Case 1:22-cv-00309-JJM-PAS Document 1 Filed 08/24/22 Page 1 of 15 PageID #: 1
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`UNITED STATES DISTRICT COURT
`DISTRICT OF RHODE ISLAND
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`C.A. No. 22-cv-309
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`LEGEND’S CREEK LLC, JON RESTIVO and
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`ADEN MOTT
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`Plaintiffs
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`Vs.
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`THE STATE OF RHODE ISLAND and the
`RHODE ISLAND DEPARTMENT OF HEALTH )
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`Defendants
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`COMPLAINT
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`Plaintiffs bring this complaint alleging violation of their rights under the Fifth and
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`Fourteenth Amendments of the United States Constitution, Article 1, Sections 2 and 16 of the
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`Rhode Island Constitution, and 28 U.S.C. §§ 1981, 1983, and 1988. Plaintiffs allege that
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`Defendants violated their civil rights by a wrongful taking of their property.
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`THE PARTIES, JURISDICTION AND VENUE
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`1. Plaintiff Legend’s Creek LLC is a limited liability company formed under Rhode Island law
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`and which operated as Legend’s Creek Farm. At the time of the relevant events, it was located
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`and operating in Rhode Island. Legend’s Creek LLC’s principal place of business is now
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`located in Vermont.
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`2. Plaintiffs Jon Restivo and Aden Mott are the members of Legend’s Creek LLC. At the time
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`of the relevant events, they were citizens and residents of the State of Rhode Island. They are
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`now citizens and residents of the State of Vermont.
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`3. Defendant Rhode Island Department of Health (“RIDOH”) is an agency of the Defendant State
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`of Rhode Island. RIDOH regulates the installation and use of commercial kitchens and public
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`water supply systems in Rhode Island, including the issuance of permits for such facilities.
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`4. The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1331 because Plaintiffs
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`allege Defendants have violated the United States Constitution.
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`5. Venue in this Court is appropriate pursuant to 28 U.S.C. § 1391 because Defendants are located
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`in this district and the events giving rise to Plaintiffs’ claims occurred here.
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`FACTS
`6. Restivo and Mott have been married since 2007.
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`7. Restivo and Mott formed Legend’s Creek Farm on March 16, 2012 for the purpose of selling
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`personal care products through the internet.
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`8. Restivo is an attorney with Darrow Everett in Providence, Rhode Island.
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`9. Mott attended Norfolk County Agricultural High School and managed Legend’s Creek Farm
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`with Restivo’s assistance.
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`10. Restivo originally purchased a property at 38A Hartford Pike, Foster, Rhode Island (“the
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`Hartford Pike Property”) at which Mott and he resided and operated Legend’s Creek Farm.
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`However, Plaintiffs wanted to grow raw materials and process food products using those raw
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`materials as well as materials provided by third parties on their own property and operate a
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`commercial kitchen on the property. A RIDOH official told Mott that the Hartford Pike
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`Property could not accommodate these uses because of wetlands on the Property.
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`11. Accordingly, in July 2014, Restivo purchased the property at 27 Mill Road in Foster (“the Mill
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`Road property”) for $396,750. It was zoned Agricultural Residential with a legal, pre-existing
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`non-conforming commercial use. Restivo and Mott resided at the property and operated
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`Legend’s Creek Farm at that location until 2020.
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`12. Plaintiffs initially grew some raw materials on the farm, including honey as well as some herbs
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`used in herbal salves, and originally made bar soap using soap from goats raised on the farm,
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`but they also purchased other materials. They processed the personal care products on the
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`property to varying degree depending on the product.
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`13. In 2014, the Mill Road Property had two dug wells and one drilled well at the time. The drilled
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`well was not operable according to Plaintiffs’ engineer, Robert Ferrari. One of the two dug
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`wells was contaminated with bacteria because of a pond on the property. The other dug well
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`serviced a separate building on the property but was otherwise usable. Much of the Property is
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`wetlands and wetland buffer areas under Rhode Island law and cannot be used for other
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`purposes.
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`14. Under RIDOH regulations, to process and sell food, Legend’s Creek Farm needed a
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`commercial kitchen. Legend’s Creek Farm built a new barn but RIDOH will not let them put
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`the commercial kitchen in the barn without a public water supply permit. This permit required
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`a public water supply from a well on the property. RIDOH indicated that the existing dug well
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`that was Plaintiffs’ water source would not meet RIDOH requirements.
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`15. In 2018, Legend’s Creek Farm filed an application with RIDOH for a new public water supply
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`source in the form of a drilled well.
