Opposition Brief — Are Acquisitions, LLC v. Hanna (No. 07-890)

FILED

b+ Q) MAR 6 - 2008

: OFFICE OF THE CLERK

No. 07-890 SURREME-COWRT U.S.

IN THE

Supreme Court of the United States

ARE ACQUISITIONS, LLC,

Petitioner,

v.

MICHAEL G. HANNA, Jr, et al.,

Respondents.

On PETITION FOR A Writ OF CERTIORARI TO THE

Court oF APPEALS OF MARYLAND

BRIEF IN OPPOSITION

THOMAS J. MINTON

GOLDMAN & MINTon, PC.

20 South Charles St., Suite 1201

Baltimore, MD 21201

(410) 783-7575

Attorney for Respondents

214543 g

COUNSEL PRESS

(800) 274-3321 » (800) 359-6859

1

QUESTION PRESENTED

Can a state court be compelled to reinstate a

dismissed negligence claim in a civil suit for damages

arising out of a private party’s past clean up of hazardous

waste?

ii

TABLE OF CONTENTS

Page

QUESTION PRESENTED .................. i

Bees OF CONTENTS .....ccccescccscecss ii

TABLE OF CITED AUTHORITIES ......... iii

ecb ebpae dbds deb oceesr esc aay 1

STATEMENT OF THE CASE ............... 1

EIN. nwo ccccccccccccecscvesees 1

B. History of the Litigation ............... 3

REASONS FOR DENYING THE PETITION ... 9

A. The Petition is Untimely. ............... 9

B. This Court Lacks Jurisdiction to Grant the

meatested Relief, ......ccccccccccccece 12

C. The Court Properly Rejected Petitioner’s

RCRA-based Negligence Claim. ........ 18

EN Per rer eee Tere 23

ili

TABLE OF CITED AUTHORITIES

Page

Cases

Abreu v. U.S., 468 F.3d 20 (1 Cir. 2006) ....... 22

Adams v. Robertson, 520 U.S. 83 (1997) ....... 10, 15

Afamefune v. Suburban Hosp., Inc., 385 Md. 677,

Pe Tk ND ia ave dccake Okc dec kane 2

Am. Ry. Express Co. v. Commonwealth of Ky.,

PAE Cees CAE) a eens ceca denidvecasanays 5

Angell v. Kelly, 336 F. Supp.2d 540 (M.D. N.C.

SNE ccsodndears badd KARcddek Eee aRseneen 7

Atl. Mut. Ins. Co. v. Kenney, 323 Md. 116,

Sk ee ee CED 6h dha deseicda caeeieewees 14,19

Avondale Fed. Savings Bank v. Amoco Oil Co.,

Woe § Syae 6 oe: : nr ere 22

Bennett Heating & Air Conditioning, Inc. v.

Nationsbank of Md., 342 Md. 169, 674 A.2d 534

CORE had tcuncduk ses henes oavan wank nenes 2

Bell Atl. Corp. v. Twombly, 1278. Ct. 1955 (2007)

PORT CEE TPT ey eer eee 2

Coleman v. Thompson, 501 U.S. 722 (1991) .... 18

iv

Cited Authorities

Cross Oil Co. v. Phillips Petroleum Co., 944

F. Supp. 787 (B.D. Mo. 1996) .............4.

Davenport v. Neely, 7 F. Supp.2d 1219 (M.D. Ala.

Belper mmr non: Bete ner pe seers enema

Duncan v. Tennessee, 405 U.S. 127 (1972) ......

Frederick v. Thomas, 578 F.2d 513 (3° Cir. 1978)

esot#oeeveeve ere eee eseeeeseeeeeeeeveeeee ese eeeeeeeee

Grable & Sons Metal Prods., Inc. v. Darue

Engineering & Mfg., 545 U.S. 308 (2005) ....

Heckrotte v. Riddle, 224 Md. 591, 168 A.2d 879

tt Peery er re Tee rere Sr rT Serr re

Herb v. Pitcairn, 324 U.S. 117 (1945) ..........

Hubbard v. United States, 514 U.S. 695 (1995)

(Rehnquist, C.J., dissenting) ...............

Jones v. State, 357 Md. 408, 745 A.2d 396 (2000)

eeseeeveeseeeeeeeeeeeeveeereereeoeseeveesveevreeveeeese eee e @

Joseph v. Bozzuto Mgmt. Co., 173 Md. App. 305,

OL Pie CO PED ik hdc usa neu cascarderee

Leavitt v. Jane L., 518 U.S. 187 (1996) .........

Page

y

Cited Authorities

Page

Lee v Kemna, 534 US. 362 (2002) ............. 18

Meghrig v. KFC Western, Inc., 516 U.S. 479

NR Sada sd ih orn con dha eed &s deen 18, 19, 23

Merrell Dow Pharmaceuticals Inc. v. Thompson,

ELD dicts odndccedaceanadeays 16

Monumental Life Ins. Co. v. United States Fid.

