Clean Water Action v. Searles Auto Recycling, Corp.

Filing 50

Judge Nathaniel M. Gorton: ENDORSED ORDER entered. MEMORANDUM AND ORDERIn accordance with the foregoing, plaintiffs motion to dismiss (Docket No. 28) is ALLOWED and the counterclaim is dismissed in its entirety without prejudice.So ordered.(Caruso, Stephanie)

United States District Court
District of Massachusetts
Clean Water Action,
Plaintiff,
v.
Searles Auto Recycling, Corp.,
Defendant.

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Civil Action No.
16-12067-NMG

MEMORANDUM & ORDER
GORTON, J.
Plaintiff Clean Water Action, a nationwide, non-profit,
public benefit corporation that works to protect the nation’s
water resources (“CWA” or “plaintiff”), claims that defendant
Searles Auto Recycling Corp. (“Searles” or “defendant”) has
violated the Clean Water Act, 33 U.S.C. § 1251 et seq., by
failing to comply with the requirements of its Stormwater
Permit.

In its counterclaim, defendant asserts that plaintiff’s

filing of this suit is an abuse of process intended for ulterior
motives extraneous to the proceeding.

Plaintiff’s motion to

dismiss the counterclaim is now pending before the Court.

For

the reasons that follow, plaintiff’s motion to dismiss will be
allowed.

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I.

Background
Searles operates an automobile salvage yard on Easthampton

Road in Northampton, Massachusetts (“the Facility”).

When

rainwater or snowmelt accumulate on the Facility, the subsequent
stormwater runoff is contaminated with pollutants because the
Facility conducts several of its industrial operations outside.
The polluted stormwater flows from the Facility into catch
basins located on Easthampton Road, and eventually into Mill
River through connected pathways of wetlands and waterways.
In May, 2016, CWA sent Searles a “60-day Notice of
Violations and Intent to File Suit Regarding NonCompliance with
Federal Clean Water Act Industrial Stormwater Discharge
Requirements” (“the notice”).

After receiving the notice,

Searles retained professionals, who investigated the Facility
and prepared a Notice of Intent for Storm Water Discharges
Associated with Industrial Activity.

In July, 2016, the United

States Environmental Protection Agency issued Searles a MultiSector General Permit ID: MAR 053878 (“Stormwater Permit” or
“Permit”) pursuant to the Clean Water Act’s National Pollutant
Discharge Elimination System.

Among other things, the Permit

requires in §§ 2.1 and 2.5 that Searles “minimize effluent
discharges” by implementing adequate “control measures”.

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In August, 2016, Searles notified CWA that the EPA had
issued to it a Stormwater Permit to demonstrate its compliance
with the Clean Water Act.

In October, 2016, CWA filed a

complaint alleging that Searles was in violation of that very
Act.

Shortly thereafter, Searles filed a motion to dismiss for

lack of subject matter jurisdiction pursuant to Fed. R. Civ. P.
12(b)(1) contending that Searles was in compliance of the Clean
Water Act when CWA filed suit and still is.

The motion was

denied by this Court on August 7, 2017.
Searles filed its answer and counterclaim on August 28,
2017.

Shortly thereafter, plaintiff filed a motion to dismiss

defendant’s counterclaim for failure to state a claim pursuant
to Fed. R. Civ. P. 12(b)(6).

That motion is the subject of this

memorandum.
II.

Legal Analysis
A.

Legal Standard

To survive a motion to dismiss, a complaint (or
counterclaim) must contain sufficient factual matter, accepted
as true, to “state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
considering the merits of a motion to dismiss, the Court may
look only to the facts alleged in the pleadings, documents
attached as exhibits or incorporated by reference in the
complaint and matters of which judicial notice can be taken.
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In

Nollet v. Justices of Trial Court of Mass., 83 F. Supp. 2d 204,
208 (D. Mass. 2000), aff’d, 248 F.3d 1127 (1st Cir. 2000).
Furthermore, the Court must accept all factual allegations in
the complaint (or counterclaim) as true and draw all reasonable
inferences in the non-movant’s favor. Langadinos v. Am.
Airlines, Inc., 199 F.3d 68, 69 (1st Cir. 2000).

