of the chemical as a coolant in electrical apparatuses represented a major environmental hazard.
Thus far, Monsanto has refuted the claims and focused on whether the three cities had standing to bring the claims, saying since the cities have no ownership stake in the state-managed San Francisco Bay.
Davila agreed, forcing the cities to amend their complaint. The cities were also given an assist by the California Legislature, which passed Assembly Bill 2594 that clarified cities do have an ownership interest in the water that flows through their stormwater pipes.
Monsanto tried a different tack on Thursday, saying the three cities had gone before the California Commission on State Mandates in 2010 and complained that new requirements that cities retrofit their stormwater pipes to filter out PCBs would cost them too much.
“A month after filing an amended complaint that amplified all the permit-compliance costs related to a 2009 domestic water supply permit, the cities were presenting the same complaints to the commission on unfunded mandates, which they failed to disclose,” Monsanto attorney Robert Howard said.
Howard then brought up the “failure to exhaust” doctrine, which stipulates that individuals and organizations must exhaust their administrative remedies before bringing a lawsuit.
The attorney argued that because there is a final hearing before the commission scheduled for next January, the federal court case should at least be stayed until then. He pushed the argument further, saying since the cities are already pursuing claims identical to the ones forwarded in their federal complaint through California’s administrative system, the case should be dismissed.
“Government code says there is not ‘either/or’ and that compliance costs must go before a single body in order to ensure consistency of determinations,” Howard told Davila during the hearing.
Davila probed whether Howard believed it was appropriate for the cities to pursue litigation if they believed the ruling of the commission was insufficient. Howard said that was up to the cities, but certainly impacted the progress of the current case.
John Fiske, arguing on behalf of the cities, said the scenario was irrelevant because the administrative proceedings with the state are completely distinct from the remedy the cities are seeking through the courts.
“Our lawsuit is about tort damages related to property damage due to a public nuisance,” Fiske told Davila. “Monsanto is not subject to the exhaustive administrative remedy. That process has nothing to do with the company’s foreseeable knowledge about what would happen if they put a product into the market.”
Fiske conceded that if the cities had sued the Commission on State Mandates halfway through the administrative process, then Howard’s legal theory would apply. But he said seeking reimbursement for permitting and retrofitting costs is distinctly different from seeking damages for ongoing property damage as a result of a public nuisance.
“This is a major public-policy issue, and if Monsanto is allowed to come in here with no cases and throw the Bill of Rights out the door, you are giving Monsanto a pass for the very conduct they knew they were causing,” Fiske said. “They knew what was happening and did not give proper warning or disposal instructions.”
Davila deflected Fiske’s argument somewhat, saying they were not arguing over the cities’ rights to bring claims related to the pollution but rather trying to determine the best path to address remedies.
The judge also probed Monsanto’s lawyers, asking them to explain why the cities shouldn’t be allowed to pursue claims in parallel with the process before the commission.
He said he would issue a ruling “shortly.”