& Guar. Co., 94 Md. App. 505, 617 A.2d 1163

CE di cnieds Ween ddksenAaecdncekdensendads 7

Patton v. United States of Am. Rugby Football,

381 Md. 627, 851 A.2d 566 (2004) ............ 13

Pritchard v. Myers, 174 Md. 66, 197 A. 620 (1938)

eS er rE Pr See rT ee erry 7

Schertz-Cibolo-Universal City v. Wright, 25 F.3d

SE ME AAU AUD so deiec dct dnanaesancceunnas 7

Schwartzman, Inc. v. Atchison, Topeka & Santa

Fe Ry. Co., 857 F. Supp. 838 (D. N.M. 1994) .. 20

Short v. Ultramar Diamond Shamrock,

46 F. Supp.2d 1199 (D. Kan. 1999) ........... 22

Tafflin v. Levitt, 92 Md. App. 375, 608 A.2d 817,

cert. denied 328 Md. 447, 614 A.2d 974 (1992)

vi

Cited Authorities

Page

325-343 E. 56% Street Corp. v. Mobil Oil Corp.,

906 F. Supp. 669 (D. D.C. 1995) ............. 20, 21

Waste, Inc. Cost Recovery Group v. Allis

Chalmers Corp., 51 F. Supp.2d 936 (N.D. Ind.

EE Sic Windhalecotscnen caved eekasdenasns 22

Zacchini v. Scripps-Howard Broadcasting Co.,

Ss CRT ED os bn 5d oe bac dedenqseusas 17

Statutes

Md. Cts. & Jud. Proc. Code §§ 12-201; 12-203 .. 11

Be Ce ED 6 kh ok Saenent aceceeecdieenes 1

ED IE Sc icn eau laden seaenevaewnvanns 1,12

als SEs OE hic dvccvinsccadsaeuas 8, 22

Rules

ee | reer ere rer Terre Tree 2

es OED kos onenscceeesprcccavase 2

i news ckebenakesvecaueet 10

vii

Cited Authorities

Page

Se A vin nandacceatabsceesebacaes 9,11

SNE coc kk chan banduewavnsena nas 10

I GA OMENS ng o's badd cbs cde dee ewa dan 4,8

a 8 Spr ren re ee rere 6

Treatises

B. Dobbs, THE LAW OF TORTS, § 134 at 315

ererrrerrrrrr rrr rer rer Ty ee rer rr riyT 14

]

JURISDICTION

This Court does not have jurisdiction to grant the

requestel relief. The Petition challenges a state court

judgmen: in which Petitioner’s “negligence” count in a

civil darrages suit was dismissed for failure to state a

claim upen which relief could be granted. The provision

applicable to state court judgments is 28 U.S.C. § 1257.

Under that section, this Court does not have jurisdiction

because the Maryland courts did not call into question

the validity or constitutionality of any treaty or statute

of the United States.

STATEMENT OF THE CASE

A. Introduction

The Petition arises out of a civil suit filed by

Petitione® against a number of persons and entities in

the Cirquit Court for Montgomery County, Maryland.

The suit sought damages against the officers, directors

and inveStors of a bankrupt corporation that had leased

commerial office and laboratory space from Petitioner.

As to the sole issue now before this Court, the suit was

dismissed for failure to state a claim upon which relief

could be granted. That dismissal was affirmed by an

intermediate appellate court.

TheP etition is directed to a decision by the Maryland

Court ¢f Appeals denying Petitioner’s “Motion to

Reconsiler” the denial of a conditional cross-petition for

2

a writ of certiorari. (Petition, pp. 3, 23). The appeal to

that court, Maryland’s highest appellate court, is

discretionary. If granted, the Petitioner’s cross-appeal

would have addressed the holding of Maryland’s

intermediate appellate court that Petitioner’s Second

Amended Complaint did not adequately allege a cause

of action sounding in “negligence” against the individual

officers and directors of the bankrupt tenant.

The intermediate appellate court (the Maryland

Court of Special Appeals) issued its opinion on August

24, 2006. (App. 1-44). That opinion was not addressed

solely to the dismissal of the “negligence” count. It

covered a wide range of issues and counts in the Second

Amended Complaint that were either dismissed on the

pleadings or subject to summary judgment. However,

the “negligence” issue was the sole focus of Petitioner’s

Conditional Cross-Petition for a Writ of Certiorari in the

Maryland Court of Appeals, and of Petitioner’s Motion

for Reconsideration of the denial of the Conditional

Cross-Petition.

