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Allied Corp. v. Frola

Citation: 19 ELR 20624
No. No. 87-462, 701 F. Supp. 1084/28 ERC 1849/(D.N.J., 12/13/1988) Motion to dismiss third-party complaint granted in part

The court holds that a third-party complaint in a hazardous waste cleanup case alleging that three parent corporations should be responsible for environmental contamination caused by their subsidiary fails to establish a sufficient basis for piercing the corporate veil under New Jersey common law. The complaint fails to satisfy the requirements of Federal Rules of Civil Procedure (F.R.C.P.) 8(a)(2) and 9(b), since it does not allege fraud, illegality, or injustice. The court next holds that the complaint adequately alleges claims against the parent corporations under the New Jersey Spill Compensation and Control Act, which requires much less to establish liability of a parent corporation than under common law principles. However, the court holds that the third-party plaintiffs' claims for damages under the Spill Act must be dismissed, since the Act does not provide a private right of action for recovery of cleanup costs and other damages. In addition, the court holds that the third-party plaintiffs cannot recover damages by bringing an action under the New Jersey Environmental Rights Act to enforce the Spill Act. The court allows the third-party plaintiffs' claims for equitable remedies and attorneys fees to survive, but cautions that it may dismiss those claims in the future. The court allows the third-party plaintiffs to replead under F.R.C.P. 15(a), since there is little chance of prejudice so early in the litigation and it is possible that the deficiencies in the complaint can be cured.

Counsel for Plaintiffs
Edward N. Fitzpatrick, John A. Avery
Clapp & Eisenberg
80 Park Plaza, Newark NJ 07102
(201) 642-3900

Counsel for Defendant
Thomas J. Schwarz, Richard S. Simon
Skadden, Arps, Slate, Meagher & Flom
919 Third Ave., New York NY 10022
(212) 735-3000