LINCOLN HARBOR ENTERPRISES, LLC v. HARTZ MOUNTAIN INDUSTRIES, INC.

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

LINCOLN HARBOR ENTERPRISES, LLC

and LINCOLN HARBOR YACHT CLUB

CONDOMINIUM ASSOCIATION, INC.,

Plaintiffs,

v.

HARTZ MOUNTAIN INDUSTRIES, INC.,

and PORT IMPERIAL FERRY CORP.

d/b/a NY WATERWAY, Civ. No. 2:19-12520 (KM-MAH)

Defendants.

OPINION

MCNULTY, U.S.D.J.:

This action concerns the effect of ferry wakes on a Hudson River

commercial marina and the natural environment of New Jersey. Plaintiff

Lincoln Harbor Enterprises (“LHE”) owns condominium units as well as boat

slips in a marina which is operated by Plaintiff Lincoln Harbor Yacht Club

Condominium Association, Inc. (“LHYCCA”). (Compl. J] 2-3 (DE 1)).! The action

is brought against Hartz Mountain Industries, Inc. (“Hartz Mountain”), a

developer of real estate near the marina, and NY Waterway (a d/b/a name for

1 Citations to certain record items will be abbreviated as follows:

DE = Docket entry number

Compl. = Complaint and Jury Demand (DE 1}

Def. Brf. = Hartz Mountain’s Brief in Support of Motion to Dismiss (DE 12-1)

Pl. Brf. = Plaintiffs’ Memorandum in Opposition (DE 32)

Def. Reply Brf. = Hartz Mountain’s Reply Brief in Further Support of Motion to

Dismiss (DE 38)

Port Imperial Ferry Corp.), which operates ferries at various sites along the

Hudson River.

Currently before the Court is the motion of Defendant Hartz Mountain to

dismiss statutory claims raised against it under the New Jersey Environmental

Rights Act, as well as the common law claims, excepting the claim of nuisance.

See Fed. R. Civ. P. 12{b)(6). Hartz Mountain has also moved for an award of

attorneys’ fees. Defendant NY Waterway joins in Hartz Mountain’s motion to

dismiss (DE 22), but makes no independent arguments on its own behalf.

For the reasons set forth in more detail below, the motion to dismiss the

statutory and certain common law claims is granted in part and denied in part.

The motion for attorneys’ fees is denied, but costs are awarded.

I. FACTUAL BACKGROUND

In considering a motion to dismiss, the Court is required to treat the

facts alleged in the complaint as true and to draw all reasonable inferences in

the plaintiffs’ favor. I summarize those allegations as follows:

In or around 1986, Hartz Mountain came to terms with the Township of

Weehawken to build a mixed-use waterfront development along the Hudson

River (“Lincoln Harbor Marina”). (Compl. 7 14). In 1988, it obtained a permit

from the United States Army Corps of Engineers (“ACE”) to construct two ferry

slips within the property. (Id. J 16). The application proposed a small-scale

ferry operation, intended to transport employees working at Lincoln Harbor

Marina, located between Piers H and D, to and from New York City using the

existing Port Imperial Ferry. (/d. 7 19). The ferry was to run twice per day. (/d.).

The ACE granted the application for a ferry landing including the slips

(the “Ferry Landing”), citing in a Statement of Findings that the “proposed

activity [would] not have a significant adverse effect on the quality of the

human environment and as such an environmental impact statement need not

be prepared for [the] permit decision.” (id.{ 21). Further, the ACE noted that

since the Ferry Landing was “to be located between two existing piers, well

within the pierhead line, no damage from existing wakes [was] expected.” (/d.).

The Ferry Landing was constructed without any wake mitigation devices or

structures. (Id. ¥ 24).

Since then, Lincoln Harbor Marina became increasingly developed. The

Ferry Landing now services patrons and employees of various businesses,

hotels, and condominiums. (Jd. | 36). Hartz Mountain recently completed a

parking deck, rendering the Ferry Landing accessible to additional members of

the general public. (Id.).

The ferries themselves are not operated by Hartz Mountain, but by

Defendant NY Waterway, with which Hartz Mountain has contracted to provide

ferry services. (Id. § 41). NY Waterway is the major ferry service provider in the

Hudson River. (Id. ] 66). Its ferries are designed to maximize speed, a goal

inimical to that of minimizing wake. (Id. { 67). Plaintiff alleges that Hartz

Mountain and NY Waterway act in concert to operate the ferry schedule for the

transportation of Hartz Mountain invitees. (/d. | 46). Ferries operate to and

from Lincoln Harbor Marina dozens of times every day, generating “destructive”

wakes. (Id. | 41-44). Plaintiffs allege that the wakes from these activities have

destroyed all of its floating pontoon boat slips in Lincoln Harbor Marina, and

cite other significant and expensive damage. (Jd. J] 60, 82}. They also allege

that the ferry activities damage the environment. (/d. § 102).

Central to Plaintiffs’ claims is the allegation that the current, high-

volume ferry activity is not consistent with the scope of operations anticipated

by the 1988 ACE application and permit. Plaintiff argues that the

circumstances have changed so significantly that the ferry activity should be

considered “un-authorized.” (Id. J 154). Attempts by Plaintiffs to encourage the

ACE to reevaluate the permit have been unsuccessful. (/d. ¢ 152).

