Genty v. Township of Gloucester

• Decision Date: 10 May 1990
• Docket Number: 85-1611(SSB),84-2407(SSB) and 85-1615(SSB).,85-1612(SSB),Civ. A. No. 83-3891(SSB),84-2549(SSB)
• Citation: 736 F. Supp. 1322
• Parties: Frank and Seba GENTY, et al., Plaintiffs, v. TOWNSHIP OF GLOUCESTER, et al., Defendants. Frank and Seba GENTY, et al., Plaintiffs, v. Yei-Shong SHIEH, et al., Defendants. Frank and Fran MAIESE, et al., Plaintiffs, v. CITY FEDERAL SAVINGS AND LOAN ASSOCIATION, et al., Defendants. Frank and Fran MAIESE, et al., Plaintiffs, v. Yei-Shong SHIEH, et al., Defendants. Neil and Geralyn D'ALLESSANDRO, et al., Plaintiffs, v. CITY FEDERAL SAVINGS AND LOAN ASSOCIATION, et al., Defendants. Neil and Geralyn D'ALLESSANDRO, et al., Plaintiffs, v. Yei-Shong SHIEH, et al., Defendants.
• Court: U.S. District Court — District of New Jersey

736 F. Supp. 1322

Frank and Seba GENTY, et al., Plaintiffs, v. TOWNSHIP OF GLOUCESTER, et al., Defendants.

Frank and Seba GENTY, et al., Plaintiffs, v. Yei-Shong SHIEH, et al., Defendants.

Frank and Fran MAIESE, et al., Plaintiffs, v. CITY FEDERAL SAVINGS AND LOAN ASSOCIATION, et al., Defendants.

Frank and Fran MAIESE, et al., Plaintiffs, v. Yei-Shong SHIEH, et al., Defendants.

Neil and Geralyn D'ALLESSANDRO, et al., Plaintiffs, v. CITY FEDERAL SAVINGS AND LOAN ASSOCIATION, et al., Defendants.

Neil and Geralyn D'ALLESSANDRO, et al., Plaintiffs, v. Yei-Shong SHIEH, et al., Defendants.

Civ. A. Nos. 83-3891(SSB), 85-1611(SSB), 84-2549(SSB), 85-1612(SSB), 84-2407(SSB) and 85-1615(SSB).

United States District Court, D. New Jersey.

May 10, 1990.

Sugarman & Associates by Robert J. Sugarman and Marcia E. Berry, Philadelphia, Pa., for plaintiffs.

Paschon, Feurey & Rosetto by Robert V. Paschon, Toms River, N.J., for defendant Tp. of Gloucester.

OPINION

BROTMAN, Senior District Judge.

Presently before the court is plaintiffs' motion seeking the entry of final judgment pursuant to Fed.R.Civ.P. 54(b) as to all claims against defendant the Township of Gloucester (the "Township") in the first phase of these sets of consolidated suits. Plaintiffs had initially sought certification pursuant to 28 U.S.C. § 1292(b) of the order in Genty dismissing certain RICO claims against the Township on statute of limitations grounds, and the order in the Maiese and D'Allessandro cases dismissing the identical RICO claims on grounds of municipal inability to form the requisite intent to commit a crime. After oral argument on January 5, 1990, counsel for plaintiffs was directed to file a motion setting forth more clearly the grounds upon which plaintiffs sought review of these matters. The instant motion was the product of that directive.¹

As will become clearer within, this motion involves plaintiffs' efforts to seek Third Circuit review of various trial rulings in the Genty case, the only homeowners case to be tried to a jury verdict. More importantly in terms of the remaining litigation in these and related cases, plaintiffs seek review of this court's dismissal on April 12, 1989 of plaintiffs' claims against the Township under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq. on the ground that a municipality is incapable of forming the mental state necessary to commit an act of racketeering activity, and therefore can not be liable under 18 U.S.C. § 1964(c). Albanese v. City Federal Savings and Loan Ass'n, 710 F.Supp. 563 (D.N.J.1989).

Also pending are the court's sua sponte motions: (1) to reconsider the prior dismissal of the RICO claims against the Township as untimely under the statute of limitations; (2) to approve the voluntary dismissal of the Township from Phase One of Genty pursuant to Fed.R.Civ.P. 41(a)(2); and (3) to approve the voluntary dismissal of Diamond Crest from Phase One of the Genty suit pursuant to Fed.R.Civ.P. 41(a)(2).

I. FACTS AND PROCEDURE

Plaintiffs are homeowners who purchased property near a municipally owned landfill in Gloucester Township, Camden County, New Jersey. Along with other similarly situated homeowners, plaintiffs filed these lawsuits—there are a total of 17 complaints filed by twelve groups of plaintiffs² —against the Township and other defendants seeking recovery for damages from alleged fraud inducing their purchases and from the operation of and presence of toxic wastes in the landfill. These suits also include claims on behalf of the homeowners' children. These cases are referred to generally as the homeowners cases, to distinguish them from other suits related to the landfill.

Between 1975 and 1980 the Township owned, and Gloucester Environmental Management Services, Inc. ("GEMS") operated, the GEMS landfill. Plaintiffs each purchased real estate in or near the Briar Lake subdivision near the landfill between 1978 and 1982. They allege that the Township and other defendants, including a developer and a mortgage lender, knew that the landfill presented a health hazard but nonetheless sanctioned and facilitated the development and sale of residential housing in its vicinity. In short, these claims alleged fraud in the sale of real estate.

