MEMORANDUM AND ORDER
On April 29, 2016, plaintiff the Town of Islip (“plaintiff’ or “the Town”) filed this action against Thomas Datre Jr., Thomas Datre Sr., Clara Datre, Richard Dátre Jr., Christopher Grabe, Gia Gatién, Ronald Cianciulli, Joseph Montuori, Brett Robinson, Iglesia De Jesucristo Palabra Miel (the “Church”), Marco Lopez, Nancy Alvarez, William Carillo, Raul Pachecho, Walter Casasola, 5 Brothers Farming Corp., DFF Farm Corp., Datre Trucking & Farming Inc., Datre Auto & Equipment Sales Inc., Daytree at Cortland' Square Inc., Daytree Custom Builders Inc., Datre Family Farms Inc., Datre Farms Realty Co. Inc., Islandia Recycling Inc., C.J. Site Development Inc., Atlas Home Improvement Corp. of Long Island d/b/a Atlas Asphalt (“Atlas”), IEV Trucking Corp. (“IEV”), COD Services Corp. (“COD”), and John Doe Nos. 1 through 10. The Complaint sets forth claims under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1964(c), 1962(d), and the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9601 et seq,-, as well as state law claims for public nuisance, private nuisance, trespass, injury to property, joint tortfeasors, fraud and deceit, and restitution.
These claims are based on the alleged illegal dumping of hazardous waste at Roberto Clemente Park (“the Park”) from July or August 2013 through April 20Í4 by defendants 5 Brothers Farming Corp., DFF Farm Corp., Datre Trucking & Farming Inc., Datre Auto & Equipment Sales Inc., Daytree at Cortland Square Inc., Daytree Custom Builders Inc., Datre Farms Realty Co. Inc,, Thomas Datre Jr., Thomas Datre Sr., Clara Datre, Richard Datre Jr. and Gia Gatien (the “Datre defendants”), together with defendants C.J. Site Development and Christopher Grabe (the “Grabe defendants”). Defendants COD and IEV (collectively, the “arranger defendants”) allegedly acted as- brokers throughout this time, arranging for the Datre and Grabe defendants to collect All material friom the John Doe defendants at various locations in Queens, Kings, Nassau, and Suffolk counties.
According to the Complaint, prior to the dumping activities, the Church, Lopez, Alvarez, Carillo, Pachecho and Casasola (collectively, the “Church.defendants”) had received permission to replace the topsoil and existing grass seed on one of the Park’s soccer fields, and individuals were seen spreading soil on the field in May 2013. In August and October 2013, the Church defendants sent two letters to the Town acknowledging their work on the soccer field.
The Complaint further alleges that the Town closed the Park in January 2014 and ordered the removal of the dumped material. The Datre and Grabe defendants re
The Complaint asserts that defendants engaged in a RICO conspiracy to fraudulently conceal the disposal of hazardous substances at the Park, setting forth underlying claims for mail and wire fraud. It also alleges CERCLA claims, which assert that defendants are all potentially responsible parties for their roles in the illegal dumping, as well as various state law claims.
Before the Court are motions to dismiss filed by the arranger, Atlas, and Church defendants. As set forth in more detail below, the Court concludes, inter alia, that the Complaint fails to allege facts from which it could be plausibly inferred that these defendants knew, or should have known, that the material dumped at the Park by the Datre and Grabe defendants contained hazardous substances. Absent such allegations regarding knowledge, plaintiff cannot plausibly assert that the arranger, Atlas, and Church defendants engaged in mail or wire fraud by misrepresenting or concealing material information (ie., the hazardous nature of the material).
In addition, the Court concludes that, for “arranger” liability to apply under CERCLA, the Complaint must allege that an arranger knew, or should have known, that the material in question was hazardous. Given the current allegations, the Complaint fails to state plausible CERCLA claims for arranger liability against COD, IEV, and the Atlas defendants. The Complaint also fails to state a plausible claim against the Church defendants for “operator” liability because it does not allege that they exercised the requisite degree of control over the Park or the hazardous substances for such liability to apply.
Finally, the Complaint does not plausibly allege state law claims against the arranger, Atlas, or Church defendants for (1) nuisance because it does not adequately allege intent or negligence, (2) trespass because the illegal dumping was not an immediate or inevitable consequence of these defendants’ actions, (3) injury to property because the underlying nuisance and trespass claims fail, (4) fraud and deceit because the Complaint fails to allege knowledge of the material’s hazardous nature, and (5) restitution because the Complaint fails to allege that these defendants had a duty to assist in the remediation of the Park.
Accordingly, the Court grants the arranger, Atlas, and Church defendants’ motions to dismiss. However, the Court gives the Town leave to re-plead to attempt to address thse pleading defects with additional allegations, if plaintiff can do so.
I. Background
A. Facts
The following facts are taken from the Complaint (“Compl.”). (ECF No. 1.) The Court assumes them to be true for purposes of deciding this motion and construes them in the light most favorable to plaintiff, the non-moving party.
The Town owns the Park, which consists of designated parkland located in Brent-wood, New York. (Compl. ¶ 70.) In April 2013, Lopez, the Church’s pastor, and Alvarez, a member of the Church, contacted the Town on behalf of the Church and requested permission to replace the topsoil and existing grass seed on one of the
In June or August 2013, the Datre and Grabe defendants began trucking in thousands of tons- of construction and demolition (“C & D”) debris, contaminated fill, and other solid wastes to the Park, dumping it over the topsoil and seed the Church defendants had deposited in May. (Id. ¶ 74.) On August 24, 2013, the Parks Department held a press conference at the Park where attendees saw trucks marked “Datre” delivering fill to the site of the soccer field. (Id. ¶ 76.)