Plaintiffs seek damages, as well as various forms of equitable relief. (Id.

47158). Plaintiffs had previously filed a substantially similar claim against the

Defendants, which was voluntarily dismissed. Lincoln Harbor Enterprises, LLC

and Lincoln Harbor Yacht Club Condominium Association, Inc. v. Hartz Mountain

Industries, Inc., et al., No. 2:18-cv-16648 (the “Initial Action”).

II, APPLICABLE LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a

complaint if it fails to state a claim upon which relief can be granted. The

defendant, as the moving party, bears the burden of showing that no claim has

been stated. Animal Science Products, Inc. v. China Minmetals Corp., 654 F.3d

462, 469 n.9 (3d Cir. 2011). For the purposes of a motion to dismiss, the facts

alleged in the complaint are accepted as true and all reasonable inferences are

drawn in favor of the plaintiff. New Jersey Carpenters & the Trustees Thereof v.

Tishman Const. Corp. of New Jersey, 760 F.3d 297, 302 (3d Cir. 2014).

Federal Rule of Civil Procedure 8{a) does not require that a complaint

contain detailed factual allegations. Nevertheless, “a plaintiffs obligation to

provide the ‘grounds’ of his ‘entitlement to relief’ requires more than labels and

conclusions, and a formulaic recitation of the elements of a cause of action will

not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); see Phillips v.

Cnty. of Allegheny, 515 F.3d 224, 232 (3d Cir. 2008) (Rule 8 “requires a

‘showing’ rather than a blanket assertion of an entitlement to relief.” (citation

omitted)). Thus, the complaint’s factual allegations must be sufficient to raise a

plaintiff’s right to relief above a speculative level, so that a claim is “plausible

on its face.” Twombly, 550 U.S. at 570; see also West Run Student Hous.

Assocs., LLC v. Huntington Nat. Bank, 712 F.3d 165, 169 (3d Cir. 2013).

That facial-plausibility standard is met “when the plaintiff pleads factual

content that allows the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S, 662,

678 (2009) (citing Twombly, 550 U.S. at 556}. While “[t]he plausibility standard

is not akin to a ‘probability requirement’... it asks for more than a sheer

possibility.” Id.

When deciding a motion to dismiss, a court typically does not consider

matters outside the pleadings. However, a court may consider documents that

are “integral to or explicitly relied upon in the complaint” or any “undisputedly

authentic document that a defendant attaches as an exhibit to a motion to

dismiss if the plaintiff's claims are based on the document.” In re Rockefeller

Ctr. Props., Inc. Sec. Litig., 184 F.3d 280, 287 (3d Cir. 1999) (emphasis and

citations omitted); see In re Asbestos Prods. Liab. Litig. (No. VI), 822 F.3d 125,

133 n.7 (3d Cir. 2016); Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014).

In that regard, courts may consider matters of public record and exhibits

attached to the complaint. Schmidt, 770 F.3d at 249 (“To decide a motion to

dismiss, courts generally consider only the allegations contained in the

complaint, exhibits attached to the complaint and matters of public record”);

Arcand v. Brother Int’l Corp., 673 F. Supp. 2d 282, 292 (D.N.J. 2009) (court

may consider documents referenced in complaint that are essential to plaintiff's

claim). That exception rests on the rationale that “[w]hen a complaint relies on

a document ... the plaintiff obviously is on notice of the contents the

document, and the need for a chance to refute evidence is greatly diminished.”

Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196-

97 (3d Cir. 1993).

Ill. ANALYSIS

Section III.A discusses the general applicability of the Environmental

Rights Act to Plaintiffs’ allegations. Section B considers whether Plaintiffs have

successfully stated a claim under any federal or New Jersey statutes. Section C

discusses whether certain of Plaintiffs’ non-statutory claims are barred by the

statute of limitations. The motion is not directed to Plaintiffs’ nuisance claims.

Section D analyzes whether Defendants ought to be awarded attorneys’ fees.

A. Applicability of the Environmental Rights Act

Plaintiffs allege that the Defendants’ actions violate various statutes

designed to regulate and protect the environment and waterways. (Compl. 9

103, 119). These enumerated statutes do not provide for a private right of

action. However, New Jersey has enacted the Environmental Rights Act

(“ERA”), which provides that “[a]Jny person may commence a civil action in a

court of competent jurisdiction against any other person alleged to be in

violation of any statute, regulation or ordinance which is designed to prevent or

minimize pollution, impairment or destruction of the environment.” N.J. Stat.

Ann. § 2A:35A-4(a). This amounts to a piggy-back private right of action for the

violation of statutes and regulations designed to protect the environment. N.J.

Stat. Ann. § 2A:35A-4.

Defendants have put forth several arguments to the effect that the ERA

does not apply here.

Defendants’ first such argument is that an ERA claim requires an

allegation of government inaction with respect to the relevant environmental

issue. (Def. Brf. at 8). It is true that “the primary goal of the ERA is to limit

lawsuits by private litigants to those instances where the government has not

acted.” Mayor and Council of Borough of Rockaway v. Klockner & Klockner, 811

F. Supp. 1039, 1054 (D.N.J. 1993) (citations omitted). But that general

statement of purpose imports no requirement that “a plaintiff must specifically

plead that the government has failed to act... .” dd. Accordingly, this

argument fails as a basis for Rule 12(b)(6) dismissal.

