Town of Islip v. Datre et al

Filing 72

ORDER granting 48 Motion to Dismiss; granting 52 Motion to Dismiss for Failure to State a Claim; granting 63 Motion to Dismiss for Failure to State a Claim; granting 64 Motion to Dismiss for Failure to State a Claim For the reasons set forth herein, the Court grants the motions to dismiss filed by COD Services Corp., IEV Trucking Corp., Ronald Cianciulli and Atlas Home Improvement Corp. of Long Island d/b/a Atlas Asphalt, and the Church defendants. Plaintiff is granted leave to file an amended complaint within 30 days of this order. SO ORDERED. Ordered by Judge Joseph F. Bianco on 3/28/2017. (Hammond, Daniel)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
_____________________
No 16-CV-2156
_____________________

TOWN OF ISLIP,
Plaintiff,
VERSUS

THOMAS DATRE, JR., ET AL.,
Defendants.
___________________
MEMORANDUM AND ORDER
March 28, 2017
___________________

JOSEPH F. BIANCO, District Judge:
On April 29, 2016, plaintiff the Town of
Islip (“plaintiff” or “the Town”) filed this action against Thomas Datre Jr., Thomas Datre
Sr., Clara Datre, Richard Datre Jr., Christopher Grabe, Gia Gatien, Ronald Cianciulli,
Joseph Montuori, Brett Robinson, Iglesia De
Jesucristo Palabra Miel (the “Church”),
Marco Lopez, Nancy Alvarez, William Carillo, Raul Pachecho, Walter Casasola, 5
Brothers Farming Corp., DFF Farm Corp.,
Datre Trucking & Farming Inc., Datre Auto
& Equipment Sales Inc., Daytree at Cortland
Square Inc., Daytree Custom Builders Inc.,
Datre Family Farms Inc., Datre Farms Realty
Co. Inc., Islandia Recycling Inc., C.J. Site
Development Inc., Atlas Home Improvement
Corp. of Long Island d/b/a Atlas Asphalt
(“Atlas”), IEV Trucking Corp. (“IEV”),
COD Services Corp. (“COD”), and John Doe
Nos. 1 through 10. The Complaint sets forth
claims under the Racketeer Influenced and

Corrupt Organizations Act (“RICO”), 18
U.S.C. §§ 1964(c), 1962(d), and the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”), 42
U.S.C. § 9601 et seq., as well as state law
claims for public nuisance, private nuisance,
trespass, injury to property, joint tortfeasors,
fraud and deceit, and restitution.
These claims are based on the alleged illegal dumping of hazardous waste at Roberto
Clemente Park (“the Park”) from July or August 2013 through April 2014 by defendants
5 Brothers Farming Corp., DFF Farm Corp.,
Datre Trucking & Farming Inc., Datre Auto
& Equipment Sales Inc., Daytree at Cortland
Square Inc., Daytree Custom Builders Inc.,
Datre Farms Realty Co. Inc., Thomas Datre
Jr., Thomas Datre Sr., Clara Datre, Richard
Datre Jr. and Gia Gatien (the “Datre defendants”), together with defendants C.J. Site Development and Christopher Grabe (the
“Grabe defendants”). Defendants COD and

Before the Court are motions to dismiss
filed by the arranger, Atlas, and Church defendants. As set forth in more detail below,
the Court concludes, inter alia, that the Complaint fails to allege facts from which it could
be plausibly inferred that these defendants
knew, or should have known, that the material dumped at the Park by the Datre and
Grabe defendants contained hazardous substances. Absent such allegations regarding
knowledge, plaintiff cannot plausibly assert
that the arranger, Atlas, and Church defendants engaged in mail or wire fraud by misrepresenting or concealing material information
(i.e., the hazardous nature of the material).

IEV (collectively, the “arranger defendants”)
allegedly acted as brokers throughout this
time, arranging for the Datre and Grabe defendants to collect fill material from the John
Doe defendants at various locations in
Queens, Kings, Nassau, and Suffolk counties.
According to the Complaint, prior to the
dumping activities, the Church, Lopez, Alvarez, Carillo, Pachecho and Casasola (collectively, the “Church defendants”) had received permission to replace the topsoil and
existing grass seed on one of the Park’s soccer fields, and individuals were seen spreading soil on the field in May 2013. In August
and October 2013, the Church defendants
sent two letters to the Town acknowledging
their work on the soccer field.

In addition, the Court concludes that, for
“arranger” liability to apply under CERCLA,
the Complaint must allege that an arranger
knew, or should have known, that the material in question was hazardous. Given the
current allegations, the Complaint fails to
state plausible CERCLA claims for arranger
liability against COD, IEV, and the Atlas defendants. The Complaint also fails to state a
plausible claim against the Church defendants for “operator” liability because it does
not allege that they exercised the requisite degree of control over the Park or the hazardous
substances for such liability to apply.

The Complaint further alleges that the
Town closed the Park in January 2014 and ordered the removal of the dumped material.
The Datre and Grabe defendants removed
some of the material and contracted with Atlas and Cianciulli (the “Atlas defendants”) to
assist in the removal effort. Subsequently,
the Suffolk County District Attorney’s Office
launched an investigation into the dumping
activities, and, in the course of that investigation, testing revealed that the dumped material contained hazardous substances. Thomas
Datre Jr. and Grabe were convicted on various charges in state court for their role in the
dumping activities.

Finally, the Complaint does not plausibly
allege state law claims against the arranger,
Atlas, or Church defendants for (1) nuisance
because it does not adequately allege intent
or negligence, (2) trespass because the illegal
dumping was not an immediate or inevitable
consequence of these defendants’ actions,
(3) injury to property because the underlying
nuisance and trespass claims fail, (4) fraud
and deceit because the Complaint fails to allege knowledge of the material’s hazardous
nature, and (5) restitution because the Complaint fails to allege that these defendants had
a duty to assist in the remediation of the Park.

The Complaint asserts that defendants engaged in a RICO conspiracy to fraudulently
conceal the disposal of hazardous substances
at the Park, setting forth underlying claims
for mail and wire fraud. It also alleges CERCLA claims, which assert that defendants are
all potentially responsible parties for their
roles in the illegal dumping, as well as various state law claims.

2

deposited in May. (Id. ¶ 74.) On August 24,
2013, the Parks Department held a press conference at the Park where attendees saw
trucks marked “Datre” delivering fill to the
site of the soccer field. (Id. ¶ 76.)

Accordingly, the Court grants the arranger, Atlas, and Church defendants’ motions to dismiss. However, the Court gives
the Town leave to re-plead to attempt to address thse pleading defects with additional allegations, if plaintiff can do so.

Subsequently, Town Board members and
officers not employed by the Parks Department asked about the dumping activity. (Id.
¶ 77.) Commissioner Montuori and Robinson informed them that the Church defendants were volunteering to repair the soccer
field, and the Town determined that they
needed a permit to clear and grade the park,
as well as consent and approval from the
Town Board for any improvements by the
Church defendants. (Id.) Commissioner
Montuori and Robinson asked the Church to
provide information for a land clearing permit and a letter from the Church describing
the work it planned to complete. (Id.) On
August 29, 2013, the Church faxed the Town
a letter (the “August letter”) signed by Lopez,
stating that the Church had been working on
the soccer field without pay since April 2013.
(Id. ¶ 81.) The letter provided no other information. (See id.)

I. BACKGROUND
A. Facts
The following facts are taken from the
Complaint (“Compl.”). (ECF No. 1.) The
Court assumes them to be true for purposes
of deciding this motion and construes them in
the light most favorable to plaintiff, the nonmoving party.
The Town owns the Park, which consists
of designated parkland located in Brentwood,
New York. (Compl. ¶ 70.) In April 2013,
Lopez, the Church’s pastor, and Alvarez, a
member of the Church, contacted the Town
on behalf of the Church and requested permission to replace the topsoil and existing
grass seed on one of the Park’s soccer fields
at the Church’s own cost and with volunteer
labor. (Id. ¶ 72.) Defendant Montuori, the
Commissioner of the Parks Department,
granted the Church defendants’ request on
behalf of the Town. (Id. ¶ 73.) Shortly thereafter in May 2013, several individuals were
seen spreading topsoil and grass seed over
roughly two-thirds of the soccer field. (Id.)
On May 13, Alvarez sent an email to defendant Robinson, Secretary to Commissioner
Montuori, asking for additional topsoil to
complete the project. (Id.) The Church
stopped working on the field in May 2013.
(Id. ¶ 82.)

Meanwhile, claiming that he was working on behalf of the Church, defendant Grabe
spoke with an architect and asked him for a
site drawing of the soccer fields to submit to
the Town with the land clearing permit information. (Id. ¶¶ 78–79.) The architect prepared the drawing, which did not include
specifications of fill material, and provided it
to Grabe. (Id. ¶ 80.) Grabe submitted the site
drawing to the Town, and the Planning and
Parks Departments reviewed it in the preparation of an application for a land clearing
and grading permit. (Id. ¶ 83.) The Town
Board subsequently granted the Church permission to spread topsoil and reseed the soccer fields at the Park. (Id. ¶¶ 84–85.) The
Parks Department then submitted an application to the Planning Department for a Land

In June or August 2013, the Datre and
Grabe defendants began trucking in thousands of tons of construction and demolition
(“C&D”) debris, contaminated fill, and other
solid wastes to the Park, dumping it over the
topsoil and seed the Church defendants had
3

The Town then sent a letter to Lopez and
the Church ordering them to cease and desist
all work in the recharge area. (Id. ¶ 98.) The
Church defendants did not reply, but the Datre and Grabe defendants responded by removing most of the fill and depositing it in
locations outside the Park. (Id. ¶ 99.) The
Atlas defendants joined in this removal effort, removing a portion of the fill from the
Park and depositing it at 117 Brook Avenue,
Deer Park, New York, property owned by the
Atlas defendants. (Id. ¶ 100.) The Atlas defendants then moved this debris from their
property to other property that they used and
occupied at 175 Brook Avenue in Deer Park
(the “Maisie Property”). (Id.) The owner of
the Maisie Property did not give the Atlas defendants permission to deposit this fill there.
(Id.) On January 27, 2014, Commissioner
Montuori reported that some C&D debris,
contaminated fill, and other waste remained
in the recharge area after the removal. (Id.
¶ 101.)

Clearing and Grading permit, which the Planning Department issued on September 12,
2013. (Id. ¶ 87.)
Around this time, deliveries of fill material ceased, and the entire area of the soccer
field was buried under a layer of material,
which extended into the wooded areas bordering the field. (Id. ¶ 89.) No additional
work was performed to seed or otherwise restore the area for use as a soccer field. (Id.)
In October 2013, Alvarez met with Commissioner Montuori and Robinson about the
work at the soccer field. (Id. ¶ 90.) Later, on
November 18, 2013, Church members Carillo, Pacheco, and Casasola faxed a letter
dated October 22, 2013 (the “October letter”)
to Commissioner Montuori in which they
stated that the Church had worked on the field
since April, but the work had ended due to
lack of irrigation. (Id. ¶¶ 91–93.) The
Church offered to resume work if the Town
would agree to provide water to the site. (Id.
¶ 93.)

Dumping continued in the spring of 2014.
(Id. ¶¶ 103–04.) On March 24, 2014, while
opening the Park gate, a park ranger observed
five Datre tractor trailers waiting on the road
outside the Park. (Id. ¶ 103.) Once the gate
was open, the trucks proceeded to the soccer
field and dropped what appeared to be topsoil
over previously deposited material, which
contained large quantities of broken glass,
crushed cement, and large stones. (Id.)
Town employees saw Datre dump trucks operating in the Park as late as April 9, 2014.
(Id. ¶ 104.)

Dumping resumed at the soccer field and
expanded into a new area in the Park shortly
after the Town received the October letter.
(Id. ¶ 94.) On November 21, 2013, a park
ranger noticed that someone had deposited
approximately 70 piles of “rocky dirt” on the
soccer field, and a public safety report indicated that this dirt was unscreened and contained large boulders. (Id. ¶ 95.) A truck
driver responsible for the dumping reported
to the ranger that he was employed by Datre.
(Id.) On November 30, 2013, the same park
ranger saw additional debris deposited on the
“recharge” area in the Park south of the soccer field, which, up to that time, had not been
a site of previous dumping. (Id. ¶ 96.) In
January 2014, Town personnel confirmed the
presence of brick, metal, rebar, and other debris in this area, as well as heavy earth moving equipment. (Id. ¶ 97.) The Town closed
the Park on January 23, 2014. (Id.)