Subsequently, Town Board members and officers not employed by the Parks Department asked about the dumping activity. (Id. ¶77.) Commissioner Montuori and Robinson informed them that the Church defendants were volunteering to repair the soccer field, and the Town determined that they needed a permit to clear and grade the park, as well as consent and approval from the Town Board for any improvements by the Church defendants. (Id.) Commissioner Montuori and Robinson asked the Church to provide information for a land clearing permit and a letter from the Church describing the work it planned to complete. (Id.) On August 29, 2013, the Church faxed the Town a letter (the “August letter”) signed by Lopez, stating that the Church had been working on the soccer field without pay since April 2013. (Id. ¶ 81.) The letter provided no other information. (See id.)
Meanwhile, claiming that he was working on behalf of the Church, defendant Grabe spoke with an architect and asked him for a site drawing of the soccer fields to submit to the Town with the land- clearing permit information, (Id. ¶¶ 78r79.) The architect prepared the drawing, which did not include specifications of- fill material, and provided it to Grabe. (Id. ¶ 80.) Grabe submitted the site drawing -to the Town, and the Planning and Parks Departments reviewed it in the preparation of an application for a land clearing and grading permit. (Id. ¶83.) The Town Board subsequently granted the Church permission to spread topsoil and reseed the soccer fields at the Park. (Id. ¶¶ 84-85.) The Parks Department then submitted an application to the Planning Department for a Land Clearing and Grading permit, which the Planning Department issued on September 12, 2013. (Id. ¶ 87.)
Around this time, deliveries of fill material ceased, and the entire area of the soccer field was buried under a layer of material, which extended into the wooded areas bordering the field. (Id. ¶89.) No additional work was performed to seed or otherwise restore the area for use as a soccer field. (Id.)
In October 2013, Alvarez met with Commissioner Montuori and Robinson about the work at the soccer field. (Id. ¶90.) Later, on November 18, 2013, Church members Carillo, Pacheco, and Casasola faxed a letter dated October 22, 2013 (the “October letter”) to Commissioner Mon-tuori in which they stated that the Church had worked on the field since April, but the work had ended due to lack of irrigation. (Id. ¶¶ 91-93.) The Church offered to resume work if the Town would agree to provide water to the site. (Id. ¶ 93.)
The Town-.then sent a letter to. Lopez and the Church ordering them to cease and desist all work in the recharge area. (Id. ¶ 98.) The Church defendants did not reply, but the Datre and Grabe defendants responded by removing most of the fill and depositing it in locations outside the Park. (Id. ¶ 99.) The Atlas defendants joined in this removal effort, removing a portion of the fill from the Park and depositing it at 117 Brook Avenue, Deer Park, New York, property owned by the Atlas defendants. (Id. ¶ 100.) The Atlas defendants then moved this .debris from their property to other property that they used and occupied at 175 Brook Avenue in Deer Park (the “Maisie Property”). (Id.) The owner of the Maisie Property did not give the Atlas defendants permission to deposit this fill there. (Id.) On January 27, 2014, Commissioner Montuori reported that some C & D debris, contaminated fill, and other waste remained in the recharge area after the removal. (Id. ¶ 10T.)
Dumping continued in the spring of 2014. (Id. ¶¶ 103-04.) On March 24, 2014, while opening the Park gate, a park ranger observed five Datre tractor trailers waiting on the road outside the Park. (Id. ¶ 103.) Once the gate was open, the trucks proceeded to the soccer' field and dropped what appeared to be topsoil over previously deposited material,, which contained large quantities of broken glass, crushed cement, and large stones. '(Id.) Town'employees’ saw Datre damp trucks operating in the Park as late as April 9, 2014. (Id. ¶ 104.) ' -
In April 2014, the 'Suffolk County District Attorney’s Office launched an investigation into the dumping of the C & D debris and illegal fill at the Park and other locations in Suffolk County.
Throughout this time (i. e., between June 2013 and April 2014), COD and IEV acted as brokers to supply material for disposal at the Park. (Id. ¶ 124.) Specifically, these defendants would arrange. for trucks owned or directed by the Datre and Grabe defendants to collect material at various locations owned or operated by the John Doe defendants in Kings, Queens, Nassau or Suffolk counties. (Id.) The Datre trucks would then transport that material to the Park for disposal. (Id.) During this period, the arranger defendants paid over $600,000 to various Datre defendants for the pickup and removal of over 1,200 separate loads of material, which totaled over 43,000 cubic yards. (Id.) IEV paid the Da-tre defendants over $417,000 for 759 loads of material, and COD paid them over $245,000 for 476 loads. (Id.) Telephone records show that, from January 1, 2013 until December 31, 2014, IEV had 151 calls with Datre Jr. and 1,331 with Grabe, while COD had 163 calls with Datre Jr. and 825 calls with Grabe. (Id. ¶¶ 131-32.) The purpose of these calls was to arrange pickup and delivery of the material. (Id.)
B. Procedural History
The Town filed the Complaint on April 29, 2016 against all defendants. (ECF No. 1.) The Church defendants answered on June 24, 2016 (ECF No. 23), IEV answered on June 29, 2016 (ECF No. 27), and the Atlas defendants answered on July 22, 2016 (ECF No. 42). Motions to dismiss were filed by COD on August 22, 2016 (ECF No. 48), IEV on September 21, 2016 (ECF No. 52), the Church defendants on December 15, 2016 (ECF No. 63), and the Atlas defendants on December 16, 2016 (ECF No. 64). The Town filed oppositions to all these motions (ECF Nos. 53, 66, 67), and each defendant except the Atlas defendants filed a reply (ECF Nos. 56, 57, 68). Oral argument took place on February 28, 2017. (See ECF No. 69.) The Court has fully considered the parties’ submissions.