The trial court dismissed the “negligence” count for

failure to state a claim upon which relief could be granted

pursuant to Md. Rule 2-322(b)(2). The legal standards

governing the decision were comparable to those

governing motions to dismiss under Fed. R. Civ. P.

12(b)(6) prior to the decision of this Court in Bell Ati.

Corp. v. Twombly, 127 S. Ct. 1955 (2007). All well pleaded

facts, and reasonable inferences drawn therefrom, were

taken as true, and considered de novo on appeal. See

Afamefune v. Suburban Hosp., Inc., 385 Md. 677, 870

A.2d 592 (2005); Bennett Heating & Air Conditioning,

Inc. v. Nationsbank of Md., 342 Md. 169, 674 A.2d 534

(1996).

3

As demonstrated below, the state court result was

consistent with federal and state law, and with decisions

of other courts that have addressed the identical issue.

B. History of the Litigation’

Petitioner is the owner of commercial property in

Rockville, Maryland that was leased to Intracel Corp., a

bio-technology company. Respondents were officers or

directors of Intracel Corp. Petitioner evicted Intracel

Corp. from the premises for non-payment of rent

effective May 1, 2001. Intracel Corp. filed for bankruptcy

in the United States Bankruptcy Court for the District

of Maryland in September 2001.

Petitioner filed its initial complaint against several

officers and directors of Intracel in September 2002.

The complaint sought $500,000 in damages relating to

the cost of removing allegedly hazardous materials from

the leased site after Intracel was evicted, plus an

additional sum in “lost rent.” Petitioner later expanded

the allegations and the number of defendants (to include

a holding company and an investment firm), in an

Amended Complaint, followed by a Second Amended

Complaint that was filed in March 2004.

The Second Amended Complaint contained twelve

counts that set out a number of theories of liability,

including trespass, waste, negligence, alter ego liability,

respondeat superior, and fraud. In addition to $3 million

' A detailed history, particularly as it relates to the

“negligence” issue Petitioner asks this Court to address, is

contained in the Court of Special Appeals’ opinion at App. 1 - 15.

4

in alleged economic loss, the Second Amended Complaint

asked for $5 million in punitive damages.

All counts of the Second Amended Complaint were

eventually dismissed for failure to state a claim, or on

summary judgment. Petitioners selected only some of

the counts for appeal. Only the “negligence” count is

pertinent here.

The “negligence” count contained a paragraph that

referenced federal law.’ It stated (in 1 114) in conclusory

terms that certain unspecified actions of all defendants:

constituted violations of numerous

environmental statutes and regulations,

including but not limited to the Atomic Energy

Act, the Resource Conservation and Recovery

Act, 42 U.S.C. § 6922 (and related regulations

at 40 C.F.R. § 262.30 to 262.34) and 42 U.S.C.

§§ 6928(d)(1) to 6928(d)(2); Md. Code,

Environmental Article, Titles 7 and 8; and

Sections 26:13.11 and .12 of the Code of

Maryland Regulations. These statutes were

enacted as safety measures, and were

designed to protect a class of persons which

included ARE [Petitioner], its employees and

other occupants of the Property.

The identical wording reappeared in an awkward

2 The recitation of the pleading history here is intended to

address Sup. Ct. Rule 14(g)(i), the requirements of which

Petitioners have largely neglected.

5

is not at issue here), but there were no other references

to federal law in any of the other 218 paragraphs of the

Second Amended Complaint.

At this point, the issues are narrower than those

raised in 7 114. The Atomic Energy Act was not briefed

to the Maryland Court of Special Appeals, was not

addressed in the Conditional Cross-Petition or in the

Motion for Reconsideration, and is not mentioned in the

Petition to this Court. In addition, Petitioner never

claimed to have incurred damages resulting from any

“safety” issues at the site; Petitioner has consistently

limited its claim to $3 million in alleged economic loss

resulting from clean-up expenses and lost rent, plus

punitive damages.® Finally, although Petitioner

expresses disagreement with the Court of Special

Appeals’ interpretation of the cited Maryland

Regulations (COMAR), the argument is irrelevant and

unavailing here. “Save in exceptional circumstances, . . .

we must accept as controlling the decision of the state

courts upon questions of local law, both statutory and

common.” Am. Ry. Express Co. v. Commonwealth of Ky.,

273 U.S. 269, 272 (1927).

The trial court dismissed the “negligence” count

without substantive discussion, stating only (in an oral

opinion delivered from the bench): “As to Count 3, the

claim of negligence as to all defendants, for the reasons

asserted by the defendants in their brief, that motion is

granted. That count is dismissed.”

