Hoosick Falls Associates v. Saint-Gobain Performance Plastics Corporation et al

MOTION to Dismiss for Failure to State a Claim

N.D.N.Y.August 31, 2016

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK HOOSICK FALLS ASSOCIATES, Plaintiff, v. SAINT-GOBAIN PERFORMANCE PLASTICS CORP., and HONEYWELL INTERNATIONAL INC., Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 1:16-cv-596 (LEK/DJS) NOTICE OF MOTION TO DISMISS PLEASE TAKE NOTICE that, upon the accompanying Memorandum of Law in Support of Defendants’ Motion to Dismiss, dated August 31, 2016, and upon all of the pleadings and proceedings heretofore had herein, the undersigned will move this Court before U.S. District Court Judge Lawrence E. Kahn, at the U.S. District Court for the Northern District of New York, located at 445 Broadway, Albany, New York on the 7th day of October, 2016 at 9:30 a.m. for an Order pursuant to Fed. R. Civ. P. 12(b)(6) dismissing the Complaint against Defendants Saint- Gobain Performance Plastics Corporation and Honeywell International Inc. Dated: August 31, 2016 Respectfully submitted, /s/ Michael L. Koenig Michael Koenig (507425) Christopher Fenlon (516392) HINCKLEY ALLEN & SNYDER LLP 30 S. Pearl Street, Suite 901 Albany, NY 12207 Tel: (518) 396-3100 Fax: (518) 396-3101 mkoenig@hinckleyallen.com cfenlon@hinckleyallen.com Case 1:16-cv-00596-LEK-DJS Document 43 Filed 08/31/16 Page 1 of 2 2 Sheila L. Birnbaum (505978) Mark S. Cheffo (302113) Douglas E. Fleming, III (519941) Patrick Curran (519940) QUINN EMANUEL URQUHART & SULLIVAN LLP 51 Madison Ave. New York, New York 10010 Tel: 212-849-7000 Fax: 212-849-7100 sheilabirnbaum@quinnemanuel.com markcheffo@quinnemanuel.com douglasfleming@quinnemanuel.com patrickcurran@quinnemanuel.com Attorneys for Defendant Saint-Gobain Performance Plastics Corporation /s/ Elissa J. Preheim Michael D. Daneker (107356) Elissa J. Preheim (107355) Allyson Himelfarb (107357) Tal Machnes (519954) ARNOLD & PORTER LLP 601 Massachusetts Avenue, NW Washington, DC 20001 Telephone: (202) 942-5000 Facsimile: (202) 942-5999 Michael.Daneker@aporter.com Elissa.Preheim@aporter.com Allyson.Himelfarb@aporter.com Tal.Machnes@aporter.com Dale Desnoyers (103795) ALLEN & DESNOYERS LLP 90 State Street, Suite 1009 Albany, NY 12207 Telephone: (518) 426-2288 Facsimile: (518) 426-2299 dale@allendesnoyers.com Attorneys for Defendant Honeywell International Inc. Case 1:16-cv-00596-LEK-DJS Document 43 Filed 08/31/16 Page 2 of 2 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK HOOSICK FALLS ASSOCIATES, Plaintiff, v. SAINT-GOBAIN PERFORMANCE PLASTICS CORP., and HONEYWELL INTERNATIONAL INC., Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 1:16-cv-596 (LEK/DJS) MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS Case 1:16-cv-00596-LEK-DJS Document 43-1 Filed 08/31/16 Page 1 of 10 i TABLE OF CONTENTS PRELIMINARY STATEMENT .......................................................................................................1 DISMISSAL STANDARD ................................................................................................................2 PLAINTIFF’S CLAIMS FAIL BECAUSE PLAINTIFF ALLEGES ECONOMIC HARM ONLY ..........................................................................................3 CONCLUSION ..................................................................................................................................8 Case 1:16-cv-00596-LEK-DJS Document 43-1 Filed 08/31/16 Page 2 of 10 Defendants Saint-Gobain Performance Plastics Corporation (“Saint-Gobain”) and Honeywell International Inc. (“Honeywell”) respectfully submit this memorandum of law in support of their motion, pursuant to Rule 12(b)(6), to dismiss this action with prejudice for failure to state a claim for relief. PRELIMINARY STATEMENT This action is one of several cases pending in this Court concerning the alleged presence of perfluorooctanoic acid (PFOA) in groundwater in Hoosick Falls, New York. Unlike the other actions, this case is not brought by individuals, but rather on behalf of a business association whose partners are located in various states. Plaintiff Hoosick Falls Associates L.P. alleges that it owns a 12-acre parcel of land in Hoosick Falls, a portion of which is leased by the Tops Friendly Market grocery store (the “Property”). (Compl. ¶ 2.) Plaintiff claims that the alleged stigma from the presence of PFOA in local groundwater, of which it claims the public became aware around November 2015, has caused the Property to diminish in value from more than $2 million to $0. (Id. ¶¶ 10, 76-82.) Plaintiff seeks recovery in tort for this alleged diminution in value from Honeywell and Saint-Gobain, the prior and current owners, respectively, of a facility in Hoosick Falls at which Plaintiff alleges chemicals containing PFOA were previously used. (Id. ¶¶ 4-6.) These claims must be dismissed because they do not allege a physical injury cognizable in tort. In its Complaint, Plaintiff does not allege that the Property has experienced any actual contamination with PFOA. In fact, in its response to Defendants’ notice of relatedness to the other actions, Plaintiff specifically states that it “seeks compensation for the diminution in property value … due to the specter of contamination.” (Dkt. 27 at 1 (emphasis added).) Plaintiff further states in that response that it is seeking “the loss of a commercial sale here, with no personal injury or property damage.” (Id. at 2.) Yet despite its own denial of contamination, Plaintiff alleges that Case 1:16-cv-00596-LEK-DJS Document 43-1 Filed 08/31/16 Page 3 of 10 2 “the reasonable and unreasonable fears of the public”—coupled with “the Property’s proximity to the Plant and its Hoosick Falls address, in general”—led to a stigma that “substantially diminished the market value of the Property, and possibly rendered it valueless.” (Compl. ¶¶ 76-77.) These tort claims based on the mere “specter of contamination” fail as a matter of law. New York law prohibits recovery in tort for pure economic harm—such as alleged “stigma” damages with no claim of physical harm. Having failed to state any viable claim for relief, the Complaint should be dismissed in its entirety and with prejudice. DISMISSAL STANDARD To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Although the court generally accepts the complaint’s alleged facts as true, it gives no deference to a complaint’s legal conclusions and “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements . . . .” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). “A pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’” Id. (quoting Twombly, 550 U.S. at 555). “While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.” Id. at 679. “‘[U]nwarranted deductions of fact’ need not be accepted as true,” MPM Silicones, LLC v. Union Carbide Corp., 931 F. Supp. 2d 387, 392 (N.D.N.Y. 2013) (Kahn, J.) (citation omitted), and a “naked assertion . . . without some further factual enhancement stops short of the line between possibility and plausibility of ‘entitle[ment] to relief.’” Twombly, 550 U.S. at 555 (citation omitted). Case 1:16-cv-00596-LEK-DJS Document 43-1 Filed 08/31/16 Page 4 of 10 3 PLAINTIFF’S CLAIMS FAIL BECAUSE PLAINTIFF ALLEGES ECONOMIC HARM ONLY Plaintiff seeks to recover in tort for alleged “stigma” damages—i.e., pure economic harm, and solely economic harm. Plaintiff reaffirmed this in its response to Defendants’ notice of relatedness, representing to the Court that its Complaint “does not include any causes of action related to potential personal injury, contamination of property or water supply, or long term health issues.” (Dkt. 27 at 2.) Instead, Plaintiff’s entire Complaint rests on a theory of alleged “stigma”—that is, Plaintiff alleges that “the reasonable and unreasonable fears of the