Armstrong v City of New York, Inc.

[*1] Armstrong v City of New York, Inc. 2005 NY Slip Op 50426(U) Decided on February 22, 2005 Supreme Court, New York County Soto, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on February 22, 2005
Supreme Court, New York County

ROBERT ARMSTRONG, CARL BASIC, PATRICK BASILICATO, ROBERT BENNET, ALBERT BIGELOW, EUGENE CARRAGHER, DAVID, d/b/a CERTIFIED CLAM CORPORATION, DONALD CIRILLO, KEITH CRAFFEY, WILLIAM DEAN, BERNARD DEAVER, JOHN DECKERT, MICHAEL DECKERT, CARLOS A. DOO, LOUIS EGNATOVICH, ROBERT EGNATOVICH, DANIEL FRANKLIN, LLOYD FRANSON, RICHARD GARDNER, DENNIS HERBERT, BILLY B. HORTON, JAMES JENKS, ANDREW LUBACZEWSKI, ERIC LUBACZEWSKI, GARY LUBACZEWSKI, THEODORE LUBACZEWSKI, CRAIG MAINSTREAM, WILLIAM MOUNT, JOSEPH E. MULVANEY, GERALD J. NIELSEN, JOHN O'BRIEN, FRANK E. PEARCE, SR., JAMES PEARCE, WAYNE RICHMOND, PAUL RITTER, WILLIAM ROSSETTI, ROBERT RUDDY, JOAO SANTOS, THOMAS SCHNOOR, JR., DAVID S. SHARKY, RONALD SICKLER, MARTIN SLAYBAUGH, HARRY STEVENS, JR., DAVID SUK, DAVID THOMPSON, MICHAEL TOPAL, JUDE WELSH, WILLIAM WILLEM and JOHN ZEMALKOWSKI a/k/a ZEMALOWSKI, Plaintiffs,

against

CITY OF NEW YORK, INC., DEPARTMENT OF ENVIRONMENTAL PROTECTION, BUREAU OF WASTEWATER TREATMENT, CONSOLIDATED EDISON, INC., CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., and ABC fictitious power companies and distributors, Defendants.



111725/04

Faviola A. Soto, J.

The plaintiffs in this action, clammers who rake clams from the Sandy Hook and Raritan Bays of New Jersey (the Bays), and a clam wholesaler, seek to recover from defendant Consolidated Edison Company of New York, Inc. (Con Edison) for economic losses allegedly incurred during and after the massive blackout of August 14, 2003 (2003 Blackout). Defendant Con Edison moves for an order dismissing the complaint as against it, pursuant to CPLR 3211(a)(7). For the reasons stated herein, the motion to dismiss is granted.

Plaintiffs' Allegations

Plaintiffs allege that certain New York City wastewater treatment facilities spilled untreated sewage and other contaminants into waters surrounding New York City, which migrated to and settled in the Bays and contaminated the water. They allege that the New Jersey Department of Environmental Protection (NJDEP) and other governmental agencies detected unacceptably elevated levels of fecal coliform and other contaminants in the water, and that NJDEP closed the shellfish beds located in the Bays. They allege that from August 18, 2003 until September 5, 2003, the plaintiffs could not harvest or wholesale clams, thereby sustaining damages.

In their sixth cause of action, asserted against Con Edison, plaintiffs claim that: they are direct and/or third-party beneficiaries of Con Edison's continuation of services to defendants the City of New York (the City) and the Bureau of Wastewater Treatment (BWT); these entities were entitled to receive electricity from Con Edison to operate its facilities; and Con Edison breached its duty of care because it negligently or wrongfully discontinued, disconnected, and interrupted, for an unreasonable length of time, the electricity supply to the City of New York and BTW, causing the City to spill or discharge effluents, and for them to therefore sustain damages.

Specifically, plaintiffs allege in their complaint that Con Edison:

A. failed to provide to the City "electrical instrumentalities and facilities that were safe and adequate and in all respects just and reasonable, in violation of [its] charter and authority as a public utility";

B. "failed to maintain adequate and reasonable equipment, including equipment to produce and "furnish to the City of New York emergency supplies of electricity for reasonably foreseeable situations" and "failed to furnish sufficient electricity to meet the needs and demands of the City ...";

C. "arbitrarily and unreasonably discontinued, disconnected, and interrupted its electrical service" to the City "without first taking other action that might have prevented such interruption" or giving notice or warning to the City of such intended action; and,

D. allowed its "interruption of its electrical service to the City of New York to continue [*2]for an unreasonable length of time without due cause or justification".

The Dismissal Motion

Con Edison moves for dismissal arguing that in the event of a service interruption, it is only liable for gross negligence, and that the plaintiffs have not alleged gross negligence on its part. Con Edison also contends that in the event of a widespread blackout, it is only liable to its direct customers if gross negligence is established, and is not liable to third parties who suffer injury due to service interruptions to customers. Con Edison further argues that the plaintiffs do not allege that they are customers or suffered injuries as customers, but merely that the electrical service interruption to the City of New York caused the shut down of waste and sewage facilities which, eventually, caused their injuries.

Con Edison also argues that plaintiffs' demand for losses of profits, market share, marketing advantage and good will are speculative, ill-defined and not recoverable and, based on the facts of the complaint, plaintiffs' demand for punitive damages is unfounded.