Next, Defendants argue that Plaintiffs have not sufficiently pled that

Defendants’ actions have damaged and continue to damage the natural

environment of New Jersey. (Def. Brf. at 8-13). The ERA broadly provides that

its private right of action exists for violations of “any statute... designed to

prevent or minimize pollution, impairment or destruction of the environment.”

N.J. Stat. Ann. § 2A:35A-4(a). The definitions section expands on this concept:

“Pollution, impairment or destruction of the environment” means

any actual pollution, impairment or destruction to any of the

natural resources of the State or parts thereof. It shall include, but

not be limited to, air pollution, water pollution, improper sewage

disposal, pesticide pollution, excessive noise, improper disposal of

refuse, impairment and eutrophication of rivers, streams, flood

plains, lakes, ponds or other water resources, destruction of

seashores, dunes, wetlands, open spaces, natural areas, parks or

historic areas.

N.J. Stat. Ann. § 2A:35A-3, Defendants rightly note that the term “natural

resources,” as used in this definitional section, is not itself defined. I do not see

a justification, however, for adopting their proffered, restrictive definition of

“natural resources,” drawn somewhat arbitrarily from New Jersey’s Spill

Compensation and Control Act. The ERA’s definition includes a long and

illustrative list of possible impairments to the environment. It expressly

includes “impairment . . . of rivers” and “destruction of seashores.” Defendants’

proffered narrow definition of “natural resources” is not compatible with this

broad language. It is plausible that, say, damage to the shoreline of the Hudson

River, ifalleged, would be an actionable environmental harm under the ERA.

Defendants’ third, stronger argument, however, is that Plaintiffs have

failed to sufficiently allege damage to the environment; in reality, Defendants

say, Plaintiffs only allege damage to their own property. (Def. Brf. at 9-12). The

ERA is designed to allow injunctive relief against harm to the environment. To

maintain the predicate statutory violations underlying their ERA claim,

Plaintiffs would need, as discussed below, to allege environmental harm.

Plaintiffs frequently and forcefully allege that wakes generated by the ferries

have damaged Lincoln Harbor Marina, its boat slips, and so on. There is very

little, however, in the way of allegations that the wakes are damaging the

environment. The only such allegation is the highly conclusory claim that

“Defendants Hartz Mountain and NY Waterway .. . have acted and continue to

act in ways damaging to the environment... .” (Compl. J 148). Such language

gives no indication of what aspect of the “environment” has been damaged, or

how exactly the wakes have done this. That deficiency is fatal under the

Twombly/ Iqbal standards.

Plaintiffs’ briefing, it is true, suggests that they could plausibly allege that

the same wakes which are so destructive to the Lincoln Harbor Marina are

impairing the shoreline of the Hudson River. Thus amendment would perhaps

not be futile, and leave to amend in this manner is granted.? To head □□□ □

wasteful process by which complaints are corrected one flaw at a time, I will

continue the discussion for the guidance of the parties—not ruling, but

assuming arguendo, that this flaw could be corrected.

Finally, Defendants argue that Plaintiffs still fail to satisfy the

requirement of the ERA that if a statute has been violated there must also be “a

likelihood that the violation will recur in the future.” N.J. Stat. Ann. § 2A:35A-

4. That argument is premised to some degree on Defendants’ position that

there is no environmental violation at all, whether past, present, or future.

(Def. Brf. at 12). But if the alleged harm to the environment can be shown to

violate environmental statutes, as discussed below, then it plausibly flows that

the harm is likely to continue. The ferries run every day, and each ferry run

creates an allegedly damaging wake. It is reasonable to infer that the ferries will

continue to run at this rate, absent any indication otherwise from Defendants.

I will grant the motion to dismiss insofar as environmental damage has

not been alleged. I will grant leave to amend, however, to allege environmental

damage. The remainder of the discussion assumes arguendo that the ERA

applies.

2 Plaintiffs draw attention to various public reports regarding the damaging

effects of ferry wakes to the environment. (Pl. Opp. at 19-21}. However, these

references in the briefing do not serve to amend the Complaint. See, e.g., Pennsylvania

ex. rel Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 181 (3d Cir. 1988) (“[I]t is axiomatic

that the complaint may not be amended by the briefs in opposition to a motion to

dismiss.”) (quotation omitted); Talley v. United States, No. 11-1180, 2014 WL 282680,

at *5 (D.N.J. Jan. 24, 2014) (“[A] complaint cannot be amended through the brief of a

party in opposition to a motion to dismiss.”).

In addition, during oral argument, Plaintiffs’ counsel suggested that

Defendants’ activities impaired the public from accessing and enjoying the Hudson

River. This prevention is, allegedly, in conflict with the NJDEP permit. But even if this

is true, Plaintiffs have not specified the relevant permit violation and have provided no

authority for the inference that those actions constitute damage to the environment.

B. Violations of Environmental Statutes

The ERA requires an underlying violation of some environmental statute

or regulation. Plaintiffs offer several possibilities. Scattered throughout the

Complaint are citations to the Rivers and Harbors Act of 1899, as amended, 33

U.S.C. §§ 401-476, et seq.; the Coastal Zone Management Act of 1972, 16

U.S.C. §§1451-1464; the National Environmental Policy Act, 42 U.S.C. §§ 4321-

4347; the Coastal Zone Management Rules, N.J-.A.C. § 7:7-1.1 et seq.; and the

Waterfront Development Act, N.J. Stat. Ann. § 12:5-1 et seq. I discuss the

federal, and then the State, theories.

