Home » Case Summaries » 2003 » City of Martinez v. Texaco Trading & Transportation, Inc.


City of Martinez v. Texaco Trading & Transportation, Inc.



The City of Martinez, California (the City) filed seventeen claims against Texaco Trading and Transportation, Inc. (Texaco) for damages to Mococo Marsh resulting from oil spilled from a Texaco oil pipeline. The district court found the City’s suit barred by res judicata after a criminal suit brought against Texaco by the California Department of Fish and Game (DFG) and arising from the same incident resulted in a civil settlement. The Ninth Circuit affirmed in part and reversed in part, determining that the City’s claims on behalf of the public interest were barred by res judicata, but the City’s private easement claims were not.

In January 1997, the City obtained an open space and conservation easement in a portion of Mococo Marsh. In November 1997, somewhere between 44.32 and 331.15 barrels of oil leaked from a pipeline owned by Texaco into the marsh. After Texaco completed cleanup operations, the Contra Costa County District Attorney filed a criminal misdemeanor complaint against Texaco alleging the oil spill had violated California’s Fish and Game Code section 5650(a). This complaint eventually ended in a civil settlement requiring Texaco to pay $138,292.80 to DFG. The Deputy District Attorney told the City it need not participate in the settlement negotiations, as it would have a separate opportunity to pursue its claims. When the City filed its civil complaint against Texaco however, the district court granted summary judgment for Texaco, finding all of the City’s claims barred by res judicata.

The Ninth Circuit reviewed the district court’s grant of summary judgment de novo, applying California law to determine whether res judicata applied in this case. The court identified three elements that must be in place before res judicata can bar a plaintiff’s suit: 1) the issues resolved in the first suit must be identical to the issues raised in the second suit, 2) the first suit must result in a final judgment on the merits, and 3) either the plaintiff or a party in privity with the plaintiff must have been a party to the first suit. California also recognizes a public interest exception to res judicata permitting “relitigation of an issue of law concerning a public entity’s ongoing statutory obligations that affect individuals and members of the public not specifically before the court in the first litigation.”[1]

Under California law, in order for issues to be identical, they must involve the breach of the same “primary right[s].”[2] The court found that the City’s property interest in Mococo Marsh was a distinct primary right that had not been resolved in the earlier suit. Specifically, the City was entitled to bring its claims for damages under California Civil Code sections 815.1 and 815.3(b) for “the loss of scenic, aesthetic, or environmental value to the real property subject to the easement.”[3] The City was also entitled to bring its claim that the oil spill had decreased the value of the easement.

The court distinguished the decision in Citizens for Open Access to Sand and Tide, Inc. v. Seadrift Ass’n.[4] In that decision, the California Court of Appeals barred a new plaintiff’s claims on the basis of res judicata, but implied that the claim would not have been barred if the new plaintiff had claimed private property rights separate from those already adjudicated. Here, those of the City’s claims arising from its private property interests in the easement were private property rights that had not been adjudicated in DFG’s criminal complaint against Texaco. The court pointed out that the City did not receive any of the money awarded in Texaco’s settlement with DFG. Moreover, the criminal court would not have had jurisdiction over the City’s claims, so they could not have been raised in the earlier criminal proceeding. The court ruled, however, that those of the City’s claims brought on behalf of the public interest were barred. The DFG was “statutorily authorized to take the lead in responding to oil spills,”[5] and was therefore assumed to have adequately represented the public in the prior proceeding.

The court then turned to the issue of privity. The court found that the City was in privity with DFG with respect to the public interest claims but not with respect to the easement claims. For the purposes of res judicata, privity requires parties’ interests to be so similar that one party could act as the “virtual representative”[6] of the other. The court noted that California law[7] authorized DFG to act on behalf of the public in resolving the oil spill dispute, and reasoned that in its settlement DFG had therefore virtually represented the City’s claims on behalf of the public. However, DFG did not have authority to settle the City’s private property damage claims, and so the court found that it was not in privity with the City with respect to those claims. Moreover, the court noted that “by informing the City that the settlement would not preclude it from later raising its civil claims, DFG made clear that it did not think it was representing the City’s [private property] interests.”[8] Finally, the court determined that it would be unfair to disallow the City’s private property claims because the City had been told it need not participate in the earlier proceeding.

The Ninth Circuit thus affirmed the district court’s ruling that res judicata barred the City’s claims on behalf of the public, but reversed and remanded with respect to the City’s private property claims, finding that those claims had “never been addressed by any court.”[9]

[1] City of Martinez v. Texaco Trading and Transp., Inc., 353 F.3d 758, 762 (9th Cir. 2003) (quoting San Diego Police Officers’ Ass’n v. City of San Diego Civil Serv. Comm’n, Cal. Rptr. 2d 248, 251 (Cal. Ct. App. 2002)).

[2] Id.

[3] Id. at 763 (quoting Cal. Civ. Code §§ 815.1, .3(b) (West 2000)).

[4] 71 Cal. Rptr. 2d 77 (Cal. Ct. App. 1998).

[5] City of Martinez, 353 F.3d at 763 n.3.

[6] Id. at 764.

[7] Cal. Gov’t Code § 8670.7(a) (West 2000).

[8] City of Martinez, 353 F.3d at 764.

[9] Id.

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