Legend's Creek LLC v. Rhode Island
| Docket Number | C. A. 22-309-JJM-PAS |
| Decision Date | 16 June 2023 |
| Parties | LEGEND'S CREEK LLC; JON RESTIVO; and ADEN MOTT, Plaintiffs, v. STATE OF RHODE ISLAND; and RHODE ISLAND DEPARTMENT OF HEALTH, Defendants. |
| Court | U.S. District Court — District of Rhode Island |
Plaintiffs Jon Restivo and Aden Mott operate Plaintiff Legend's Creek LLC, a business located in Foster, Rhode Island (collectively “Plaintiffs” or “Legend's Creek”). Legend's Creek sought a public water supply well permit from the Rhode Island Department of Health (“RIDOH”) in order to install a commercial kitchen where it intended to process food product on site. RIDOH investigated and denied its application, finding no definitive evidence that a junkyard located on an adjoining property would not contaminate the groundwater for the public supply well.
After appealing RIDOH's decision to the Rhode Island Superior Court and being denied, Legend's Creek filed this suit alleging six counts against Defendants the State of Rhode Island and RIDOH for violating their civil rights by wrongfully taking their property and othei' due process violations. Before the Court is Defendants' Motion to Dismiss Legend's Creek's Complaint. ECF No. 13.
I. BACKGROUND
Mr Restivo and Mr. Mott are members of and operate Legend's Creek, LLC. After selling personal care products over the internet from a location on Hartford Pike in Foster, Mr Restivo purchased property at 27 Mill Road in Foster hoping to reside there and operate Legend's Creek Farm, where they would grow raw materials and process personal care products. They hoped to eventually operate a commercial kitchen to process and sell food at the farm.
In order to have a commercial kitchen, Legend's Creek needed to apply for a public water supply permit because the existing well did not meet RIDOH requirements. In their application, Plaintiffs identified an adjoining junkyard Wright's Auto Salvage (“Wright's”), as a potential source of contamination. Plaintiffs allege that RIDOH asked the Rhode Island Department of Environmental Management (“RIDEM”) about Wright's and reported that it had no information that the junkyard contaminated the groundwater. Plaintiffs began to drill the well before any permit was issued.
RIDOH denied Plaintiffs' permit application. Plaintiffs later attempted to work with RIDOH who said they might approve the permit if Plaintiffs conducted a hydrogeological study to determine whether Wright's was polluting the groundwater. Legend's Creek Farm and Mr. Restivo filed an administrative appeal of RIDOH's denial to the Rhode Island Superior Court pursuant to § 42-35-15 of the Rhode Island Administrative Procedures Act (“RIAPA”). That court dismissed the appeal when Plaintiffs sold the property for $804,000.
Next, Plaintiffs filed this six count complaint-' Count I, Physical Taking under the Fifth Amendment to the United States Constitution and Article 1, § 16 of the Rhode Island Constitution; Count II, Regulatory Taking; Count III, Violation of Procedural Due Process under the Fourteenth Amendment to the United States Constitution and Article 1, § 2 of the Rhode Island Constitution; Count IV, Violation of the Rhode Island Administrative Procedures Act R.I. Gen. Laws § 42-35-15;[1] Count V, Violation of Equal Protection Clause under the Fourteenth Amendment to the United States Constitution and Article 1, § 2 of the Rhode Island Constitution; and Count VI, Violation of Substantive Due Process. They allege damages of lost property value-they believe the property could have sold for over $1 million if it received the public water supply permit-and millions of dollars in lost profits from Legend's Creek's potential business operations. Defendants move to dismiss all counts. ECF No. 13.
Federal Rule of Civil Procedure 12(b)(6) tests the plausibility of the claims presented in a plaintiffs complaint. “To avoid dismissal, a complaint must provide ‘a short and plain statement of the claim showing that the pleader is entitled to relief.'” Garcia-Catalan v. United States, 734 F.3d 100, 102 (1st Cir. 2013) (quoting Fed.R.Civ.P. 8(a)(2)). At this stage, “the plaintiff need not demonstrate that she is likely to prevail, but her claim must suggest ‘more than a sheer possibility that a defendant has acted unlawfully.'” Id. at 102-03 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). The “complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
“The plausibility inquiry necessitates a two-step pavane.” Garcia -Catalan, 734 F.3d at 103. “First, the court must distinguish ‘the complaint's factual allegations (which must be accepted as true) from its conclusory legal allegations (which need not be credited).”' Id. (quoting Morales-Cruz v. Univ. of P.R., GIG F.3d 220, 224 (1st Cir. 2012)). “Second, the court must determine whether the factual allegations are sufficient to support ‘the reasonable inference that the defendant is liable for the misconduct alleged.'” Id. (quoting Haley v. City of Boston, GG1 F.3d 39, 46 (1st Cir. 2011)). “In determining whether a complaint crosses the plausibility threshold, ‘the reviewing court [must] draw on its judicial experience and common sense.'” Id. (alteration in original) (quoting Iqbal, 556 U.S. at 679).
