Three public-water-system-operating California cities brought suit in the Northern District of California against Monsanto alleging that Monsanto’s manufacture and sale of PCB-containing products from the 1930s through the 1970s caused pollution that increased the cities’ cost and ability to comply with federal stormwater discharge regulations for discharge into the San Francisco Bay. Monsanto sought to dismiss the claims and in City of San Jose v. Monsanto Company, Nos. 15-3178, 15-5152, & 16-0071 (N.D.CA. Aug. 22, 2016), the United States District Court for the Northern District of California granted the motion, but allowed the municipalities to amend their complaints as to their nuisance causes of action.
The cities alleged public nuisance claims framed around an allegation that Monsanto’s historic manufacture of PCB-containing products created a nuisance that “injuriously affected” the cities’ property rights. Interpreting California water regulations, the court determined that stormwater is the “property” of the state and that “the Cities do not take ownership of stormwater merely because it flows through municipal pipes on its way to the Bay.” Because the cities do not have a traditional property right that is affected by the alleged nuisance, the court granted Monsanto’s motions to dismiss, but alluded to at least two ways in which the cities may be able to cure their pleadings.
First, the court noted that two types of nuisance claims were available to the cities: the type that the cities pleaded, which provides a cause of action to any person whose property rights were “injuriously affected,” and a second type which provides a cause of action to “the city attorney of any town or city in which the nuisance exists.” Possibly because only injunctive relief, and not damages, would be available, the cities did not allege this second type of public nuisance claim.
Second, the court suggested that the cities may be able to more accurately articulate in their pleadings the “injurious” effect that they allegedly suffered as a regulatory or usufructuary interest in stormwater or as an interest in their stormwater management systems themselves. (In this context, “usufructuary” means the right of one person or entity to use the property of another.) To that end, the court pointed out in a footnote that “[a]t the hearing on this motion, the Cities clarified for the first time that they claim regulatory and usufructuary interests in stormwater.… In fact, … the Cities’ complaints do not mention stormwater management systems at all and refer only to the Bay itself.”
While this decision appears to offer some interesting academic guidance regarding rights to stormwater, the court’s treatment of the cities’ amended complaints may be more impactful in providing practical guidance for municipalities and historic polluters.