II. Standard op' Review
In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept the factual allegations set forth in the complaint as' true and draw all reasonable inferences in favor of the plaintiff. See, e.g., Cleveland v. Caplaw Enters.,
The Supreme Court clarified the appropriate pleading standard in Ashcroft v. Iqbal, setting forth two principlés for a district court to follow in deciding a motion to dismiss.
III. Discussion
Plaintiff brought federal claims against defendants for violations of RICO, 18 U.S.C. §§ 1964(c), 1962(d), and CERCLA,
A. RICO Claims
Under RICO, it is “unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt.” 18 U.S.C. § 1962(c). Section 1962(d) makes it “unlawful for any person to conspire to violate ... the provisions of subsection ... (c).” 18 U.S.C. § 1962(d). Furthermore, “[w]hen § 1962 is violated, in addition to criminal penalties, the RICO statutes also authorize civil lawsuits, which, if successful, can entitle a plaintiff to treble damages, costs, and attorney’s fees.” DLJ Mortg. Capital, Inc. v. Kontogiannis,
Courts have described civil RICO as “ ‘an unusually potent weapon—the litigation equivalent • of a thermonuclear device.’ ” Katzman v. Victoria’s Secret Catalogue,
Although civil RICO presents many hurdles for a plaintiff to overcome, the Supreme Court has also “made clear that it would not interpret civil RICO narrowly.” Attorney Gen. of Canada v. R.J. Reynolds Tobacco Holdings, Inc.,
Here, defendants argue that the Town lacks standing to proceed under RICO because it has failed to exhaust its other remedies for seeking reimbursement for its cleanup costs. They also argue that the Town has failed to state a RICO claim for mail or wire fraud because the Complaint alleges no facts from which a jury could infer fraudulent intent. As set forth below, the Court agrees that the Town has failed to state a claim on which relief can be granted and, therefore, grants defendants’ motions to dismiss the RICO claims. See Fed. R. Civ. P. 12(b)(6).
1. Standing
To establish standing under RICO, a plaintiff must allege “(1) a violation of section 1962; (2) injury to business or property; and (3) causation of the injury by the violation.” First Nationwide Bank v. Gelt Funding Corp.,
Defendants argue that the Town has not shown a “clear and definite” injury under RICO because it has not exhausted its other remedies for the $4 million it incurred in clean-up costs, given that the Town’s other claims seeking relief for this injury (i.e., its CERCLA and state law claims) are still pending. Citing Commercial Union Assurance Co., plc v. Milken,
The Court disagrees. All of the cases cited by defendants (except Commercial Union) involved situations where the amount of damages suffered was directly dependent on either a separate, ongoing proceeding—the results of which would determine whether or to what extent the plaintiff suffered an injury—or' a debt recoverable via foreclosure. None of them stand for the broad principle that, before bringing a RICO claim, all plaintiffs
At the outset, the Court concludes that Commercial Union is inapposite. In that case, the Second Circuit simply held that the plaintiff investors could not maintain 'a RICO action after receiving the amount they lost in investments via settlement. Commercial Union,
Similarly, DLJ Mortgage Capital does not support defendants’ position because it simply applied the well-established rule that, where a creditor-plaintiff alleges an injury from a fraudulently-induced mortgage, the plaintiff must pursue foreclosure remedies provided by the mortgage before filing a RICO claim for the lost debt. See
In the remaining cases, the alleged injuries all depended on the outcome of ongoing proceedings. In Bankers Trust, for example, the plaintiffs “RICO claim for injuries suffered as a result of its lost debt overlap[ped] with the ongoing proceedings in the bankruptcy court,” and, thus, the plaintiff lacked standing.
(lj [the plaintiff] was injured by the identical transactions that injured the bankrupt corporation, and (2) should the corporation, through its trustee in bankruptcy, recover for its injury, [the plaintiffs] injury will itself be reduced. For instance, should the bankruptcy trustee ultimately recover all the fraudulently transferred assets, [the plaintiffs] injuiy could be significantly reduced; conversely should the assets never be recovered, or should the bankruptcy court Order the claim abandoned, [the plaintiffs] injury would be much more severe.
Id. Thus, the amount of damages turned on whether the plaintiff could collect on its debt, which, in turn, depended on the outcome of the ongoing bankruptcy proeeed-
Likewise, in Stochastic Decisions, the plaintiff, a judgment creditor, brought a RICO claim alleging a conspiracy to prevent it from satisfying its outstanding judgment obtained in New Jersey against the defendants, claiming that the amount of the judgment was recoverable under RICO as “lost debt.”
Finally, Sky Medical dealt with New York’s no-fault automobile insurance scheme, which allows an insurer to deny a claim for medical treatment if a physician finds that treatment is not medically necessary during an independent medical examination (“IME”). See Sky Medical,
plaintiffs damages [were] not ‘clear and definite’ for so long as some of the no-fault claims that form the basis of plaintiffs RICO causes of action are .still being litigated in state court or arbitration. Plaintiff could prevail on some or all of those claims, which would reduce the amount that plaintiff could recover under RICO.
Id. at 233. Accordingly, •given the plaintiffs failure to separate his claims based on concluded and pending proceedings, this Court dismissed all of the RICO claims. Id.
