R.M. Bacon, LLC v. Saint-Gobain Performance Plastics Corp.
| Decision Date | 20 February 2018 |
| Docket Number | 1:17-CV-0441 (LEK/DJS) |
| Parties | R.M. BACON, LLC, et al., Plaintiffs, v. SAINT-GOBAIN PERFORMANCE PLASTICS CORP., et al., Defendants. |
| Court | U.S. District Court — Northern District of New York |
In this case, the Court is asked to consider the viability of an action stemming from the contamination of groundwater with perfluorooctanoic acid ("PFOA") in the Village of Hoosick Falls, New York. Dkt. No. 24 ("Amended Complaint") ¶¶ 1-6. In the Amended Complaint, plaintiffs R.M. Bacon, LLC ("RM") and Michael Bacon allege that defendants Saint-Gobain Performance Plastics Corp. and Honeywell International Inc. contaminated the Village's groundwater by discharging PFOA from one or more manufacturing facilities they operated within the Village. E.g., id. As a result of this contamination, Plaintiffs allege that property values "experienced a significant decline," id. ¶ 66, which "caused the collapse of [RM's] 30-year old local business," id. ¶ 1, and diminished the value of Bacon's property, id. ¶ 169. Presently before the Court is Defendants' motion to dismiss the Amended Complaint for failure to state a claim. Dkt. Nos. 26 ("Motion"), 26-2 ("Memorandum"). For the reasons that follow, the Motion is granted in part and denied in part.
The following facts are taken from the allegations in the Amended Complaint, which are assumed to be true when deciding a motion to dismiss for failure to state a claim. Bryant v. N.Y. State Educ. Dep't, 692 F.3d 202, 210 (2d Cir. 2012).
PFOA is a man-made chemical used, among other things, "to make fabrics water and stain resistant." Am. Compl. ¶¶ 19, 24. Originally manufactured by the 3M Company, PFOA was also "a key component in the manufacturing of Teflon." Id. ¶¶ 20, 23. According to Plaintiffs, "PFOA has been identified as an emerging contaminant of concern," id. ¶ 26, and the U.S. Environmental Protection Agency ("EPA") has "noted that peer-reviewed studies indicate that 'exposure to PFOA over certain levels may result in adverse health effects,'" id. ¶ 30. "PFOA has the potential to be more of a health concern because it can stay in the environment and in the human body for long periods of time." Id. ¶ 27.
New York State has identified a small factory at 14 McCaffrey Street as the primary source of Hoosick Falls's PFOA contamination. Id. ¶ 31. The McCaffrey Street facility began operating in approximately 1955. Id. ¶ 33. AlliedSignal, which later merged with Honeywell, id. ¶ 14, acquired the facility in 1986, id. ¶ 34. In 1997, Honeywell sold the facility to a company called Furon, which sold it to Saint-Gobain in 1999. Id. ¶ 35. Saint-Gobain owns the facility to this day. Id.
Defendants utilized PFOA to manufacture stain resistant fabrics and other products at the McCaffrey Street facility. Id. ¶¶ 36-39. Plaintiffs allege that "Defendants discharged PFOA into the environment through releases into the atmosphere" and by "discharg[ing] wastewatercontaining PFOA directly into . . . the soil." Id. ¶¶ 43, 45. Defendants further allege that "[i]t is possible, if not probable, that [D]efendants also followed waste disposal practices that resulted in the discharge or burial of PFOA-ladened waste in the municipal landfill and one or more other locations around the community." Id. ¶ 46. As a result of Defendants' conduct, Plaintiffs allege, the Village's groundwater contains PFOA levels that far exceed the EPA's health advisory limit of 70 parts per trillion (ppt). Id. ¶¶ 29, 50-52. Groundwater tests at some sites have revealed average PFOA levels of 7,686 ppt, and one test registered 130,000 ppt. Id. ¶ 50.
The Village's municipal water supply provides drinking water to nearly 95% of its approximately 3,500 residents. Id. ¶¶ 53-55. In November 2015, the EPA recommended that Village residents no longer use the municipal water supply for drinking and cooking due to the high levels of PFOA. Id. ¶ 56. In late 2015, Saint-Gobain began providing free bottled water to Village residents, and agreed to fund the installation of a filtration system on the municipal water system to remove PFOA. Id. ¶ 58. In January 2016, New York designated the McCaffrey Street facility a state Superfund site. Id. ¶ 62.
Several area banks have indicated that they will not provide mortgage financing for homes in Hoosick Falls, and at least one bank official publically stated that his bank would not issue any mortgages for any home connected to the municipal water supply. Id. ¶ 63. As a result of the contamination and the lack of available financing, property values in Hoosick Falls have declined dramatically. Id. ¶ 66. Plaintiffs further allege that "the economic development of the Village has largely ceased," id. ¶ 67, and "people are reluctant to undertake property development," id. ¶ 71.