1. Violations of Federal Statutes

Defendants argue as a threshold matter that all of the claims based on

federal environmental statutes are invalid because the ERA provides a right to

sue only for violations of New Jersey state environmental laws. (Def. Brf. at 14-

15). In support, Defendants cite to cases expressly recognizing ERA causes of

action based on violations of state statutes. They cite no authority, however, for

the proposition that the ERA excludes claims based on violations of federal

statutes.3 The statute, by its plain language, confers a cause of action based on

violation of “any statute, regulation or ordinance which is designed to prevent

or minimize .. . destruction of the environment.” N.J. Stat. Ann. § 2A:35A-4{a)

(emphasis added). Defendants’ argument, based on a mere absence in the case

law, is too weak to overcome this clear statutory language. I hold that the ERA

can be used to allow a claim for violations of federal environmental statutes.

I therefore turn to the federal statutes cited by the Plaintiffs. Defendants

argue, with some justification, that merely citing an entire statute by title and

claiming it has been violated is insufficient to state a claim under the

One of the cited cases refers to a right of action under the ERA for violation of

“New Jersey environmental statutes,” and refers to the ERA as a remedy for inaction

by “the government.” Rockaway, 811 F. Supp. at 1054-1055. The ERA claims in that

case, however, were made under state law. The case did not discuss the issue of

whether ERA covers federal environmental violations; any argument by negative

implication that federal statutes are excluded is unconvincing.

Twombly/ Iqbal standards. (Def Brf. at 17). The Plaintiffs clearly could have

done much more to key their factual allegations to the elements of these federal

statutory violations. Indeed, in amending the complaint, Plaintiffs ought to cite

with more specificity the particular statutory provisions, whether state or

federal, that Defendants have allegedly violated, and state factually how the

elements of such violations are met.*

This is not a complaint, however, that lacks factual allegations. To some

extent, it is possible for the reader to apply the Rule 12(b)(6) standard to such

facts as are alleged, and I will do so.

Regarding the Rivers and Harbors Act, 33 U.S.C. § 403, no violation is

sufficiently alleged. This Act requires that structures in navigable rivers be

built only according to “plans recommended by the Chief of Engineers and

authorized by the Secretary of the Army... .” 33 U.S.C.A. § 403. There is no

allegation that the structures erected by Defendants did not comply with this

requirement; rather, the allegation is that the subsequent use of the piers

became excessive. This statutory claim is dismissed.

Claims relating to the Coastal Zone Management Act of 1972 fare

similarly. Plaintiffs have not cited, nor can I discover, any particular provision

of that statute that would be violated by the facts alleged here. The statute and

associated regulations require that the applicant certify in its permit

application to the relevant federal agency that the proposed action complies

4 During oral argument, Plaintiffs’ counsel explained that the Twombly/ Iqbal

standards were in fact met with respect to statutory violations. Because, the argument

went, the statutes cited by Plaintiffs were listed on the ACE permit, Defendants were

on notice that they would need to comply with them. Subsequent stages of litigation

would fill in the gaps, as expert witnesses would explain exactly which provisions were

violated. 1 disagree; more specificity is required. Plaintiffs cannot simply list multiple

statutes by title, but must point to the statutory provisions that they say are being

violated, and state how, factually, they are being violated.

Plaintiffs have raised other, non-environmental statutory violations; these,

however, seem to have been alleged in the context of establishing negligence or

nuisance. See, e.g., Compl. | 91. The analysis here is confined to the allegations ofa

private right of action via the ERA for environmental violations.

10

with an approved state coastal management program. See 16 U.S.C. §

1456(c)3; 33 C.F.R. § 320.3(b); 33 C.F.R. § 320.4(h). Defendants seem to have

done just that. (DE 1-1 at 13).

Plaintiffs’ real gripe is not that the initial permit application was

inaccurate, but that the Defendants did not update their permit once

circumstances had changed. Plaintiffs draw attention to 33 C.F.R. § 325.7, the

regulation describing ACE permit modifications. (Compl. 4153). The relevant

section reads as follows:

The district engineer may reevaluate the circumstances and

conditions of any permit, including regional permits, either on his

own motion, at the request of the permittee, or a third party, or as

the result of periodic progress inspections, and initiate action to

modify, suspend, or revoke a permit as may be made necessary by

considerations of the public interest. In the case of regional

permits, this reevaluation may cover individual activities,

categories of activities, or geographic areas. Among the factors to

be considered are the extent of the permittee’s compliance with the

terms and conditions of the permit; whether or not circumstances

relating to the authorized activity have changed since the permit

was issued or extended, and the continuing adequacy of or need

for the permit conditions; any significant objections to the

authorized activity which were not earlier considered; revisions to

applicable statutory and/or regulatory authorities; and the extent

to which modification, suspension, or other action would adversely

affect plans, investments and actions the permittee has reasonably

made or taken in reliance on the permit. Significant increases in

scope of a permitted activity will be processed as new applications

for permits in accordance with § 325.2 of this part, and not as

modifications under this section.