In April 2014, the Suffolk County District
Attorney’s Office launched an investigation
into the dumping of the C&D debris and ille-

4

gal fill at the Park and other locations in Suffolk County.1 1 (Id. ¶ 105.) Soil tests of samples taken from the Park in the course of this
investigation revealed the presence of hazardous substances, including asbestos, pesticides, and heavy metals. (Id. ¶ 106.) In response to this report, the Town undertook a
removal action under the supervision of the
New York State Department of Environmental Conservation. (Id. ¶ 107.) The Town’s
removal plan was approved, and removal activities commenced in June 2015. (Id. ¶¶ 107,
109.) In the end, a total of 39,932.44 tons of
C&D debris and unacceptable fill were removed from the Park, costing the Town over
$4 million. (Id. ¶ 110.)

calls with Datre Jr. and 825 calls with Grabe.
(Id. ¶¶ 131–32.) The purpose of these calls
was to arrange pickup and delivery of the material. (Id.)
B. Procedural History
The Town filed the Complaint on April
29, 2016 against all defendants. (ECF No. 1.)
The Church defendants answered on June 24,
2016 (ECF No. 23), IEV answered on June
29, 2016 (ECF No. 27), and the Atlas defendants answered on July 22, 2016 (ECF No.
42). Motions to dismiss were filed by COD
on August 22, 2016 (ECF No. 48), IEV on
September 21, 2016 (ECF No. 52), the
Church defendants on December 15, 2016
(ECF No. 63), and the Atlas defendants on
December 16, 2016 (ECF No. 64). The Town
filed oppositions to all these motions (ECF
Nos. 53, 66, 67), and each defendant except
the Atlas defendants filed a reply (ECF Nos.
56, 57, 68). Oral argument took place on
February 28, 2017. (See ECF No. 69.) The
Court has fully considered the parties’ submissions.

Throughout this time (i.e., between June
2013 and April 2014), COD and IEV acted as
brokers to supply material for disposal at the
Park. (Id. ¶ 124.) Specifically, these defendants would arrange for trucks owned or directed by the Datre and Grabe defendants to
collect material at various locations owned or
operated by the John Doe defendants in
Kings, Queens, Nassau or Suffolk counties.
(Id.) The Datre trucks would then transport
that material to the Park for disposal. (Id.)
During this period, the arranger defendants
paid over $600,000 to various Datre defendants for the pickup and removal of over 1,200
separate loads of material, which totaled over
43,000 cubic yards. (Id.) IEV paid the Datre
defendants over $417,000 for 759 loads of
material, and COD paid them over $245,000
for 476 loads. (Id.) Telephone records show
that, from January 1, 2013 until December
31, 2014, IEV had 151 calls with Datre Jr.
and 1,331 with Grabe, while COD had 163

II. STANDARD OF REVIEW
In reviewing a motion to dismiss pursuant
to Rule 12(b)(6), the Court must accept the
factual allegations set forth in the complaint
as true and draw all reasonable inferences in
favor of the plaintiff. See, e.g., Cleveland v.
Caplaw Enters., 448 F.3d 518, 521 (2d Cir.
2006); Nechis v. Oxford Health Plans, Inc.,
421 F.3d 96, 100 (2d Cir. 2005). “In order to
survive a motion to dismiss under Rule
12(b)(6), a complaint must allege a plausible

1

1Datre Jr. ultimately pleaded guilty to four Class E
felony counts and four class A misdemeanor counts
for his role in these activities. (Compl. ¶ 58.) With
respect to the Park dumping, he pleaded guilty to a felony charge, which stated that, between May 2013 and
April 2014, he recklessly disposed of over 2,000
pounds of aggregate weight of hazardous substance
that he deposited in the Park, and a misdemeanor

charge, which stated that he commenced operation of
a solid waste management facility at the Park without
a permit during that same period. (Id. ¶ 58(a)–(b).)
Grabe pleaded guilty to similar charges. (Id. ¶ 60(a).)

5

set of facts sufficient ‘to raise a right to relief
above the speculative level.’” Operating Local 649 Annuity Trust Fund v. Smith Barney
Fund Mgmt. LLC, 595 F.3d 86, 91 (2d Cir.
2010) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555 (2007)). This standard
does not require “heightened fact pleading of
specifics, but only enough facts to state a
claim to relief that is plausible on its face.”
Twombly, 550 U.S. at 570.

A. RICO Claims
Under RICO, it is “unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which
affect, interstate or foreign commerce, to
conduct or participate, directly or indirectly,
in the conduct of such enterprise’s affairs
through a pattern of racketeering activity or
collection of unlawful debt.” 18 U.S.C.
§ 1962(c). Section 1962(d) makes it “unlawful for any person to conspire to violate . . .
the provisions of subsection . . . (c).” 18
U.S.C. § 1962(d). Furthermore, “[w]hen
§ 1962 is violated, in addition to criminal
penalties, the RICO statutes also authorize
civil lawsuits, which, if successful, can entitle
a plaintiff to treble damages, costs, and attorney’s fees.” DLJ Mortg. Capital, Inc. v.
Kontogiannis, 726 F. Supp. 2d 225, 236
(E.D.N.Y. 2010) (citing 18 U.S.C.
§ 1964(c)). Specifically, RICO provides a
private cause of action for “[a]ny person injured in his business or property by reason of
a violation of section 1962 of this chapter.”
18 U.S.C. § 1964(c).

The Supreme Court clarified the appropriate pleading standard in Ashcroft v. Iqbal,
setting forth two principles for a district court
to follow in deciding a motion to dismiss.
556 U.S. 662 (2009). First, district courts
must “identify[ ] pleadings that, because they
are no more than conclusions, are not entitled
to the assumption of truth.” Id. at 679.
“While legal conclusions can provide the
framework of a complaint, they must be supported by factual allegations.” Id. Second, if
a complaint contains “well-pleaded factual
allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Id.
III. DISCUSSION

Courts have described civil RICO as “‘an
unusually potent weapon—the litigation
equivalent of a thermonuclear device.’”
Katzman v. Victoria’s Secret Catalogue, 167
F.R.D. 649, 655 (S.D.N.Y. 1996) (quoting
Miranda v. Ponce Fed. Bank, 948 F.2d 41, 44
(1st Cir. 1991)), aff’d, 113 F.3d 1229 (2d Cir.
1997). “Because the ‘mere assertion of a
RICO claim . . . has an almost inevitable stigmatizing effect on those named as defendants, . . . courts should strive to flush out frivolous RICO allegations at an early stage of
the litigation.’” Id. (quoting Figueroa Ruiz v.
Alegria, 896 F.2d 645, 650 (1st Cir. 1990));
see DLJ Mortg. Capital, 726 F. Supp. 2d at

Plaintiff brought federal claims against
defendants for violations of RICO, 18 U.S.C.
§§ 1964(c), 1962(d), and CERCLA, 42
U.S.C. § 9601 et seq. It has also brought state
law claims for public nuisance, private nuisance, trespass, injury to property, joint tortfeasors, fraud and deceit, and restitution. The
arranger, Church, and Atlas defendants move
to dismiss all claims against them.2 2 For the
reasons discussed below, these motions are
granted, but plaintiff is given leave to replead its claims.

2

2Hereinafter, “defendants” refers to the arranger defendants, Church defendants, and Atlas defendants
collectively.

6

Here, defendants argue that the Town
lacks standing to proceed under RICO because it has failed to exhaust its other remedies for seeking reimbursement for its cleanup costs. They also argue that the Town has
failed to state a RICO claim for mail or wire
fraud because the Complaint alleges no facts
from which a jury could infer fraudulent intent. As set forth below, the Court agrees that
the Town has failed to state a claim on which
relief can be granted and, therefore, grants
defendants’ motions to dismiss the RICO
claims. See Fed. R. Civ. P. 12(b)(6).

236. Indeed, although civil RICO may be a
“potent weapon,” plaintiffs wielding RICO
almost always miss the mark. See Gross v.
Waywell, 628 F. Supp. 2d 475, 479–83
(S.D.N.Y. 2009) (conducting survey of 145
civil RICO cases filed in the Southern District of New York from 2004 through 2007,
and finding that all thirty-six cases resolved
on the merits resulted in judgments against
the plaintiffs, mostly at the motion to dismiss
stage). Accordingly, courts have expressed
skepticism toward civil RICO claims. See,
e.g., DLJ Mortg. Capital, 726 F. Supp. 2d at
236 (“[P]laintiffs have often been overzealous in pursuing RICO claims, flooding federal courts by dressing up run-of-the-mill
fraud claims as RICO violations.”).

1. Standing
To establish standing under RICO, a
plaintiff must allege “(1) a violation of section 1962; (2) injury to business or property;
and (3) causation of the injury by the violation.” First Nationwide Bank v. Gelt Funding
Corp., 27 F.3d 763, 767 (2d Cir. 1994) (quoting Hecht v. Commerce Clearing House, Inc.,
897 F.2d 21, 23 (2d Cir. 1990)). Pursuant to
the second requirement, “‘[a] RICO plaintiff
only has standing if, and can only recover to
the extent that, he has been injured in his
business or property by the conduct constituting the RICO violation, and only when his or
her actual loss becomes clear and definite.’”
Denney v. Deutsche Bank AG, 443 F.3d 253,
266 (2d Cir. 2006) (quoting First Nationwide, 27 F.3d at 767–69) (brackets omitted);
see also Motorola Credit Corp. v. Uzan, 322
F.3d 130, 135 (2d Cir. 2003) (where amount
of damages was not “clear and definite,”
holding that “Plaintiffs lack statutory standing under RICO because their claims are unripe”). Under this rule, a claim will be dismissed for lack of statutory standing “where
the extent of damages are still unknown, [and
therefore] a RICO injury remains speculative
and unprovable.” DLJ Mortg. Capital, 726 F.
Supp. 2d at 237 (citations omitted).

Although civil RICO presents many hurdles for a plaintiff to overcome, the Supreme
Court has also “made clear that it would not
interpret civil RICO narrowly.” Attorney
Gen. of Canada v. R.J. Reynolds Tobacco
Holdings, Inc., 268 F.3d 103, 139 n.6 (2d Cir.
2001) (citing Sedima, S.P.R.L. v. Imrex Co.,
473 U.S. 479 (1985)). In Sedima, the Supreme Court rejected an interpretation of
civil RICO that would have confined its application to “mobsters and organized criminals.” 473 U.S. at 499. Instead, the Court
held: “The fact that RICO has been applied in
situations not expressly anticipated by Congress does not demonstrate ambiguity. It
demonstrates breadth.” Id. (citation omitted);
see also Anza v. Ideal Steel Supply Corp., 547
U.S. 451, 479 (2006) (Breyer, J., concurring
in part and dissenting in part) (“RICO essentially seeks to prevent organized criminals
from taking over or operating legitimate businesses. Its language, however, extends its
scope well beyond those central purposes.”).
Thus, a court should not dismiss a civil RICO
claim if the complaint adequately alleges all
elements of such a claim, even if the alleged
conduct is not quintessential RICO activity.

Defendants argue that the Town has not
shown a “clear and definite” injury under
7

RICO because it has not exhausted its other
remedies for the $4 million it incurred in
clean-up costs, given that the Town’s other
claims seeking relief for this injury (i.e., its
CERCLA and state law claims) are still pending. Citing Commercial Union Assurance
Co., plc v. Milken, 17 F.3d 608, 612 (2d Cir.
1994), Bankers Trust Co. v. Rhoades, 859
F.2d 1096, 1106 (2d Cir. 1988), Stochastic
Decisions, Inc. v. DiDomenico, 995 F.2d
1158, 1166 (2d Cir. 1993), DLJ Mortgage
Capital, 726 F. Supp. 2d at 237, and Sky Medical Supply Inc. v. SCS Support Claims Services, Inc., 17 F. Supp. 3d 207, 231 (E.D.N.Y.
2014), defendants contend that such exhaustion is required in the Second Circuit before
a plaintiff may bring RICO claims.

viable RICO cause of action may be maintained.”). This case says nothing about RICO
standing where, as here, a plaintiff has not recovered anything for an injury suffered as a
result of a RICO enterprise.
Similarly, DLJ Mortgage Capital does
not support defendants’ position because it
simply applied the well-established rule that,
where a creditor-plaintiff alleges an injury
from a fraudulently-induced mortgage, the
plaintiff must pursue foreclosure remedies
provided by the mortgage before filing a
RICO claim for the lost debt. See 726 F.
Supp. 2d at 237; see also First Nationwide,
27 F.3d at 769 (“[T]he loss [the plaintiff]
would suffer as to those loans [the plaintiff]
has not finally foreclosed cannot yet be determined. Only when [the plaintiff’s] actual loss
becomes clear and definite will the claims be
ripe for suit.”); In re Merrill Lynch Ltd.
P’ships Litig., 154 F.3d 56, 59 (2d Cir. 1998)
(“[W]hen a creditor alleges he has been defrauded[,] RICO injury is speculative when
contractual or other legal remedies remain
which hold out a real possibility that the debt,
and therefore the injury, may be eliminated or
significantly reduced.” (citing Bankers Trust,
859 F.2d at 1106; First Nationwide, 27 F.3d
at 769)). Only after the plaintiff pursues this
remedy could a court determine the extent of
the injury resulting from the fraudulently-induced mortgage. See DLJ Mortg. Capital,
726 F. Supp. 2d at 237. That a creditor must
foreclose or otherwise attempt to collect on a
debt prior to bringing a RICO claim does not
imply that all other plaintiffs, including those
not collecting on a debt, must pursue nonRICO claims first.