Bacon formed RM in 1985. Id. ¶ 75. The company, located in the neighboring town of Hoosick, id. ¶ 76, primarily provides "home construction and home improvement" services, id. ¶ 79. It also performs a variety of related construction and property improvement services, including excavations, soil and fill services, and roadway development. Id. ¶ 81. By 2015, RM was "the leading construction company in an approximately 25-mile radius of Hoosick Falls" and "essentially[] performed all excavation and roadway development work for all new commercial construction in the area between 2010 and 2015." Id. ¶¶ 86-87.
The discovery of PFOA contamination in Hoosick Falls had a profound impact on RM's business. Id. ¶ 90. The decline in property values, groundwater contamination, and lack of available financing caused nearly all home construction and improvement work to cease in 2016. Id. ¶ 90-105. RM "had no construction or excavation work scheduled at the start of July 2016," id. ¶ 102, and "no new contracts for 2016," id. ¶ 105. Its shrinking payroll reflects the economic downturn. From 2010 to 2016, RM had seven employees. Id. ¶ 101. By June 2016, the company had only one part-time and three full-time employees. Id. By September 2016, Bacon was RM's sole remaining employee, and he received no salary for his work. Id. ¶ 107. The company "experienced a substantial loss of revenue for the 2016 fiscal year." Id. ¶ 111. "Individuals have expressly stated that the presence of PFOA in the environment prevents them from hiring" RM. Id. ¶ 109.
Bacon owns the Hoosick property on which RM operates. Id. ¶ 112. He attempted to sell the property in 2016, listing it at $100,000 below its 2015 assessed value. Id. ¶ 113. No one has offered to purchase, or even looked at, the property. Id. ¶ 114.
RM commenced this action on April 19, 2017. Dkt. No. 1 ("Complaint"). Defendants initially moved to dismiss the Complaint on June 20, 2017. Dkt. No. 9 ("First Motion"). Following a joint stipulation submitted on July 14, 2017, Dkt. No. 22 ("Stipulation"), the Court allowed RM to file an amended complaint, adding Bacon as a plaintiff, Dkt. No. 23 ("Amendment Order"). Plaintiffs filed the Amended Complaint on July 25, 2017, thus mooting the First Motion. Am. Compl.
In the Amended Complaint, Plaintiffs allege claims for tortious interference with business relations, negligence, and negligence per se. Am. Compl. ¶¶ 117-85. Defendants moved to dismiss the Amended Complaint for failure to state a claim on August 3, 2017. Mot. Plaintiffs opposed the Motion, Dkt. No. 28 ("Opposition"), and Defendants submitted a reply, Dkt. No. 33 ("Reply").
To survive a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, a "complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A court must accept as true the factual allegations contained in a complaint and draw all inferences in favor of the plaintiff. Allaire Corp. v. Okumus, 433 F.3d 248, 249-50 (2d Cir. 2006). Plausibility, however, requires "enough fact[s] to raise a reasonable expectation that discovery will reveal evidence of [the alleged misconduct]." Twombly, 550 U.S. at 556.
The plausibility standard "asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). "[T]he pleading standard Rule 8 announces does not require 'detailed factual allegations,' but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id. (quoting Twombly, 550 U.S. at 555). Where a court is unable to infer more than the mere possibility of the alleged misconduct based on the pleaded facts, the pleader has not demonstrated that she is entitled to relief and the action is subject to dismissal. Id. at 678-79.
Plaintiffs allege five causes of action against Defendants: negligent interference with prospective economic advantage, Am. Compl. ¶¶ 117-31, intentional interference with economic relationship, id. ¶¶ 132-47, tortious interference with business relationship, id. ¶¶ 148-56, negligence, id. ¶¶ 157-70, and negligence per se, id. ¶¶ 171-85.The first three claims are brought by RM alone, while both Plaintiffs allege claims for negligence and negligence per se.1
RM's first enumerated claim is negligent interference with prospective economic advantage. Am. Compl. ¶¶ 117-31. In support of this claim, RM alleges that Defendants' negligent "contamination of the environment has disrupted [its] economic relationships with existing and future customers in the local community," id. ¶ 128, and caused it to suffer "substantial economic losses in 2016 and beyond," id. ¶ 129. Defendants' "wrongful conduct," RM claims, "constitutes the primary, if not sole, cause of the harm that [it] incurred." Id. ¶ 130.
As Defendants correctly note, Mem. at 4, "...
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