public” and its “Property’s proximity to the Plant and its Hoosick Falls address, in general” led to a stigma that “substantially diminished the market value of the Property, and possibly rendered it valueless.” (Compl. ¶¶ 76-77.) Plaintiff admits it does not allege that its property itself has suffered any physical damage, and has recently reaffirmed that it alleges “no personal injury or property damage.” (Dkt. 27 at 2.) New York law prohibits exactly this type of action, where Plaintiff seeks to recover in tort for exclusively economic harm in the absence of any alleged personal injury or property damage. Indeed, “the widely accepted if not universal view among the courts in this country is that causing the value of another’s property to diminish is not in and of itself a basis for tort liability.” Mehlenbacher v. Akzo Nobel Salt, Inc., 71 F. Supp. 2d 179, 188 (W.D.N.Y. 1999), aff’d in pertinent part sub nom. Integrated Waste Servs., Inc. v. Akzo Nobel Salt, Inc., 216 F.3d 1072 (2d Cir. 2000).1 As such, each of Plaintiff’s three tort claims—for negligence, negligence per se, and strict liability—fails as a matter of law. 1 See, e.g., Adams v. Star Enter., 51 F.3d 417, 424 (4th Cir. 1995) (affirming grant of motion to dismiss claims for negligence and strict liability where property owners sought stigma damages only but their land was not contaminated); Berry v. Armstrong Rubber Co., 989 F.2d 822, 829 (5th Cir. 1993) (on summary judgment, affirming district court’s dismissal of claim for stigma damages Case 1:16-cv-00596-LEK-DJS Document 43-1 Filed 08/31/16 Page 5 of 10 4 New York law imposes no duty in negligence to protect “against purely economic losses.” See 532 Madison Ave. Gourmet Foods, Inc. v. Finlandia Ctr., Inc., 96 N.Y.2d 280, 290 (2001). Plaintiff’s negligence claim is squarely foreclosed under the New York Court of Appeals’ holding in 532 Madison. There, several businesses in the vicinity of a crane collapse brought negligence claims for pure economic harm, alleging loss of income due to street closures following the incident. 96 N.Y.2d at 286-87. The Court of Appeals held that such claims must be dismissed, because there is no legal duty to protect against foreseeable economic harm. Id. at 292. As the Court of Appeals explained, “foreseeability of harm does not define duty,” because New York does not subject defendants to “unlimited liability to an indeterminate class of persons conceivably injured by any negligence in a defendant’s act.” Id. at 289. Instead, the Court limited the defendants’ duty to those who “suffered personal injury or property damage—as historically courts have done,” to “afford[] a principled basis for reasonably apportioning liability.” Id. at 291-92. Here also, without any duty supporting Plaintiff’s allegations of pure economic harm, Plaintiff’s negligence claim fails as a matter of law. Moreover, negligence claims require not just a breach of duty; they also require a “resulting injury to plaintiff.” Hidden Meadows Dev. Co. v. Parmelee’s Forest Prods. Inc., 289 A.D.2d 642, 643 (3d Dep’t 2001) (emphasis added). It is black-letter New York law that this because property owner failed to demonstrate that hazardous substances physically damaged his property); Wilson v. Amoco Corp., 33 F. Supp. 2d 969, 980 (D. Wyo. 1998) (granting defendants’ motion for summary judgment because “Plaintiffs in the instant matter may not recover damages based solely on stigma absent proof of some physical injury or harm to the specific Plaintiff’s property”); see also In re Paoli R.R. Yard PCB Litig., 113 F.3d 444, 463 (3d Cir. 1997) (Pennsylvania law requires property owner to demonstrate physical damage in addition to “damage caused by negative publicity alone”); Smith v. Kansas Gas Serv. Co., 285 Kan. 33, 50 (2007) (“In order to recover for the diminution in value of real property resulting from the marketplace fear or stigma