III. DISCUSSION
The State seeks to dismiss the five remaining claims under various theories of immunity, preclusion, and for failure to state a claim.
The Eleventh Amendment provides a state immunity from “any suit in law or equity, commenced or prosecuted ... by Citizens of another State, or by Citizens or Subjects of any Foreign State.” U.S. Const, amend. XI. This immunity also applies to suits by a state's own citizens. Tennessee v. Lane, 541 U.S. 509, 517 (2004).
RIDOH “stands in the shoes of Rhode Island itself, as an arm of the state.” Sinapi v. R. I. Bd. of Bar Examiners, 910 F.3d 544, 553 (1st Cir. 2018). Therefore, “[a state agency] and its members in their official capacities would appear to be protected by the Eleventh Amendment from any suits for money damages.” Id.
Id. (citing United States v. Georgia, 546 U.S. 151, 158 (2006) (emphasis in original)). Because Plaintiffs takings claims in Counts I and II allege actual violations of the Fourteenth and Fifth Amendments and the Fourteenth Amendment incorporates the Fifth Amendment against the states, the State's Eleventh Amendment immunity is superseded and the Court finds that the State is not immune under the Eleventh Amendment.[2]
In this case, RIDOH considered Legend's Creek's permit application, applied the regulations to the facts presented in the application, and issued a decision denying the permit. Defendants argue that they have absolute quasi-judicial immunity afforded by common law because they are adjudicatory bodies that functioned in this case in ways similar to judges. Legend's Creek argues that quasi-judicial immunity does not apply here because it has not sued individual state actors or the State under a theory of respondeat superior.
The doctrine of quasi-judicial[3] immunity “provides absolute immunity for public officials, including agency officials, who perform quasi-judicial functions.” Coggeshall v. Mass. Bd. of Registration of Psychologists, 604 F.3d 658, 662 (1st Cir. 2010) (citing Butz v. Economou, 438 U.S. 478, 508, 512-13 (1978)); Goldstein v. Galvin, 719 F.3d 16, 24 (1st Cir. 2013) (absolute immunity applies to “agency officials with functions similar to judges and/or prosecutors”; see Bettencourt v. Bd. of Registration in Med. of Mass., 904 F.2d 772, 782 (1st Cir. 1990). The immunity “endures even if the official acted maliciously and corruptly in exercising his judicial or prosecutorial functions.” Goldstein, 719 F.3d at 24 (internal quotation marks omitted); see also Wang v. New Hampshire Bd. of Registration in Med., 55 F.3d 698, 702 (1st Cir. 1995). “Although this concept of absolute immunity allows some abuses of official power to go unredressed, it is necessary for the effective administration of government that government workers be able to perform their jobs without fear of liability.” Id. (internal quotation marks omitted); see also Calhoun v. City of Providence, 390 A.2d 350, 356 (1978) ("Certain types of activities, as for example judicial decision-making * * * must be engaged in by these officials freely, independently, and untrammeled by the possibilities of personal liability”).
Legend's Creek contorts reality to make a distinction that there can be no quasi-judicial immunity for Defendants because they are “the State” and not individual actors. But Legend's Creek's allegations and arguments make clear that the decisions they are suing over were made by individual RIDOH employees. RIDOH officials engaged in judicial decision-making when they denied the permit based on their knowledge, experience, and discretion. See ECF No. 11 ¶¶ 29-32 (); See ECF No. 15 at 19-20 (“Plaintiffs allege that the Defendants' actions in denying them the public water supply permit based on the mere theoretical possibility of contamination from an adjoining property constitute a taking in violation of the federal and state constitutions.”). “While...
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