The Court disagrees. All of the cases
cited by defendants (except Commercial Union) involved situations where the amount of
damages suffered was directly dependent on
either a separate, ongoing proceeding—the
results of which would determine whether or
to what extent the plaintiff suffered an injury—or a debt recoverable via foreclosure.
None of them stand for the broad principle
that, before bringing a RICO claim, all plaintiffs must exhaust every alternative means of
recovery.3 3
At the outset, the Court concludes that
Commercial Union is inapposite. In that
case, the Second Circuit simply held that the
plaintiff investors could not maintain a RICO
action after receiving the amount they lost in
investments via settlement. Commercial Union, 17 F.3d at 612. The Second Circuit thus
held that the plaintiffs failed to state damages
recoverable under RICO. Id. (“Hence, in the
instant case, without provable damages, no
3
3Indeed, this proposition stands at odds with the common practice of bringing RICO claims alongside other
federal and state claims. See, e.g., Breslin Realty Dev.
Corp. v. Schackner, 457 F. Supp. 2d 132, 133
(E.D.N.Y. 2006); SKS Constructors, Inc. v. Drinkwine, 458 F. Supp. 2d 68 (E.D.N.Y. 2006); City of N.Y.

v. Cyco.Net, Inc., 383 F. Supp. 2d 526 (S.D.N.Y.
2005); Calabrese v. CSC Holdings, Inc., 283 F. Supp.
2d 797, 804 (E.D.N.Y. 2003); Pahmer v. Greenberg,
926 F. Supp. 287 (E.D.N.Y. 1996).

8

RICO claim alleging a conspiracy to prevent
it from satisfying its outstanding judgment
obtained in New Jersey against the defendants, claiming that the amount of the judgment was recoverable under RICO as “lost
debt.” 995 F.2d at 1162–63. The Second Circuit, however, refused to recognize the judgment amount as RICO damages, given that
“the amount of [the plaintiff’s] ‘lost debt’
[could] not be determined at [that] time because of the ongoing efforts to collect those
judgments.” Id. at 1165. Once again, therefore, the amount of the alleged RICO injury
turned on the outcome of ongoing proceedings on a non-RICO claim. See id.

In the remaining cases, the alleged injuries all depended on the outcome of ongoing
proceedings. In Bankers Trust, for example,
the plaintiff’s “RICO claim for injuries suffered as a result of its lost debt overlap[ped]
with the ongoing proceedings in the bankruptcy court,” and, thus, the plaintiff lacked
standing. 859 F.2d at 1106. Specifically, the
Court found that
(1) [the plaintiff] was injured
by the identical transactions
that injured the bankrupt corporation, and (2) should the
corporation, through its trustee in bankruptcy, recover for
its injury, [the plaintiff’s] injury will itself be reduced. For instance, should
the bankruptcy trustee ultimately recover all the fraudulently transferred assets, [the
plaintiff’s] injury could be
significantly reduced; conversely should the assets
never be recovered, or should
the bankruptcy court order the
claim abandoned, [the plaintiff’s] injury would be much
more severe.

Finally, Sky Medical dealt with New
York’s no-fault automobile insurance
scheme, which allows an insurer to deny a
claim for medical treatment if a physician
finds that treatment is not medically necessary during an independent medical examination (“IME”). See Sky Medical, 17 F. Supp.
3d at 215 (summarizing New York’s
scheme). The scheme also permits the claimant to “seek immediate redress” for such a denial by filing suit in state court or submitting
the dispute to arbitration. Id. In Sky Medical,
the plaintiff alleged that the defendants committed RICO fraud by fabricating IME reports, and that courts and arbitrators had relied on these fraudulent IME reports in denying the plaintiff’s claims against defendants
in other proceedings. Id. at 217–18. The
plaintiff admitted, however, that some of the
denials underlying its RICO claims were still
pending before state courts or arbitrators, and
the plaintiff did not separate its RICO claims
based on proceedings that had concluded (in
which case the fraud had produced an injury)
and those that had not (in which case no injury had occurred yet). Id. at 231. In other
words, plaintiff alleged that it suffered harm
because courts and arbitrators had denied its
claims based on the defendants’ fraud, but, in
some of the cases identified in the complaint,
those same courts and arbitrators had not yet

Id. Thus, the amount of damages turned on
whether the plaintiff could collect on its debt,
which, in turn, depended on the outcome of
the ongoing bankruptcy proceedings. See id.
(“[A]t this time, it is impossible to determine
the amount of damages that would be necessary to make plaintiff whole, because it is not
known whether some or all of the fraudulently transferred funds will be recovered by
the corporation. Should they be recovered,
[the plaintiff] would benefit along with [the
corporation’s] other creditors and its injury
would decrease.”).
Likewise, in Stochastic Decisions, the
plaintiff, a judgment creditor, brought a
9

at 234 (citing Allstate Ins. Co. v. Lyons, 843
F. Supp. 2d 358, 365–66 (E.D.N.Y. 2012)).

denied the plaintiff’s claims. Id. at 231.
Thus, this Court concluded that “the extent of
the injury plaintiffs have alleged—wrongful
denial of their insurance claims—is contingent upon determinations in state court and
arbitration proceedings that plaintiff is not
entitled to reimbursement for its claims.” Id.
at 231–32. The Court, therefore, held that the

In holding that RICO’s ripeness doctrine
was not limited to the secured lender context,
moreover, this Court relied on Uzan, 322
F.3d at 135, Harbinger Capital Partners
Master Fund I, Ltd. v. Wachovia Capital
Markets, LLC, 347 Fed. App’x 711, 713 (2d
Cir. 2009) (summary order), and DeSilva v.
North Shore–Long Island Jewish Health Systems, Inc., 770 F. Supp. 2d 497, 521
(E.D.N.Y. 2011). None of these cases impose a broad requirement of complete exhaustion of RICO claims via non-RICO
causes of action. Uzan involved a RICO
claim that arose in connection with a loan
from the plaintiffs to the defendants secured
by shares in the defendants’ company. 322
F.3d at 133. At the time of the RICO lawsuit,
however, the plaintiffs had not sought foreclosure on the collateral, and the defendants
had initiated arbitration pursuant to the loan
agreement seeking to reschedule payments.
Id. at 134. The Second Circuit held that the
plaintiffs lacked standing because “the RICO
damages sought are in respect of a loss that
would be abated to the extent that: Plaintiffs
realize value on the collateral; Plaintiffs recover in the Swiss arbitrations; or the size of
the debt on the underlying contracts, or the
obligation to pay it, is affected by any ruling
on [the company’s] defenses in the Swiss arbitration that is binding and enforceable.” Id.
at 136. Thus, like in Sky Medical, the extent
of the plaintiffs’ injury was directly dependent on the outcome of another proceeding.
See id. The same is true for Harbinger Capital, 347 Fed. App’x at 713—where the Court
found that, “if the [Bankruptcy] Trustee succeed[ed] in its recovery actions, Appellants,
as first-in-line creditors, [would have] potentially experience[d] some recovery on the
loan they claim[ed] damages for” in the instant action. Meanwhile, DeSilva concerned
injuries that had not yet occurred. Specifically, the DeSilva plaintiffs’ alleged injury—

plaintiff’s damages [were] not
‘clear and definite’ for so long
as some of the no-fault claims
that form the basis of plaintiff’s RICO causes of action
are still being litigated in state
court or arbitration. Plaintiff
could prevail on some or all of
those claims, which would reduce the amount that plaintiff
could recover under RICO.
Id. at 233. Accordingly, given the plaintiff’s
failure to separate his claims based on concluded and pending proceedings, this Court
dismissed all of the RICO claims. Id.
As defendants correctly point out, this
Court in Sky Medical rejected the argument
that RICO’s ripeness doctrine was limited to
the context of secured lenders pursuing nonpaying debts. Id. at 232. Nevertheless, neither Sky Medical nor the cases on which Sky
Medical relied in reaching this conclusion
embraced the broad exhaustion principle for
which defendants advocate now. As noted
above, Sky Medical applied the ripeness doctrine because the plaintiff’s claimed injury
was based on the outcome of court and arbitration proceedings that were still ongoing.
See 17 F. Supp. 3d at 231–33. This Court did
not dismiss the RICO claims based on a general failure to exhaust the plaintiff’s fraud
claims through other, non-RICO theories of
liability. See id. On the contrary, this Court
noted that, under existing case law, “a plaintiff need not exhaust all possible remedies in
state court before bringing a RICO suit.” Id.
10

If “there are multiple defendants involved,
the plaintiff must connect the allegations of
fraud to each individual defendant.” Colony
at Holbrook, Inc. v. Strata G.C., Inc., 928 F.
Supp. 1224, 1231 (E.D.N.Y. 1996). For example, in Moore, the court held that a complaint met this heightened pleading standard
where it “contain[ed] a chart listing twelve
different mailings said to contain fraudulent
representations, along with the dates of these
mailings and cross-references to the paragraphs of the complaint in which the mailings
[were] further discussed.” 189 F.3d at 173;
see also ABF Capital Mgmt. v. Askin Capital
Mgmt., L.P., 957 F. Supp. 1308, 1326
(S.D.N.Y. 1997) (holding that complaint met
particularity requirement where, for each defendant, the “[p]laintiffs identif[ied] and
quote[d] from specific written materials they
allege[d] were distributed to and relied upon
by them, and describe[d] how these materials
were false or failed to disclose material information”).
By contrast, in Colony at
Holbrook, 928 F. Supp. at 1231, the court
held that a complaint did not meet Rule 9(b)’s
heightened pleading standard because it did
not include “statements setting forth the content, date, or place of any alleged misrepresentations, and the identity of the persons
making them.” Id. (brackets omitted). Instead, the complaint “contain[ed] sweeping
and general allegations of mail and wire fraud
directed at all the defendants rather than connecting the alleged fraud to the individual defendants.” Id.; see also McGee v. State Farm
Mut. Auto. Ins. Co., No. 08-CV-392 FB CLP,
2009 WL 2132439, at *5 (E.D.N.Y. July 10,
2009) (holding that a plaintiff failed to plead
fraud with particularity where he “loosely allege[d] throughout his complaint that the defendants contacted each other by means of
the mails and/or the wires, without specifying
precise methods of communication” or identifying “any specific fraudulent statement”).

their inability to bring timely claims for unpaid wages—was “contingent upon a court
actually dismissing those hypothetical claims
as time-barred,” but no court had done so at
the time of the RICO suit. 770 F. Supp. 2d at
521.
In sum, the cases cited by defendants
simply indicate that, where a plaintiff raises a
RICO claim whose injury is dependent on the
outcome of an ongoing proceeding or a debt
recoverable via foreclosure, the injury is not
“clear and definite” enough for the plaintiff
to have RICO standing. Here, however, the
Town’s RICO claims are not dependent on an
unpaid debt or ongoing proceedings in other
forums. Instead, the Town has alleged a concrete, particularized injury, namely the loss
of $4 million in clean-up costs, as a result of
the RICO enterprise. (Compl. ¶ 110.) Therefore, the Town has satisfied the injury requirement, and its RICO claims are ripe for
review.
2. Particularity and Intent
As predicate acts for its RICO claims, the
Town alleges that defendants engaged in mail
and wire fraud in violation of 18 U.S.C.
§§ 1341 and 1343. (See Compl. ¶ 134 (mail
and wire fraud by all defendants); id. ¶ 128
(wire fraud by Church defendants); id.
¶¶ 131–32 (wire fraud by arranger defendants); id. ¶ 134 (mail fraud by arranger defendants); ¶ 135 (wire fraud by Atlas defendants).) When alleging fraudulent activities as
predicate acts for a RICO claim, a plaintiff
must satisfy the particularity requirements of
Rule 9(b). Moore v. PaineWebber, Inc., 189
F.3d 165, 172–73 (2d Cir. 1999). Specifically, a RICO plaintiff must “(1) specify the
statements that the plaintiff contends were
fraudulent, (2) identify the speaker, (3) state
where and when the statements were made,
and (4) explain why the statements were
fraudulent.” Anatian v. Coutts Bank (Switzerland) Ltd., 193 F.3d 85, 88 (2d Cir. 1999).

