Judge David S. Cunningham, Case Number: 22STCV01489, Date: 2023-09-07 Tentative Ruling

Judge: David S. Cunningham, Case: 22STCV01489, Date: 2023-09-07 Tentative Ruling

Case Number: 22STCV01489 Hearing Date: September 7, 2023 Dept: 11

22STCV01489 (People of the State of California v. Prologis, Inc.)

Tentative Ruling Re: Motion to Intervene

Date: 9/7/23

Time: 1:45 pm

Moving Party: Ohio Security Insurance Company (“OSIC”)

Opposing Party: None

Department: 11

Judge: David S. Cunningham III

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TENTATIVE RULING

OSIC’s motion to intervene probably should be denied.

BACKGROUND

This case arises from a warehouse fire in Carson, California. The warehouse housed millions of pounds of flammable commercial products – e.g., hand sanitizers and anti-bacterial wipes. During the firefighting effort, which lasted days, “enormous quantities” of the products and “waste discharged into the storm drains on and near” the warehouse and “eventually flowed into the Dominguez Channel (‘Channel’).” (First Amended Complaint, ¶ 1.) The products “caused a chemical and biological reaction in the Channel waters releasing large amounts of hydrogen sulfide gas, and its characteristic foul odor, into the air.” (Ibid.) “The foul odor lingered for weeks and created a public nuisance in a portion of the city of Carson and nearby areas, causing thousands of impacted residents and families to temporarily relocate from their homes.” (Ibid.)

“By this lawsuit,” County of Los Angeles, Los Angeles County Flood Control District, and Consolidated Fire Protection District of Los Angeles County “seek damages they incurred, including, but not limited to, investigating and enforcing violations of the hazardous materials laws” and putting out the fire. (Id. at ¶ 4.)

Here, OSIC moves to intervene. OSIC insures J&M Company, Inc. (“J&M”). J&M allegedly suffered property damage caused by the fire. OSIC made insurance payments to J&M and now wants to file a subrogation claim against Defendants.

DISCUSSION

To recap, this is an action by public entities against private Defendants for damages related to the public entities’ investigation of Defendants’ violations, enforcement of Defendants’ violations, and firefighting. The Court’s understanding is that J&M is not a party to the case, and the operative complaint does not allege claims pertaining to damages suffered by J&M.

Although the motion to intervene is unopposed, the Court still must determine whether OSIC is entitled to intervene as a matter of right. The answer appears to be no. “An insurer that has paid benefits to its insured for losses caused by a third party generally has a right of subrogation (by terms of the insurance policy or by operation of law) against the party responsible for the loss.” (Edmon & Karnow, Cal. Practice Guide: Civ. Procedure Before Trial (The Rutter Group June 2023 Update) ¶ 2:410.5, emphasis in original.) “This subrogation right is an interest ‘relating to the property or transaction’ so that the insurer may sue in its own name or intervene in any action by the insured against the responsible party.” (Ibid., emphasis added.) The instant case is not an action by the insured (J&M) against the responsible parties (Defendants).

The next issue concerns permissive intervention. The Court has discretion to grant permissive intervention if:

• The nonparty has a direct and immediate interest in the litigation; and

• The intervention will not enlarge the issues in the case; and

• The reasons for intervention outweigh any opposition by the existing parties.

(Id. at ¶ 2:414, emphasis in original.) OSIC contends it holds a direct interest because the liability issues are the same. OSIC claims the public entities and OSIC “will either gain or lose depending on the outcome of the judgment . . . because a judgment for Defendants . . . defeats the claims of both” the public entities and OSIC. (Motion, p. 2.) The Court tends to disagree for two reasons. One, OSIC fails to cite authority granting permissive joinder to assert a subrogation claim related to a private insured’s private insurance in a suit by public entities to redress public damages. Two, even assuming a direct interest exists, the Court “has discretion to deny intervention . . . if the interests of the original litigants outweigh the intervenor’s concerns.” (Edmon & Karnow, supra, at ¶ 2:420, emphasis in original.) “For example, intervention will not be allowed when it would delay the principal suit, or require a reopening of the case for further evidence, or delay the trial of the action, or change the position of the original parties.” (Ibid.) Defendants’ culpability for J&M’s property damage is a different issue than Defendants’ culpability for the public entities’ damages. Different properties, different facts, different harms. The Court believes intervention would raise new issues and enlarge the issues in the case. (See id. at ¶ 2:436 [instructing that permissive intervention is improper “if it would enlarge the issues”].)

Accordingly, the Court is inclined to deny the motion to intervene, but OSIC remains free to request leave to intervene in an appropriate case or to file a separate subrogation lawsuit “in its own name[.]” (Id. at ¶ 2:410.5.)