Holcim - NER, Inc. v. Town of Swampscott

671 F.Supp.3d 84

HOLCIM - NER, INC., f/k/a Aggregate Industries - Northeast Region, Inc., Plaintiff, v. TOWN OF SWAMPSCOTT and Town of Swampscott Select Board, Defendants.

Civil Action No. 21-11861-NMG

United States District Court, D. Massachusetts

Signed May 3, 2023

Aaron D. Rosenberg, Sheehan Phinney Bass & Green, PA, Boston, MA, Jonathan R. Voegele, Sheehan Phinney Bass & Green PA, Manchester, NH, for Plaintiff Aggregate Industries - Northeast Region, Inc.

Aaron D. Rosenberg, Sheehan Phinney Bass & Green, PA, Boston, MA, for Plaintiff Holcim -NER, Inc.

Adam Simms, Matthew Joseph Hamel, Pierce Davis & Perritano LLP, Boston, MA, for Defendants.

MEMORANDUM & ORDER

GORTON, United States District Judge

This case arises out of an alleged unconstitutional taking by the Town of Swampscott ("the Town") and the Town of Swampscott Select Board ("the Board") (collectively, "the defendants") in connection with certain permit restrictions applicable to a quarry owned by Holcim - NER, Inc., f/k/a Aggregate Industries - Northeast Region, Inc., ("Aggregate" or "plaintiff"). Pending before the Court is defendants' motion to dismiss (Docket No. 37) which will be allowed, in part, and denied, in part.

I. Background

Aggregate is a Massachusetts corporation with a principal place of business in Middleton, Massachusetts. It owns and operates a quarry located on the border of the Town of Swampscott and the City of Salem, Massachusetts ("the Quarry"). The Quarry has been used to excavate rock, stone and other materials from the ground for more than 100 years. The Town of Swampscott is a municipality located in Essex County, Massachusetts. The Board is a municipal entity holding general supervisory powers within the Town and was constituted pursuant to the Massachusetts General Laws.

The following facts are derived from the supplemental first amended complaint and are accepted as true for the purpose of these proceedings. In the 1990s, the Board enacted an Earth Removal By-Law ("the By-Law") requiring any person or business to obtain an annual permit if it wanted to remove more than 600 cubic yards of natural materials from a parcel of land in the Town. The By-Law also created an advisory body, the Earth Removal Advisory Committee ("ERAC"), to evaluate permit applications and make recommendations to the Board as to whether a permit should be issued and what conditions should be imposed.

Aggregate and its predecessors have obtained earth removal permits from the Town each year since the By-Law was passed. Plaintiff avers that, for years, it has negotiated directly with the ERAC which has regularly recommended the approval of earth removal permits that the Board has consistently accepted. Such permits are typically effective for a one-year period from July through June. The 2019-20 permit, however, was extended until June 30, 2021, due to the COVID-19 pandemic.

During the course of negotiations for the 2021-2022 permit, the Board and its Chairman, Peter Spellios ("Spellios"), took an active role in proposing additional restrictions based upon a new "human annoyance" standard. Some ERAC members expressed concerns about the nature of the Board's involvement and the purported bias of its members. For instance, many of the restrictions proposed by the Board tracked changes which Spellios had proposed without success to add to the Town By-Laws.

Plaintiff received a draft permit from the Board in April, 2021, which modified several provisions that Aggregate and the ERAC had previously agreed upon. Aggregate discussed the new draft with the ERAC and ultimately received an extension of time from the Board in order to submit comments and suggest changes to the restrictions.

Aggregate provided written feedback on the draft permit prior to the June 16, 2021, meeting at which the permit was voted upon and its counsel attended the meeting and spoke on his client's behalf. Among other issues, plaintiff objected to the imposition of a restriction which would prevent it from blasting at a depth of greater than 50 feet. Although the Board voted to approve the permit over Aggregate's opposition and despite statements by some ERAC members that more time would be beneficial, it explained that Aggregate could seek modifications to the permit after it was issued.

In November, 2021, Aggregate filed a complaint in this Court and, in April, 2022, it filed an amended complaint in response to defendants' initial motion to dismiss. Defendants moved to dismiss the amended complaint as well but their motion was rendered moot when Aggregate filed this supplemental first amended complaint ("SFAC") in November, 2022, with the consent of defendants and by permission of the Court. Defendants filed a motion to dismiss the SFAC shortly thereafter which plaintiff timely opposed in January, 2023.