Furthermore, although a plaintiff may
“allege fraudulent intent generally” under
11

a plaintiff did not allege “conscious behavior” that sufficed to establish fraudulent intent where the “facts [in the complaint could]
only lead to the inference that [the defendant]
and its principals successfully did business
with their long-time business contacts,” who
had allegedly committed fraud.

Rule 9(b), it still “must provide some minimal factual basis for conclusory allegations
of scienter that give rise to a strong inference
of fraudulent intent.” Powers v. British Vita,
P.L.C., 57 F.3d 176, 184 (2d Cir. 1995); see
also Moore, 189 F.3d at 173. A complaint
satisfies this standard by either (1) “alleg[ing]
a motive for committing fraud and a clear opportunity for doing so” or (2) “identifying circumstances indicating conscious behavior by
the defendant.” Powers, 57 F.3d at 184. Under the “motive and opportunity” approach,
“[a]lthough the desire to enhance income
may motivate a person to commit fraud, allegations that a defendant stands to gain economically from fraud do not satisfy the
heightened pleading requirements of Rule
9(b).” ABF Capital, 957 F. Supp. at 1327
(citing Shields v. Citytrust Bancorp, Inc., 25
F.3d 1124, 1130 (2d Cir. 1994)). Indeed, “a
generalized profit motive that could be imputed to any company . . . has been consistently rejected as a basis for inferring fraudulent intent.” Brookdale Univ. Hosp. & Med.
Ctr., Inc. v. Health Ins. Plan of Greater N.Y.,
No. 07-CV-1471 RRM/LB, 2009 WL
928718, at *6 (E.D.N.Y. Mar. 31, 2009) (collecting cases).

a. Arranger Defendants
Here, the Town has not adequately
pleaded fraud with particularity or fraudulent
intent against the arranger defendants. First,
like the complaint in Colony at Holbrook, the
Complaint here does not identify any statements made by the arranger defendants that
were fraudulent, much less the person who
made those statements, the time they were
made, or their content. See Colony at
Holbrook, 928 F. Supp. at 1231; see also
McGee, 2009 WL 2132439, at *5. Instead, it
merely asserts the arranger defendants made
a number of phone calls to the Datre and
Grabe defendants and that “a substantial portion, if not all of these calls, were made to arrange pickup and delivery of contaminated
fill, C&D or other solid waste to [the Park],
or to conceal or otherwise advance the activities of the [RICO] Enterprise.” (Compl.
¶ 131; accord id. ¶ 132.) This is a far cry
from Moore’s highly detailed chart that laid
out with specificity the allegedly fraudulent
statements. 189 F.3d at 173. Instead, it is
much closer to the “sweeping and general allegations of mail and wire fraud” that proved
insufficient to meet Rule 9(b)’s heightened
pleading standard in Colony at Holbrook.
928 F. Supp. at 1231. Therefore, the Town
has not met that standard here.

Meanwhile, under the “conscious behavior” approach, “the strength of the circumstantial evidence must be greater.” ABF Capital, 957 F. Supp. at 1326 (citing Powers, 57
F.3d at 184). In ABF Capital, for example, a
plaintiff adequately alleged “conscious behavior” indicative of fraud where the facts
showed that the defendant “represented that
it had reduced the art of valuing and modeling [collateralized mortgage obligations] to a
‘proprietary, quantitative’ science, when in
fact it was relying on intuition and pressure
from [its] Brokers.” Id. at 1327. On the other
hand, in Odyssey Re (London) Ltd. v. Stirling
Cooke Brown Holdings Ltd., 85 F. Supp. 2d
282, 298 (S.D.N.Y. 2000), aff’d, 2 F. App’x
109 (2d Cir. 2001), the court concluded that

In addition, even if the Town had specified particular fraudulent statements, identified the speaker, outlined the time and place
they occurred, and explained why they were
fraudulent, see Anatian, 193 F.3d at 88, the
Complaint does not set forth facts “that give

12

Accordingly, the RICO claims against the arranger defendants are dismissed.

rise to a strong inference of fraudulent intent,” Powers, 57 F.3d at 184. In particular,
the Town has not explicitly alleged any motive for the arranger defendants to engage in
fraudulent conduct, as required to establish
intent under the motive and opportunity approach. See id. Instead, the Complaint
merely sets forth the amounts paid by the arranger defendants to the Datre defendants for
the transportation of the material from the
pickup sites to the Park. (See Compl. ¶ 124.)
Given the absence of any allegations about
how much the John Doe defendants paid the
arranger defendants for arranging removal of
the material, however, the amounts the arranger defendants paid do not even establish
a “generalized profit motive” to engage in
fraud, which still would be insufficient to establish intent. Brookdale, 2009 WL 928718,
at *6.

b. Atlas Defendants
Furthermore, the Complaint fails to state
RICO claims against the Atlas defendants for
the same reasons it fails to state claims
against the arranger defendants. Specifically,
the Complaint neither identifies a specific
statement made by Atlas or Cianciulli that
constitutes fraud nor sets forth facts that establish a motive to engage in fraudulent activity or conscious behavior indicative of
fraudulent intent. (See Compl. ¶¶ 100, 122
135.) Therefore, the RICO claims against the
Atlas defendants are dismissed.
c. Church Defendants
Finally, the Town has also failed to state
a RICO claim against the Church defendants.
First, for defendants Alvarez, Carillo,
Pacheco, and Casasola, the Complaint does
not meet Rule 9(b)’s heightened pleading requirements. With respect to Alvarez, the
Complaint alleges that she made “22 separate
telephone calls with [Grabe] between January
1, 2013 and December 31, 2014” and that,
“[o]n information and belief, these telephone
calls were made to maintain the façade that
the Church membership, and no others, were
conducting work at [the Park].” (Compl.
¶ 128.) As with the arranger defendants, this
vague reference to several different phone
calls between Alvarez and Grabe—without
specifying the date or the content of those
calls—is not enough to satisfy Rule 9(b)’s requirement to “specify the statements that the
plaintiff contends were fraudulent . . . state
where and when the statements were made,
and . . . explain why the statements were
fraudulent.” Anatian, 193 F.3d at 88; see also
Colony at Holbrook, 928 F. Supp. at 1231;
McGee, 2009 WL 2132439, at *5. Also, the
calls were between Alvarez and Grabe, not

Nor does the Complaint allege “circumstances indicating conscious behavior by the
[arranger] defendant[s]” showing fraudulent
intent. Powers, 57 F.3d at 184. The multitude of phone calls between the arranger defendants and the Datre and Grabe defendants—and the payments made to the Datre
defendants—merely establish that the arranger defendants had a business relationship
with other companies that were allegedly engaged in criminal conduct. The existence of
such a relationship, without more, is not
enough to establish fraudulent intent on the
part of the arranger defendants. See Odyssey,
85 F. Supp. 2d at 298 (“Plaintiff must allege
more than that defendants had worked together previously to create an inference of the
fraudulent intent to enter into a conspiracy
against this particular plaintiff.”); Gmurzynska v. Hutton, 257 F. Supp. 2d 621, 630
(S.D.N.Y. 2003) (“[M]ere allegations that
Defendants knew one another, or had prior
relationships unrelated to the wrongful acts
alleged in the Complaint, are insufficient,
standing alone, to set forth a conspiracy
claim.”), aff’d, 355 F.3d 206 (2d Cir. 2004).
13

defendants (Compl. ¶ 128), and, thus, the
Town has not alleged “a motive for committing fraud and a clear opportunity for doing
so,” Powers, 57 F.3d at 184. Nor is the August letter—which merely stated that the
Church had “been working on the ‘Ball Field’
at [the Park], without pay, since April 2013”
(Compl. ¶ 81)—so blatantly false or misleading as to permit an inference of fraudulent intent on behalf of Lopez or the Church, much
less the remaining Church defendants who
had nothing to do with the letter. See ABF
Capital, 957 F. Supp. at 1327. As such, the
RICO claims against the Church defendants
are dismissed.

Alvarez and the Town. Indeed, the Complaint does not allege that Alvarez made any
fraudulent communication with the Town
that could provide a basis for fraud liability.
As for Carillo, Pacheco, and Casasola, the
Town alleges that they made a fraudulent
statement in the October letter when they said
that “the congregation of [the Church] has
been working on the ‘Ball Field’ at [the
Park], without pay, since April 2013” because “work performed by members of the
Church congregation had ceased in May
2013.” (Compl. ¶ 92.) The next paragraph
of the Complaint, however, belies this assertion of falsity because it acknowledges that
the October letter also informed the Town
that the Church’s work at the Park “had
stopped.” (Id. ¶ 93.). In other words, the October letter stated that the Church had worked
on the soccer field, but this work had ended.
Thus, the Complaint does not adequately explain why the October letter was fraudulent.
Compare Houraney v. Burton & Assocs.,
P.C., 701 F. Supp. 2d 258, 262 (E.D.N.Y.
2010) (holding that plaintiff failed to explain
why statement was fraudulent where it was
“not necessarily inconsistent” with plaintiff’s
factual allegations), with Nanjing Standard
Int’l, Ltd. v. DMD Int’l Ltd., No. 12 CIV.
8248 LLS, 2013 WL 5882928, at *3
(S.D.N.Y. Oct. 25, 2013) (holding that plaintiff explained why statements were fraudulent where “[t]he complaint allege[d] that defendants’ statements request[ed] port fees
and customs taxes . . . [but] no such fees or
taxes were due”).

***
In short, the Court concludes that the
Town has standing to pursue its RICO claims
but has failed to state a RICO claim against
defendants because the Complaint does not
meet Rule 9(b)’s pleading requirements or allege sufficient facts that would allow for an
inference of fraudulent intent.
In addition, the Town’s overarching theory of RICO fraud is that all of the defendants
engaged in an enterprise to dump hazardous
waste at the Park and lie to the Town about
their activities. (See Compl. ¶ 127 (“The purpose of the enterprise was to arrange and facilitate the unlawful disposal of contaminated
fill, C&D debris and other solid wastes at
multiple locations in Suffolk County. . . . The
racketeering activity that is the subject of this
action is the illegal disposal of contaminated
fill, C&D debris and other solid wastes at [the
Park].”) As discussed below, however, the
Complaint alleges no facts from which it
could be inferred that (1) the arranger,
Church, or Atlas defendants knew, or should
have known, that the material the Datre defendants deposited in the Park was hazardous; (2) the Church defendants knew, or
should have known, that the material was
waste; or (3) the arranger defendants knew,

In any event, the Complaint fails to plead
facts giving rise to a “strong inference” of
fraudulent intent on the part of any of the
Church defendants. The Complaint offers no
explanation for why the Church defendants
would “maintain the façade that the Church
membership, and no others, were conducting
work at [the Park]” as a cover for the illegal
dumping activities by the Datre and Grabe
14

or should have known, that the material
would be transported to the Park or other illegal dumping locations. In other words, the
Town alleges that defendants engaged in a
scheme to illegally dispose of hazardous
waste at the Park, but fails to allege that they
knew, or should have known, that the material was hazardous, waste (for the Church defendants), or meant for delivery at the Park
(for the arranger defendants). Absent allegations of such knowledge, and given plaintiff’s
theory of fraud, the Court concludes that the
Complaint does not “state a claim to relief
that is plausible on its face” under RICO as
to the arranger, Church, and Atlas defendants. Twombly, 550 U.S. at 570 (emphasis
added).

disclose.”), the claims still fail because the
Town has not alleged that defendants knew,
or should have known, the material information they are alleged to have concealed
(i.e., that the material was hazardous), see
Curtis & Assocs., P.C. v. Law Offices of David M. Bushman, Esq., 758 F. Supp. 2d 153,
179 n.26 (E.D.N.Y. 2010) (“[M]ail and wire
fraud are ‘specific intent crimes’ requiring
proof of defendant’s ‘conscious knowing intent to defraud.’” (quoting United States v.
Regan, 937 F.2d 823, 827 (2d Cir. 1991))),
aff’d sub nom. Curtis v. Law Offices of David
M. Bushman, Esq., 443 F. App’x 582 (2d Cir.
2011).
Accordingly, the Court grants defendants’ motions to dismiss with respect to the
RICO claims.4 4

