United States District Court, D. New Jersey
MCNULTY UNITED STATES DISTRICT JUDGE
and Third-Party Plaintiffs, Newport Associates Development
Company ("Newport Development") and Newport
Associates Phase I Developers Limited Partnership
("Newport Phase One") (together,
"Newport"), seek remedial, statutory, and punitive
damages related to an alleged environmental contamination in
the Newport Marina in Jersey City ("the Spill").
Newport, originally sued by Public Service Electric and Gas
Company ("PSE&G") in connection with the Spill,
brings claims against PSE&G as Counterclaim Defendant,
and against Third-Party Defendant Consolidated Edison Company
of New York ("Con Edison"). (Con Edison and
PSE&G are referred to collectively as the
seeks relief from the Utilities under both federal and state
statutes. Under the federal Oil Pollution Act (the
"OPA"), Newport seeks removal costs and statutory
damages (count VIII); declaratory judgment (count IX); and
contribution (count X). Under the New Jersey Spill
Compensation 86 Control Act (the "Spill Act"),
Newport seeks contribution and declaratory relief (count
XIII). Under the Comprehensive Environmental Response
Compensation and Liability Act of 1980 ("CERCLA"),
Newport seeks response costs, contribution, and declaratory
judgment (count XIV). Last, Newport seeks a citizen-suit
injunction under the Hazardous Liquids Pipeline Safety Act
("HLPSA") (count XV). These counts are not
implicated by the motion now before the Court.
PSE&G alone, Newport brings claims for breach of an
easement (count I), termination or modification of the
easement (count VII), and indemnification under the easement
(count XI). These counts are not implicated by the motion now
before the Court.
both Utilities, Newport brings claims for pre-Spill
negligence (count II); negligence in responding to the Spill
(count III); trespass (count IV); nuisance (count V); strict
liability for ultrahazardous or abnormally dangerous
activities (count VI); and indemnification under an access
agreement (count XII).
the Court is Con Edison's motion pursuant to Fed.R.Civ.P.
12(b)(6) to dismiss four of these counts: pre-Spill
negligence (count II); strict liability for ultrahazardous or
abnormally dangerous activities (count VI); trespass (count
IV); and nuisance (count V). For the reasons discussed below,
Con Edison's motion to dismiss is granted in part and
denied in part.
here on the facts alleged in the amended third party
Complaint that are relevant to the four counts targeted by
the motion to dismiss.
Development is a New Jersey general partnership with its
principal place of business in Jersey City, New Jersey. (A3PC
¶ 16). Newport Phase One is a New Jersey limited
partnership with its principal place of business at the same
address as Newport Development. (Id. ¶¶
16-17). PSE&G is a New Jersey corporation with its
principal place of business in Newark, New Jersey.
(Id. ¶ 18). Con Edison is a New York
corporation with its principal place of business in New York
City. (Id. ¶ 19).
Installation of the cables
Utilities own and operate two 35OkV electric cables that
transmit electricity from Jersey City, New Jersey, to
Brooklyn, New York (the "Cables"). (A3PC ¶
24). The Cables run overland from PSE&G's Hudson
substation in Jersey City, under the Hudson River, overland
through Manhattan, and then under the East River to Con
Edison's Farragut substation in Brooklyn. (Id.).
The Cables do not supply electricity to Newport's
property or any other property in New Jersey. (Id.).
Rather, the Cables supply electricity to Con Edison's
customers in New York. (Id.).
first Cable, as well as the steel pipe for the second Cable,
were installed in 1972. (A3PC ¶ 25). The second Cable
was installed in 1982. (Id.). Both Con Edison and
PSE&G participated in the design and construction of the
Cables, as well as the maintenance and repair (or lack
thereof) of the Cables. (Id. at ¶ 21). Among
other agreements, the "1975 ICA" between Con Edison
and PSE&G provided as follows: "In behalf of Con
Edison and [PSE&G], Con Edison shall maintain the entire
river crossing section of the [Cables]. All maintenance costs
so incurred shall be shared equally by the parties
Edison never certified to PSE&G that construction of the
Cables was substantially complete, never obtained a
certificate of occupancy or similar document from any
relevant government regulator, and never ceased performing
services on the Cables, including the portion of the Cables
owned by Con Edison. (A3PC ¶ 22). In Newport's view,
these facts support an inference that Con Edison never
relinquished its role with respect to the
electric Cable is seven miles long and is housed in a steel
pipe with a 10-inch diameter. (A3PC at ¶ 26). The pipes
are generally encased in coal tar and, except around the
welds, concrete. (Id.). The pipes contain dielectric
fluid, a refined petroleum product, to insulate the Cables.
dielectric fluid circulates throughout the entire length of
the Cables and through onshore storage tanks. (A3PC at ¶
27). Over the years, the Utilities have from time to time
added new dielectric fluid to the storage tanks to replace
fluid that has leaked into the environment. (Id.).
Cables are designed to operate even while leaking, provided
that additional dielectric fluid is pumped into the Cables to
replace leaking fluid. (A3PC at ¶ 28). A pressure
sensor, the sole system to detect leaks, is designed to sense
only large leaks. The sensor may detect the existence of a
leak, but not its location. The present Spill, which has been
ongoing since at least October 2016, has not triggered the
pressure sensor. (Id.).
