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DIVERSIFIED CARTING, INC. v. CITY OF NEW YORK

August 15, 2005.

DIVERSIFIED CARTING, INC., DIVERSIFIED CONSTRUCTION CORP., and TROY CARUSO, Plaintiffs,
v.
THE CITY OF NEW YORK; SEASONS CONTRACTING CORP.; TURNER CONSTRUCTION CORP.; THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY; THE NEW YORK STATE EMERGENCY MANAGEMENT OFFICE; THE FEDERAL EMERGENCY MANAGEMENT AGENCY; WORLD TRADE CENTER PROPERTIES LLC; SILVERSTEIN PROPERTIES, INC.; SILVERSTEIN WTC MANAGEMENT CO. LLC; WESTFIELD AMERICA TRUST WESTFIELD WTC LLC; WESTFIELD CORPORATION, INC.; WESTFIELD AMERICA, INC.; 7 WORLD TRADE CENTER CO.; MARRIOTT INTERNATIONAL, INC.; U.S. GENERAL SERVICES ADMINISTRATION; and "JOHN DOE" and "JANE DOE," being fictitious names, Defendants.



The opinion of the court was delivered by: HAROLD BAER, JR., District Judge[fn*] [fn*] Margaret Johnson, a summer 2005 intern in my Chambers, and currently a second year law student at New York University School of Law, provided substantial assistance in the researching and drafting of this opinion.

OPINION & ORDER

On December 3, 2004, Plaintiffs, Diversified Carting, Inc., Diversified Construction Corporation and Troy Caruso (collectively, "Diversified"), filed the instant action against the above named defendants for, inter alia, breach of contract, unjust enrichment, quantum meruit, and breach of fiduciary duty. (Compl. ¶ 1).*fn1 Presently before this Court is a consolidated motion to dismiss and a motion for summary judgment. (Dckt. 82; 90.) For the foregoing reasons, the motion to dismiss is GRANTED in-part and DENIED in-part and the motion for summary judgment is DENIED. I. BACKGROUND

A. Factual Background

  The World Trade Center was a "complex of seven commercial buildings" located in Lower Manhattan. (Compl. ¶ 24.) On September 11, 2001, the World Trade Center was destroyed as a result of a terrorist attack. As is now common knowledge, two planes were hijacked and flown into the Twin Towers of the World Trade Center, causing their collapse and the destruction of other buildings within the complex and a myriad of deaths and personal injuries.

  According to Diversified, on or about September 11, 2001, it was retained to assist with the search, excavation, and clean-up efforts at the World Trade Center disaster site. (Compl. ¶ 30.) While Diversified acknowledges that its services were not retained through the typical competitive bid process and no written contract was ever executed, they alleged that they performed excavation and demolition, and provided equipment and trucking services from on or about September 11, 2001 through sometime in January 2002. (Compl. ¶¶ 28; 30-32; 34.) Consequently, Diversified billed for its work using "billing rates for time, material, trucking and equipment" which it has alleged were "fair [and] reasonable." (Compl. ¶¶ 31; 32.)

  Diversified now alleges it has not been paid for the work it performed at Building 7 and filed the instant action to recover not less than $452,498.97 against a variety of public and private entities involved in the recovery and clean-up efforts at the World Trade Center following the September 11, 2001 terrorist attacks. (Compl. ¶¶ 1; 35.)

  First, the Complaint asserts that the Federal Government, and in particular, the Federal Emergency Management Agency ("FEMA") and the U.S. General Services Administration (collectively, "the Federal Defendants") hired contractors, including Diversified, to assist in the search, excavation, and clean-up efforts at the World Trade Center. (Compl. ¶¶ 11; 21; 30).*fn2

  Second, in addition to the Federal Defendants, the Complaint also includes several New York City and State agencies. (Compl. ¶ 8.) In particular, the Complaint alleges that the New York City Department of Design and Construction, the New York City Department of Transportation, and the New York City Office of Emergency Management (collectively, "the City Defendants"), and the New York State Emergency Management Office ("NYSEMO"), an agency of the State of New York, contracted with general contractors who, in turn, contracted with Diversified. (Compl. ¶¶ 30; 33.) The Port Authority of New York and New Jersey ("the Port Authority"),*fn3 the owner of the World Trade Center, is another governmental entity sued in this lawsuit. (Compl. ¶¶ 9; 24.)

