BKK Working Group Proceeding With Litigation against PRPs

The BKK Class I Landfill in West Covina, California operated as a hazardous waste disposal site from the late 1960s through the late 1980s. Thousands of businesses sent wastes to the site during that period. Starting in about 2004, after receiving an order from the California Department of Toxic Substances Control (DTSC) to conduct essential activities at the site, about 50 parties that sent wastes to the site formed the BKK Working Group (BKK Group). Over the years since that time the group entered into various agreements with the DTSC to investigate and conduct response activities at the site. The BKK Group claims to have spent millions of dollars on these activities.

Because the BKK Group wanted to preserve its claimed right to seek contribution from the thousands of other potentially responsible parties (PRPs) that sent wastes to the site, it asked PRPs to enter into tolling agreements. Many of them did so. However, many also did not and, in 2018, the BKK Group filed suit against several hundred parties in BKK Working Group et al. v. 1700 Santa Fe LTD et al., Case No. 2:18-cv-05810-MWF-PLA (C.D. Cal.) and BKK Working Group et al. v. Albertsons Companies, Inc. et al. Case No. 2:18-cv-05836-MWF-PLA (C.D. Cal.)(the BKK Cases). Both cases were stayed, however, while the BKK Group and DTSC pursued settlements with the PRPs.

Starting in about 2021, DTSC and the BKK Group started making de minimis “cash out” settlement offers to PRPs. In exchange for payment, DTSC and the BKK Group offered a covenant not to sue and contribution protection under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). (Read our client alert on the settlement offer and concerns about the amounts demanded and protections offered, DTSC Makes ‘De Minimis’ Settlement Offers to BKK Site Potentially Responsible Parties.) Some parties accepted settlement offers and some did not; the settlement process is ongoing. 

Earlier this year, the judge handling the BKK Cases decided that the plaintiffs would either have to pursue the litigation or dismiss the cases. In April 2024, the court approved Case Management Orders (CMOs) that required the plaintiffs to proceed with the litigation. Among other things, the court ordered that (1) an Amended Complaint be filed by April 29, 2024; (2) the defendants be served with Requests for Waivers of Service of Process by July 22, 2024; (3) summonses be requested for those who fail to return the waivers by Sept. 21, 2024; (4) the parties exchange specified information, primarily regarding wastes sent to the site and information regarding the defendants’ insurance coverage, by Nov. 19, 2024; (5) the defendants choose defendants’ leadership counsel by Dec. 20, 2024; and (6) the parties meet and confer regarding further CMOs by Jan. 6, 2025. The court stayed the filing of responsive pleadings until Feb. 19, 2025.

As a result of the court’s orders, on April 29, 2024, the BKK Group filed amended complaints and subsequently started serving the named defendants with Requests for Waivers and accompanying documents. (Although it appears that many of the packages were served on agents for service of process, our understanding is that they did not include a summons and, therefore, did not effect formal service.) Defendants that receive the packages have several options. They can either execute the waiver; or wait to be served. In either case they will have to then exchange information, choose liaison counsel and ultimately either participate in the litigation or enter into a settlement with the BKK Group. They may also be able to contact DTSC and request that they be permitted to enter into the de minimis settlement they were previously offered. Our understanding is that, at least for the time being, the BKK Group is not willing to allow the defendants to enter into tolling agreements and then be dismissed.

If you have any questions regarding this matter, please feel free to contact Albert M. Cohen at 310.282.2228 or acohen@loeb.com.