SUPERIOR COURT OF CALIFORNIA 

COUNTY OF LOS ANGELES 

 

DEPARTMENT 71 

 

TENTATIVE RULING 

 

 

Defendant Leach International Corporation’s unopposed motion for a determination that the settlement between Plaintiff Idemia America Corp. and Defendant Leach International Corporation was made in good faith is granted.   

Defendant Leach International Corporation’s motion for a bar order for contribution protection under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”) section 113, 42 U.S.C. § 9613, California Superfund, Health and Safety Code § 25363 et seq. (“HSAA”), and other federal and state common law claims is granted. 

 

Defendant Leach International Corporation (“Leach International”) (“Defendant”) moves for a determination that the settlement between Plaintiff Idemia America Corp. (“Idemia”) (“Plaintiff”) and Leach International was entered into in good faith.  (Notice Motion, pg. 2; C.C.P. §877.6(a)(1).)  Leach International moves for a bar order for contribution protection under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”) section 113, 42 U.S.C. §9613, California Superfund, Health and Safety Code §§25363 et seq. (“HSAA”), and other federal and state common law claims (“Bar Order”).  (Notice Motion, pg. 2.) 

 

Background 

On July 28, 2023, Plaintiff filed its Complaint against Leach International and Non-Settling Defendants alleging five causes of action: (1) Response Costs Under California Superfund, Health and Safety Code §§25363 et seq.; (2) trespass; (3) continuing private nuisance; (4) continuing public nuisance; and (5) violation of California Business & Professions Code §17200.  

Leach International and Plaintiff have been engaged in arm’s length settlement negotiations since May 2023.  (Decl. of Elliott ¶23.)  In August 2023, the parties agreed to enter into a Settlement Agreement.  (Decl. of Elliott ¶23.) 

Leach International filed the instant motion on January 31, 2024.  Defendants The Muller Company, TRI Partners, MCV III Associates, and Stephen J. Muller (“Muller Defendants”), The Northwestern Mutual Life Insurance Company (“Northwestern”), and Engineered Magnetics, Inc. (“EMI”) (collectively, “Non-Settling Defendants”) filed a notice of non-opposition on February 2, 2024. 

 

Legal Standard 

“Any party to an action in which it is alleged that two or more parties are joint tortfeasors or co-obligors on a contract debt shall be entitled to a hearing on the issue of the good faith of a settlement entered into by the plaintiff or other claimant and one or more alleged tortfeasors or co-obligors, upon giving notice in the manner provided in subdivision (b) of Section 1005.”  (C.C.P. §877.6(a)(1).) 

“The issue of the good faith of a settlement may be determined by the court on the basis of affidavits served with the notice of hearing, and any counter affidavits filed in response, or the court may, in its discretion, receive other evidence at the hearing.”  (C.C.P. §877.6(b).) 

A determination by the court that the settlement was made in good faith shall bar any other joint tortfeasor or co-obligor from any further claims against the settling tortfeasor or co-obligor for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.”  (C.C.P. §877.6(c).) 

There is no precise yardstick for measuring “good faith” of a settlement with one of several tortfeasors. But it must harmonize the public policy favoring settlements with the competing public policy favoring equitable sharing of costs among tortfeasors. To accomplish this, the settlement must be within the “reasonable range” (within the “ballpark”) of the settling tortfeasor’s share of liability for the plaintiff’s injuries—taking into consideration the facts and circumstances of the particular case.  (Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal. 3d 488, 499.) 

Whether the settlement was within the “good faith ballpark” is to be evaluated on the basis of information available at the time of settlement, including: (1) a rough approximation of plaintiffs’ total recovery and the settlor’s proportionate liability; (2) the amount paid in settlement; (3) a recognition that a settlor should pay less in settlement than if found liable after a trial; (4) the allocation of the settlement proceeds among plaintiffs; (5) the settlor’s financial condition and insurance policy limits, if any; and (6) evidence of any collusion, fraud, or tortious conduct between the settlor and the plaintiffs aimed at making the non-settling parties pay more than their fair share.  (Id.) 

“The party asserting lack of good faith (in a settlement) shall have the burden of proof on that issue.”  (C.C.P. §877.6(d).) 