Relatedly, to the extent that the Town bases its RICO fraud claims on the arranger, Atlas, and Church defendants’ concealment of
the dumping scheme (rather than affirmative
misrepresentations), see United States v. Autuori, 212 F.3d 105, 118 (2d Cir. 2000) (“The
fraud statutes are violated by affirmative misrepresentations or by omissions of material
information that the defendant has a duty to

B. CERLCA Claims
Congress enacted CERCLA in 1980 “in
response to the serious environmental and
health risks posed by industrial pollution,”
designing it “to promote the timely cleanup
of hazardous waste sites and to ensure that the

4

4 The Court further notes that the Complaint does not
adequately allege the use of interstate wires or mails.
See Tymoshenko v. Firtash, 57 F. Supp. 3d 311, 321
(S.D.N.Y. 2014) (“The elements of wire fraud under
18 U.S.C. § 1343 are (i) a scheme to defraud (ii) to get
money or property, (iii) furthered by the use of interstate wires. The elements of mail fraud under 18
U.S.C. § 1341 are identical, except that mail fraud
must be furthered by use of the mails.” (citation omitted)). Specifically, it appears that the phone calls and
letters serving as the basis for the fraud claims all took
place between residents of New York (see, e.g.,
Compl. ¶¶ 14, 15, 43, 128–32, 135–36), and communications between residents of the same state are presumed to be intrastate, see DeFazio v. Wallis, 500 F.
Supp. 2d 197, 204 (E.D.N.Y. 2007). Plaintiff’s conclusory assertion that defendants “transmitted or
caused to be transmitted by means of wire communications in interstate or foreign commerce, writings,
signs, signals, pictures and sounds” in furtherance of
the scheme to defraud does not cure this defect because it is a legal conclusion, not a factual statement.
See Iqbal, 556 U.S. at 678 (“Although for the purposes

of a motion to dismiss we must take all of the factual
allegations in the complaint as true, we ‘are not bound
to accept as true a legal conclusion couched as a factual allegation.’” (quoting Twombly, 550 U.S. at 555));
Tracy v. NVR, Inc., No. 04-CV-6541L, 2009 WL
3153150, at *3 (W.D.N.Y. Sept. 30, 2009) (“[C]ourts
have dismissed complaints containing no factual allegations, but only legal conclusions tracking the language of a statute.” (collecting cases)). Although the
phone records the Complaint references may ultimately “provide evidence that signals were ‘transmitted or caused to be transmitted by means or wire communications in interstate or foreign commerce’” (Pl.’s
Reply Mem. Opp’n to COD’s Mot. to Dismiss, ECF
No. 59 (“Pl.’s COD Opp’n”), at 2), those factual allegations are not presently in the Complaint, and, therefore, it is deficient on the interstate commerce element.

15

clean up a contaminated area or reimburse the
Government for its past and future response
costs.” Id. at 609; see also 42 U.S.C.
§ 9613(f)(1) (“Any person may seek contribution from any other person who is liable or
potentially liable under section 9607(a) of
this title . . . .”).

costs of such cleanup efforts were borne by
those responsible for the contamination.”
Burlington N. & Santa Fe Ry. Co. v. United
States, 556 U.S. 599, 602 (2009). The statute
imposes strict liability on four classes of “potentially responsible parties” (“PRPs”):
(1) the owner and operator of
a vessel or a facility,

The Complaint alleges that COD, IEV,
and the Atlas defendants are liable as arrangers under § 9607(a)(3). (Compl. ¶ 160.) It
also alleges that the Church defendants are liable as operators under § 9607(a)(1). (Id.
¶ 158.) The arranger and Atlas defendants argue that the Town has not pleaded sufficient
facts to demonstrate that they knew the material transported by or for Datre (1) was hazardous or (2) was meant for disposal at the
Park. The Church defendants assert that the
Complaint does not set forth facts demonstrating that they were “operators” of the Park
within the meaning of the statute. For the reasons outlined below, the Court concludes that
the Town has not stated a claim against defendants under CERCLA and, therefore, dismisses the CERCLA claims.

(2) any person who at the time
of disposal of any hazardous
substance owned or operated
any facility at which such hazardous substances were disposed of,
(3) any person who by contract, agreement, or otherwise
arranged for disposal or treatment, or arranged with a
transporter for transport for
disposal or treatment, of hazardous substances owned or
possessed by such person, by
any other party or entity, at
any facility or incineration
vessel owned or operated by
another party or entity and
containing such hazardous
substances, and

1. Arranger Defendants
As noted above, an entity becomes liable
under § 9607(a)(3) if “by contract, agreement, or otherwise,” it “arranged with a transporter for transport for disposal or treatment,
of hazardous substances owned or possessed
by . . . any other party or entity, at any facility
. . . operated by another party or entity and
containing such hazardous substances.” The
Supreme Court has indicated that liability
plainly attaches under this subsection when
an entity “enter[s] into a transaction for the
sole purpose of discarding a used and no
longer useful hazardous substance.” Burlington N., 556 U.S. at 610. Conversely, “an entity [can] not be held liable as an arranger
merely for selling a new and useful product if

(4) any person who accepts or
accepted any hazardous substances for transport to disposal or treatment facilities,
incineration vessels or sites
selected by such person, from
which there is a release, or a
threatened release which
causes the incurrence of response costs, of a hazardous
substance . . . .
Id. at 608–09 (quoting 42 U.S.C. § 9607(a))
(footnote omitted). If a person or entity “is
identified as a PRP, it may be compelled to
16

or that it was hazardous. (Pl.’s COD Opp’n
at 13.)

the purchaser of that product later, and unbeknownst to the seller, disposed of the product
in a way that led to contamination.” Id.

Although the language and logic the Supreme Court employed in Burlington Northern support defendants’ argument on the intent requirement with respect to the hazardous nature of the material (as discussed below), the factual and legal issues in that case
were distinct from the instant case. In Burlington Northern, the arranger defendant,
Shell Oil Company (“Shell”), sold products
containing hazardous substances to a distributor. 556 U.S. at 602–03. The distributor’s
“delivery spills, equipment failures, and . . .
rinsing of tanks and trucks allowed [the products] to seep into the soil and upper levels of
ground water of the . . . facility” where the
distributor operated. Id. at 604. The plaintiffs sued Shell under CERCLA after the distributor went out of business, asserting arranger liability. Id. at 605. The Supreme
Court held that “Shell was not liable as an arranger for the contamination that occurred at
[the] . . . facility” because Shell did not intend
“that at least a portion of the product be disposed of during the transfer process.” Id. at
612–13. Instead, Shell’s intent was to sell the
distributor “an unused, useful product,” and,
therefore, its “mere knowledge that spills and
leaks continued to occur [was] insufficient
grounds for concluding that Shell ‘arranged
for’ the disposal of [the products] within the
meaning of § 9607(a)(3).” Id. at 613.

When the arrangements “fall between
these two extremes,” such as when “the seller
has some knowledge of the buyers’ planned
disposal,” the Court has indicated that liability is “[l]ess clear.” Id. In these circumstances, “the determination whether an entity
is an arranger requires a fact-intensive inquiry that looks beyond the parties’ characterization of the transaction as a ‘disposal’ or
a ‘sale’ and seeks to discern whether the arrangement was one Congress intended to fall
within the scope of CERCLA’s strict-liability
provisions.” Id. In deciding what types of
arrangements fall into this category, the Supreme Court concluded that arranger liability
under CERCLA implicitly creates an exception to the statute’s strict liability provisions.
See id. at 611. Specifically, the Court held
that “the word ‘arrange’ [in the statute] implies action directed to a specific purpose,”
and, consequently, “an entity may qualify as
an arranger under § 9607(a)(3) when it takes
intentional steps to dispose of a hazardous
substance.” Id.
The parties here dispute the scope of this
intent requirement. On the one hand, the arranger defendants argue that a plaintiff must
allege that the arranger intentionally disposed
of a hazardous substance at a particular site.
(See COD’s Mem. Supp. Mot. to Dismiss,
ECF No. 48-7 (“COD’s Br.”), at 17–18.) In
other words, according to the arranger defendants, a plaintiff must establish that the arranger knew (1) that the material was meant
for disposal (rather than, e.g., sale), (2) where
the material was to be deposited, and (3) that
the material was hazardous. On the other
hand, the Town argues that a plaintiff need
only allege that the arranger intended to arrange for the material’s disposal, and, therefore, it is irrelevant whether the arranger
knew where the material was to be deposited

Burlington Northern thus focused entirely on the arranger’s intent with respect to
the nature of the transaction. Accordingly,
Shell’s knowledge of the ultimate destination
of its products or those products’ hazardous
composition was not at issue. It follows that
Burlington Northern provides no direct guidance on the issue presented here, i.e., whether
an alleged arranger must know the disposal
location or whether the material was hazardous. Indeed, given the Town’s allegation that
the arranger defendants entered into their
17

[the predecessor] disposing of transformer oil
containing PCBs.” Id. at *6. The court reasoned that “the defendants’ specific intent to
dispose of the transformers themselves is not
enough to make them ‘arrangers’ under § 9607(a), even if the defendants had
knowledge that oil was in the used transformers when they sold them.” Id. (citing Burlington N., 556 U.S. at 612). Therefore, the court
granted the defendants’ motion for summary
judgment because “the plaintiffs [had] not
created a genuine issue of material fact as to
whether the defendants arranged for the disposal of a hazardous substance, i.e., PCBs.”
Id.

transactions with the Datre, Grabe, and John
Doe defendants to dispose of the Doe defendants’ unwanted material, the “sale vs. disposal” issue in Burlington Northern is not
present here. (See Compl. ¶ 124 (alleging
that IEV and COD “acted as brokers to supply contaminated fill, C&D material and
other solid wastes . . . for disposal at [the
Park]” (emphasis added).)
The arranger defendants cite Schiavone v.
Northeast Utilities Services Co., No.
3:08CV429 AWT, 2011 WL 1106228 (D.
Conn. Mar. 22, 2011) and Hobart Corp. v.
Waste Management of Ohio Inc., 840 F.
Supp. 2d 1013, 1027 (S. Dist. Ohio 2011), to
support their argument for an enhanced intent
requirement. Schiavone concerned the defendants’ sale of used transformers as scrap
metal to the plaintiffs’ predecessor-in-interest between 1968 and 1978. 2011 WL
1106228, at *1–2. Some of the oil in the
transformers contained hazardous substances
known as polychlorinated biphenyls
(“PCBs”). Id. at *2. In 1973, the defendants
issued a policy requiring their operating companies to drain used transformers of oil containing PCBs before selling the transformers.
Id. By 1976, the defendants were selling the
used transformer oil for commercial value or
disposing of it by means of disposal services,
but they never targeted the predecessor for
the sale or disposal of the oil. Id. Their interactions with the predecessor were limited
to the sale of transformers. See id. at *6. After the State of Connecticut discovered contamination on the plaintiffs’ property, the
plaintiffs remediated the property and sued
the defendants for contribution based on a
theory of arranger liability. Id. at *3.

In Hobart Corp., the court considered
two separate claims, a “base claim” and a
“migration claim,” for arranger liability
against the defendants. 840 F. Supp. 2d at
1027. The base claim alleged that they “directly disposed of wastes at the Site that included hazardous substances.” Id. at 1022.
In other words, the defendants “contributed
to contamination at the Site, through [their]
disposal of wastes that included hazardous
substances at the Site.” Id. at 1018. The “migration claim” alleged that the defendants
“allowed hazardous substances on their adjacent properties to migrate and contaminate
the Site.” Id. at 1027. Specifically, one defendant allegedly “released hazardous substances on its property adjacent to the Site
and allowed these hazardous substances on
its property to migrate through the groundwater to contaminate the Site,” and another defendant’s adjacent property “contain[ed] hazardous substances which [the defendant] . . .
failed to contain and . . . allowed . . . to migrate through the groundwater to contaminate
the Site.” Id.