3 The claim for punitive damages is no longer at issue.

6

The reasons stated “in the brief “may be fairly

categorized as falling into two lines of argument, as

follows. First, the preceding (7.e., first) Amended

Complaint had been dismissed for lack of specificity, with

leave to amend. In granting leave to amend, however,

the trial judge required the plaintiff to re-plead the

negligence allegations with more specificity; which

defendants had committed what tortious violations of law

by virtue of what acts or omissions? The brief posited

(correctly) that the Second Amended Complaint failed

to meet that charge.

Second, the brief asserted that none of the cited

statutes addressed the allocation of clean-up costs as

between private parties, particularly as between a

landlord and a tenant. In other words, the plaintiff was

not within the group of persons whom the cited statutes

sought to protect, especially where the sole issue raised

in the action was economic loss.

The former line of argument would not be pertinent

here but for the admonition of Sup. Ct. Rule 15.2 to point

out in this Opposition any misstatements of fact in the

Petition. Virtually all of the Petition’s factual assertions

at pp. 6 -10 were hotly disputed and remained so after

preliminary motions disposed of the case. For example,

Respondent Richard Cox, the general counsel of Intracel

Corp., did not control the company’s operations or

finances. Indeed, he was charged in Petitioner’s

summary judgment briefing merely with failing to “press

the issue” of securing additional funding from investors

for clean-up. Respondent David Fox was a director of

Intracel for only a very short time, participated in only

one board meeting (by telephone), and knew nothing

7

about Intracel’s eviction or what materials were stored

on site.* The other directors did not misallocate funds

from the sale of a corporate asset; they paid the proceeds

of the sale to the persons or entities that had a security

interest in the asset. At any rate, if they had misallocated

assets, the claim was more appropriately made under

the “alter ego” claim (which was dismissed and not

appealed), or by the trustee in bankruptcy on behalf of

the bankrupt corporate entity. See, Schertz-Cibolo-

Universal City v. Wright, 25 F.3d 1281, 1284 (5" Cir.

1994); Angell v. Kelly, 336 F. Supp.2d 540, 544 (M.D. N.C.

2004); Tafflin v. Levitt, 92 Md. App. 375, 608 A.2d 817,

cert. denied 328 Md. 447, 614 A.2d 974 (1992); Pritchard

v. Myers, 174 Md. 66, 197 A. 620 (1938). Finally, ARE

did not attempt to induce Respondents to return to the

site after eviction. ARE would not permit Respondents

to return to do any clean-up with their own employees,

although they were ready, willing, and able to do so.

Instead, ARE barred Respondents from the premises

and insisted that they retain a private contractor whose

initial estimate for clean-up was approximately $250,000.

These, and dozens of other disputed facts,

impractical to list here, including ARE’s contributory

negligence in allocating a $230,000 security deposit to

back rent rather than to clean-up, were never resolved.

That is why, when the intermediate appellate court

* Petitioner also failed to appeal any issue relating to David

Fox in the Maryland appellate courts, in that its briefs did not

cite or discuss a single factual allegation or issue as to Mr. Fox.

See, Monumental Life Ins. Co. v. United States Fid. & Guar.

Co., 94 Md. App. 505, 544, 617 A.2d 1163 (1982). As a result, Mr.

Fox is not properly named as a Respondent in this Court.

8

remanded the “trespass” count, it invited all of the

defendants to file further summary judgment motions.®

(App. 34).

It is, however, the second line of argument that goes

to the heart of the dispute here. Sup. Ct. Rule 14.4(g)(i)

requires the Petitioner to include in the Petition:

pertinent quotations of specific portions of the

record or summary thereof, with specific

reference to the places in the record where the

matter appears (e.g., court opinion ...), SO as

to show that the federal question was timely

and properly raised and that this Court has

jurisdiction to review the judgment on a writ

of certiorari.

The Petition does not quote, because it cannot quote,

any ruling by any Maryland court which holds that, as

Petitioner characterizes it:

a tenant ... owes no legal duty to manage

{hazardous or radioactive] waste in accordance

with the requirements of the federal Resource

Conservation and Recovery Act (‘RCRA’),

42 U.S.C. §§ 6901-6992k, ... in stark conflict

with decisions of several courts of appeals that

* The “trespass” issue was the sole focus of Respondents’

appeal to the Maryland Court of Appeals, which reversed the

Court of Special Appeals. That decision terminated the suit in

its entirety, until the present Petition was filed.

9

have affirmed criminal convictions and civil

liability premised on the opposite proposition.

(Petition, p. 3).

The actual ruling of the Maryland Court of Special

Appeals was merely that: “RCRA was not designed to

protect private entities, like ARE, from economic harm.”

(App. 18). The holding is neither controversial nor fit

for review in this Court.

REASONS FOR DENYING THE PETITION

A. The Petition is Untimely.

The substantive decision Petitioner attempts to place

at issue was handed down by the Maryland Court of

Special Appeals in August 2006. (App. 1 - 44). Thereafter,

Petitioner sought further review in the form of a

discretionary appeal to the Maryland Court of Appeals.