alleged to have been created by a defendants negligence, the plaintiff must establish that the property sustained a physical injury as a direct and proximate result of the negligent conduct.”). Case 1:16-cv-00596-LEK-DJS Document 43-1 Filed 08/31/16 Page 6 of 10 5 injury must be a physical injury to the plaintiff or the plaintiff’s property, and thus a plaintiff “may not recover damages for negligently caused financial harm without accompanying physical injury.” Rebecca Moss, Ltd. v. 540 Acquisition Co., 285 A.D.2d 416, 416 (1st Dep’t 2001) (emphasis added). “Something more,” such as “physical invasion or damage,” is required. Mehlenbacher, 71 F. Supp. 2d at 188 (dismissing under New York law claims of “plaintiffs who only seek damages for diminution in property value unrelated to actual physical [property] damage”).2 Because Plaintiff admits it alleges no physical invasion or physical damage to its property, the negligence claim (Count 1) must be dismissed. The same is true for Plaintiff’s negligence per se claims—claims that were also asserted and dismissed by the trial court in 532 Madison “on the ground that plaintiffs could not establish a duty owed by defendants.” 96 N.Y.2d at 287. “[T]he New York Court of Appeals has emphasized repeatedly that negligence per se is only appropriate when the statute is ‘designed to protect a definite class of persons from a hazard of definable orbit.’” Coene v. 3M Co. ex rel. Minn. Mining & Mfg. Co., No. 10 Civ. 6546, 2015 WL 5773578, at *5 (W.D.N.Y. Sept. 30, 2015) (citation omitted) (emphasis added); accord Mauro v. Costco Wholesale Corp., No. 09 Civ. 1391, 2013 WL 3816731, at *4 (E.D.N.Y. July 22, 2013). Thus, in Coene, the court held that an employee who worked for Kodak could not sue for personal injuries arising from alleged violations of the Federal Mine Safety and Health Act, since that statute was passed “‘to protect the health and safety of the 2 The highest courts in New York at both the state and federal level similarly have rejected tort claims that fail to allege personal injury or property damage. See In re World Trade Ctr. Lower Manhattan Disaster Site Litig., 758 F.3d 202, 213 (2d Cir. 2014) (holding that “a fear of cancer without some physical manifestation of contamination is not an independent basis for a cause of action”); Caronia v. Philip Morris USA, Inc., 22 N.Y.3d 439, 452 (2013) (answering questions certified to it by the Second Circuit and rejecting independent claim for medical monitoring because New York tort law does not allow recovery “absent any evidence of present physical injury or damage to property”). Case 1:16-cv-00596-LEK-DJS Document 43-1 Filed 08/31/16 Page 7 of 10 6 Nation’s coal or other miners.’” 2015 WL 5773578, at *5 (quoting 30 U.S.C. § 801(g)) (emphasis added). Here, none of the provisions of New York’s Environmental Conservation Law that Plaintiff cites in support of its negligence per se claims were enacted to protect against Plaintiff’s alleged economic injury. See Compl. ¶ 85 (citing N.Y. Envtl. Conservation L. §§ 17-0501, 27-0914, and 37-0107). Rather, they were enacted to coordinate collection and treatment of solid waste “consistent with the protection of the public health,” N.Y. Envtl. Conservation L. § 27-0101, to reduce toxicity of solid waste “without impeding or discouraging the expanded use of post-consumer materials in the production of packaging and its components,” id. § 37-0201, and to ensure that all discharges of pollutants comply with “all applicable requirements of the Federal Water Pollution Control Act.” Id. § 17-0801. Nowhere in these statutory purposes is there any indication that the legislature enacted these laws to protect businesses from pure economic loss. Plaintiff’s negligence per se claim (Count 2) thus fails for lack of a supporting duty and must therefore be dismissed. Finally, Plaintiff’s strict liability claim (Count 3) must also be dismissed because Plaintiff pleads solely economic harm. Under New York law, a claim for strict liability requires that the harm that is alleged to have been caused is “harm to the person or property of another.” 