As defendants correctly point out, this Court in Sky Medical rejected the argument that RICO’s ripeness doctrine was limited to the context of secured lenders pursuing nonpaying debts. Id. at 232. Nevertheless, neither Sky Medical nor the cases on which Sky Medical relied in reaching this conclusion embraced the broad exhaustion principle for which defendants advocate now. As noted above,
In holding that RICO’s ripeness doctrine was not limited to the secured lender context, moreover, this Court relied on Uzan,
In sum, the cases cited by defendants simply indicate that, where a plaintiff raises a RICO claim whose injury is dependent on the outcome of an ongoing proceeding or a debt recoverable via foreclosure, the injury is not “clear and definite” enough for the plaintiff to have RICO standing. Here, however, the Town’s RICO claims are not dependent on an unpaid debt or ongoing proceedings in other forums. Instead, the Town has alleged a concrete, particularized injury, namely the loss of $4 million in clean-up costs, as a result of the RICO enterprise. (Compl. ¶ 110.) Therefore, the Town has satisfied the injury requirement, and its RICO claims are ripe for review.
2. Particularity and Intent
As predicate acts for its RICO claims, the Town alleges that defendants engaged in mail and wire fraud in violation of 18 U.S.C. §§ 1341 and 1343. (See Compl. ¶ 134 (mail and wire fraud by all defendants); id. ¶ 128 (wire fraud by Church defendants); id. ¶¶ 131-32 (wire fraud by
Furthermore, although a plaintiff may “allege fraudulent intent generally” under Rule 9(b), it still “must provide some minimal factual basis for conelusory allegations of scienter that give- rise to a strong inference of fraudulent intent.” Powers v. British Vita, P.L.C.,
a. Arranger Defendants
Here, the Town Ras not adequately pleaded fraud with particularity or fraudulent intent against the arranger defendants. First, like the complaint in Colony at Holbrook, the Complaint here does not identify any statements made by the arranger defendants that were fraudulent, much less the person who made those statements, the time they'were made, or théir content. See Colony at Holbrook,
In addition, even if the Town had specified particular fraudulent statements, identified the speaker, outlined the time and place they occurred, and explained why they were fraudulent, see Anatian,
Nor does the Complaint allege “circumstances indicating conscious behavior by the [arranger] defendant^]” showing fraudulent intent. Powers,
b. Atlas Defendants
Furthermore, the Complaint fails to state RICO claims against the Atlas defendants for the same reasons it fails to state claims against the arranger defendants. Specifically, the Complaint neither identifies a specific statement made by Atlas or Cianciulli that constitutes fraud nor sets forth facts that establish a motive to engage in fraudulent activity or conscious behavior indicative of fraudulent intent. (See Compl. ¶¶ 100, 122 135.) Therefore, the RICO claims against the Atlas defendants are dismissed.
c. Church Defendants
Finally, the Town has also failed to state a RICO claim against the Church defendants. First, for defendants Alvarez, Carillo, Pacheco, and Casasola,. the Complaint does not meet Rule 9(b)’s heightened pleading requirements. With respect to Alvarez, the Complaint alleges that she made “22 separate telephone calls with [Grabe] between January 1, 2013 and December 31, 2014” and that, “[o]n information and belief, these telephone calls were made to maintain the fagade that the Church membership, and no others,-were conducting work at [the Park].” (Compl. ¶ 128.) As with the arranger defendants, this vague reference to several different phone calls between Alvarez and Grabe— without specifying the date or the content of those calls—is not enough to satisfy Rule 9(b)’s requirement to “specify the statements that the plaintiff contends were fraudulent ... state where and when the statements were made, and ... explain why the statements were fraudulent.” Anatian,
As for Carillo, Pacheco, and Casasola, the Town alleges that they made a fraudulent statement in the October letter when they said that “the congregation of [the Church] has been working on the ‘Ball Field’ at [the Park], without pay, since April 2013” because “work performed by members of the Church congregation had ceased in May 2013.” (Compl. ¶ 92.) The next paragraph of the Complaint, however, belies this assertion of falsity because it acknowledges that the October letter also informed the Town that the Church’s work at the Park “had stopped.” (Id. ¶ 93,). In other words, the October letter stated that the Church had worked on the soccer field, but this work had ended. Thus, the Complaint does not adequately explain why the October letter was fraudulent. Compare Houraney v. Burton & Assocs., P.C.,
In any event, the Complaint fails to plead facts giving rise to a “strong inference” of fraudulent intent on the part of any of the Church defendants. The Complaint offers no explanation for why the Church defendants would “maintain the fagade that the Church membership, and no others, were conducting work at [the Park]” as a cover for the illegal dumping activities by the Datre and Grabe defendants (Compl. ¶ 128), and, thus, the Town has not alleged “a motive for committing fraud and a clear opportunity for doing so,” Powers,
⅜ ⅜ ⅝
In short, the Court concludes that the Town has standing to pursue its RICO claims but has failed to state a RICO claim against defendants because the Complaint does not meet Rule 9(b)’s pleading requirements or allege sufficient facts that would allow for an inference of fraudulent intent.