  Third, beyond the governmental entities, the Complaint names the lessees of the World Trade Center, World Trade Center Properties LLC, Silverstein Properties, Inc., Silverstein WTC Management Co. LLC, and 7 World Trade Company, L.P. (collectively, "SRE"). (Compl. ¶¶ 12-14; 19; 25.) Other alleged lessees of the World Trade Center included in the instant action are Westfield America Trust, Westfield WTC LLC, Westfield Corporation, Inc., and Westfield America, Inc. (collectively, "Westfield"), which leased the retail space within the World Trade Center. (Compl. ¶¶ 15-18.) In addition, Marriott International, Inc.,*fn4 which either owned or leased the land and/or the building that housed the Marriott Hotel located at the World Trade Center, is a defendant. (Compl. ¶¶ 20; 26.)

  Lastly, the Complaint names two contractors which allegedly served as the general contractors for the recovery and clean-up efforts at the World Trade Center, Turner Construction Corp. ("Turner") and Seasons Construction Corp. ("Seasons"). (Compl. ¶¶ 6; 7; 33.)

  B. Procedural History

  Diversified filed the instant action on December 3, 2004. (Dckt. 1.) HMH filed a motion for summary judgment on May 9, 2005. (Dckt. 82.) On May 16, 2005, I issued an Order requiring defendants to file a single consolidated motion to dismiss. (Dckt. 89.) The Defendants had apparently not bothered to chat with one another about their proposed motions to dismiss, or if they had, felt their prose deserved separate and distinct study despite their overwhelming similarities. Subsequently, the Federal Defendants, the City Defendants, and SRE filed a consolidated motion to dismiss on June 6, 2005. (Dckt. 90.)

  II. MOTION TO DISMISS

  A. Motion to Dismiss

  The Federal Defendants, the City Defendants, and SRE move to dismiss the Complaint. The Federal Defendants contend that this Court lacks subject matter jurisdiction because neither the Tucker Act, 28 U.S.C. §§ 1346, 1491, the Miller Act, 40 U.S.C. § 3131 et. seq., nor the Stafford Act, 42 U.S.C. § 5121 et. seq., waive federal sovereign immunity. Further, the Federal Defendants argue that if this Court has subject matter jurisdiction, Diversified has failed to state a claim under the Miller Act. Similarly, the City Defendants maintain that Diversified's Second and Ninth Causes of Action improperly seek recovery under the Miller Act and the Stafford Act. The City Defendants and SRE also challenge the sufficiency of the pleadings.

  1. Subject Matter Jurisdiction

  The Federal Defendants move to dismiss the Complaint for lack of subject matter jurisdiction in accordance with Rule 12(b)(1) of the Federal Rules of Civil Procedure ("Rule 12(b)(1)"). Pursuant to Rule 12(b)(1), this Court must accept all of the facts alleged in the Complaint as true and "draw all reasonable references in favor of the plaintiff." Raila v. United States, 355 F.3d 118, 119 (2d Cir. 2004). In any analysis of such a motion, "the plaintiff bears the burden of proving by a preponderance of the evidence that jurisdiction exists," Chayoon v. Chao, 355 F.3d 141, 143 (2d Cir. 2004) (citing Garcia v. Akwesasne Hous. Auth., 268 F.3d 76, 84 (2d Cir. 2001)), and jurisdiction must be "affirmatively" demonstrated. APWU et. al. v. Potter, 343 F.3d 619, 623 (2d Cir. 2003). Dismissal of the Complaint is only appropriate where "it appears beyond doubt that the plaintiff can prove no set of facts which would entitle him or her to relief." Raila, 355 F.3d at 119.

  Subject matter jurisdiction is, of course, essential for Plaintiff to proceed, and to establish it here, a plaintiff must "demonstrate a specific statutory waiver of sovereign immunity." Lawson v. Fed. Emergency Mgmt. Agency, No. 03 Civ. 881, 2003 WL 2006600, at *2 (S.D.N.Y. Apr. 30, 2003), aff'd, 104 Fed. Appx. 216 (2d Cir. 2004). Absent such consent or statutory waiver, the United States is immune from suit and this Court lacks subject matter jurisdiction. United States v. Mitchell, 445 U.S. 535, 538 (1980) (citation omitted); Spinale v. United States, No. 03 Civ. 1704, 2004 WL 50873, at *6 (S.D.N.Y. Jan. 9, 2004) (holding that if the United States "has not waived its sovereign immunity, or if the conditions under which the United States has agreed to waive that immunity have not been met, federal subject matter jurisdiction does not exist").

