Facts

Beginning in the 1930s, a 44-acre property next to the San Diego International Airport was developed by Ryan Aeronautical Company for heavy manufacturing of aircraft and military planes for the U.S. government. In 1962, the Port District became owner and trustee of the site.

In its complaint, the Port District alleged that defendants (collectively "TDY") leased the site from 1939 to 2002 and left the site with soil and groundwater contamination at the termination of the lease in 2002. The Port District sued defendants in federal court under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), the California Water Code, the California Hazardous Substances Account Act, and several common law theories. The Port District claimed that it incurred approximately $1.5 million to investigate contaminations at the site. The Port District also sought its attorneys fees in the case.

In an earlier lawsuit, it was awarded a $23 million judgment against TDY for breach of lease.

TDY answered the Port District's complaint and counter-claimed against the Port District for CERCLA contribution, declaratory relief, state law contribution, equitable indemnification, and public nuisance, alleging the Port District caused a portion of the contamination of the site and surrounding areas.

TDY then filed third-party complaints against the San Diego County Regional Airport Authority and General Dynamics Corporation, claiming that those entities also contributed to contamination of the site and surrounding areas.

The Airport Authority, which currently leases the site from the Port District, filed a counterclaim against TDY, alleging that TDY contaminated the site. General Dynamics then filed a separate lawsuit against TDY, alleging that TDY contaminated the site and nearby properties.

PLAINTIFF'S CONTENTIONS:
The plaintiff contended it incurred and would incur significant expenses in discharging its duty as trustee to investigate and remediate the site’s contamination.

DEFENDANT'S CONTENTIONS:
The defendant contended its pollution of the site was insignificant and all entities should contribute to the clean-up. Defendants also sued for $15 million in costs they had allegedly incurred in clearning up PCB's from nearby Convair Lagoon.

Damages

The Port District made a claim of approximately $1.5 million for costs related to investigation of the site. The Port District added claims for declaratory relief and attorneys' fees. TDY, the Airport Authority, and General Dynamics all sought contribution for costs of investigation and cleanup of contamination. The Airport Authority also claimed consequential damages, alleging that the contamination impeded or precluded the Authority's ability to construct improvements on the site.

Result

After a private mediation process and settlement conferences with the magistrate judge (Hon. Louisa S. Porter) the Port District, Airport Authority and TDY settled in March 2007 with no moneys exchanged. The Port District agreed to remove existing buildings on the site (using funds from the state court judgment it previously obtained against TDY). TDY agreed to complete remediation of the site under the direction of the Regional Water Quality Control Board, as per a 2004 Cleanup and Abatement Order. The Airport Authority also admitted in the settlement agreement that it has no current or reasonably foreseeable future plans or specific development projects for the site. The Port District, TDY, and the Airport Authority agreed to appoint an arbitrator to resolve any future disputes related to the settlement, and the court retained jurisdiction for enforcement purposes. TDY and General Dynamics also settled. Under the settlement, General Dynamics paid TDY an undisclosed amount. Under the two settlements, all the underlying actions were dismissed.