In addition, the Town’s overarching theory of RICO fraud is that all of the defendants engaged in an enterprise to dump hazardous waste at the Park and lie to the Town about their activities. (See Compl. ¶ 127 (“The purpose of the enterprise was to arrange and facilitate the unlawful disposal of contaminated fill, C & D debris and other solid wastes at multiple locations in Suffolk County. ... The racketeering activity that is the subject of this action is the illegal disposal of contaminated fill, C & D debris and other solid wastes at [the Park].”) As discussed below, however, the Complaint alleges no facts from which it could be inferred that (1) the arranger, Church, or Atlas defendants knew, or should have known, that the material the Datre defendants deposited in the Park was hazardous; (2) the Church defendants knew, or should have known, that the material was waste; or (3) the arranger defendants knew, or should have known, that the material would be transported to the Park or other illegal dumping locations. In other words, the Town alleges that defendants engaged in a scheme to illegally dispose of hazardous waste at the Park, but fails to allege that they knew, or should have known, that the material was hazardous, waste (for the Church defendants), or meant for delivery at the Park (for the arranger defendants). Absent allegations of such knowledge, and given plaintiffs theory of fraud, the Court concludes that the Complaint does not “state a claim to relief that is plausible on its face” under RICO as to the arranger, Church, and Atlas defendants. Twombly,
Relatedly, to the extent that the Town bases its RICO fraud claims on the arranger, Atlas, and Church defendants’ concealment of the dumping scheme (rather than affirmative misrepresentations), see United States v. Autuori,
Accordingly, the Court grants defendants’ motions to dismiss with respect to the RICO claims.
B. CERLCA Claims
Congress enacted CERCLA in 1980 “in response to the serious environmental and health risks posed by industrial pollution,” designing it “to promote the timely cleanup of hazardous waste sites and to ensure that the costs of such cleanup efforts were borne by those responsible for the contamination.” Burlington N. & Santa Fe Ry. Co. v. United States,
(1) the owner and operator of a vessel or a facility,
(2) any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of,
(3) any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous substances, .and
(4) any person who accepts or accepted any hazardous substances .for transportto disposal or treatment facilities, incineration vessels or sites selected by such person, from which there is a release,, or a threatened release which causes the .incurrence of response costs,- of a hazardous substance ....
Id. at 608-09 (quoting 42 U.S.C. § 9607(a)) (footnote omitted). If a person or entity “is identified as a PRP, it may be compelled to clean up a contaminated area or reimburse the Government for its past and future response costs.” Id. at 609,
The Complaint alleges that COD, IEV, and the Atlas defendants are liable as arrangers under § 9607(a)(3). (Compl. ¶ 160.) It also alleges that the Church defendants are liable as operators under § 9607(a)(1). (Id. ¶ 158.) The Arranger and Atlas defendants argue that the Town has not pleaded sufficient facts to demonstrate that they knew the material transported by or for Datre (1) was hazardous or (2) was meant for disposal at the Park. The Church defendants assert that the Complaint does not set forth facts demonstrating that they were “operators” of the Park within- the nieaning of the statute. For the reasons outlined below, the Court concludes that the Town has not stated a claim against defendants under CERCLA and, therefore, dismisses the CERCLA claims.
1. Arranger Defendants
As noted above, an entity becomes liable under § 9607(a)(3) if “by contract, agreement, or otherwise,” it. “arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by .,. any other party or entity, at any facility ... operated by another party or entity and containing such hazardous substances.” The Supreme Court has indicated that liability plainly attaches under this subsection when an entity “enter [s] into a transaction for the sole purpose of discarding a used and no longer useful hazardous substance.” Burlington N.,
When the arrangements “fall between: these two extremes,” such as when “the seller has some knowledge of the buyers’ planned disposal,” the Court has indicated that liability is “[l]ess clear.” Id, In these circumstances, “the determination whether an entity is an arranger requires a fact-intensive inquiry that looks beyond the parties’ characterization of the transaction as a ‘disposal’ or a ‘sale’ and seeks to discern whether* the arrangement was one Congress intended to fall within the .scope of- CERCLA’s strict-liability provisions.” Id. In deciding what types of arrangements fall into this category, the Supreme Court concluded that arranger liability under CERCLA implicitly creates an exception to the- statute’s strict liability provisions'. See id. at 611,
The parties here dispute the scope of this intent requirement. On the one hand, the arranger defendants argue that a plaintiff must allege that the arranger intentionally disposed of a hazardous substance at a particular site. (Se.e COD’s Mem. Supp. Mot. to Dismiss, ECF No. 48-7 (“COD’s Br.”), at 17-18.) In other words, according to the arranger deféndants, a plaintiff must, establish that the arranger
Although the language and logic the Supreme Court employed in Burlington Northern support defendants’ argument on the intent requirement with respect to the hazardous nature of the material (as discussed below), the factual and legal issues in that case were distinct from the instant case. In Burlington Northern, the arranger defendant, Shell Oil Company (“Shell”), sold products containing hazardous substances to a distributor.
Burlington Northern thus focused entirely on the arranger’s intent with respect to the nature of. the transaction. Accordingly, Shell’s knowledge of the ultimate destination of its products or those products’ hazardous composition was not at issue. It follows that Burlington Northern provides no direct guidance on the issue presented here, ie., whether an alleged arranger must know the disposal location or whether the material was hazardous. Indeed, given the Town’s allegation that the arranger defendants entered into their transactions with the Datre, Grabe, and John Doe defendants to dispose of the Doe defendants’ unwanted material, the “sale vs. disposal” issue in Burlington Northern is not present here. (See Compl. ¶ 124 (alleging that IEV and COD “acted as brokers to supply contaminated fill, C & D material and other solid wastes ,.. for disposal at [the Park]” (emphasis added).)
