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Penrose Park Associates, L.P. v. United States

United States District Court, E.D. Pennsylvania

August 1, 2018

PENROSE PARK ASSOCIATES, L.P. Plaintiff,
v.
UNITED STATES OF AMERICA, acting through the DEFENSE LOGISTICS AGENCY; and, PENNONI ASSOCIATES, INC. Defendants.

          MEMORANDUM

          C. Darnell Jones, II J.

         I. Introduction

         Plaintiff Penrose Park Associates, L.P. brings the above-referenced action asserting claims for Failure to Properly Remediate Land Under the Hazardous Sites Cleanup Act of 1988, 35 P.S. §§ 6020.101 et seq. (Count I); Negligent Retention of a Contractor (Count II); Negligent Supervision of a Contractor (Count III); Breach of Contract (Count IV); Breach of Express Warranty (Count V); Breach of Implied Warranty of Merchantability (Count VI); and Breach of Implied Warranty of Fitness For a Particular Purpose (Count VII). (Am. Compl., ECF No. 7.) Presently before this Court is Defendant United States of America's (“United States”) Motion to Dismiss all claims pursuant to Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction. For the reasons set forth below, Defendant's Motion shall be granted.

         II. Factual Background

         The present case arises from the “design, installation and/or repair of vapor barriers” which resulted in “injury” to Plaintiff's property, Siena Place. (Am. Compl. ¶ 9.) Siena Place was previously owned by the Defense Logistics Agency (“DLA”), which operated a manufacturing and supply depot for the United States military. (Am. Compl. ¶ 10.) On December 10, 1999, the Pennsylvania Department of Environmental Protection (“PaDEP”) ordered the DLA to remediate a napthalene plume that developed in the soil on the land now occupied by Siena Place. (Am. Compl. ¶ 11.) On or about September 20, 2017, Plaintiff purchased Siena Place from the Philadelphia Housing Authority. (Am. Compl. ¶ 15.) Plaintiff granted the DLA an easement to allow the agency and its contractor the right to enter the land in order to install or repair the vapor barriers at any points in time, in accordance with the PaDEP's 1999 order. (Am. Compl. ¶ 16.) The easement further provided that the DLA was required to “fund the cost for the installation of vapor barriers underneath to-be-constructed residential or commercial buildings on the [p]roperty.” (Am. Compl. ¶ 12.) Additionally, the vapor barriers would “be installed by a fully-insured, licensed and responsible contractor who shall provide appropriate warranties protecting [Penrose Park] against defects in material and workmanship in the vapor barriers used.” (Am. Compl. ¶ 13.) With respect to any potential disputes regarding its terms, the easement stated that “any action commenced to enforce these terms of access shall be brought in the United States District Court for the Eastern District of Pennsylvania.” (Am. Compl. ¶ 17; Am. Compl. Ex. E ¶ 21.) To satisfy the terms of the easement, the DLA hired Fullard Environmental Controls, Inc. (“Fullard”) for the remediation work, and Defendant Pennoni Associates, Inc. (“Pennoni”) was hired as a sub-contractor. (Am. Compl. ¶ 18.)

         Plaintiff alleges that sometime around October 2016, residents of two separate properties at Siena Place reported that “‘petroleum-like' vapors were emanating from their properties.” (Am. Compl. ¶ 21.) Plaintiff claims the vapor barriers failed, causing naphthalene plume gases to leak into the aforementioned properties. (Am. Compl. ¶ 22.) As a result, Plaintiff contends it incurred “substantial expenses to repair the houses, relocate families and sustained harm to its reputation for building quality, residential homes.” (Am. Compl. ¶ 23.) Plaintiff now seeks monetary damages for the “injury and/or loss to its property.” (Am. Compl. ¶ 27.)

         III. Standard of Review

         A challenge to subject matter jurisdiction under Rule 12(b)(1) may take two forms: a facial challenge or a factual challenge. If a facial challenge concerns an alleged pleading deficiency, the trial court is restricted to a review of the allegations of the complaint and any documents referenced therein. CNA v. United States, 535 F.3d 132, 139 (3d Cir. 2008); Gould Elec. Inc. v. United States, 220 F.3d 169, 177 (3d Cir. 2000). When considering a facial challenge, “the trial court must consider the allegations of the complaint as true.” Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977).

         A factual challenge “concerns the actual failure of a plaintiff's claims to comport factually with the jurisdictional prerequisites.” CNA, 535 F.3d at 139 (internal quotation, citation, and alterations omitted). If the challenge before the trial court is a factual challenge, the court does not accord any presumption of truth to the allegations in the plaintiff's Complaint, and the plaintiff bears the burden of proving subject-matter jurisdiction. Id. With a factual challenge, the court may weigh evidence outside the pleadings and make factual findings related to the issue of jurisdiction. Id.; U.S. ex rel. Atkinson v. Pa. Shipbuilding Co., 473 F.3d 506, 514 (3d Cir.x2007). “[T]he existence of disputed material facts will not preclude the trial court from evaluating for itself the merits of the jurisdictional claims.” Mortensen, 549 F.2d at 891.

         IV. Discussion

         In bringing its claims, Plaintiff invokes the Federal Tort Claims Act, 28 U.S.C. § 1346(b)(1), to confer jurisdiction upon this court. (Am. Compl. ¶ 4.) The United States argues in its Motion to Dismiss that this Court does not have subject matter jurisdiction because: (1) subject matter jurisdiction cannot be conferred by agreement of the parties; (2) the Tucker Act gives the Court of Federal Claims exclusive jurisdiction over breach of contract claims against the United States; and, (3) Plaintiff failed to exhaust administrative remedies as required by the FTCA. (Def.'s Mot. Dismiss 1.)

         A. The Forum Selection Clause in the Easement Is Inapplicable Because Parties Cannot Confer Subject Matter Jurisdiction on Federal Courts

         As stated above, the easement Plaintiff granted the DLA contained a forum selection clause, which provides: “So long as not prohibited by law, any action commenced to enforce these terms of access shall be brought in the United States District Court for the Eastern District of Pennsylvania.” (Am. Compl. Ex. E ¶ 21.) The United States now argues that the forum selection clause is invalid “because parties to an agreement cannot unilaterally confer subject matter jurisdiction” on a federal court, and even if they could, the clause does not apply to the instant case. (Def.'s Mot. Dismiss 4-5.)

         It is well settled that “no action of the parties can confer subject-matter jurisdiction upon a federal court. Thus, the consent of the parties is irrelevant.” Ins. Corp. of Ireland, Ltd. v. Compagnie Des Bauxites De Guinee,456 U.S. 694, 702 (U.S. 1982); see also Wharton-Thomas v. United States, 721 F.2d 922, 926 (3d Cir. 1983) (recognizing that the limits of subject matter jurisdiction are prescribed by the United States Constitutional and individual federal statutes, therefore it cannot be conferred or waived); Spectacor Mgmt. Group v. Brown, 131 F.3d 120, 125 (3d Cir. 1997) (noting federal jurisdiction cannot be conferred by agreement of parties, as it “arises under the constitution. It is not created by contract or waiver.”); Stewart v. JPMorganChase Bank, N.A. (In re ...


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