Although it was “undisputed that the defendants had a specific purpose of disposing
of used transformers,” the court determined
that the plaintiffs “produced no evidence that
could support a conclusion that the defendants had as a purpose in their dealings with

The court held that, by alleging direct disposal of the material by the defendants, the
base claim “unquestionably state[d] a plausible claim” under CERCLA. Id. Despite the
Complaint’s failure to plead intent, the court
18

claim in Hobart Corp. (Pl.’s COD Opp’n at
16.) Unlike that claim, however, the Complaint does not allege that the arranger defendants physically participated in the disposal of the material at the Park. See 840 F.
Supp. 2d at 1018, 1022. The arranger defendants, meanwhile, argue that the Town’s
claims against them are closer to the migration claim in that, like the migration defendants, they are “only alleged to have acted in a
manner that resulted in the hazardous material being placed on the Town’s property.”
(COD’s Br. at 16–17.) In Hobart Corp.,
however, it was unclear whether the defendants intended to dispose of the released substances when those substances migrated to
the site at issue. See 840 F. Supp. 2d at 1027
(focusing on lack of allegation that the defendants released the substances “with the intention that at least a portion of [them] be disposed of”). Thus, the issue was not whether
the defendants “acted in a manner that resulted in the hazardous material being placed
on the [plaintiff’s] property” (COD’s Br. at
16–17), but whether they intended to dispose
of that material, see Hobart Corp., 840 F.
Supp. 2d at 1027. As noted above, the Town
has adequately alleged that the arrangers intended to arrange for the disposal of the material. (Compl. ¶ 124.)

concluded that “the state of mind is implied
in the very nature of the alleged disposal activity.” Id. Indeed, the court equated the base
claim with “the easy case posited by the Supreme Court where ‘CERCLA liability
would attach under § 9607(a)(3) if an entity
were to enter into a transaction for the sole
purpose of discarding a used and no longer
useful hazardous substance.’” Id. (quoting
Burlington N., 556 U.S. at 610). The migration claim, on the other hand, did not set forth
a plausible claim for arranger liability because it “more vaguely allege[d] conduct on
adjacent properties that ultimately impacted
the Site in question” without specifying
whether the defendants released hazardous
substances on the adjacent properties “‘with
the intention that at least a portion of the
product be disposed of during the [release].’”
Id. (quoting Burlington N., 556 U.S. at 612)
(alteration in original).
Like Burlington Northern, both of these
cases are factually inapposite. First, in Schiavone, the court determined that the plaintiffs
failed to demonstrate intent because the evidence established that the defendants only
meant to dispose of the transformers, not the
oil within them that actually contained the
hazardous substances. 2011 WL 1106228, at
*6. Here, conversely, the Town has alleged
that the arranger defendants arranged for the
disposal of the exact material that contained
the hazardous substances. (See Compl.
¶ 124.) The facts of Schiavone would be
analogous to this case if the defendants there
had intended to dispose of the oil, rather than
the transformers. In other words, the oil in
that case is analogous to the material deposited at the Park here, as both contained hazardous substances. As the defendants in
Schiavone only disposed of the transformers,
however, it is distinguishable factually.

Importantly, like Burlington Northern,
neither Schiavone nor Hobart Corp. asked
whether the defendants knew (1) where the
material would be deposited or (2) that the
material was hazardous. Other cases, however, have addressed these issues. In a case
that was favorably cited in Burlington Northern, for example, the Sixth Circuit declined
to adopt the first requirement for which defendants advocate concerning the disposal location. See United States v. Cello-Foil Prod.,
Inc., 100 F.3d 1227, 1232 (6th Cir. 1996)
(“[O]nce it has been demonstrated that a
party possessed the requisite intent to be an
arranger, the party cannot escape liability by
claiming that it had no intent to have the

Hobart Corp. is also distinguishable. The
Town argues that its claims against the arranger defendants are comparable to the base
19

that case. See 556 U.S. at 612–13. Therefore,
because the Town alleges that the arranger
defendants were arranging for the material’s
disposal (Compl. ¶ 124), the Court concludes
that their lack of knowledge regarding the
disposal location does not render the Town’s
CERCLA claims defective. See Cello-Foil,
100 F.3d at 1232; Aceto, 872 F.2d at 1381;
Florida Power & Light, 893 F.2d at 1318;
AAMCO, 962 F.2d at 286.

waste disposed in a particular manner or at a
particular site.”); see also Burlington N., 556
U.S. at 611. The Eighth and Eleventh Circuits
have similarly declined to require proof that
the defendant knew where the material was to
be deposited. See United States v. Aceto Agr.
Chemicals Corp., 872 F.2d 1373, 1381 (8th
Cir. 1989) (“Courts have also held defendants
‘arranged for’ disposal of wastes at a particular site even when defendants did not know
the substances would be deposited at that site
or in fact believed they would be deposited
elsewhere.” (collecting cases)); Florida
Power & Light Co. v. Allis Chalmers Corp.,
893 F.2d 1313, 1318 (11th Cir. 1990)
(“[E]ven though a manufacturer does not
make the critical decisions as to how, when,
and by whom a hazardous substance is to be
disposed, the manufacturer may be liable.”).
For its part, the Second Circuit has recognized that “arranger liability can attach to
parties that do not have active involvement
regarding the timing, manner or location of
disposal,” thus suggesting that knowledge of
the precise disposal location is immaterial.
See Gen. Elec. Co. v. AAMCO Transmissions, Inc., 962 F.2d 281, 286 (2d Cir. 1992).

Separately, few courts have addressed
whether an arranger defendant must know
that the material in question is hazardous, but
the case most directly on point did impose
such a knowledge requirement. See Appleton
Papers Inc. v. George A. Whiting Paper Co.,
No. 08-C-16, 2012 WL 2704920 (E.D. Wis.
July 3, 2012), aff’d sub nom. NCR Corp. v.
George A. Whiting Paper Co., 768 F.3d 682
(7th Cir. 2014). Appleton Papers concerned
the recycling of “broke,” an industry term for
the trim, cuttings, and waste created during
the process of making or coating paper. Id.
at *1. The court concluded that the plaintiff
(on a counterclaim by the defendants) “was
not an arranger [in part] because it . . . lacked
knowledge that broke . . . could be hazardous.” Id. at *12. Based on Burlington Northern’s indication that “an entity may qualify as
an arranger under § 9607(a)(3) when it takes
intentional steps to dispose of a hazardous
substance,” the court reasoned that “[i]t
seems doubtful that a defendant can ever be
found to be an arranger if he did not know the
substance in question is hazardous.” Id. at
*11 (quoting Burlington N., 556 U.S. at 611).
It also highlighted additional language from
Burlington Northern to support this conclusion:

The Court agrees with the principle of
these cases that alleged arrangers “cannot escape liability by ‘contracting away’ their responsibility or alleging that the incident was
caused by the act or omission of a third
party.” Aceto, 872 F.2d at 1381 (quoting
State of N.Y. v. Gen. Elec. Co., 592 F. Supp.
291, 297 (N.D.N.Y. 1984)). As such, the
Court applies the rule adopted in Cello-Foil
(and suggested by AAMCO Transmissions)
that a defendant may still be held liable as an
arranger even if it has “no intent to have the
waste disposed in a particular manner or at a
particular site.” Cello-Foil, 100 F.3d at 1232.
Burlington Northern, moreover, does not
mandate otherwise, given the Supreme
Court’s favorable citation to Cello-Foil and
exclusive focus on intent with respect to the
fact of disposal, rather than the location, in

[W]hen the Burlington Northern court notes that “if an entity were to enter into a transaction for the sole purpose of
discarding a used and no

20

takes intentional steps to dispose of a . . . substance.” See Burlington N., 556 U.S. at 611.
Instead, the Court required “intentional steps
to dispose of a hazardous substance.” Id.
(emphasis added). Courts applying Burlington Northern, moreover, have consistently
mirrored this language to include the term
“hazardous” in describing the relevant intent.
See, e.g., Gen. Elec. Co., 670 F.3d at 383
(“[F]ollowing Burlington Northern, a discernible element of intent to dispose of a hazardous substance is necessary for an entity to
be sanctioned pursuant to § 9607(a)(3).”
(emphasis added)); Team Enterprises, LLC v.
W. Inv. Real Estate Trust, 647 F.3d 901, 908
(9th Cir. 2011) (“[A]ctions taken with the intent to dispose of a hazardous substance are
sufficient for arranger liability.” (second emphasis added)); Consolidation Coal Co. v.
Georgia Power Co., 781 F.3d 129, 149 (4th
Cir. 2015) (“[I]ntent to sell a product that
happens to contain a hazardous substance is
not equivalent to intent to dispose of a hazardous substance.” (emphasis added)).

longer useful hazardous substance,” it is implicit or assumed in such a statement that
the entity knew or at least suspected that the substance was
harmful.
Id. (quoting Burlington N., 556 U.S. at 610).
Beyond the language of Burlington
Northern, the court also found support for its
interpretation from “the underlying purpose
of arranger liability under CERCLA.” Id.
The purpose of arranger liability, the court
reasoned, is “to deter and, if necessary, to
sanction parties seeking to evade liability by
‘contracting away’ responsibility.” Id. (quoting United States v. Gen. Elec. Co., 670 F.3d
377, 382 (1st Cir. 2012)). Where “the dangerousness of the product is unknown to the
would-be arranger,” however, “it is difficult
to find that the disposer was trying to evade
liability for that danger.” Id. In addition, absent knowledge of the substance’s hazardous
nature, “there is no conduct to deter by imposing arranger liability because the disposal
was essentially an innocent act: people who
do not even suspect that their product is
harmful are not in a position to be deterred.”
Id.

The Court also agrees that requiring
knowledge of the substance’s hazardous nature comports with CERCLA’s purpose of
preventing responsible parties from “contracting away” their liability and deterring
them from attempting to do so. See Appleton
Papers, 2012 WL 2704920, at *11. First, as
the Appleton Papers court correctly concluded, imposing liability on parties lacking
this knowledge would not deter them from arranging for the disposal of a product they do
not believe to be harmful. See id. It cannot
be said, moreover, that such a party was attempting to “contract away” its responsibility
for polluting if it did not even realize it was
polluting. See id.

This Court agrees with the analysis in
Appleton Papers. First, as the court in that
case correctly pointed out, the language in
Burlington Northern suggests that the alleged
arranger must know the substance in question
was hazardous. See id. Indeed, if, as the
Town argues, knowledge of the hazardous
nature of the material were irrelevant—and
the only inquiry was whether the alleged arranger intended for the disposal of some material—the Supreme Court could have omitted the term “hazardous” from its holding, in
which case the holding would have read,
“[U]nder the plain language of the statute, an
entity may qualify as an arranger . . . when it

This interpretation is also consistent with
the Supreme Court’s recognition that parties
who arrange for the sale of a useful product
that contains hazardous substances are not liable as arrangers under CERCLA even when
21

rule “could broaden the sweep of Section
107(a)(3) beyond the bounds of fairness.” Id.
As an example, the court posited that “it
would be unfair to require [a] defendant to
contribute to the cost of cleanup” if that defendant merely “arranges for a plant to treat a
hazardous substance that [the defendant]
owns or possesses, but [had] . . . no
knowledge (or even reason to know) that the
processing will result in the release of hazardous waste.” Id. In other words, the Third Circuit indicated that arranger liability should
not extend to an entity that is innocent of any
wrongdoing by virtue of its lack of
knowledge about the pollution that could result from its arrangements. See id. Requiring
the alleged arranger to know that the material
in question contains hazardous substances
follows from this holding.

they know the substances “will be leaked,
spilled, dumped, or otherwise discarded.”
Burlington N., 556 U.S. at 510 (holding that
such knowledge “may provide evidence of
the entity’s intent to dispose of its hazardous
wastes” but “alone is insufficient to prove
that an entity ‘planned for’ the disposal”).
Under this rule, a party who sells a product
knowing it contains hazardous substances and
knowing that those substances will be discarded is not liable as long as the party did
not intend for the buyer to dispose of it. In
this Court’s view, the seller’s knowledge of
the pollution that will result from the sale renders the seller more culpable for the resulting
contamination than an entity who arranges
for the disposal of a product it does not even
realize poses a risk of contamination. It
would be anomalous, therefore, to hold the
less culpable entity liable while permitting
the more culpable seller to escape liability.
See Burlington N., 556 U.S. at 602 (“[CERCLA] was designed . . . to ensure that the
costs of such cleanup efforts were borne by
those responsible for the contamination.”);
Chitayat v. Vanderbilt Assocs., 702 F. Supp.
2d 69, 76 (E.D.N.Y. 2010) (“Congress enacted CERCLA for the purpose of ensuring
‘that those responsible for any damage, environmental harm, or injury from chemical poisons bear the costs of their actions.’” (quoting
S. Rep. No. 848, 96th Cong., 2d Sess. 13
(1980))); Morton Int’l, Inc. v. A.E. Staley
Mfg. Co., 343 F.3d 669, 678 (3d Cir. 2003)
(“[A] court should not lose sight of the ultimate purpose of [of CERCLA], which is to
determine whether a defendant was sufficiently responsible for hazardous-waste contamination so that it can fairly be forced to
contribute to the costs of cleanup.”).