33 C.F.R. § 325.7(a) (emphasis added). I assume arguendo that this provision

would qualify as a statute or regulation designed to protect the environment, as

required by the ERA. What the regulation does, however, is grant the district

engineer authority to reevaluate permits, and it describes the relevant factors

and procedures. The directive that “significant increases in scope” will be

processed as “new applications’ falls short of imposing an affirmative obligation

on the permittee to request a new permit. If the Plaintiffs believe this provision

has been violated, they will have to state their basis in any amended pleading.

11

Similarly, the National Environmental Policy Act, 42 U.S.C. §§ 4321-

4347, does not immediately announce itself as a source of an ERA claim based

on the facts alleged in this complaint. Plaintiffs state that Section 4332{c)

requires the ACE to “supplement the Environmental! Impact Statement (EIS) or

Environmental Assessment (EA) if there are significant new circumstances or

information relevant to environmental concerns.” (Compl. § 162). On its face,

this provision states an obligation that falls on the ACE, not on the Defendants.

Again, more specificity will be required if the court is to infer that Defendants

have violated the law.

Accordingly, Plaintiffs have not plausibly claimed that the Defendants

have violated any of the federal statutes described in the Complaint. The

federal-law-based claims under the ERA, relating to the Rivers and Harbors

Act, the Coastal Zone Management Act of 1972, and the National

Environmental Policy Act, are dismissed without prejudice.

2. Violations of New Jersey Statutes

Plaintiffs have alleged, again under the aegis of the ERA, that the

Defendants violated two New Jersey statutes or regulations: the Coastal Zone

Management Rules, N.J.A.C. § 7:7-1.1 et seq., and the Waterfront Development

Act, N.J. Stat. Ann. § 12:5-1 et seg. (Compl. 94 102, 119).

With respect to the Coastal Zone Management Rules (the “CZM Rules”),

Plaintiffs have not specified which provisions of this comprehensive and wide-

ranging scheme Defendants allegedly violated. Such a deficiency would

ordinarily suffice to send Plaintiffs back to the drafting table. See Khorchid v. 7-

Eleven, Inc., No. 18-8525, 2019 WL 3812472 (D.N.J. Aug. 14, 2019) (dismissing

complaint that generally cited a statute but failed to specify the claimed

violation). The Plaintiffs did cite specific language from the CZM Rules in their

pre-suit notice to the Defendants, however. (Compl. Exhibit 8, page 4). I will

assume that is what is meant, and confine my analysis to that.

Plaintiffs’ most salient argument is that Defendants have not taken any

steps to mitigate the environmental damage caused by their activities under (or

12

in excess of) the authorization of the ACE permit. (Compl. | 76). The CZM

Rules require permittees to “take all reasonable steps to prevent, minimize, or

correct any adverse impact on the environment resulting from activities

conducted pursuant to the permit, or from noncompliance with the permit.”

N.J.A.C. § 7:7-27.2(c}(5). Defendant NY Waterway is not alleged to be a

permittee. Defendant Hartz Mountain, however, is; it received the ACE permit

for the Ferry Landing.

The complaint alleges that Hartz Mountain has taken no steps at all to

mitigate the damage of the activities permitted by the permit, namely the

construction of the Ferry Landing for specified purposes. The requirement to

take such steps does not have a temporal limit; a permittee must minimize

environmental damage on an ongoing basis, even after the permitted

construction is complete. As discussed above, Plaintiffs have not adequately

alleged an adverse impact on the environment. Assuming that objection can be

overcome by amendment, however, the Complaint may be viewed as plausibly

alleging that Hartz Mountain’s actions and inactions violate the CZM Rules.

Turning now to the New Jersey Waterfront Development Act, the

complaint again fails to pinpoint a specific provision of this complex statute

that the Defendants have violated. However, in their briefing, they draw

attention to N.J. Stat. Ann. § 12:5-3(a), which requires that plans for

waterfront development be approved by the New Jersey Department of

Environmental Protection (“NJDEP”). (Pl. Opp. at 30). I will confine my analysis

to that.

Plaintiffs allege that the Ferry Landing was built without a NJDEP

permit. (Compl. 4 23). That allegation, on its face, would sufficiently state a

plausible claim that Defendant Hartz Mountain, as the builder of the Ferry

Landing, violated the New Jersey Waterfront Development Act. It is stated,

13

however on information and belief, and the defendants point to what they say

is just such a permit.§

This claim also fails under the requirement of the ERA that the violation

is likely to recur in the future. The Ferry Landing was built long ago. There is

been no allegation that Hartz Mountain intends to build another. The harmful

ferry activities—the real source of the complaint here—are not alleged to

require a permit under this statute. Therefore, the Plaintiffs have failed to state

a claim that the violation of this statute is actionable. Finally, as was the case

under the CZM Rules, the only permittee here is Hartz Mountain; there is no

viable cause of action pled against NY Waterway, which is not a permittee at

all.

Accordingly, the New Jersey statutory claims (at least relating to the CZM

Rules) could be considered successfully pled against Defendant Hartz

Mountain, but not against Defendant NY Waterway, ifan amended complaint

can make an adequate allegation of adverse impact to the environment.