On December 6, 2006 Respondents’ petition for a writ of

certiorari was granted by the Court of Appeals (on the

sole issue that the intermediate appellate court had

decided adversely to Respondents), but Petitioner’s

conditional cross-petition was denied.

Sup. Ct. Rule 13.1 states:

A petition for a writ of certiorari seeking

review of a judgment of a lower state court

that is subject to discretionary review by the

state court of last resort is timely when it is

10

filed with the Clerk within 90 days after entry

of the order denying discretionary review.

This Petition should have been filed no later than March

6, 2007.°

This argument is not a mere procedural nicety.

As Justice Rehnquist wrote, “[a] high degree of

selectivity is ... enjoined upon [the Supreme Court] in

exercising [its] certiorari jurisdiction.” Hubbard v.

United States, 514 U.S. 695, 720 (1995) (Rehnquist, C.J.,

dissenting). Here, Petitioner’s dilatory pursuit of the

6 The operative pleading which ostensibly gives rise to the

Petition, z.e., Petitioner’s state court Motion for Reconsideration

of the December 6, 2006 order, was also untimely. The pertinent

Md. Rule is 8-605. It provides that a motion for “reconsideration

of a decision by the Court that disposes of the appeal” must be

filed “(1) before the issuance of the mandate or (2) within 30 days

after the filing of the opinion of the Court, whichever is earlier.”

(Emphasis added). Petitioners waited until the day before the

issuance of the mandate before filing their Motion for

Reconsideration in September 2007. That is, they necessarily

elected the later of the two triggering events, not the earlier,

because the opinion that completely terminated their appeal was

issued on December 6, 2006. Thus, even in the unlikely event

that the reference in Sup. Ct. Rule 13.3 to “a petition for

rehearing” may be construed to embrace a “Motion for

Reconsideration of a Denial of a Conditional Cross-petition for

a Writ of Certiorari,” the Petition here is still untimely because

the Motion for Reconsideration was itself untimely. Petitioner

cannot demonstrate that the Maryland Court of Appeals lacked

an adequate procedural basis on which to deny the Motion for

Reconsideration, which that court did quickly, without comment,

and without need of any reply from Respondents. See, Adams v.

Robertson, 520 U.S. 83, 87-88 (1997).

11

issue now results in a strained request that this Court

review the decision of the Maryland Court of Appeals to

deny a discretionary review of a lower court’s decision.

(Petition pp. 3, 23). The decision whether to review the

intermediate appellate court’s decision, however, is left

by statute to the discretion of the Maryland Court of

Appeals. Md. Cts. & Jud. Proc. Code $§ 12-201, 12-203.

The certiorari process serves an important

function in Maryland’s' system of

jurisprudence. It allows this Court to select

and review cases that we deem to be “desirable

and in the public interest. ...” In exercising

this broad discretion, we limit the issues that

we elect to review by denying petitions for

certiorari in whole or in part, so that we may

deal directly with the issues selected.

Jones v. State, 357 Md. 408, 419, 745 A.2d 396, 401-02

(2000) (citations omitted).

Petitioner had the opportunity under Sup. Ct. Rule

13.1 to challenge the substantive decision of the

Maryland Court of Special Appeals. Now, however,

Petitioner asserts a challenge to the Court of Appeals’

exercise of its discretion to determine what is “desirable

and in the public interest.” The challenge undermines

Maryland’s appellate process as established by statute

and administered by its highest court.

12

Sup. Ct. Rule 10(b) provides that a petition for

certiorari may be granted where:

a state court of last resort has decided an

important federal question in a way that

conflicts with a decision of another state court

of last resort or of a United States Court of

Appeals... .

The Maryland Court of Appeals made no such decision.

B. This Court Lacks Jurisdiction to Grant the

Requested Relief.

The grant of jurisdiction to this Court for review on

a writ of certiorari is found at 28 U.S.C. § 1257(a), which

states:

Final judgments or decrees rendered by the

highest court of a state in which a decision

could be had, may be reviewed by the Supreme

Court by writ of certiorari where the validity

of a treaty or statute of the United States is

drawn into question or where the validity of a

statute of any State is drawn into question on

the ground of its being repugnant to the

Constitution, treaties, or laws of the United

States, or where any title, right, privilege, or

immunity is specially set up or claimed under

the Constitution or the treaties, statutes of,

or any commission held or authority exercised

under, the United States.

13

The Maryland courts decided none of the above in this

action. They did not question the validity of any treaty

or statute of the United States, never called into question

the statute of any State on any grounds, and did not

deprive Petitioners of any right or immunity conferred

by the Constitution, laws, or commissions of the United

States.