Finally, and most importantly, the imposition of a knowledge requirement concerning the hazardous nature of the substance is
consistent with the language of the statute.
As relevant here, arranger liability under
§ 9607(a)(3) attaches to “any person who . . .
arranged for disposal or treatment . . . of hazardous substances.” (emphasis added). As
noted above, Burlington Northern observed
that “the word ‘arrange’ implies action directed to a specific purpose,” 556 U.S. at 611,
and, by the terms of the statute, that “specific
purpose” is not the disposal of any substance
but the disposal of hazardous substances, see
§ 9607(a)(3). Thus, just as the term “arrange” implies a specific intent to dispose of
the substance, see Burlington N., 556 U.S. at

The Third Circuit employed similar reasoning in Morton International. 343 F.3d at
678. There, the court held that “ownership or
possession [of a hazardous substance] alone
[was not] a sufficient basis upon which to
ground ‘arranger liability’” because such a
22

611, so too does it imply knowledge that the
substance is hazardous.5 5

2. Atlas Defendants
The same is true for the Atlas defendants.
The Complaint only alleges that, after the
Town requested removal of the material from
the Park, the Atlas defendants participated in
that removal effort. (Id. ¶ 100.) It contains
no facts from which it could be inferred that
the Atlas defendants knew that the material
they transported from the Park contained the
hazardous substances later uncovered in the
investigation by the Suffolk County District
Attorney’s office. Accordingly, the Town
has failed to state a plausible claim for arranger liability against the Atlas defendants.

Consequently, the Court concludes that,
for arranger liability to apply, a plaintiff must
establish that the defendant who arranged for
the disposal of material knew, or should have
known, that the material contained hazardous
substances. See Appleton Papers, 2012 WL
2704920, at *11–12; Burlington N., 556 U.S.
at 611. The Complaint here, however, does
not allege that the arranger defendants knew
the material Datre dumped at the Park contained hazardous substances. Instead, it
simply alleges that the arranger defendants
“had knowledge of the disposal of the materials they arranged to transport.” (Compl.
¶ 125.) Furthermore, the facts alleged in the
Complaint regarding the arranger defendants—that they made various phone calls to
the Datre and Grabe defendants and acted as
brokers between those defendants and the
John Doe defendants—do not give rise to an
inference that they knew, or should have
known, of the material’s hazardous nature.
(Id. ¶¶ 130–35.) For instance, it contains no
allegation that the price they paid for the disposal of the material was so unusually low as
to suggest wrongdoing or that the Datre and
Grabe defendants had a history of environmental contamination of which the arranger
defendants were aware. As such, based on
the current allegations in the Complaint, the
Town has not stated a plausible claim for arranger liability under CERCLA against the
arranger defendants.

3. Church Defendants
As noted above, under § 9607(a)(1), the
“operator of a vessel or a facility” may be
held liable for clean-up costs. The Supreme
Court has defined an “operator” as “someone
who directs the workings of, manages, or
conducts the affairs of a facility.” United
States v. Bestfoods, 524 U.S. 51, 66–67
(1998). “[S]harpen[ing]” this definition, the
Court ruled that, to be held liable as an “operator,” a defendant “must manage, direct, or
conduct operations specifically related to pollution, that is, operations having to do with
the leakage or disposal of hazardous waste, or
decisions about compliance with environmental regulations.” Id. at 66–67. The Second Circuit has held that the Supreme Court’s
“sharpened construction” of the term “operator” is “sufficiently broad to extend beyond
titular owners and day-to-day operators,” but

5

5The Town correctly points out that “CERCLA must
be construed liberally to effectuate its two primary
goals: (1) enabling the EPA to respond efficiently and
expeditiously to toxic spills, and (2) holding those parties responsible for the releases liable for the costs of
the cleanup.” B.F. Goodrich Co. v. Murtha, 958 F.2d
1192, 1198 (2d Cir. 1992). Nevertheless, the Supreme
Court has also made clear that arranger liability “may
not extend beyond the limits of the statute itself.” Burlington N., 556 U.S. at 510. For the reasons set forth
above, the Court concludes that construing

§ 9607(a)(3) to contain no knowledge requirement relating to the hazardous nature of the substances would
“extend [arranger liability] beyond the limits of the
statute itself,” id., and thereby “broaden the sweep of
Section 107(a)(3) beyond the bounds of fairness,”
Morton Int’l, 343 F.3d at 678.

23

degree of control over the Park or the hazardous material for operator liability. First, the
Complaint mentions only one instance where
purported members of the Church were seen
spreading topsoil, and that instance occurred
in May 2013, well before the Datre and Grabe
defendants began dumping the material later
determined to contain hazardous substances.
(Compl. ¶ 73.) The Complaint contains no
allegation that the Church defendants were
spreading hazardous material on the soccer
field at that time, and this single instance is
hardly sufficient to show that Church members were present at the Park when the dumping of the hazardous material by the Datre
and Grabe defendants occurred, much less
that the Church defendants themselves “conduct[ed]” the dumping “operations.”
Bestfoods, 524 U.S. at 67. Relatedly, contrary to the Town’s assertion that the Church
defendants had control over the soccer field
portion of the Park (Pl.’s Church Opp’n at
18), the Complaint contains no allegation that
the Church defendants had the capacity to
grant the Datre and Grabe defendants access
to the Park. Indeed, the only allegation concerning access suggests otherwise. (See
Compl. ¶ 103 (alleging that the Datre defendants entered the Park after a park ranger
opened the gate).)

still “implies a level of control over the hazardous substances at issue.” AMW Materials
Testing, Inc. v. Town of Babylon, 584 F.3d
436, 444 (2d Cir. 2009) (brackets and emphasis omitted).
Correspondingly, “although the imposition of operator liability does not require a
finding that the defendant directly participated in the day-to-day activities at the site,
an operator under CERCLA must make the
relevant decisions on a frequent, typically
day-to-day basis.” City of N.Y. v. N.Y. Cross
Harbor R.R. Terminal Corp., No. 98-CV7227 (ARR) (RML), 2006 WL 140555, at
*12 (E.D.N.Y. Jan. 17, 2006) (citations, emphasis, and brackets omitted). Individuals
found to be operators are usually “actively involved in decision-making concerning environmental compliance or hazardous waste
disposal on a regular, ongoing basis.” Id. at
*13 (collecting cases). Conversely, “an individual officer or director who has only limited or sporadic involvement in environmental compliance issues or hazardous waste disposal cannot be considered an operator for
CERCLA purposes.” Id. (collecting cases).
Under this body of law, the Complaint
does not plausibly allege that the Church defendants “manage[d], direct[ed], or conduct[ed] operations specifically related to
pollution.” Bestfoods, 524 U.S. at 66–67.
The Town argues that the Complaint satisfies
this standard because it alleges that the
Church defendants approached the Town to
place topsoil at the Park, Church members
were present at the Park, and Church members sent the August and October letters assuming responsibility for the work done
there. (Pl.’s Mem. Opp’n to Church Defs.’
Mot. to Dismiss, ECF No. 66 (“Pl.’s Church
Opp’n”), at 18.)

Furthermore, that the Church defendants
requested permission to spread topsoil from
the Town and later sent letters acknowledging that they had worked on the field in April
2013—again, months before the dumping began—does not suggest that they “manage[d]”
or “direct[ed] . . . operations specifically related to pollution.” Id. At best, it might be
inferred from the letters that the Church contracted with the Datre and Grabe defendants
to deposit the material at the Park, but such a
contractual arrangement is not a basis for operator liability. See 42 U.S.C. § 9607(a) (distinguishing between liability for the “operator of a vessel or a facility” and for “any person who by contract, agreement, or otherwise

These allegations, however, do not state a
plausible claim with respect to the requisite

24

arranged for disposal . . . of hazardous substances. . . .”); Delaney v. Town of Carmel,
55 F. Supp. 2d 237, 261 (S.D.N.Y. 1999)
(holding that a town was not liable as an operator where it entered into a lease with private parties for the disposal of septic tank and
cesspool waste, but the plaintiffs “offer[ed]
no evidence . . . to suggest that [the town] carried out disposal activities at the Site, provided personnel, equipment, or supplies, had,
or exerted, any control over the activities or
management at the Site”). In any event, the
Complaint is devoid of any factual allegations that such a contractual arrangement existed.6 6 For these reasons, the Town has
failed to plausibly allege that the Church defendants were “operators” within the meaning of § 9607(a)(1). Accordingly, the CERCLA claims against the Church defendants
are dismissed.

4. Contribution Claim
Defendants also move to dismiss the
Town’s CERCLA contribution claims. Under 42 U.S.C. § 9613(f)(1), “[a]ny person
may seek contribution from any other person
who is liable or potentially liable under section 9607(a) of this title. . . .” As set forth
above, the Court concludes that the arranger,
Atlas, and Church defendants are not “potentially liable under section 9607(a),” id., and,
thus, are not subject to contribution under
§ 9613(f). Therefore, the contribution claims
against the arranger, Atlas, and Church defendants are dismissed.7 7
C. State Law Claims
Finally, defendants move to dismiss the
Town’s state law claims against them for
public nuisance, private nuisance, trespass,
injury to property, fraud and deceit, and restitution.8 8 As set forth below, the motions are
granted with respect to the state law claims.

6

6The Complaint does not seek to hold the Church defendants liable as arrangers. (See Compl. ¶ 158.) Even
if it did, however, it does not contain any allegation
that the Church defendants knew the dumped material
contained hazardous substances and, therefore, would
fail for the same reasons as the CERCLA claims
against the arranger and Atlas defendants.

3), the Court construes its withdrawal of the joint tortfeasors claim as extending to the Atlas defendants. In
any event, the claim fails because the Town has not
alleged that it incurred liability to a third party. See
MPM Silicones, LLC v. Union Carbide Corp., 931 F.
Supp. 2d 387, 407 (N.D.N.Y. 2013) (“Under New
York law, a party who voluntarily makes a payment
has no right to seek indemnification for a loss it was
not obligated to pay in the first instance. . . . Because
Plaintiff’s payment . . . was made voluntarily to cover
costs it incurred by choice rather than by legal obligation to a third party, it is not a payment that can support
Plaintiff’s claims for indemnification and contribution.”).

7
7Given the Court’s rationale for dismissing the contribution claims, it need not and does not address defendants’ alternative argument that the Town has not “resolved its liability to the United States or a State . . . in
an administrative or judicially approved settlement”
within the meaning of § 9613(f)(3)(B). (See COD’s
Br. at 18–19.)
8
8The Town has voluntarily withdrawn its joint tortfeasors claim against the arranger and Church defendants.
(See Pl.’s COD Opp’n at 23; Pl.’s Church Opp’n at
22.) Given that the Atlas defendants expressly joined
with the arranger defendants’ argument on this claim
(Atlas Defs.’ Letter Mot. to Dismiss, ECF No. 64, at
5), and the Town does not advance this claim in its response to the Atlas defendants’ motion (see Pl.’s
Opp’n to Atlas Defs.’ Mot. to Dismiss, ECF No. 67, at

25

1. The existence of a public
nuisance—a substantial interference with a right common
to the public;

1. Supplemental Jurisdiction
As a threshold matter, the Church defendants argue that this Court should decline to
exercise supplemental jurisdiction over the
state law claims because the Town fails to
state federal claims against them under RICO
or CERCLA. See 28 U.S.C. § 1367(c)(3);
Carnegie-Mellon Univ. v. Cohill, 484 U.S.
343, 350 n.7 (1988). As discussed above, the
Church defendants are correct that the Complaint fails to state federal claims against
them (as well as the arranger and Atlas defendants), but the Court concludes that the
exercise of supplemental jurisdiction is appropriate because the federal claims against
the Datre and Grabe defendants remain, and
the state law claims against the arranger, Atlas, and Church defendants “derive from a
common nucleus of operative fact,” namely,
the dumping of the material at the Park.
United Mine Workers of Am. v. Gibbs, 383
U.S. 715, 725 (1966); see also Stokes v. City
of Mount Vernon, N.Y., No. 11 CV 7675 VB,
2013 WL 1222720, at *1 (S.D.N.Y. Mar. 25,
2013) (exercising supplemental jurisdiction
over state law claims against individual defendants where federal claims against them
were dismissed because the pending federal
claims against the city “ar[o]se from the same
common nucleus of operative fact as the state
claims against the individual defendants”).