C. Statute of Limitations

Setting aside the statutory claims discussed above, the Defendants have

moved to dismiss “Plaintiffs’ remaining claims” based on the statute of

limitations. (Def. Brf. at 22). The applicable period, they say, is the six-year

limitation relating to “tortious injury to real or personal property.” N.J. Stat.

5 Plaintiffs’ “information and belief” is allegedly based on their unsuccessful

attempt to obtain a copy of the permit from both NJDEP and ACE. Defendants argue

in their briefing that Hartz Mountain had in fact obtained an NJUDEP permit, citing an

exhibit to the Complaint itself. (Def. Reply Brf. at 8, citing DE 1-4) They attach a copy

of what purports to be that permit in a separate declaration (DE 34-2), and counsel

stated at oral argument that this is the relevant permit. Defendants also note that in

Hartz Mountain’s ACE permit application, there is an indication that “[b]y letter dated

17 June 1988, the subject proposal has been approved for a modification-in detail by

the [NJDEP] Waterfront Development Permit, permit number 85-0072-1.” (DE 1-1 at

13).

Permitting is concededly a complex process. But should this claim—which is

being dismissed on other grounds—be revived by amendment, the Court will expect to

see some clarity from both sides as to these matters of public record.

14

Ann. § 2A:14-1. I analyze this issue in relation to the Plaintiffs’ tort claims,

excepting nuisance, as to which Defendants have not moved (Def. Repl. at 9).°

Both sides cite Russo Farms, Inc. v. Vineland Bd. of Educ., 675 A.2d 1077

(N.J. 1996). Russo involved flood damage that was discovered by those

plaintiffs more than six years before they filed their complaint. Jd. at 1084. The

New Jersey Supreme Court found that multiple claims were still nevertheless

actionable, citing the “continuing tort doctrine.” Id. at 1086-1088. Defendants

here argue that the continuing tort doctrine applies only to the claims of

nuisance. (Def. Reply Brf. at 9). Russo itself, however, makes no such

argument, and lists cases applying the doctrine to claims other than nuisance,

including negligent exposure of a toxin and trespass. /d. at 1085.

The court in Russo did bar one claim under the statute of limitations—a

claim of negligent construction. Jd. at 1091. That claim was rejected, however,

because it involved, not an ongoing or recurring tort, but an alleged breach of

duty that happened only once—at the time of construction, more than six years

before the claim was brought. Jd. In our case, Plaintiffs have alleged that the

Defendants breach their duty every time they cause a ferry to create a

damaging wake, an event which occurs dozens of times a day. Theirs is not the

kind of claim barred by Russo.

Defendants argue further that Plaintiffs’ prayer for $25 million in

“permanent” damages to property renders this a fixed and “permanent” tort,

rather than a continuing one. (Def. Reply Brf. at 9-10). In support, Defendants

cite a case interpreting Russo, Haddonbrook Associates v. General Elec. Co.,

427 F. App’x 99 (3d Cir. 2011). There, the Third Circuit, in affirming the

District Court’s grant of summary judgment, agreed with the conclusion that

seeking damages for diminution in property value supported an implication

6 Defendants state that this statute of limitations applies to Plaintiffs’ ERA claims

as well. The statute of limitations, however, by its terms applies to “action[s] at law.”

As to the ERA, Plaintiffs seek only equitable relief. To find the ERA claims untimely,

further analysis would be required.

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that the alleged harm was not a continuing nuisance. Id. at 102. Therefore, the

claim was barred by the six-year statute of limitations. Id. But the prayer for

“permanent” damages was just one factor that the Third Circuit considered in

determining whether the injury constituted a continuing tort. Id. Moreover, in

Haddonbrook, evidence showed that “the value of the property was completely

destroyed well before the six-year period prior to Haddonbrook’s suit.” Jd. Not

so here. Plaintiffs here have alleged a “new injury” within the limitations period,

which is “necessary to apply the continuing tort doctrine.” Id.

The statute of limitations is an affirmative defense, which may be

adjudicated at the motion to dismiss stage only if its applicability is clear from

the face of the complaint and facts properly considered on a Rule 12(b)(6)

motion. See Fried v. JP Morgan Chase & Co., 850 F.3d 590, 604 (3d Cir. 2017);

see also Bethel v. Jendoco Const. Corp., 570 F.2d 1168, 1174 (3d Cir. 1978).

The damages in this case, including damages for destruction of Lincoln

Harbor’s boat slips, cannot be said, from the Complaint, to have definitely

accrued prior to the six-year limitation period. Defendants’ $25 million

number, by the way, is not literally asserted in unitary fashion by the Plaintiffs;

Defendants seem to have calculated it by adding together a claim for $10

million in previously suffered damages and a statement that $15 million in

damages are anticipated in the future. (Compl. 99-100 against Hartz

Mountain; J] 118, 121 against NY Waterway). It cannot be said that Plaintiffs

have alleged $25 million in past damages that accrued more than six years

prior to the filing of the complaint.

Moreover, there are further allegations of ongoing tortious activity.

Plaintiffs argue that, despite previous litigation and negotiation with

Defendants, both NY Waterway and Hartz Mountain have committed new

injuries. For example, they allege that NY Waterway “continues to operate” its

ferries in a manner that harms Plaintiffs’ property. (Compl. q 112). Plaintiffs

allege damages that have accrued within the six-year limitation period. (Jd.