 

Discussion 

The Court determines the settlement between Plaintiff and Leach International was made in good faith.  Leach International sufficiently demonstrated the first and second factors are met for the test to determine if a settlement is made in good faith.   

First, Leach International agreed to settle with Plaintiff for a monetary amount of $455,000 out of the total $5.6 million cost of remediation.  (See Decl. of Elliott ¶¶11, 23; Supp.-Decl. of Elliott ¶2, Exh. A at §2.1(a).)  Leach International’s total contribution constitutes nearly 8% of the estimated cleanup costs.  (Decl. of Elliott ¶26.)  Leach International operated at 3150 East Ana Street and 18435 Susana Road, Compton, California (“Site”) for 3-4 years, compared with the 17 years of ownership by Dominguez Estate, 7 years of operation by Eldema Lights, 20 years of ownership and operation by Genisco, 8 years of ownership by Northwestern Mutual, 11 years of ownership by MCV III, 5 years of ownership by EMI, and approximately 25 years of ownership by Idemia.  (Decl. of Elliott ¶26.)   

If the total years of operations and ownership are added together, Leach International’s 3-4 years of operations should correspond to a roughly 4% liability share, based solely on eight potentially responsible operators who occupied the property between 1957 and the present. When considering the potentially responsible owners, Leach International’s share of the projected cleanup costs is fair, considering that Dominguez Estate, Northwestern Mutual, MCV III, Genisco, and Idemia each benefited from rents funded by these operations for over 90 years collectively.  (Decl. of Elliott ¶26) 

Second, the agreed settlement amount of $455,000 is less than Leach International’s theoretical proportional share of liability but is large enough to contribute significantly to the Site cleanup.  (See Tech-Bilt, 38 Cal.3d at pg. 499 [“A settlor should pay less in settlement than he would if he were found liable after a trial”].)  

Avoiding the expense of litigating Plaintiff’s case against Leach International will prevent the expenditure of significant costs by all parties and obviate the need for additional litigation with respect to Leach International’s share of liability. In addition, the entirety of the settlement proceeds will be disbursed to Plaintiff to partially fund the Site cleanup, benefiting all parties to this action by reducing the total cleanup costs and each defendants’ proportional liability. Accordingly, the $455,000 settlement is valuable to all of the parties and evidences good faith.  (See Decl. of Elliott ¶24.) 

Third, there is no evidence of the existence of collusion, fraud, or tortious conduct aimed to injure the interests of non-settling defendants.  (Tech-Bilt, 38 Cal. 3d at pg. 499.)  Plaintiff and Leach International have been engaged in arm’s length settlement negotiations since May 2023.  (Decl. of Elliott ¶23.)  In August 2023, the parties agreed to enter into the Settlement Agreement.  (Decl. of Elliott ¶23.)  Further, none of the Non-Settling Defendants appearing in this action contest this motion.  (Decl. of Elliott ¶24, Exh. K; Notice of Non-opposition.) 

Pursuant to the Settlement Agreement, Leach International moves for this Court to issue a Bar Order for claims for contribution and indemnity by third parties against Plaintiff and Leach International because a settlement agreement that resolves environmental issues, as this Settlement Agreement does, is in the public interest.  (Fullerton Redevelopment Agency v. Southern California Gas Co. (2010) 183 Cal.App.4th 428, 435.)  Whether the claims are brought under CERCLA, state statute, or common law, if an agreement assess and allocates response costs at a hazardous waste cleanup site, claims for contribution by third parties against settling parties for the matters addressed in a settlement agreement are properly barred.  (Id.) 

Here, issuing a Bar Order to bar claims for contribution and indemnity under state and federal statutes and common law is appropriate because Leach International’s settlement payment specifically allocates response costs that correspond to Leach International’s potential liability share, and promotes remediation of the contamination at the Site.  Therefore, a Bar Order to bar claims for contribution and indemnity against Leach International under state and federal statutes and common law is appropriate. 

 

Conclusion 

Leach’s motion for a determination that the settlement between Plaintiff and Leach was entered into in good faith is granted.   

Leach’s motion for a bar order for contribution protection under CERCLA, HSAA, and other federal and state common law claims is granted. 

Moving Party to give notice. 

 

Dated:  February _____, 2024