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

> District Court, D. New Jersey · February 4, 2020

URL: https://www.frixlaw.com/law-library/cases/10267555

## Case

- **Court:** District Court, D. New Jersey
- **Decided:** February 4, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

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.
15

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

16

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

20

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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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10267555. Public record. Not legal advice.