The arranger defendants cite Schiavone v. Northeast Utilities Services Co., No. 3.08CV429 AWT,
Although it was “undisputed that the defendants had a specific purpose of disposing of used transformers,” the court determined that the plaintiffs “produced no evidence that could support a conclusion that the defendants had as a purpose in their dealings with [the predecessor] disposing of transformer oil containing PCBs.” Id. at *6. The court reasoned that “the defendants’ specific intent to dispose of the transformers themselves is not enough to make them ‘arrangers’ under § 9607(a), even if the defendants had knowledge that oil was in the used transformers when they sold them.” Id. (citing Burlington N.,
In Hobart Corp., the court considered two separate claims, a “base claim” and a “migration claim,” for arranger liability against the defendants.
The court held that, by alleging direct disposal of the material by the defendants, the base claim “unquestionably state[d] a plausible claim” under CERCLA. Id. Despite the Complaint’s failure to plead intent, the court concluded that “the state of mind is implied in the very nature of the alleged disposal activity.” Id. Indeed, the court equated the base claim with “the easy case posited by the Supreme Court where ‘CERCLA liability would attach under § 9607(a)(3) if an entity were to enter into a transaction for the sole purpose of discarding a used and no longer useful hazardous substance.’ ” Id. (quoting Burlington N.,
Like Burlington Northern, both of these cases are factually inapposite. First, in Schiavone, the court determined that the plaintiffs failed to demonstrate intent because the evidence established that the defendants only meant to dispose of the transformers, not the oil within them that actually contained the hazardous substances.
Hobart Corp. is also distinguishable. The Town argues that its claims against the arranger defendants are comparable to the base claim in Hobart Corp. (Pl.’s COD Opp’n at 16.) Unlike that claim, however, the Complaint does not allege that the arranger defendants physically participated in the disposal of the material at the Park. See
Importantly, like Burlington Northern, neither Schiavone nor Hobart Corp. asked whether the defendants knew (1) where the material would be deposited or (2) that the material was hazardous. Other cases, however, have addressed these issues. In a case that was' favorably cited in Burlington Northern, for example, the Sixth Circuit declined to adopt the first requirement for which defendants advocate concerning the disposal location. See United States v. Cello-Foil Prod., Inc.,
The Court agrees with the principle of these cases that alleged arrangers “cannot escape liability by ‘contracting away
Separately,’ few courts have addressed whether an arranger defendant must know that the material in question is hazardous, but the case most directly on point did impose such a knowledge requirement. See Appleton Papers Inc. v. George A. Whiting Paper Co., No. 08-C-16,
[W]hen the Burlington Northern court notes that “if an entity were to enter into a transaction for the sole purpose of discarding a used and no longer useful hazardous substance,” it is implicit or assumed in such a statement that the entity kneiv or at least suspected that the substance was harmful.
Id. (quoting Burlington N.,
Beyond the language of Burlington Northern, the court also found support for its interpretation from “the underlying purpose of arranger liability under CERC-LA.” Id. The purpose of arranger liability, the court. reasoned, is “to deter and, if necessary, to sanction parties seeking to evade liability by ‘contracting away’ responsibility.” Id. (quoting United States v. Gen. Elec. Co.,
This Court agrees with the analysis in Appleton Papers. First,'as the court in that case correctly pointed out, the language in Burlington Northern suggests that the alleged arranger , must know the substance in question was hazardous. See id. Indeed, if, as the Town argues, knowledge of the hazardous nature of the material were irrelevant—and the only inquiry was whether the alleged arranger intended for the disposal of some material—the Supreme Court could have omitted the term “hazardous” from its holding, in which case the holding would have read, “[U]nder the plain language of the statute, an entity may qualify as an arranger ... when it takes intentional steps to dispose of a ... substance.” See Burlington N.,
The Court also agrees that requiring knowledge of the substance’s hazardous nature comports with CERCLA’s purpose of preventing responsible parties from “contracting away” their liability and deterring them from attempting to do so. See Appleton Papers,
This interpretation is also consistent with the Supreme Court’s recognition that parties who arrange for the sale of a useful product that contains hazardous substances are not liable as arrangers under CERCLA even when they know the substances “will be leaked, spilled, dumped, or otherwise discarded.” Burlington N.,
The Third Circuit employed similar reasoning in Morton International.
Finally, and most importantly, the imposition of a knowledge requirement concerning the hazardous nature of the substance is consistent with the language of the statute. As relevant here, arranger liability under § 9607(a)(3) attaches to “any person who ... arranged for disposal or treatment ... of hazardous substances.” (emphasis added). As noted above, Burlington Northern observed that “the word ‘arrange’ implies action directed to a specific purpose,”
Consequently, the Court concludes that, for arranger liability to apply, a plaintiff must establish that the defendant who arranged for the disposal of material knew, or should have known, that the material contained hazardous substances. See Appleton Papers,
2. Atlas Defendants
The same is true for the Atlas defendants. The Complaint only alleges that, after the Town requested removal of the material from the Park, the Atlas defendants participated in that removal effort. (Id. ¶ 100.) It contains no facts from which it could be inferred that the Atlas defendants knew that the material they transported from the Park contained the hazardous substances later uncovered in the investigation by the Suffolk County District Attorney’s office. Accordingly, the Town has failed to state a plausible claim for arranger liability against the Atlas defendants.