118). Whether this is accurate remains to be seen. But the Plaintiffs have

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alleged it, and given the specific description of the damages and the fact that

NY Waterway operates its ferries every day, the allegation is plausible.

Similarly, Plaintiffs have alleged that Hartz Mountain has in fact

“increase[d]” the magnitude of its harms to the Plaintiffs. (Id. 7 86). It is

plausible, drawing reasonable inferences in the Plaintiffs’ favor, that this

increase has occurred within the applicable six-year period, thereby creating a

new breach and harm.

The statute of limitations may apply at some point to limit the damages

recoverable. See Russo, 675 A.2d at 1094 (limiting potential damages to those

incurred within the applicable limitation period). At the motion to dismiss

stage, however, I cannot conclude that Plaintiffs’ claims are wholly barred by

the six-year statute of limitations. The motion to dismiss the tort claims on

statute of limitations grounds is denied.

D. Attorneys’ Fees & Costs

1. Prevailing-party fees in this action

Defendants, assuming they prevail on their motion to dismiss, have

moved for an award of attorneys’ fees pursuant to the relevant section of the

ERA, N.J. Stat. Ann. § 2A:35A-10(a). That provision states that “[iJn any action

under this act the court may in appropriate cases award to the prevailing party

reasonable counsel and expert witness fees ... where the prevailing party

achieved reasonable success on the merits.” Defendants cite to Central Bergen

Properties v. Crown Leisure Products, Inc., No. 94-4335, 1996 LEXIS 22483

(D.N.J. Oct. 18, 1996) for the proposition that a defendant in an ERA action

may receive attorneys’ fees even when its motion to dismiss in granted in part

and denied in part. (Def. Reply Brf. at 10). I will assume that is a theoretical

possibility, although the court in Central Bergen in fact denied attorneys’ fees

to the defendant. Id. at *40.

The ERA provision allows the Court, within its discretion, to award

attorneys’ fees to a “prevailing party.” I do not choose to exercise my discretion

to award interim fees, based on partial victories on particular counts (which in

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any event are subject to amendment). I do not find it appropriate to award

prevailing-party attorneys’ fees at this stage. The application is denied without

prejudice to renewal at a time when it is more clear which is the “prevailing

party” in this action.

2. Rule 41{d) fees and costs for prior dismissed action

Defendants also request attorneys’ fees and costs in connection with the

Initial Action (now dismissed) because it was filed by the Plaintiffs in violation

of the ERA’s 30-day pre-suit notice requirement. (Def. Reply Brf. at 11). Federal

Rule of Civil Procedure 41(d) provides that “[i]f a plaintiff who previously

dismissed an action in any court files an action based on or including the same

claim against the same defendant, the court [] may order the plaintiff to pay all

or part of the costs of that previous action... .”

The ERA provides that all suits must be preceded by 30 days’ written

notice to the defendants, as well as the New Jersey Attorney General and the

NJDEP. N.J. Stat. Ann. § 2A:35A-11. The plaintiffs did provide written pre-suit

notice by letter on November 20, 2018. Instead of waiting 30 days, however,

they filed the complaint in the Initial Action just nine days later, on November

29, 2018. (Initial Action, DE 10-2 therein at 4; DE 1 therein).

There is an exception to the notice requirement where the plaintiff “can

show that immediate and irreparable damage will probably result... .” N.J.

Stat. Ann. § 2A:35A-11. Plaintiffs’ complaint in the Initial Action contained a

footnote stating that irreparable harm would occur if they were forced to

provide the full 30 days’ pre-suit notice. (Initial Action, DE 1 therein at 30 n. 7).

Still, nothing in that footnote rose above the level of say-so. Plaintiffs were

represented by sophisticated counsel who were aware of the notice period, and

I see no basis to conclude that permitting the entire 30-day notice period to

run before filing suit would have crossed the line to “irreparable” damage.

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Defendant Hartz Mountain moved to dismiss the Initial Action for

insufficient pretrial notice.” Plaintiffs, in response, voluntarily dismissed the

Initial Action. (Initial Action, DE 18 therein). Having waited out the 30-day

notice period, plaintiffs then filed this, the current action. Federal Rule of Civil

Procedure 41(d) therefore applies, since it allows for an award of costs if the

plaintiff files a new action, having “previously dismissed an action.”

An issue arises as to whether attorneys’ fees are recoverable “costs”

under Rule 41({d). The presumptive American Rule, of course, is to the contrary,

as is the usual practice of assessing costs of litigation in this District. See Fed.

R. Civ. P. 54; D.N.J. Loc. Civ. R. 54.1.

As it happens, there is recent guidance from the U.S. Court of Appeals

for the Third Circuit. Choosing one strand of a three-way Circuit split, the

Court held that attorneys’ fees are not routinely included in the Rule 41(d)

definition of “costs,” but are recoverable under Rule 41(d) when the underlying

substantive statute defines costs to include attorneys’ fees:

We therefore adopt the Underlying Substantive Statute

Interpretation of Rule 41(d) and hold that “costs” in Rule 41(d)

includes attorneys’ fees only where the underlying statute defines

‘costs’ to include attorneys’ fees. Because in this case there is no

applicable underlying substantive statute that defines “costs” as

including attorneys’ fees, the District Court’s Order denying the

award of those fees will be affirmed.