Aggregate's June, 2021, earth removal permit ("the 2021 Permit") was set to expire on June 30, 2022, during the pendency of this litigation. In the meantime, Aggregate timely submitted its application for a 2022-2023 permit. The new application was not acted upon but, in June, 2022, Aggregate informed the Town that it planned to continue operating in accordance with the 2021 Permit. On June 29, 2022, the Board voted to extend the 2021 Permit for 90 days and, on September 28, 2022, for an additional 120 days. Plaintiff disputes the adequacy of the notice provided for those meetings and challenges the validity of the proceedings.

II. Motion to Dismiss

A. Standing

Before reaching the merits of whether the complaint has stated an actionable claim for relief, the Court must address defendants' contention that plaintiff lacks standing and, therefore, that its claims must be dismissed pursuant to Fed. R. Civ. P. 12(b)(1).

Article III, section 2, of the United States Constitution restricts federal court jurisdiction to actual "cases" and "controversies." U.S. Const. art. III, § 2. In order to establish standing under the case-or-controversy requirement, a plaintiff must demonstrate: 1) that it has suffered an injury in fact, 2) a causal nexus between the injury it suffered and the claimed wrong, and 3) a likelihood that the injury will be redressed by a favorable decision from the court. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).

The Town contends that Aggregate has not suffered an injury in fact and thus lacks standing. The Supreme Court has defined an injury in fact as

an invasion of a legally protected interest which is (a) concrete and particularized; and (b) actual or imminent, not conjectural or hypothetical.

Lujan, 504 U.S. at 560, 112 S.Ct. 2130 (cleaned up).

In order to be concrete, the complained-of injury must be "real, not abstract." Spokeo, Inc. v. Robins, 578 U.S. 330, 352, 136 S.Ct. 1540, 194 L.Ed.2d 635 (2016). Aggregate claims that it has been subjected to unconstitutional permitting restrictions which improperly limit the use of its property and will force it to incur significant revenue losses. The ongoing nature of the alleged deprivation of its property rights and its claim of "imminent fiscal injury" constitute a real injury. Mass. v. U.S. HHS, 923 F.3d 209, 227 (1st Cir. 2019). Further, an injury is particularized if it "affect[s] the plaintiff in a personal and individual way." Lujan, 504 U.S. at 560 n. 1, 112 S.Ct. 2130. The actions of the Town directly and specifically affect Aggregate and the "imminent financial harm alleged would impact it in an individual way." Mass. v. U.S. HHS, 923 F.3d at 227 (cleaned up).

For an injury to be actual or imminent, the complained-of injury must have already happened or be sufficiently threatening. A hypothetical injury speculated to occur at some future point cannot establish standing. Lujan, 504 U.S. at 564, 112 S.Ct. 2130. Defendants contend that the alleged injury in this case is purely hypothetical because they have not yet enforced the 2021 Permit restrictions and have no specific plans to implement them in the future. Aggregate responds that it is, however, currently unable to take certain actions because of the restrictions to which it is subject. The Court will not require Aggregate to

expose [it]self to liability before bringing suit to challenge the basis for the threat — for example, the constitutionality of a law threatened to be enforced.

MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 129, 127 S.Ct. 764, 166 L.Ed.2d 604 (2007).

B. Legal Standard

To survive a motion to dismiss under Fed. R. Civ. P. 12(b)(6), the subject pleading must contain sufficient factual matter to state a claim for relief that is actionable as a matter of law and "plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A claim is facially plausible if, after accepting as true all non-conclusory factual allegations, the court can draw the reasonable inference that the defendant is liable for the misconduct alleged. Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d 1, 12 (1st Cir. 2011).

When rendering that determination, a court may consider certain categories of documents extrinsic to the complaint "without converting a motion to dismiss into a motion for summary judgment." Freeman v. Town of Hudson, 714 F.3d 29, 36 (1st Cir. 2013) (citing Watterson, 987 F.2d at 3). For instance, a court may consider documents of undisputed authenticity, official public records, documents central to a plaintiff's claim and documents that were sufficiently referred to in the complaint. Watterson, 987 F.2d at 3.

A court may not disregard properly pled factual allegations in the complaint even if actual proof of those facts is improbable. Ocasio-Hernandez, 640 F.3d at 12. Rather, the court's inquiry must focus on the reasonableness of the inference of liability that the plaintiff is asking the court to draw. Id. at 13.

C. Application

1. Takings Clause

The Takings Clause prohibits...