Although a

court must accept as true all of the factual allegations
contained in a complaint, that doctrine is not applicable to
legal conclusions. Ashcroft v. Iqbal, 556 U.S. 662 (2009).
B.

Analysis

CWA moves to dismiss Searles’ counterclaim pursuant to Rule
12(b)(6) on the grounds that (1) the Court has already rejected
Searles’ contention that CWA knowingly pursued a groundless
claim and (2) Searles failed to allege sufficient factual matter
to state the ulterior motive element in its claim for abuse of
process.
1.

Court’s Ruling on CWA’s Allegations

CWA first contends that the Court previously concluded that
CWA’s allegations were made in good faith, plausible and
supported by sufficient factual matter when it denied Searles’
motion to dismiss for lack of subject matter jurisdiction.

CWA

suggests, therefore, that the Court cannot find abuse of process
on its part.

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CWA’s argument does not, however, consider the proper
standard of review for a motion to dismiss.

When a claim is

challenged under Rule 12(b)(6), the Court views the pleadings in
the light most favorable to the non-moving party. See Fitzgerald
v. Barnstable Sch. Comm., 55 U.S. 246 (2009).

When the Court

ruled on Searles’ motion to dismiss, the pleadings were viewed
in the light most favorable to CWA.

In considering CWA’s motion

to dismiss the counterclaim, this Court will view the pleadings
in the light most favorable to Searles.
2.

Ulterior Purpose

CWA also contends that Searles has not pled sufficient
factual matter to support its claim for abuse of process.
Specifically, CWA claims that Searles has not alleged an
“ulterior purpose” to CWA’s filing suit, an element necessary to
succeed on a claim for abuse of process.

Searles responds that

its counterclaim is well-pled and maintains that CWA instituted
a baseless suit with the intent to “use it as a club” to coerce
Searles to pay (or settle to pay) monies to CWA.
In its counterclaim, Searles asserts that
despite having received notice of Searles’ compliance with
the Clean Water Act, CWA initiated the instant action for
the ulterior purpose of obtaining fees and penalties from
Searles.
Abuse of process is a form of coercion to obtain a
collateral advantage that is not properly involved in the

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proceeding itself. Vittands v. Sudduth, 49 Mass. App. Ct. 401,
406 (2000).

The surrender of property or payment of money are

common examples of collateral advantage. Id.

In order to

succeed on a claim for abuse of process, a moving party must
prove that (1) a process was used (2) for an ulterior or
illegitimate purpose (3) resulting in damage. Psy-Ed Corp. v.
Klein, 459 Mass. 697, 713 (2011).
Searles’s contention that CWA initiated this lawsuit to
obtain fees is unavailing because any imposed civil penalties
will not be payable to CWA and any attorneys’ fees awarded would
not be “ulterior” but rather directly involved in the proceeding
itself.

If a citizen prevails in a suit brought under the CWA,

the district court may award attorney’s fees and injunctive
relief, and impose civil penalties on the defendant, payable to
the United States Treasury. Paolino v. JF Realty, LLC, 710 F.3d
31, 35(1st Cir. 2013) (citing §§ 1365(a) & (d)).
Even if CWA has instituted this action in order to obtain
attorneys’ fees, such fees would be incidental to the successful
action under the Clean Water Act. Vahlsing v. Commercial Union
Ins. Co., 928 F.2d 486, 490 (1st Cir. 1991)(“when process is
employed for the purpose for which the law intends its use, no
abuse of process occurs even though the person using the process
may have an improper motive in addition to his lawful
intention”).

The Clean Water Act was designed not only to allow
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a citizen to commence an action on his own behalf against any
person who is alleged to be in violation of an effluent standard
or limitation under the Clean Water Act but also to encourage
citizens to do so. See 33 U.S.C. § 1365(a); Nat. Res. Def.
Council v. EPA, 484 F.2d 1331, 1337 (1st Cir. 1973)(noting that
Congress added an attorney’s fees provision to “encourage
citizens to bring meritorious actions”).

The purpose of fee

awards under the Clean Water Act is the promotion of citizen
enforcement. Id. at 1338 (reiterating that petitioners, in a
watchdog role, have performed a service and are entitled to
attorneys’ fees).
Searles alleges that CWA’s only purpose in bringing suit is
to obtain fees and penalties which will become due based solely
on the merits of the instant proceeding.