The only issue decided by the Maryland Court of

Special Appeals was the legal sufficiency of Petitioner’s

“negligence” claim as pled in the Second Amended

Complaint. That pleading’s reference to federal

environmental statutes was pertinent only within the

framework of Maryland tort law. That law requires

sufficient allegations of: (1) a duty owed by defendant to

the plaintiff to protect the plaintiff from injury;

(2) breach of that duty; (3) actual injury or loss, and;

(4) injury or loss proximately resulting from the breach.

Patton v. United States of Am. Rugby Football, 381 Md.

627, 851 A.2d 566 (2004). Within this legal structure,

evidence of a statutory violation may furnish evidence

of negligence but:

In Maryland, the violation of a statute does

not constitute negligence per se. Rather, the

breach of a statutory duty may be considered

some evidence of negligence where three

requirements are met. First, the plaintiff must

be a member of the class of persons the statute

was designed to protect. Second, the injury

suffered must be of the type the statute was

designed to prevent. Third, the plaintiff must

present legally sufficient evidence to

14

demonstrate that the statutory violation was

the proximate cause of the injury sustained.

Joseph v. Bozzuto Mgmt. Co., 173 Md. App. 305, 326, 918

A.2d 1230, 1242 (2007); See, Atl. Mut Ins. Co. v. Kenney,

323 Md. 116, 124, 591 A.2d 507, 510-511 (1991).

The Court of Special Appeals concluded that,

whatever RCRA violations may have been alleged, the

allegations were futile because: “the statutes relied upon

by [Petitioner] were not intended to protect against the

type of harm appellant experienced.” (App. 17). “RCRA

was not designed to protect private entities from

economic harm.” (App. 18). In other words, alleged

RCRA violations do not satisfy the first two required

elements of Maryland law listed in the Joseph decision

as quoted above.

Thus the Petitioner fails to take into account a critical

distinction between a decision that contravenes federal

law, and one that merely restricts the scope of that

federal law’s reach into the realm of state tort law. The

latter type of decision is, and should be, uniquely left to

the state court’s discretion.

Maryland is among the minority of states that treat

statutory violations as mere evidence of negligence, not

as negligence per se. Joseph, 173 Md. App. at 329. Viewed

in that context, because the RCRA provisions cited in

the Second Amended Complaint do not prescribe

anything about tort law, it is within the purview of the

state court “to adopt the standards or rules of conduct

from such statutes and to apply them to tort cases.”

Id., citing B. Dobbs, THE LAW OF TORTS, § 134 at

315 (2001).

15

This ourt does not generally grant petitions for

certiorar to review the application of state law to a

pleading »r a set of facts. Leavitt v. Jane L., 518 U.S.

137, 144 (996).

Wit] “very rare exceptions,” ... we have

adhered to the rule in reviewing state court

judgnents under 28 U.S.C.§ 1257 that we will

not onsider a petitioner’s federal claim unless

it was either addressed by, or properly

preented to, the state court that rendered the

deciion we have been asked to review.

Adams v.Robertson, 520 U.S. at 88 (citation omitted).

Here no state court has ever ruled on the issued

framed b’ Petitioner as the “question presented,” i.e.,

the natue and extent of a “tenant’s” duty to manage

hazardow waste under RCRA. The “tenant” was never

a party t) this proceeding, having filed for bankruptcy

protectiol. The Respondents’ duties under federal law

were ne‘er discussed by the trial court or by the

intermedate appellate court, both of which determined

merely tlat alleged breaches of those duties did not give

rise to a laim for civil damages. Federal law was never

addressel in any way by the Court of Appeals whose

action daying a discretionary appeal is the subject of

the requsted writ.

For jurposes of federal diversity jurisdiction, this

Court ha held:

Weconclude that a complaint alleging a

viohtion of a federal statute as an element of

16

a state cause of action, when Congress has

determined that there should be no private,

federal cause of action for the violation, does

not state a claim “arising under the

Constitution, laws, or treaties of the United

States.” 28 U.S.C. § 1331.

Merrell Dow Pharmaceuticals Inc. v. Thompson,

478 U.S. 804, 817 (1986).””

If Merrell announces the standards for federal

question jurisdiction, it is no wonder that Petitioner did

not file this case in federal court and, indeed, resisted

Respondents’ efforts to have the case removed to the

federal bankruptcy court overseeing Intrace] Corp.’s

bankruptcy.

