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City of Neodesha v. BP Corporation North America Inc.

United States District Court, D. Kansas

March 16, 2017

CITY OF NEODESHA, Plaintiff,
v.
BP CORPORATION NORTH AMERICA INC., BP PRODUCTS NORTH AMERICA, INC, and ATLANTIC RICHFIELD COMPANY, Defendants.

          MEMORANDUM AND ORDER

          KATHRYN H. VRATIL, UNITED STATES DISTRICT JUDGE

         The City of Neodesha brings diversity suits against BP Corporation North America Inc., BP Products North America, Inc., and Atlantic Richfield Company (collectively, “BP”), alleging that BP violated four subsections of the City waste ordinance as to 825 parcels of land. See Neodesha City Code Section 36-407. This matter is before the Court on the City's Motion For Leave To File Consolidated Second Amended Complaint (Doc. #31) filed July 18, 2016. For reasons set forth below, the Court finds that the motion should be overruled.

         Legal Standards

         Under Federal Rule of Civil Procedure 15(a)(2), once a responsive pleading has been filed, “a party may amend its pleading only with the opposing party's written consent or the court's leave.” Fed.R.Civ.P. 15(a)(2). Courts should “freely give leave when justice so requires.” Id. A court may refuse to grant leave to amend, however, based upon a showing of undue delay, undue prejudice to the opposing party, bad faith or dilatory motive, failure to cure deficiencies by amendments previously allowed or futility of amendment. Duncan v. Manager, Dep't of Safety, City & Cty. of Denver, 397 F.3d 1300, 1315 (10th Cir. 2005). With regard to futility, a court must analyze the proposed amendment as though it were before the court on a motion to dismiss under Fed.R.Civ.P. 12(b)(6). Ketchum v. Cruz, 961 F.2d 916, 920 (10th Cir. 1992).

         Under Rule 12(b)(6), the Court assumes as true all well-pleaded factual allegations and determines whether they plausibly give rise to an entitlement of relief. Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). To survive a motion to dismiss, a complaint must contain sufficient factual matter to state a claim which is plausible - and not merely conceivable - on its face. Id. at 679-80; Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In determining whether it states a plausible claim for relief, the Court draws on its judicial experience and common sense. Iqbal, 556 U.S. at 679.

         The Court need not accept as true those allegations which state only legal conclusions. See id.; Hall v. Bellmon, 935 F.3d 1106, 1110 (10th Cir. 1991). Plaintiff bears the burden of framing its claim with enough factual matter to suggest that it is entitled to relief; it is not enough to make threadbare recitals of a cause of action accompanied by conclusory statements. Twombly, 550 U.S. at 556. Plaintiff makes a facially plausible claim when it pleads factual content from which the Court can reasonably infer that defendant plaintiff is liable for the misconduct alleged. Iqbal, 556 U.S. at 678. Plaintiff must show more than a sheer possibility that defendants have acted unlawfully - it is not enough to plead facts that are “merely consistent with” liability. Id. (quoting Twombly, 550 U.S. at 557). A pleading which offers labels and conclusions, a formulaic recitation of the elements of a cause of action, or naked assertions devoid of further factual enhancement will not stand. Iqbal, 556 U.S. at 678. Similarly, where the well-pleaded facts do not permit the Court to infer more than the mere possibility of misconduct, the complaint has alleged - but has not “shown” - that the pleader is entitled to relief. Id. at 1950. The degree of specificity necessary to establish plausibility and fair notice depends on context, because what constitutes fair notice under Rule 8(a)(2), Fed. R. Civ. P., depends on the type of case. Robbins v. Oklahoma, 519 F.3d 1242, 1248 (10th Cir. 2008) (citing Phillips v. Cty. of Allegheny, 515 F.3d 224, 232-33 (3d Cir. 2008)).

         Procedural Background

         On December 19, 2014, the City filed 821complaints in Neodesha Municipal Court, alleging that BP had violated newly revised provisions of the Neodesha waste ordinance, Section 36-407 of the Neodesha City Code. Each complaint alleged that as to a specific tract of property in the City, from September 1, 2009 through December 19, 2014 and beyond, BP violated Section 36-407(a), which makes it unlawful to allow hazardous or industrial wastes to accumulate or run off by natural or unnatural migration on or under the surface (Counts One and Two); Section 36-407(b), which requires owners and occupants to maintain their premises free of industrial and hazardous wastes, (Count Three); Section 36-407(c), which makes it unlawful to fail to dispose of refuse, including benzene and other hydrocarbons, in a clean and sanitary manner (Count Four); and Section 36-407(d) which makes it unlawful to accumulate industrial waste or hazardous waste in a manner not approved (Count Five). See, e.g., Doc. #1-2 filed January 28, 2015 in Case No. 15-4025-KHV.

         On January 27 and 28, 2015, BP filed notices of removal in the 821 cases. See Case Nos. 15-4025-KHV through 15-4844-KHV, and Case No. 15-4847-KHV (Municipal Court Nos. 2014-1202, et seq.).[1] The City filed a motion to remand arguing that the Court lacked subject matter jurisdiction because the cases were not “civil actions” that could be removed under 28 U.S.C. §§ 1332 and 1441. Specifically, the City argued that the complaints were criminal or quasi-criminal actions which sought to impose a punishment or penalty to enforce a public right. BP asserted that the complaints were civil in nature. The Court undertook a detailed analysis of the complaints, the language of the Neodesha Municipal Code, the Kansas statutory definition of a crime and federal and state case law. The Court ruled that the alleged violations of revised Neodesha Code § 36-407 were “civil actions” for purposes of removal under Section 1441, and thus overruled the motion to remand. See Memorandum And Order (Doc. #69) filed March 31, 2016 in Case No. 15-4014 (incorporated herein by reference).[2]

         On April 19, 2016, the City filed amended complaints in each of the 821 cases. On April 20, 2016, the Court consolidated the cases under Case No. 15-4025. See Order Consolidating Cases (Doc. #6) filed in Case No. 15-4014.[3] On June 6, 2016, BP filed a motion for judgment on the pleadings. See BP Corporation North America Inc.'s Rule 12(c) Motion For Judgment On The Pleadings On The City Of Neodesha's Amended Complaints (Doc. #21). On July 18, 2016, the City responded by filing a motion for leave to file a consolidated second amended complaint. See City's Motion For Leave To File Consolidated Second Amended Complaint (Doc. #31).

         Facts

         Plaintiff's proposed consolidated second amended complaint alleges the following facts:

         The City is a municipality in Wilson County in southeastern Kansas. BP has admitted that petroleum waste products are in the groundwater and subsurface soil of certain portions of the City. BP has acknowledged responsibility to address the presence of such waste products. The waste products include (1) volatile organic compounds (“VOCs”) such as benzene, toluene, ethyl benzene and xylenes; (2) semi-volatile organic compounds such as polyaromatic hydrocarbons; and (3) metals such as arsenic, chromium, lead and mercury.

         For many years, BP has conducted semi-annual groundwater and surface water monitoring events in the City. BP conducted monitoring events in April and October of 2009; May and October of 2010, 2011, 2012, 2013 and 2014; and May of 2015. During each monitoring event BP took and analyzed a number of groundwater samples for VOCs and screened them against Tier II risk-based levels established by the Kansas Department of Health and Environment (“KDHE”). Tier II levels are “based upon current EPA toxicity values . . . [and] represent the concentrations at which the contaminants pose an acceptable human health risk to receptors, including ...


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