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Heller Urban Renewal, LLC v. Fer Boulevard Realty Copr.

United States District Court, D. New Jersey

January 23, 2014

HELLER URBAN RENEWAL, LLC and THE HARRISON REDEVELOPMENT AGENCY, Plaintiffs,
v.
FER BOULEVARD REALTY COPR., et al., Defendants.

AMENDED OPINION

STANLEY R. CHESLER, District Judge.

This matter comes before the Court upon two motions to dismiss the Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). One motion was filed by Defendants Sternco Dominion Real Estate Corp. and The Hartz Mountain Group (the "Hartz Defendants"). The other was filed by Defendants FER Boulevard Realty Corp. and Erez Shternlicht (the "FER Defendants"). Plaintiffs Heller Urban Renewal, LLC and The Harrison Redevelopment Agency (collectively, "Plaintiff" or "Heller") have opposed both motions. The Court held oral argument on December 16, 2013. It has considered the papers filed by the parties as well as the arguments presented on December 16. For the reasons set forth below, and for the reasons stated on the record of oral argument, the Court will dismiss the Amended Complaint in its entirety. As indicated by the following discussion, the dismissal of some claims will be accompanied by leave of Court to re-plead them in a Second Amended Complaint.

I. BACKGROUND

In brief, this is an environmental action concerning the remediation of property located at 700 Frank E. Rodgers Boulevard South in Harrison, New Jersey (hereinafter, the "Property"). According to the Amended Complaint, the Property is contaminated with polychlorinated biphenyls (PCBs), oil and other hazardous waste. The Property is currently owned by Plaintiff Harrison Redevelopment Agency, which acquired title through an order of condemnation entered by the New Jersey Superior Court on or about June 10, 2011. Plaintiff Heller is the current tenant, and, according to the Amended Complaint, responsible for remediation of the Property pursuant to a redevelopment agreement with the Harrison Redevelopment Agency. The Defendants named in this suit are prior owners of the Property. The immediate predecessor owner is FER, which attempted to operate a moving and document storage company on the Property. FER acquired the Property in 1999, when Defendant Shternlicht, FER's principal, contracted to buy the Property from the Hartz Defendants and, on the same day the contract for sale was executed, assigned the contract to FER. Prior to that sale, the Hartz Defendants owned the Property from 1970 to 1999. In or about 1993, the Hartz Defendants ceased their manufacturing and other industrial operations at the Property, and their obligations to clean up the Property pursuant to New Jersey's Industrial Site Recovery Act ("ISRA") commenced. As acknowledged in the Amended Complaint, the Hartz Defendants, under a directive by the New Jersey Department of Environmental Protection ("NJDEP") to remediate, filed a civil action in this Court in 1994 seeking contribution for the remediation costs from previous owners of the Property pursuant to the § 113 of the federal Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA").[1] The Amended Complaint alleges that the Hartz Defendants' ISRA remediation remains incomplete.

Heller alleges that, in the process of redeveloping the Property, it has undertaken the task of an extensive and costly cleanup of contaminants. It further alleges that according to its experts, these response costs will total approximately $25, 000, 000. Heller filed this action seeking to recover the necessary response costs from prior owners the Hartz Defendants and the FER Defendants pursuant to CERCLA. The Hartz Defendants filed a motion to dismiss the initial Complaint, which sought an order declaring them responsible to remediate under ISRA and ordering them to meet such obligations. The Court denied the motion, but in so doing further observed that the Complaint appeared to be scant on the factual allegations that might allow Heller to meet the pleading standard imposed by Federal Rule of Civil Procedure 8(a). Thereafter, upon the parties' stipulation, Heller filed its Amended Complaint on September 5, 2013. The Amended Complaint, now challenged by all Defendants on this Rule 12(b)(6) motion, contains eleven counts, including several under CERCLA. It has also asserted claims for relief pursuant to two New Jersey statutes and various common law claims.

II. DISCUSSION

A. Legal Standards

A complaint will survive a motion under Rule 12(b)(6) only if it states "sufficient factual allegations, accepted as true, to state a claim for relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556.) Following Iqbal and Twombly, the Third Circuit has held that, to prevent dismissal of a claim, the complaint must show, through the facts alleged, that the plaintiff is entitled to relief. Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir. 2009). The Court must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and then determine whether a reasonable inference may be drawn that the defendant is liable for the alleged misconduct." Argueta v. U.S. Immigration and Customs Enforcement, 643 F.3d 60, 74 (3d Cir. 2011). While the Court must accept all factual allegations as true, it need not accept a "legal conclusion couched as a factual allegation." Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 2007); Fowler, 578 F.3d at 210-11; see also Iqbal, 556 U.S. at 679 ("While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations."). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, will not suffice." Iqbal, 556 U.S. at 678. In a Rule 12(b)(6) motion, the Court is limited in its review to a few basic documents: the complaint, exhibits attached to the complaint, matters of public record, and undisputedly authentic documents if the complainant's claims are based upon those documents. See Pension Benefit Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir.1993).

B. CERCLA Claims

The First through Fourth Counts of the Amended Complaint assert causes of action under CERCLA, described by the Third Circuit as a "broad and complex statute aimed at the dangers posed by hazardous waste sites." United States v. CDMG Realty Co., 96 F.3d 706, 712 (3d Cir. 1996). Heller's primary claim, for recovery of response costs incurred in remediating environmental contamination, arises under § 107 of the statute. See 42 U.S.C. § 9607. To assert a viable claim under CERCLA § 107, a plaintiff must plead facts establishing the following four elements:

(1) that hazardous substances were disposed of at a "facility"; (2) that there has been a "release" or "threatened release" of hazardous substances from the facility into the environment; (3) that the release or threatened release has required or will require the expenditure of "response costs"; and (4) that the defendant falls within one of four categories of responsible parties.

CDMG Realty, 96 F.3d at 712 (citing 42 U.S.C. § 9607(a)). Section 107(a) lists the four classes of people liable for response costs: the facility's current owner or operator; any person who owned or operated the facility "at the time of disposal" of a hazardous substance; one who arranged for disposal or arranged for transport for disposal of a hazardous substance; and one who accepts hazardous substances for transport. 42 U.S.C. § 9607(a)(1)-(4).

Defendants focus their motions to dismiss on the fourth element of a CERCLA § 107 claim, arguing that the Amended Complaint fails to plead facts, which, if assumed to be true, would plausibly establish that they fall within one of the four categories of responsible parties.[2] The Amended Complaint indeed does not make clear which of the four categories Plaintiff asserts exposes Defendants to CERCLA liability. Rather, it generally claims that "defendants all fall within one of the four classes of parties subject to liability under CERCLA 42 U.S.C. § 9607(a) for the wrongful and improper discharge, release and/or disposal of PBCs and oil throughout the property." (Am. Compl. ¶ 38.) Plaintiff's written submissions in opposition to the motions, as well as its representations at oral argument, have clarified that it pursues the claim on the grounds that The Hartz Defendants and the FER Defendants disposed of PCBs, oil and/or other hazardous substances during the respective time periods that each owned the Property.

The seminal case in the Third Circuit on what constitutes an actionable "disposal" within the meaning of CERCLA is United States v. CDMG Realty . There, the Court of Appeals began its ...


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