Moreover, if the pleading of alleged RCRA violations

as possible evidence of negligence under Maryland law

may not be considered a claim arising under the laws of

7 This view has evolved in recent years to accommodate

federal court jurisdiction over issues of federal law in

circumstances not present here: “The question is, does a state-

law claim necessarily raise a stated federal issue, actually

disputed and substantial, which a federal forum may entertain

without disturbing any congressionally approved balance of

federal and state judicial responsibilities.” Grable & Sons Metal

Prods., Inc. v. Darue Engineering & Mfg., 545 U.S. 308, 314

(2005). Thus, in Grable, federal jurisdiction was properly

exercised because: “the federal statute is ... an essential element

of [plaintiff's] quiet title claim, and the meaning of the federal

statute is actually in dispute; it appears to be the only legal or

factual issue contested in the case.” Jd. at 315. No similar factor

is present here.

17

the United States for purposes of federal question

jurisdiction, the rejection of those allegations under

Maryland law cannot reasonably be interpreted as a

challenge to the validity of RCRA itself. At a minimum,

the issue is so intertwined with Maryland tort law that

this Court’s exercise of jurisdiction is not warranted.

Duncan v. Tennessee, 405 U.S. 127 (1972).

This Court should also recognize that the negligence

claim at the center of this Petition was rejected on

independent state grounds. In addition to rejecting the

alleged RCRA violations as constituting adequate,

actionable evidence of negligence, the Court of Special

Appeals determined that, although Petitioner had had

three chances to plead its case, it consistently “failed to

allege any common law duty that was negligently

breached by the defendants.” (App. 21).

In large measure, [Petitioner] appears to be

attempting to assert that the defendants

“negligently” breached the lease contract

[which required the tenant to clean up the site

upon vacating the premises]. Such an assertion

is insufficient to state a cause of action for

negligence. See Heckrotte v. Riddle, 224 Md.

591, 595 (1961)....

(App. 21).

Because the Maryland Court of Special Appeals

“rested its decision on both state and federal grounds,

either of which would have been dispositive, [this Court |

would have ... no jurisdiction.” Zacchini v. Scripps-

Howard Broadcasting Co., 433 U.S. 562, 568 (1977) (and

cases cited therein).

18

This Court from the time of its foundation has

adhered to the principle that it will not review

judgments of state courts that rest on

adequate and independent state grounds. ...

The reason is so obvious that it has rarely upon

[sic] thought to warrant statement. It is found

in the partitioning of power between the state

and federal judicial systems and in the

limitations of our own jurisdiction. Our only

power over state judgments is to correct them

to the extent that they incorrectly adjudge

federal rights. And our power is to correct

wrong judgments, not to revise opinions. We

are not permitted to render an advisory

opinion, and if the same judgment would be

rendered by the state court after we corrected

its views of federal laws, our review could

amount to nothing more than an advisory

opinion.

Herb v. Pitcairn, 324 U.S. 117, 125 — 126 (1945) (citations

omitted). See, Lee v Kemna, 534 U.S. 362, 375 (2002);

Coleman v. Thompson, 501 U.S. 722, 729 (1991).

C. The Court Properly Rejected Petitioner’s RCRA-

based Negligence Claim.

In Meghrig v. KFC Western, Inc., 516 U.S. 479 (1996)

this Court held that RCRA does not authorize a private

cause of action for recovery of past clean up costs.

“RCRA is not principally designed to effectuate clean

up of toxic waste sites or to compensate those who have

attended to the remediation of environmental hazards.”

Id. at 483. “That RCRA’s citizen suit provision was not

19

intended to provide a remedy for past cleanup costs is

further apparent from the harm at which it is directed

..., 1¢, “imminent and substantial danger” to health

or to the environment. /d. at 485. Thus, “Congress did

not intend for a private citizen to be able to undertake a

cleanup and then proceed to recover its costs under

RCRA.” Id. at 487.

In light of the foregoing, in Petitioner’s civil suit to

recover cleanup costs incurred as a result of

Respondents’ alleged negligence, the Maryland Court

of Special Appeals held that “RCRA was not designed

to protect private entities, like ARE, from economic

harm.” (App. 18). In other words, Petitioner was not

“within the class of persons sought to be protected [by

RCRA], and the harm suffered [was not] of the kind

which the statute was intended to protect.” (App. 16 -

17, quoting Atl. Mut., 323 Md. at 124).

According to Petitioner, by reaching this conclusion

the Maryland Court of Special Appeals not only ignored

a number of federal appellate decisions imposing

criminal liability on corporate officers under RCRA, but

itself acted improperly “in finding no duty on the part

of Respondents.” (Petition p. 19).

We have been unable to find any court of

appeals that has endorsed the remarkable

notion that a company that abandons materials

that constitute hazardous waste has no duty

to label them, to store them properly, and,

pursuant to a waste manifest, to arrange for

their transport to a permitted hazardous waste

20

treatment or disposal unit for their proper

disposition.

(Petition p. 15). Indeed, the “remarkable notion” has not

been endorsed by any Maryland appellate court in this

case either.