3. Church Defendants
As noted above, under § 9607(a)(1), the “operator of a vessel or a facility” may be held liable for clean-up costs. The Supreme Court has defined an “operator” as “someone who directs the workings of, manages, or conducts the affairs of a facility.” United States v. Bestfoods,
Correspondingly, “although the imposition of operator liability does not require a finding that the defendant directly participated in the day-to-day activities at the site, an operator under CERCLA must make the relevant decisions on a frequent, typically day-to-day basis.” City of N.Y. v. N.Y. Cross Harbor R.R. Terminal Corp., No. 98-CV-7227 (ARR) (RML),
These allegations, however, do not state a plausible claim with respect to the requisite degree of control over the Park or the hazardous material, for operator liability. First, the Complaint mentions only one instance where purported members of the Church were seen spreading topsoil, and that instance occurred in May 2013, well before the Datre and Grabe defendants began dumping the material later determined to* contain hazardous substances. (Compl. ¶ 73.) The Complaint contains no allegation that the Church defendants were spreading hazardous material on :the soccer field at that time, and this single instance is hardly sufficient to show, that Church m'embers were present at the Park when the dumping of the hazardous material by the. Datre and Grabe defendants occurred, much less that the Church defendants themselves “conduct[ed]” ..the dumping “operations.” Bestfoods,
’ Furthermore, that the Church defendants requested permission to spread topsoil from the Town and later sent letters acknowledging that they had worked on the field in April 2013—again, months before the dumping began—does not suggest that they “manage[d]" or “directed] ... operations specifically related to pollution.” Id, At best, it might be inferred from the letters that the Church contracted with the Datre and Grabe defendants to deposit the material at the Park, but such a contractual arrangement is not a basis -for operator liability. See 42 U.S.C. § 9607(a) (distinguishing between liability for the “operator of a vessel or a facility” and for “any person who by contract, agreement, or otherwise arranged for disposal ... of hazardous substances. ... ”); Delaney v. Town of Carmel,
4. Contribution Claim
Defendants also move to dismiss the Town’s CERCLA contribution claims. Under 42 U.S.C. § 9613(f)(1), “[a]ny person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title,... ” As set forth above, the Court concludes that the arranger, Atlas, and Church defendants are not “potentially liable under section 9607(a),” id, and, thus, are not subject to contribution under § 9613(f). Therefore, the contribution claims against the arranger, Atlas, and Church defendants are dismissed.
C. State Law Claims
Finally, defendants move to dismiss the Town’s state law claims against them for public nuisance, private nuisance, trespass, injury to property, fraud and deceit, and restitution.
1. Supplemental Jurisdiction
As a threshold matter, the Church defendants argue that this Court should decline to exercise supplemental jurisdiction over the state law claims because the Town fails to state federal claims against them under RICO or CERCLA. See 28 U.S.C. § 1367(c)(3); Carnegie-Mellon Univ. v. Cohill,
Under New York law, “[t]he elements for public and private nuisance are generally the same.” Cangemi v. United States,
1. The existence of a public nuisance— a substantial interference with a right common to the public;
2. negligent or intentional conduct or omissions by a defendant that create, contribute, to, or maintain that public nuisance; and
3. particular harm suffered by plaintiff different in kind from that suffered by the community at large as a result of that public nuisance.
N.A.A.C.P. v. AcuSport, Inc.,
Although “the release or threat of release of hazardous waste into the environment” is clearly a nuisance, N.Y. v. W. Side Corp.,
3.Trespass
A “trespass” under New York law is “the interference with a person’s right to possession of real property either by an unlawful act or a lawful act performed in an unlawful manner.” 55 Motor Ave. Co. v. Liberty Indus. Finishing Corp.,
The Complaint fails to allege a trespass with respect to the arranger, Atlas, and Church defendants. First, as noted above, the Complaint does not allege that the arranger defendants directly disposed of hazardous material at the Park. Instead, it seeks to hold them liable to the extent they facilitated the dumping by the Datre and Grabe defendants. The arranger defendants, however, only acted as brokers, connecting the John Doe defendants with the Datre and Grabe defendants. Absent knowledge of the material’s hazardous nature or the Datre and Grabe defendants
Second, the Complaint is devoid of any allegation that the Atlas defendants trespassed against the Town. On the contrary, the Town alleges that the Atlas defendants assisted the Town by removing some of the dumped material from the Park and transporting it elsewhere. (See Compl. ¶ 100.) Although the Complaint does allege that the Atlas defendants deposited that material at the Maisie Property without the permission of the owner (see id.), the trespass claim is based entirely on the dumping that occurred at the Park (see id. at ¶¶ 193-96). In any event, absent special circumstances not alleged here, the Town lacks standing to bring a trespass claim on behalf of a private individual like the owner of the Maisie Property. See In re Dynegy, Inc.,
Finally, the Complaint does not allege that the Church defendants intentionally entered the Park without permission. The only direct entry by the Church defendants alleged in the Complaint occurred in May 2013, when unidentified individuals assumed to be affiliated with the Church were seen spreading topsoil on the soccer field. (Compl. ¶73.) The Complaint concedes, however, that the Church defendants had permission from the Town at this time to enter the Park and spread topsoil on the soccer field. (See id. (alleging that Commissioner Montuori “permitted the Church to begin work in or around May of 2013 at the Church’s sole cost and expense”).) Presumably referring to the August and October letters, the Town argues that the Church defendants are liable for trespass because they took “responsibility for continuing the delivery of material to the Park in the name of the Church and further [took] responsibility for the deposition of the materials there.” (Pl.’s Church Opp’n at 21.) The Court finds it implausible, however, to read the August and October letters as taking responsibility for the Datre and Grabe defendants’ illegal dumping activities, especially given that they had no apparent motive to do so. Instead, the only reasonable reading of the letters is that they are referring to the May 2013 activities. Nor can the Church defendants’ be said to have “established control over the wastes that were delivered to the Park, and control over the soccer field portion of the Park” for the same reasons that they cannot be deemed “operators” under CERCLA. (Pl.’s Church Opp’n at 21.) More importantly for the trespass claim, the dumping by the Datre and Grabe defendants was certainly not “an immediate or inevitable' consequence of’ the act of sending the letters, nor does the Complaint allege any actions by the Church defendants that would immediately or inevitably result in such activities. Marone,
As such, the Town has failed to state plausible claims for trespass against the arranger, Atlas, and Church defendants.