Army Corps of Engineers (the "ACOE") and the New
Jersey Department of Environmental Protection (the
"NJDEP") issued permits for the Cables. The permits
required a six-foot protective layer of crushed stone. (A3PC
¶ 29). The Utilities failed to install the required
layer of crushed stone, at least along the hundreds of feet
of the Cables in the vicinity of the Pier that have now been
excavated or lanced. (Id.).
1986, Newport acquired a portion of the riverbed of the
Hudson River, adjacent to Jersey City. The Cables pass over
that portion of the riverbed. At the time Newport acquired
the property, the Cables were already installed. (A3PCat
January 1, 1987, Newport and PSE&G entered into an
easement agreement (the "Easement") that superseded
all prior agreements between their predecessors in interest.
(A3PC at ¶ 32). The Easement runs parallel to the Pier,
approximately 5 to 35 feet north of the Pier, and is about 30
feet wide. (Id.).
time the Easement was negotiated, PSE&G knew of the true
risks of a leak, but failed to disclose them and
affirmatively concealed them from Newport. (A3PC at ¶
33). PSE&G did not disclose design flaws that increased
the likelihood of leaks and decreased the likelihood of their
detection. (Id.). PSE&G also did not disclose
Cables' non-conformities to the permit conditions.
(Id.). PSE&G also did not disclose pre-existing
damage to Cables, including damage from contact with a
tugboat propeller and barge-mounted crane. (Id.).
Maintenance, repair, protection, and replacements
the design and installation of the Cables, Newport alleges,
the Utilities continued to be reckless in (1) failing to
properly maintain, repair, and protect the Cables (A3PC at
¶¶ 38-40); and (2) failing to replace the Cables
despite the fact that they have exceeded their useful life.
(Id. at ¶ 41-44).
Spill was discovered on October 3, 2016. (A3PC at ¶ 45).
The Cables are the source of the Spill. (Id.).
2017, the Utilities' divers discovered the leak in the
Cables which was the source of the Spill. (A3PC at ¶
46). The leak was caused by a welding flaw, known as a
lack-of-fusion defect. (Id.). The defective weld is
located on an irregularly-spaced coupler. (Id. at
Cables were fabricated in 20-foot segments. (A3PC at ¶
47). In a land-based factory, pairs of 20-foot segments were
welded together to form 40-foot segments. (Id.).
Then, on a vessel in the river, 40-foot segments were welded
together, and the Cables were dropped to the riverbed.
(Id.). As a result, the Cables have regularly-spaced
welds every 20 feet. (Id.). The defective weld,
however, is not a regularly-spaced weld. (Id.).
Rather, the defective weld is on one of three
irregularly-spaced couplers, which appear to have been
installed after a piece of pipe was "cut out" and
replaced. (Id.). The written plans for the Cables do
not include these irregularly-spaced couplers. (Id.
at ¶ 48).
Damage from the Spill
Spill has polluted Newport's property. The response to
the Spill has interfered with Newport's property and
imposed substantial economic costs on Newport. (A3PC at
¶ 51). The Coast Guard, which has overseen the response
to the Spill, determined that the Spill posed an imminent and
substantial threat to the public health or welfare of the
United States or the environment of the United States.
Accordingly, the Coast Guard invoked its authority under the
Clean Water Act to direct all federal, state, and private
actions to remove the discharge and to mitigate or prevent
the threat of the discharge. (A3PC at ¶ 52).
October 6, 2016, NJDEP issued a field directive to PSE&G
finding PSE&G responsible for the Spill. (A3PC at ¶
November 17, 2016, the Coast Guard issued an administrative
order directing Newport to, among other things, remove
certain debris from the Easement area. (A3PC at ¶ 54).
Newport complied with the Coast Guard's order.
(Id.). In order to comply, Newport incurred and
continues to incur additional costs. (Id.).
costs have been increased by the Utilities' conduct since
the spill. (DE 98, ¶¶ 55, 57, 59-63).
for the parties and so assume familiarity with the procedural
history of this matter, including my previous filed opinion
(DE 62). I highlight here some items particularly pertinent
to these motions.
February 14, 2017, PSE&G filed an amended complaint
against Newport. (DE 40).
March 14, 2017, Newport filed a motion to dismiss the amended
complaint. (DE 43).
December 28, 2017, I filed an opinion (DE 62) and order (DE
63) granting in part and denying in part Newport's motion
February 9, 2018, Newport filed an answer to the amended
complaint with a third-party complaint against Con Edison and
a counterclaim against PSE&G. (DE 72).
April 13, 2018, PSE&G filed an answer to Newport's
counterclaim with a crossclaim against Con Edison. (DE 81).
same date, Con Edison filed a motion to dismiss certain
counts in the third-party complaint. (DE 85).
21, 2018, Newport filed an amended answer to the amended
complaint with a third-party complaint against Con Edison and
a counterclaim against PSE&G. (A3PC).
11, 2018, PSE&G filed an answer to Newport's
counterclaim with a crossclaim against Con Edison. (DE 99).
15, 2018, Con Edison filed a motion to dismiss the amended
third-party complaint. (Mot. to Dismiss).
August 6, 2018, Newport filed a response in opposition to Con
Edison's motion to dismiss the amended ...