In actions for abuse

of process that have survived motions to dismiss, plaintiffs
have alleged sufficient facts to show that process was used to
gain a collateral advantage outside of the proceeding.

See,

e.g., Vittands, 49 Mass App. Ct. at 406 (holding that defendant
stated a claim for abuse of process against plaintiff who
brought suit to prevent defendant from legally building on her
own land); see also Millenium Equity Holdings, LLC v. Mahlowitz,
456 Mass. 627 (2010)(determining that attorney stated a
counterclaim for abuse of process against defendant who brought

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suit in order to disqualify the attorney from representing his
wife in a divorce proceeding).
In this case, fees and penalties are not a collateral
advantage outside of the proceeding because there will be an
award only if plaintiff has correctly employed the citizen suit
provision in the Clean Water Act and prevails on the merits of
its claim.

Searles does not allege that CWA brought the instant

action in order to coerce Searles into doing something that
cannot be achieved pursuant to the Clean Water Act.

Any award

of attorneys’ fees received by CWA will be incidental to its
success on the merits. See Restat. 2d of Torts, § 682(b)(there
is no action for abuse of process when the process is used for
the purpose for which it is intended but there is an incidental
purpose of benefit to the party bringing suit).
Searles’ counterclaim also suggests that
CWA has willfully misused the declaratory judgment remedy
in an attempt to accomplish purposes not warranted by the
process.
Searles expands on that claim in its opposition memorandum,
asserting that CWA’s suit is an abuse of process because its
“demands exceed any potential relief it could get” by bringing
suit and it “attempts to achieve through use of the court that
which the court is itself powerless to order”.

Searles cites no

Massachusetts case law in support of that contention.

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Even so, the Court has authority to grant the relief that
CWA seeks.

The Clean Water Act gives district courts

jurisdiction to enforce effluent standards and to apply any
appropriate civil penalties.

See 33 U.S.C. § 1365(a).

CWA

properly brought this action in the district court which has the
power to grant civil penalties and a declaratory judgment and
accordingly, bringing suit was not an abuse of process.
In its opposition memorandum, Searles also claims that
CWA’s alleged misuse of discovery is considered an abuse of
process.

The Court will not address that issue because Searles

did not allege such facts in its counterclaim, instead raising
them, for the first time, in its opposition memorandum. Nollet,
83 F. Supp. 2d at 208 (the Court may look only to the facts
alleged in the pleadings).
III.

Defendant’s Request for Leave to Amend
A.

Legal Standard

Leave to amend shall be freely given when justice so
requires. Fed. R. Civ. P. 15(a)(2).

A court “enjoys significant

latitude in deciding whether to grant leave to amend” and the
court's decision is proper if any adequate reason for allowance
is discernable from the record. U.S. ex rel. Gagne v. City of
Worcester, 565 F.3d 40, 48 (1st Cir. 2009).

Grounds for denial

generally involve undue delay, bad faith, dilatory motive,
repeated failure to cure deficiencies and futility of the
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amendment. United States ex rel. Rost v. Pfizer, Inc., 507 F.3d
720, 733-34 (1st Cir. 2007).
B.

Analysis

In defendant’s opposition memorandum, it requests leave to
amend its counterclaim, pursuant to Fed. R. Civ. P. 15(a), in
the event that the Court finds the counterclaim insufficient to
survive the motion to dismiss.

Further, defendant states it

intends to add more specific allegations demonstrating
plaintiff’s ulterior motive if afforded an opportunity to amend.
This Court sees no adequate reason for denial and will dismiss
the counterclaim without prejudice and allow defendant leave to
amend once.

Should defendant’s first amended counterclaim be

insufficient, however, it will be dismissed with prejudice. See
Montini v. Lawler, Nos. 12-11296-DJC, 12-11399-DJC, 2014 WL
1271696, at *12 n.7 (denying leave to amend after plaintiff had
been afforded leave to file one amended complaint).
ORDER
In accordance with the foregoing, plaintiff’s motion to
dismiss (Docket No. 28) is ALLOWED and the counterclaim is
dismissed in its entirety without prejudice.
So ordered.
/s/ Nathaniel M. Gorton
d
Nathaniel M. Gorton
United States District Judge
Dated January 17, 2018
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