Garza v. Citigroup Inc., 881 F. 3d 277, 284 (3d Cir. 2018).§

Hartz Mountain also made arguments relating to the Rivers and Harbors Act

(Initial Action, DE 10-1 therein at 9-10), which were in part recapitulated, albeit by a

different law firm, in the instant motion to dismiss. Hartz Mountain, by the way, was

the only party that moved to dismiss in the Initial Action; the Rule 41(d} motion for

fees relates only to Hartz Mountain.

8 That approach was anticipated in this District by Anders v. FPA Corp., No. CIV.

93-2830, 1995 WL 785109 (D.N.J. Apr. 24, 1995). Anders, however, was potentially a

bit broader than the later-decided and controlling Garza case. Anders held that costs

under Rule 41(d) would include attorneys’ fees where available, not only pursuant to

the underlying substantive statute, but also “under a fee-shifting statute, rule or other

authority in the previously dismissed case.” Id. at *3

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Attorneys’ fees provisions ordinarily are intended to provide an incentive

to plaintiffs, so that they can find attorneys willing to bring cases under

remedial statutes. In conjunction with Rule 41(d), however, an attorneys’ fees

provision plays a different role: it provides a small disincentive to the

resumption of dismissed cases. Where a party otherwise entitled to fees is

content to let the matter drop, the parties to the dismissed case are left in that

posture. Only where the opposing party restarts litigation does it expose itself

to fees that could have been awarded in the prior case.

Now the ERA does not literally “define” costs. See Garza, 881 F.3d at

284. It does, however, provide explicitly that “the court may in appropriate

cases award to the prevailing party reasonable counsel and expert witness fees

... where the prevailing party achieved reasonable success on the merits.” N.J.

Stat. Ann. § 2A:35A-10. It would be too literal, I think, to require that the

underlying substantive statute contain a “definition” of the term “costs”; few

do. The better approach is exemplified by LegalForce, Inc. v. LegalZoom.com,

Inc., a case decided recently by the U.S. District Court for the Northern District

of California. 2019 WL 1170777 (N.D. Cal. Mar. 13, 2019). LegalZoom held that

the Lanham Act, although it does not define “costs” as such, contains a fee-

shifting provision that is sufficient to trigger the Rule 41(d) analysis. Id. at *2.°

So the question becomes this: Would attorneys’ fees have been

recoverable under the ERA? The answer is yes only if obtaining the dismissal of

the Initial Action because it was filed 21 days too early makes Hartz Mountain

a “prevailing party” which has “achieved reasonable success on the merits.”

N.J. Stat. Ann. § 2A:35A-10(a). As a matter of statutory interpretation, | make

9 As it turned out, however, the LegalZoom court did not award fees, because it

found that the case was not “exceptional,” a prerequisite to such an award under the

Lanham Act. 2019 WL 1170777 at *2. In Anders, too, the underlying statute provided

for an award of fees to a successful insurance “claimant,” a provision held sufficient to

trigger Rule 41(d). The court ultimately denied fees, however, finding that the party

seeking fees did not meet the statutory definition of a “claimant.” 1995 WL 785109 at

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no such finding. As a matter of the Court’s discretion, I would not grant an

award of attorneys’ fees in these circumstances.

Hartz Mountain’s victory, while technically a dismissal, constituted little

more than a temporary advantage. Hartz is standing on its bare procedural

right to 30 days’ pre-suit notice. The notice provision is not really for the

benefit of defendants anyway— it is primarily intended to allow the government

to intervene in the case or otherwise respond. Player v. Motiva Enterprises LLC,

No. CIV. 02-3216, 2006 WL 166452, at *14 (D.N.J. Jan. 20, 2006), aff'd, 240 F.

App’x 513 (3d Cir. 2007). Hartz Mountain does not seem to have been

prejudiced in any way by receiving nine days’ notice, rather than thirty. Rather,

it moved to dismiss and awaited the running of the 30-day period and the

inevitable refiling of the action, in a sort of Biglaw version of “Mother, May I"—a

game for children. This is not anything like prevailing, or success, “on the

merits.”!0

As to a Rule 41(d) award of “costs” in the usual sense, however, Rule

41(d) is self-sufficient; it does not require any independent entitlement based

on the substantive law. Hartz Mountain is therefore authorized, if it wishes, to

submit a bill of costs for usual and customary items. See Fed. R. Civ. P. 54;

D.N.J. Loc. Civ. R. 54.1.

CONCLUSION

For the foregoing reasons, Defendant NY Waterway’s motion to join the

motion to dismiss is GRANTED. The Defendants’ motion to dismiss the

environmental statutory claims in the Complaint is GRANTED. The motion to

dismiss is DENIED as to all other claims. The Defendants’ motion for attorneys’

fees is DENIED, although Hartz Mountain is authorized to submit a bill of costs

under Rule 41(d), Fed. R. Civ. P.

10 I add that even if fees were awarded, any such award would likely be a small

one. It would be confined to fees unnecessarily and duplicatively incurred in moving to

dismiss the Initial Action based on insufficient pre-suit notice.

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All dismissals are without prejudice to the submission within 60 days of

a proposed amended complaint that remedies the defects noted above.

Dated: February 4, 2020

HON. KEVIN MCNULTY, a .

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