After plaintiffs had filed the first round of complaints for alleged real estate fraud in 1983 and 1984, the New Jersey Department of Environmental Protection suit for remediation and response costs, New Jersey Department of Environmental Protection v. Gloucester Environmental Management Services, Inc., Civ. No. 84-152 (hereinafter "NJDEP v. GEMS"), was removed to federal court. That suit encompasses claims under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (hereinafter "CERCLA"), 42 U.S.C. § 9601 et seq., the New Jersey Spill Compensation and Control Act (hereinafter the "Spill Act"), N.J.Stat.Ann. § 58:10-23.11 et seq., the Solid Waste Management Act, N.J.Stat.Ann. § 13:1E-1 et seq., the Sanitary Landfill Facility Closure and Contingency Fund Act, N.J.Stat. Ann. § 13:1E-100 et seq., and the Water Pollution Control Act, N.J.Stat.Ann. § 23:5-28 et seq., against the Township as owner of the GEMS landfill, and against alleged operators, generators, and transporters. The suit, in toto, involves approximately 250 parties, and is described more completely in other opinions. E.g., NJDEP v. GEMS, 719 F.Supp. 325 (D.N.J.1989).³ This particular aspect of the landfill litigation presents the most complex case management issues; divided into clean-up and remediation phases, it has produced ten case management orders, with a Seventh Amended Complaint being filed on February 14, 1990.

The other related suits include Township of Gloucester v. Maryland Casualty Co., Civil No. 83-4485, the suit by the Township against its insurance carriers, Neighborhood Toxic Cleanup Emergency v. Reilly, 716 F.Supp. 828 (D.N.J.1989), the suit by various homeowners to enjoin the clean-up because of alleged health hazards, and various suits by NJDEP for access to property to effectuate the cleanup. E.g., New Jersey Dep't of Environmental Protection v. Briar Lake Development Corp., 736 F.Supp. 62 (D.N.J.1990).

After the first round of homeowner complaints was filed (alleging fraud and RICO violations as mentioned above), the homeowner plaintiffs filed a second round of suits against the operators, generators, and transporters. Modeled after the NJDEP v. GEMS case, the basic legal claims in the second round of suits were based on RICO and CERCLA. In an opinion and order dated November 1, 1985, the homeowners suits were divided into two categories: the real estate fraud suits became the Phase One suits, and the ownership, management and operation suits were labelled the Phase Two suits. Panek v. City Federal Savings and Loan Ass'n, Civil No. 85-948 slip op. (D.N.J. Nov. 1, 1985). In five of the twelve cases, separate complaints had been filed⁴ for the real estate and RICO claims, and the complaints of each group of plaintiffs were consolidated. Thus, in Genty, the two complaints were consolidated "for purposes of discovery and trial." Order of July 19, 1985 (Docket Entry No. 125). In each of the remaining seven cases, a single complaint had been filed. On November 1, 1985, the court stayed the Phase Two aspects, that is, the ownership, operation and management claims of the cases to allow the parties, and the court, to concentrate their limited resources on real estate fraud claims in Phase One. Docket Entries 148 and 149.

The Phase one suits then proceeded through discovery in 1986. The Genty case was tried to a verdict before this court in April, 1989. The Maiese and D'Allesandro cases then went to trial, with the consent of the parties, before Hon. Jerome B. Simandle, see 28 U.S.C. 636(c)(1), the United States Magistrate who oversaw the case management and discovery in these complex suits. Settlements were reached before these cases were submitted to the respective juries.

In the Genty case, the Township had been dismissed as a defendant on October 19, 1984, on the basis of a two year statute of limitations for RICO claims. Docket Entry 58. On January 7, 1986, plaintiffs and the Township entered into a stipulation under which all Phase One claims would be dismissed against the Township. Docket Entry 196. This allowed the Genty case to proceed to trial, where a jury returned a verdict in favor of plaintiffs in the amount of $3,000 against defendants Oliveri, and a verdict of no cause for action against the remaining defendants other than the Township, which had been voluntarily dismissed before trial. Meanwhile, in 1987, the Supreme Court held that the statute of limitations under RICO is four years. Agency Holding Corp. v. Malley-Duff & Assocs., 483 U.S. 143, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987).

After the Genty trial, plaintiffs filed an appeal only to discover, once the case had reached the Third Circuit, that there was no final order from which to appeal because one defendant had not participated in the trial,⁵ and because the cases had been consolidated. The Third Circuit therefore dismissed the appeal for lack of jurisdiction by order dated November 28, 1987.

The Phase One proceedings then returned to the district court, where the stay as to Phase Two of the homeowners suits was lifted on October 30, 1989. The remaining Phase One suits have largely settled, and the Township is the only viable non-settling party. The Township is also the only Phase One defendant in the Phase Two round of suits.

To achieve finality in order to permit an appeal to the Third Circuit, plaintiffs now seek to enter a voluntary dismissal as to defendant Diamond Crest in Genty I pursuant to Fed.R.Civ.P. 41(a)(2), see Jorden v. National Guard Bureau, 877 F.2d 245, 248 (3d Cir.1989); Cable Investments, Inc. v. Woolley, 867 F.2d 151, 153 (3d Cir.1989); Fassett v. Villanova Chapter of Delta Kappa Epsilon, 807 F.2d...