  Diversified relies on three statutes to establish subject matter jurisdiction: (1) the Tucker Act, (2) the Miller Act, and (3) the Stafford Act.

  a. Tucker Act

  The Tucker Act "provides a comprehensive system for commencing actions against the United States as an entity." Coleman v. Nolan, 693 F. Supp. 1544, 1548 n. 3 (S.D.N.Y. 1988) (internal quotations omitted). In particular, the Tucker Act waives sovereign immunity and provides subject matter jurisdiction for non-tort claims against the United States "founded either upon the Constitution, or any act of Congress, or any regulation of an executive department, or upon any express or implied contract with the United States." C.H. Sanders Co. v. BHAP Hous. Dev. Fund Co., 903 F.2d 114, 119 (2d Cir. 1990) (quoting 28 U.S.C. § 1346(a)(2)). However, the Tucker Act "is solely jurisdictional" and "does not create a substantive right to money damages." Cheminova A/S v. Griffin L.L.C., 182 F. Supp. 2d 68, 75 (D.D.C. 2002) (citing United States v. Mitchell, 463 U.S. 206, 216-17 (1983) (emphasis added).

  Under Tucker, and in order to prevail here, Diversified must demonstrate more. The Tucker Act, without an independent waiver of sovereign immunity, does not provide the Court with subject matter jurisdiction over the Federal Defendants.

  b. Stafford Act

  The Stafford Act, also known as the Disaster Relief Act of 1974, was enacted to provide federal assistance to states in times of disasters. See 42 U.S.C. § 5121 et seq. While the Stafford Act empowers the President to order FEMA, inter alia, to clear debris, FEMA's activities are not entitled to sovereign immunity unless they were "based upon the exercise or performance of . . . a discretionary function or duty." Dureiko v. United States, 209 F.3d 1345, 1351 (Fed. Cir. 2000) (quoting 42 U.S.C. § 5148). To determine whether FEMA's activities were discretionary, and entitled to sovereign immunity, the Federal Circuit has articulated a two-prong test:
(1) whether the act involves an element of judgment or choice; and
(2) if so, whether that judgment is of the kind that the discretionary function exception was designed to shield.
Dureiko, 209 F.3d at 1351.*fn5 Under the first prong of the test, an act does not involve judgment or choice, and FEMA can be sued as they are here, if "a federal statute, regulation or policy specifically prescribes a course of action for an employee to follow." Id. (quoting Berkovitz v. United States, 486 U.S. 531, 536 (1988)); see also Graham v. Fed. Emergency Mgmt. Agency, 149 F.3d 997, 1006 (9th Cir. 1998). Conversely, if FEMA's decision was discretionary, the analysis continues to the second prong of the Dureiko test. See, e.g., Dureiko, 209 F.3d at 1351. Under the second prong of the test, FEMA is entitled to sovereign immunity if its actions and decisions were "based on considerations of public policy." Id. (citation omitted); see also Rosas v. Brock, 826 F.2d 1004, 1009 (11th Cir. 1987). The Federal Circuit reasoned that Congress could not have intended that this exception would:
[A]llow government agencies like FEMA to voluntarily contract with other parties in the course of providing disaster relief assistance, reap the benefits of such contracts but refuse to perform under them, and then claim immunity from liability resulting from its non-performance.
Dureiko, 209 F.3d at 1353-4.

  This two-prong analysis was fashioned by the Federal Circuit to resolve a contractual dispute arising from a mobile home park damaged by Hurricane Andrew. Id., at 1348. In the aftermath of the federally declared disaster, FEMA was enlisted to oversee the recovery and reconstruction efforts of the disaster area. Id. As part of the recovery efforts, FEMA allegedly entered into a contract with the plaintiff whereby FEMA would clear debris from the mobile home park in exchange for permission to house displaced hurricane victims in the mobile home park. Id. Plaintiff alleged that FEMA failed to remove the debris in the agreed upon manner and subsequently sued FEMA for, inter alia, breach of contract. Id. at 1350. FEMA maintained that sovereign immunity shielded it from liability and moved to dismiss, claiming that the district court lacked subject matter jurisdiction. Id. The district court agreed and granted the motion. Id. at 1353. On appeal, the Federal Circuit rejected FEMA's contention, and held that once FEMA entered into the contract, its acts were no longer discretionary but, ...


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