55 Motor Ave. Co. v. Liberty Indus. Finishing Corp., 885 F. Supp. 410, 423 (E.D.N.Y. 1994) (quoting Rosenblatt v. Exxon Co., U.S.A., 335 Md. 58, 75 (1994)) (emphasis added). Thus, “[t]he doctrine of strict liability, by its express language and traditional application, is aimed at protecting against harm to person or property which arises from the dangerous activity” and does not extend to purely economic losses. Rosenblatt, 335 Md. at 75. Accordingly, courts dismiss strict liability claims that do not plead physical harm. Remson v. Verizon Commc’ns, Inc., No. 07 Civ. 5296, 2009 WL Case 1:16-cv-00596-LEK-DJS Document 43-1 Filed 08/31/16 Page 8 of 10 7 723872, at *4 (E.D.N.Y. Mar. 13, 2009), overruled in part on other grounds by Caronia v. Philip Morris USA, Inc., 22 N.Y.3d 439 (2013). As the Remson court explained, where plaintiffs do not allege “the element of physical injury . . . [,] they fail to allege an element essential to the stating of a claim for . . . strict liability,” and “those claims must be dismissed.” Id. Here, Plaintiff admits that it alleges no physical injury. (Dkt. 27 at 2.) Thus, its strict liability claims must be dismissed. In sum, because Plaintiff’s claims are not premised on any alleged property damage or physical injury, but rather are premised entirely on a theory of “stigma” damages, Plaintiff’s claims for negligence, negligence per se, and strict liability should be dismissed for failure to state a claim. Case 1:16-cv-00596-LEK-DJS Document 43-1 Filed 08/31/16 Page 9 of 10 8 CONCLUSION Having failed to state any viable claim for relief, Plaintiff’s Complaint should be dismissed in its entirety and with prejudice. Dated: August 31, 2016 Respectfully submitted, /s/ Sheila L. Birnbaum Sheila L. Birnbaum (505978) Mark S. Cheffo (302113) Douglas E. Fleming, III (519941) Patrick Curran (519940) QUINN EMANUEL URQUHART & SULLIVAN LLP 51 Madison Ave. New York, New York 10010 Tel: 212-849-7000 Fax: 212-849-7100 sheilabirnbaum@quinnemanuel.com markcheffo@quinnemanuel.com douglasfleming@quinnemanuel.com patrickcurran@quinnemanuel.com Michael Koenig (507425) Christopher Fenlon (516392) HINCKLEY ALLEN & SNYDER LLP 30 S. Pearl Street, Suite 901 Albany, New York 12207 Tel: (518) 396-3100 Fax: (518) 396-3101 mkoenig@hinckleyallen.com cfenlon@hinckleyallen.com Attorneys for Defendant Saint-Gobain Performance Plastics Corporation /s/ Elissa J. Preheim Michael D. Daneker (107356) Elissa J. Preheim (107355) Allyson Himelfarb (107357) Tal Machnes (519954) ARNOLD & PORTER LLP 601 Massachusetts Avenue, NW Washington, DC 20001 Telephone: (202) 942-5000 Facsimile: (202) 942-5999 Michael.Daneker@aporter.com Elissa.Preheim@aporter.com Allyson.Himelfarb@aporter.com Tal.Machnes@aporter.com Dale Desnoyers (103795) ALLEN & DESNOYERS LLP 90 State Street, Suite 1009 Albany, NY 12207 Telephone: (518) 426-2288 Facsimile: (518) 426-2299 dale@allendesnoyers.com Attorneys for Defendant Honeywell International Inc. Case 1:16-cv-00596-LEK-DJS Document 43-1 Filed 08/31/16 Page 10 of 10 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK HOOSICK FALLS ASSOCIATES, Plaintiff, v. SAINT-GOBAIN PERFORMANCE PLASTICS CORP., and HONEYWELL INTERNATIONAL INC., Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 1:16-cv-596 (LEK/DJS) CERTIFICATE OF SERVICE I certify that on August 31, 2106 I electronically filed the foregoing Notice of Motion to Dismiss and Memorandum of Law in support thereof with the Clerk of the Northern District of New York using the CM/ECF system, which sent notification of such filing to all counsel of record. /s/ Michael Koenig Hinckley, Allen & Snyder LLP Case 1:16-cv-00596-LEK-DJS Document 43-2 Filed 08/31/16 Page 1 of 1