In fact, the Court of Special Appeals’ analysis of the

tort implications of RCRA reflects a reasoned approach

applying the general principle that “whether or not the

Plaintiff can assert a cause of action based on negligence

per se [by referring to a statute] is an issue akin to

whether a private cause of action exists under a statute.”

325-343 E. 56% Street Corp. v. Mobil Oil Corp., 906

F. Supp. 669, 688 (D. D.C. 1995), citing Frederick v.

Thomas, 578 F.2d 513, 517 (3 Cir. 1978); Schwartzman,

Inc. v. Atchison, Topeka & Santa Fe Ry. Co., 857 F. Supp.

838, 848 (D. N.M. 1994).

The United States Court of Appeals for the

Third Circuit has noted, most formulations of

the standards for implying a private cause of

action center on the presence or absence of a

legislative intent to impose civil liability. In

theory, at least, application of the negligence

per se doctrine represents a judicial policy

judgment independent of legislative intent

with respect to the imposition of civil liability.

Both, however, address the question of

whether the policy behind the legislative

enactment will be appropriately served by

using it to impose and measure civil damage

liability.

Td., 906 F: Supp at 688, citing Frederick, 578 F.2d at 517 n. 8.

21

The court in 325-343 E. 56 Street Corp. addressed

the issue under RCRA in the same manner that the Court

of Special Appeals addressed it in this case. It reached

the same conclusion:

Id.

Id.

[T]he court determines that RCRA does not

have the specific purpose of protecting a

particular class of people. It was enacted to

protect the public from soil and water

contamination, not to protect a certain class

of persons seeking to recover monetary

damages. None of the RCRA provisions

indicate that the class of persons to be

protected is any less broad than the entire

population of the United States. Therefore,

allowing Plaintiff to proceed with its

negligence per se claim would be improper.

Furthermore:

Having found no express or implied private

cause of action for money damages under

RCRA, and finding a Congressional intent that

the RCRA citizen suit provisions serve only

to allow private plaintiffs to act as “private

attorney generals,” the court determines that

Plaintiff’s negligence per se claim for

violations of 42 C.F.R. Pts. 280-81 should be

dismissed.

22

In fact, it appears to Respondents that every court

that has addressed RCRA’ use in private civil damages

actions has concluded that the statute cannot be used to

establish a civil duty owed to a private litigant. See, Short

v. Ultramar Diamond Shamrock, 46 F. Supp.2d 1199,

1201 (D. Kan. 1999) (“Plaintiffs cannot use the theory of

negligence per se to bootstrap a private cause of action

for damages when one is not provided by the RCRA.

Accordingly, the court concludes that plaintiffs’

negligence per se claim for violations of 42 U.S.C. §§

6901, et seg. should be dismissed.”); See also, Abreu v.

U.S., 468 F.3d 20, 32 (1* Cir. 2006) (Because RCRA

explicitly does not provide for private damage actions,

“a damage action under the [Federal Tort Claims Act] is

not available against the Navy, based on a RCRA

violation.”); Avondale Fed. Savings Bank v. Amoco Oil

Co., 170 F.3d 692 (7" Cir. 1999) (RCRA violations will

not support a private cause of action for “restitution”);

Waste, Inc. Cost Recovery Group v. Allis Chalmers

Corp., 51 F. Supp.2d 936 (N.D. Ind. 1999) (RCRA

violations will not support a private cause of action for

“contribution”); Davenport v. Neely, 7 F. Supp.2d 1219

(M.D. Ala. 1998) (RCRA violations will not support a

private cause of action for “indemnity” and

“eontribution”); Cross Oil Co. v. Phillips Petroleum Co.,

944 F. Supp. 787, 789 (E.D. Mo. 1996) (RCRA violations

will not support a claim for “strict liability” in respect of

past cleanup costs).

In sum, there is no conflict between the ruling of

the Maryland Court of Special Appeals and the many

federal appellate courts that have imposed criminal

responsibility on corporations and corporate officials

under RCRA. The Court of Special Appeals never

23

reached the issue that forms the ostensible basis for the

Petition. Instead, the Court of Special Appeals decided,

in a manner that represents the logical extension of this

Court’s ruling in Meghrig, that the regulatory scheme

embodied in RCRA does not provide a framework for

the assertion of tort duties owed to a private litigant, or

a proper basis for seeking monetary damages arising

out of alleged negligence.

CONCLUSION

For all of the foregoing reasons, this Court should

dismiss or deny the Petition by ARE Acquisitions, LLC

for a writ of certiorari to the Court of Appeals of

Maryland.

Respectfully submitted,

THOMAS J. MINTON

GoLpMAN & Minton, PC.

20 South Charles St., Suite 1201

Baltimore, MD 21201

(410) 788-7575

Attorney for Respondents