USA – CALIFORNIA Law and Practice Contributed by: Kim Bick, Alan Bick, Corrie Plant and Tyler Alexander, Bick Law LLP
if post-foreclosure the lender continues to operate, direct, or maintains the operation of the property in a manner that contributes to further contamination. However, lenders are allowed to manage and maintain the property post-foreclosure to protect the security interest. 9.2 Lender Protection Lenders may protect themselves from potential CER- CLA or California Hazardous Substance Account Act liability by: • avoiding participation in management or control of the property or facility, except as necessary and appropriate to protect their security interest; • obtaining and maintaining indicia of ownership as defined by EPA’s regulations at 40 CFR § 280.200 (d); and • in the event of foreclosure, winding up operations and liquidating the facility as soon as commercially reasonable. Companies in California may face civil liability to regu- lators under both federal and California environmen - tal statutes. Some environmental statutes, like the Clean Water Act and California’s Prop 65, provide for citizen suit enforcement. Companies may also face liability under common law theories like negligence, nuisance, and trespass for environmental effects that harm neighbouring landowners. Companies may also be liable at contract or for fraud in real property trans- actions. 10.2 Exemplary or Punitive Damages In general, the proper measure of damages in Cali- fornia civil actions is compensatory damages (Cal. Civil Code § 3333). Punitive damages are disfavoured under California law and limited to the enumerated cir- cumstances in Civil Code Section 3294: oppression, fraud, or malice. A party seeking punitive damages must plead specific facts satisfying the Civil Code Section 3294 standards in the complaint and prove those facts by clear and convincing evidence at trial. Where punitive damages are available, they are limited 10. Civil Liability 10.1 Civil Claims
to what is necessary to punish and deter bad conduct and by the due process concerns explained by the US Supreme Court in BMW v Gore and State Farm v Campbell . 10.3 Class or Group Actions Class action procedures are available for environ- mental cases in California where the proposed class satisfies the standards in California Code of Civil Pro- cedure § 382 for state court or Federal Rule of Civil Procedure Rule 23 (b)(3) for federal district court. The party seeking class certification bears the burden to prove: • numerosity – that the proposed class is too large to practically join all members to the action; • commonality – that common questions of law or fact predominate over individual issues; • typicality – that the proposed class members’ claims or defences are typical to those of the class; and • adequacy – that the proposed class members will adequately represent the interests of the class. 10.4 Landmark Cases Landmark California environmental cases include the following. • Friends of Mammoth v Bd. of Supervisors , 8 Cal. 3d 247 (1972) – held that CEQA’s definition of “pro- ject” includes private activities that require govern- ment permission. • National Audubon Soc’y v Sup. Ct. (Mono Lake), 33 Cal. 3d 419 (1983) – held that the California State Water Resources Control Board has an ongoing responsibility to determine whether water diversions are in the best interest of public trust resources. • Center for Biological Diversity v Dept. of Fish & Wildlife , 62 Ca. 4th 204 (2015) – upheld California’s use of AB 32’s statewide GHG reduction goals as a reasonable standard for “significance” under CEQA but found agency failed to rationally explain how the reduction in the specific land use development at issue was adequate to support the statewide goal. • Association of Irritated Residents v EPA , 10 F.4th 937 (9th Cir. 2021) – upheld EPA’s approval of Cali-
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