Pursuant to CPLR 3211(c), Con Edison further asks the court to consider the affidavit of Michael Forte, its Chief Engineer for Transmission Planning. The affidavit explains the events that caused the 2003 Blackout and the process for restoration of electrical service, and concludes that there was no negligence on the part of Con Edison. In his affidavit, Forte references the Final Report on the August 14, 2003 Blackout in the United States and Canada: Causes and Recommendations, which was commissioned by the United States and Canadian governments and submitted by Con Edison in support of its motion.[FN1] Con Edison argues that this case is distinguishable from other cases because the 2003 Blackout, the largest such occurrence in the nation's history, has been extensively investigated and no negligence on Con Edison's part has been found.

Discussion

Con Edison argues that the complaint should be dismissed because New York law provides that it owes no duty to the plaintiffs.

In opposition, plaintiffs argue that it is not New York Law that governs, but New Jersey law, and that New Jersey does impose a duty. They assert that New York lacks interest, New Jersey has a paramount interest in protecting its waters from pollution, and the injuries to their businesses occurred in New Jersey.

New York law governs here, and plaintiffs' arguments to the contrary are not persuasive. The significant contacts and the jurisdiction in which they are located are based in New York, New York has the greatest concern with the specific issue raised in this litigation, the defendants include the City of New York and are based in New York, plaintiffs are private parties including those located in New York, and the purpose of the law is to regulate conduct, by determining duty and the standard of care, and not to allocate loss. See Padula v. Lilarn Props. Corp, 84 NY2d 519; Schultz v. Boy Scouts of America, Inc. 65 NY2d 189. New York Law

[*3]The Court of Appeals has restricted the orbit of duty owed by utilities for service interruptions that allegedly cause injuries to those with whom or which the utility does not have a contractual relationship. Strauss v Belle Realty Co., 65 NY2d 399 [1985]; Milliken & Co. v Consolidated Edison Co., 84 NY2d 469, 477 [1994]).[FN2]

In Strauss, the Court of Appeals considered whether Con Edison owed a duty to a 77-year old man injured in a fall on a darkened staircase in his apartment building during a citywide blackout. Although the Court found that the injuries "may have been conceivably foreseeable," it nonetheless determined that there was no contractual relationship between the plaintiff and the utility for the lighting in the building's common areas and, as a matter of public policy, that the utility owed no duty to the plaintiff. Strauss, at 402. The court noted that while it need not be blind to the obvious impact of a city-wide deprivation of electric power, it is court's responsibility to limit the legal consequences of wrongs to a controllable degree. Strauss, supra, 65 NY2d at 402.

Similarly, in 532 Madison Ave. Gourmet Foods, Inc. v Finlandia Center, Inc., 96 NY2d 280, 289 rearg denied sub nom. 5th Ave. Chocolatiere, Ltd. v 540 Acquisition Co., LLC., 96 NY2d 938 [2001], the court stated: "[a]s a matter of policy, we restricted liability for damages in negligence to direct customers of the utility in order to avoid crushing exposure to the suits of millions of electricity consumers in New York City and Westchester".

So too in Milliken & Co., supra, the court determined that the utility owed no duty to the plaintiffs, commercial tenants of Garment Center properties, who claimed to have suffered injuries due to a disruption of electrical services during "Buyers Week" as the plaintiffs lacked a direct contractual relationship with the utility. The court further noted that plaintiffs could not recover under a theory of third-party beneficiaries. Id., at 478.

Here, the plaintiffs have no contractual or other direct relationship with Con Edison, the complaint does not state a cause of action against this defendant in tort, the complaint does not set forth a cause of action for plaintiffs' recovery against Con Edison as third-party beneficiaries, and plaintiffs' [*4]claimed damages are economic in nature. Nor, in light of settled law, have plaintiffs otherwise stated in their complaint a cause of action that would distinguish their claims so as to survive this motion to dismiss.

In light of this conclusion, the court does not rule on the parties' arguments regarding the applicability of a provision found in the Tariff that "in case the supply of service shall be interrupted or irregular or defective or fail from causes beyond its control or through ordinary negligence of employees, servants or agents ... [Con Edison] will not be liable therefor".

As plaintiffs failed to cross-move for leave to amend their complaint and failed to submit a proposed amended complaint or to make the requisite showing, their request set forth in their opposing papers is not considered.

Accordingly, it is

ORDERED that the motion of defendant Consolidated Edison Company of New York, Inc. to dismiss the complaint as against it is granted, and the complaint is severed and dismissed as against said defendant; and it is further

ORDERED that the remainder of the action shall continue; and it is further

ORDERED that the remaining parties are reminded that they are to appear for a compliance conference on June 22, 2005, at 2:00 p.m., at 80 Centre Street, Room 103; and it is further

ORDERED that movant shall serve notice of entry with a copy of this decision and order upon the County Clerk and the Trial Support Office within thirty days of entry.

Dated: New York, New York

February 22, 2005

_________________________FAVIOLA A. SOTO, J.S.C.

Copies mailed Footnotes

Footnote 1: In addition to the aforementioned Canadian/U.S. Report, Con Edison has also submitted the Initial Report by the New York State Department of Public Service on the August 14, 2003 Blackout.

Footnote 2:Plaintiffs' reference to Koch v Consolidated Edison Co., 62 NY2d 548 [1984], to support their argument, that they are the members of the public for whose benefit Con Edison was contracted to perform services, is misguided. There, and unlike in this action, the Court found that Con Edison had expressly undertaken a contractual duty to supply energy to the plaintiffs (id. at 558-559; see also Milliken & Co., 84 NY2d at 479.