4. Injury to Property
Under New York law, “ ‘injury to property is an actionable act, whereby the estate of another is lessened, other than a personal injury, or the breach of a contract.” N.Y. Gen. Constr. Law § 25-b. As such, “any tortious act (other than personal injury) resulting in damage ... constitutes an injury to property.” Lippes v. Atl. Bank of N.Y.,
5. Fraud and Deceit
To state a claim for fraud under'New York law, a plaintiff must allege “(1) a material misrepresentation- or omission of fact (2) made by defendant with knowledge of its falsity (3) and intent to defraud; (4) reasonable reliance on the part of the plaintiff; and (5) resulting damage to the plaintiff.” Crigger v. Fahnestock & Co.,
As set forth at length above with respect to the Town’s RICO claims, the Complaint does not sufficiently allege that the arranger, Atlas, or Church defendants made -statements to the Town that they knew to be false with the intent to defraud the Town. The Town, therefore, • has not alleged that defendants made a material misrepresentation known to be false and with the intent to defraud. In addition, as discussed in connection with the Town’s CERCLA claims, the Complaint does not allege that defendants knew that the material deposited at the Park by the Datre and Grabe defendants was hazardous. Thus, it does not allege -that they engaged in an act of concealment because concealment requires knowledge of the material information. See Fidenas AG v. Honeywell Inc.,
6. Restitution,
Under New York law, a “person who has performed the duty of another by supplying things or services although acting without the other’s knowledge or consent, is entitled to restitution from the other.if (a) he acted unofficiously and with intent to charge therefor, and (b) the things or services supplied were immediately necessary to satisfy the requirements of public decency, health, or safety.” City of N.Y. v. Lead Mus. Ass’n, Inc.,
D. Leave to Amend
Despite the Town’s failure to state any plausible claims against the arranger, Atlas, or Church defendants, the Court grants the Town leave to amend its Complaint. Federal Rule of Civil Procedure 15(a)(2) states that a district court “should freely give leave [to amend] when justice so requires.” Moreover, although the Town has not specifically requested it, “the Court may sua sponte grant leave to amend.” Straker v. Metro. Transit Auth.,
IV. Conclusion
In sum, for the above reasons, the Court grants the motions to dismiss filed by the arranger, Church, and Atlas defendants and grants the Town leave to amend its Complaint. The Town shall have thirty days from the date of this Memorandum and Order to file its amended complaint.
SO ORDERED.
Notes
. Datre Jr. ultimately pleaded guilty to four Class E felony counts and four class A misdemeanor counts for his role in these activities. (Compl. ¶ 58.) With respect to the Park dumping, he pleaded guilty to a felony charge, which stated that, between May 2013 and April 2014, he recklessly disposed of over 2,000 pounds of aggregate weight of hazardous substance that he deposited in the Park, and a misdemeanor charge, which stated that he commenced operation of a solid waste management facility at the Park without a permit during that same period. (Id. ¶ 58(a)-(b).) Grabe pleaded guilty to similar charges. (Id. ¶ 60(a).)
. Hereinafter, ".defendants” refers to the arranger defendants, Church defendants, and Atlas defendants collectively.
. Indeed, this proposition stands at odds-with the common practice of bringing RICO claims alongside other federal and state claims, See, e.g., Breslin Realty Dev. Corp. v. Schackner,
. The Court further notes that the Complaint does not adequately allege the use of interstate wires or mails. See Tymoshenko v. Firtash,
. The Town correctly points out that "CERC-LA must be construed liberally to effectuate its two primary goals: (1) enabling the EPA to respond efficiently and expeditiously to toxic spills, and (2) holding those parties responsible for the releases liable for the costs of the cleanup.” B.F. Goodrich Co. v. Murtha,
. The Complaint does not seek to hold the Church defendants liable as arrangers, (See Compl. ¶ 158.) Even if it did, however, it does not contain- any allegation that the. Church defendants knew the dumped material contained hazardous substances and, therefore, would fail for the same reasons as the CERC-LA claims against the arranger and Atlas defendants. :
. Given the Court's rationale for dismissing the contribution claims, it need not and does not address defendants’ alternative argument that the Town has not "resolved its liability to the United States or a State ... in an administrative or judicially approved settlement” within the meaning of § 9613(f)(3)(B). (See COD’s Br. at 18-19.)
. The Town has voluntarily withdrawn its joint tortfeasors claim against the arranger and Church defendants. (See Pl.'s COD Opp’n at 23; Pl.’s Church Opp’n at 22.) Given that the Adas defendants expressly joined with the arranger defendants’ argument on this claim (Adas Defs.' Letter Mot, to Dismiss, ECF No. 64, at 5), and the Town does not advance this claim in its response to the Adas defendants’ motion (see Pl.’s Opp’n to Atlas-Defs.' Mot. to Dismiss, ECF No. 67, at 3), the Court construes its withdrawal of the joint tortfeasors claim as extending to the Atlas defendants. In any event, the claim fails because the Town has not alleged that it incurred liability to a third party. See MPM Silicones, LLC v. Union Carbide Corp.,
. To the extent the Town argues for restitu- - tion based on unjust enrichment, the - Complaint fails to state how the defendants were unjustly enriched as a result of their alleged role in the dumping activities.