2. negligent or intentional
conduct or omissions by a defendant that create, contribute
to, or maintain that public nuisance; and
3. particular harm suffered by
plaintiff different in kind from
that suffered by the community at large as a result of that
public nuisance.
N.A.A.C.P. v. AcuSport, Inc., 271 F. Supp. 2d
435, 448 (E.D.N.Y. 2003). Significantly,
both torts require intentional or negligent
conduct on the part of a defendant.
Although “the release or threat of release
of hazardous waste into the environment” is
clearly a nuisance, N.Y. v. W. Side Corp., 790
F. Supp. 2d 13, 29 (E.D.N.Y. 2011), the
Town has failed to sufficiently plead intentional or negligent conduct that would give
rise to nuisance liability under New York
law. First, as discussed above, the Complaint
is devoid of any allegation from which it
could be inferred that the arranger, Atlas, or
Church defendants knew the material
dumped at the Park by the Datre and Grabe
defendants was hazardous. Accordingly, it
cannot be said that they intentionally contributed to the nuisance created by the Datre and
Grabe defendants. Likewise, the Complaint
does not allege that the arranger, Atlas, or
Church defendants had an affirmative duty to
ascertain whether the dumped material was
hazardous, as required to allege negligence,
see Taunus Corp. v. City of N.Y., 279 F. Supp.
2d 305, 312 (S.D.N.Y. 2003) (“When a claim
of nuisance is based on negligent conduct, the
plaintiff will have to prove all the elements of
negligence, including duty.”). Therefore, the

2. Public and Private Nuisance
Under New York law, “[t]he elements for
public and private nuisance are generally the
same.” Cangemi v. United States, 939 F.
Supp. 2d 188, 205 (E.D.N.Y. 2013). To state
a claim for private nuisance, “a plaintiff must
allege: ‘(1) an interference substantial in nature; (2) intentional or negligent in origin;
(3) unreasonable in character; (4) with plaintiff’s right to use and enjoy land; (5) caused
by defendant’s conduct in acting or failing to
act.” Id. at 203. Likewise, for public nuisance, a plaintiff must allege
26

ing it elsewhere. (See Compl. ¶ 100.) Although the Complaint does allege that the Atlas defendants deposited that material at the
Maisie Property without the permission of
the owner (see id.), the trespass claim is based
entirely on the dumping that occurred at the
Park (see id. at ¶¶ 193–96). In any event, absent special circumstances not alleged here,
the Town lacks standing to bring a trespass
claim on behalf of a private individual like
the owner of the Maisie Property. See In re
Dynegy, Inc., 770 F.3d 1064, 1068 (2d Cir.
2014) (“In general, a plaintiff lacks standing
to assert the rights or interests of third parties.”).

Complaint fails to state a plausible claim for
public or private nuisance against the arranger, Atlas, or Church defendants.
3. Trespass
A “trespass” under New York law is “the
interference with a person’s right to possession of real property either by an unlawful act
or a lawful act performed in an unlawful manner.” 55 Motor Ave. Co. v. Liberty Indus.
Finishing Corp., 885 F. Supp. 410, 424
(E.D.N.Y. 1994). To state a trespass claim, a
plaintiff must allege “an intentional entry
onto the land of another without justification
or permission,” with “intent . . . defined as intending the act which produces the unlawful
intrusion, where the intrusion is an immediate
or inevitable consequence of that act.”
Marone v. Kally, 109 A.D.3d 880, 882 (N.Y.
App. Div. 2013) (emphasis added).

Finally, the Complaint does not allege
that the Church defendants intentionally entered the Park without permission. The only
direct entry by the Church defendants alleged
in the Complaint occurred in May 2013,
when unidentified individuals assumed to be
affiliated with the Church were seen spreading topsoil on the soccer field. (Compl. ¶ 73.)
The Complaint concedes, however, that the
Church defendants had permission from the
Town at this time to enter the Park and spread
topsoil on the soccer field. (See id. (alleging
that Commissioner Montuori “permitted the
Church to begin work in or around May of
2013 at the Church’s sole cost and expense”).) Presumably referring to the August
and October letters, the Town argues that the
Church defendants are liable for trespass because they took “responsibility for continuing
the delivery of material to the Park in the
name of the Church and further [took] responsibility for the deposition of the materials there.” (Pl.’s Church Opp’n at 21.) The
Court finds it implausible, however, to read
the August and October letters as taking responsibility for the Datre and Grabe defendants’ illegal dumping activities, especially
given that they had no apparent motive to do
so. Instead, the only reasonable reading of
the letters is that they are referring to the May

The Complaint fails to allege a trespass
with respect to the arranger, Atlas, and
Church defendants. First, as noted above, the
Complaint does not allege that the arranger
defendants directly disposed of hazardous
material at the Park. Instead, it seeks to hold
them liable to the extent they facilitated the
dumping by the Datre and Grabe defendants.
The arranger defendants, however, only acted
as brokers, connecting the John Doe defendants with the Datre and Grabe defendants.
Absent knowledge of the material’s hazardous nature or the Datre and Grabe defendants
plan to unlawfully dump material at the Park,
the unlawful dumping was not “an immediate
or inevitable consequence” of the arranger
defendants’ brokering activities. Id.
Second, the Complaint is devoid of any
allegation that the Atlas defendants trespassed against the Town. On the contrary,
the Town alleges that the Atlas defendants
assisted the Town by removing some of the
dumped material from the Park and transport-

27

(5) resulting damage to the plaintiff.” Crigger v. Fahnestock & Co., 443 F.3d 230, 234
(2d Cir. 2006). A plaintiff may premise a
state law fraud claim “on acts of concealment
where the defendant had a duty to disclose
material information.” Meisel v. Grunberg,
651 F. Supp. 2d 98, 118 (S.D.N.Y. 2009)
(quoting Kaufman v. Cohen, 307 A.D.2d 113,
119 (N.Y. App. Div. 2003)).

2013 activities. Nor can the Church defendants’ be said to have “established control over
the wastes that were delivered to the Park,
and control over the soccer field portion of
the Park” for the same reasons that they cannot be deemed “operators” under CERCLA.
(Pl.’s Church Opp’n at 21.) More importantly for the trespass claim, the dumping
by the Datre and Grabe defendants was certainly not “an immediate or inevitable consequence of” the act of sending the letters, nor
does the Complaint allege any actions by the
Church defendants that would immediately
or inevitably result in such activities.
Marone, 109 A.D.3d at 882.

As set forth at length above with respect
to the Town’s RICO claims, the Complaint
does not sufficiently allege that the arranger,
Atlas, or Church defendants made statements
to the Town that they knew to be false with
the intent to defraud the Town. The Town,
therefore, has not alleged that defendants
made a material misrepresentation known to
be false and with the intent to defraud. In addition, as discussed in connection with the
Town’s CERCLA claims, the Complaint
does not allege that defendants knew that the
material deposited at the Park by the Datre
and Grabe defendants was hazardous. Thus,
it does not allege that they engaged in an act
of concealment because concealment requires knowledge of the material information. See Fidenas AG v. Honeywell Inc.,
501 F. Supp. 1029, 1039 (S.D.N.Y. 1980)
(“Fraudulent
concealment
requires
knowledge.”). Accordingly, the Complaint
fails to state a plausible claim for fraud under
New York law.

As such, the Town has failed to state
plausible claims for trespass against the arranger, Atlas, and Church defendants.
4. Injury to Property
Under New York law, “‘injury to property’ is an actionable act, whereby the estate
of another is lessened, other than a personal
injury, or the breach of a contract.” N.Y.
Gen. Constr. Law § 25-b. As such, “any tortious act (other than personal injury) resulting
in damage . . . constitutes an injury to property.” Lippes v. Atl. Bank of N.Y., 69 A.D.2d
127, 140 (N.Y. App. Div. 1979). The Town
cites its nuisance and trespass claims as the
grounds for its injury to property claim (Pl.’s
COD Opp’n at 23; Pl.’s Church Opp’n at 22),
but, as discussed above, the Complaint fails
to state plausible claims for those torts. Accordingly, it fails to state a claim for injury to
property.

6. Restitution
Under New York law, a “person who has
performed the duty of another by supplying
things or services although acting without the
other’s knowledge or consent, is entitled to
restitution from the other if (a) he acted unofficiously and with intent to charge therefor,
and (b) the things or services supplied were
immediately necessary to satisfy the requirements of public decency, health, or safety.”
City of N.Y. v. Lead Indus. Ass’n, Inc., 222

5. Fraud and Deceit
To state a claim for fraud under New
York law, a plaintiff must allege “(1) a material misrepresentation or omission of fact
(2) made by defendant with knowledge of its
falsity (3) and intent to defraud; (4) reasonable reliance on the part of the plaintiff; and
28

A.D.2d 119, 125 (N.Y. App. Div. 1996) (emphasis added). The Town’s restitution claim
is predicated on the assumption that the arranger, Atlas, and Church defendants had a
duty to assist with the clean-up of the Park by
virtue of their complicity in the dumping activities by the Datre and Grabe defendants.
As discussed above, the Complaint does not
sufficiently allege that the arranger, Atlas,
and Church defendants are liable for these activities under RICO, CERCLA, or state law.
Therefore, the Complaint does not adequately allege a duty on the part of these defendants to assist in the remediation efforts
and, thus, fails to state a claim for restitution.9 9

in the instant case. In particular, the Court
notes that the Town’s action against the Datre
and Grabe defendants will continue, and the
defects in plaintiff’s Complaint with respect
to the arranger, Church, and Atlas defendants
is largely a failure to allege sufficient facts to
identify the fraudulent conduct or demonstrate the relevant knowledge on the part of
these defendants. In other words, better
pleading could correct the defects identified
in plaintiff’s Complaint. Accordingly, the
Court grants plaintiff leave to file an
amended complaint if it wishes to maintain
this action against the arranger, Church, and
Atlas defendants.
IV. CONCLUSION

D. Leave to Amend
In sum, for the above reasons, the Court
grants the motions to dismiss filed by the arranger, Church, and Atlas defendants and
grants the Town leave to amend its Complaint. The Town shall have thirty days from
the date of this Memorandum and Order to
file its amended complaint.

Despite the Town’s failure to state any
plausible claims against the arranger, Atlas,
or Church defendants, the Court grants the
Town leave to amend its Complaint. Federal
Rule of Civil Procedure 15(a)(2) states that a
district court “should freely give leave [to
amend] when justice so requires.” Moreover,
although the Town has not specifically requested it, “the Court may sua sponte grant
leave to amend.” Straker v. Metro. Transit
Auth., 333 F. Supp. 2d 91, 102 (E.D.N.Y.
2004). A district court’s discretion to grant
such leave “is broad,” and depends upon
“many factors, including ‘undue delay, bad
faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by
amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc.’” Local 802, Associated Musicians
of Greater N.Y. v. Parker Meridien Hotel,
145 F.3d 85, 89 (2d Cir. 1998) (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)). Under this liberal standard, the Court concludes
that it is appropriate to grant leave to amend

SO ORDERED.
______________________
JOSEPH F. BIANCO
United States District Judge
Dated: March 28, 2017
Central Islip, NY
***
Plaintiff is represented by Michael J. Cahill
and Guy W. Germano of Gemano & Cahill,
P.C., 4250 Veterans Memorial Highway,
Suite 275, Holbrook, NY 11741. Defendant
COD is represented by Laurel R. Kretzing
and Jeffrey D. Lebowitz of Jaspan Schlesinger LLP, 300 Garden City Plaza, Garden

9

9To the extent the Town argues for restitution based
on unjust enrichment, the Complaint fails to state how

the defendants were unjustly enriched as a result of
their alleged role in the dumping activities.

29

City, NY 11530. Defendant IEV is represented by Michael D. Cassell of Hogan &
Cassell LLP, 500 North Broadway, Suite
153, Jericho, NY 11753. The Atlas defendants are represented by John F. Carman, Esq.,
666 Old Country Rd., Garden City, NY
11530. The Church Defendants were represented by Alesia J. Kantor, of the Law Offices of Joseph F. Kilada, P.C., 100 Quentin
Roosevelt Blvd., Suite 208, Garden City, NY
11530, on this motion, but Ms. Kantor has
since withdrawn as counsel.

30