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`16. Plaintiffs also filed applications with other state and local governmental entities for necessary
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`permits and approvals, including the Rhode Island Department of Environmental Management
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`(“RIDEM”) for a septic system, and the Town of Foster for a building permit.
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`17. The RIDOH regulations state that the well must be on their property and that it must be 200
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`feet or more from their property line. However, RIDOH has granted variances from this
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`requirement to others.
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`18. The RIDOH regulations also require applicants to identify all potential sources of pollution
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`within 1750 feet of the proposed drinking water source (the well) on a map. Legend’s Creek
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`Farm understood that the purpose of this requirement is to provide for testing to determine
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`whether the water on the property to be used is contaminated by nearby sources of pollution.
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`The RIDOH regulations do not state the well must be 1750 feet from any possible source of
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`pollution and RIDOH has admitted that the regulations do not so state. RIDOH has granted
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`other applications for public water supply systems despite the presence of a potential source of
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`contamination within 1750 feet. Moreover, even when a public water supply system permit is
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`granted, the permit-holder must test the well for contamination periodically and report the
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`result to RIDOH.
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`19. On July 12, 2018, Legend’s Creek Farm filed the application and identified an adjoining junk
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`yard, Wright’s Auto Salvage (“Wright’s” or “the junkyard”), on the map as a possible source
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`of pollution. Wright’s has been in business for about 60 years. It is regulated by RIDEM.
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`20. On information and belief, RIDOH asked RIDEM about Wright’s. RIDEM said it had done a
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`visual inspection of Wright’s and Wright’s had reported it was not polluting but RIDEM had
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`no information on the groundwater under Wright’s. RIDEM has the authority to test the
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`groundwater and the water in Hemlock Brook which separates Wright’s from the Mill Road
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`Property. RIDOH did not feel RIDEM’s inspection addressed the issue of possible
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`groundwater contamination.
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`21. Based on their discussions with RIDOH personnel and to establish that the proposed well could
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`produce potable water, Legend’s Creek Farm proceeded to hire a company to drill the well.
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`Ferrari, who provides training for RIDOH officials, selected the site for the well as set forth in
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`the application. It is 800 feet deep and produces potable water.
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`22. Legend’s Creek Farm also proceeded with the other work necessary to operate the food
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`processing business including building the septic system, constructing the barn and outfitting
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`the space where the commercial kitchen is intended to go with code-compliant building
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`materials.
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`23. On October 5, 2018, RIDOH denied the application stating that “The existence of this
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`significant source of pollution [Wright’s] within the wellhead protection area, is inconsistent
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`with the Regulations.” RIDOH was unable to identify with what part of the Regulations this
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`was inconsistent.
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`24. RIDOH admits it has no data showing any actual contamination of the Mill Road Property’s
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`groundwater. However, it took the position that the possibility of groundwater contamination
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`by Wright’s is sufficient reason to deny Legend’s Creek Farm’s application.
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`25. With regard to surface water, the Legend’s Creek Farm property is upgradient from Hemlock
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`Brook, the stream separating Legend’s Creek Farm from Wright’s. Most of the Wright’s
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`property slopes away from the Brook but some does slope towards the Brook. The Brook
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`would carry any pollution in surface water towards Barden Reservoir which feeds into the
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`Scituate Reservoir and which is the largest reservoir in the State. RIDOH ensures that the
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`water from the Scituate Reservoir meets drinking standards. RIDOH states it has no concerns
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`that Wright’s is contaminating Hemlock Brook and causing significant contamination in the
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`Scituate Reservoir. Accordingly, it is highly unlikely that any pollution in surface water would
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`move from the junkyard to the Legend’s Creek Farm property.
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`26. With respect to groundwater, RIDOH does not know in what direction it would flow from
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`Wright’s. Ferrari believes it is much more likely that any groundwater pollution from the
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`junkyard would move downgradient toward the Barden Reservoir.
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`27. On November 5, 2018, Legend’s Creek Farm submitted a written appeal of RIDOH’s initial
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`decision.
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`28. On November 15, 2018, Anita Flax, who represents the Department of Health, advised Restivo
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`that any supplemental information should be submitted as part of a revised application, as “any
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`evidence presented at an appeal hearing that was not presented in the original application will
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`have no bearing on the denial of that application.”
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`29. Plaintiffs requested meetings with RIDOH personnel and they were eventually told in March
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`2019 that the application was denied because the well had to be both 200 feet from any of their
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`property lines and 1750 feet from the adjoining junkyard and no location on the property met
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`that requirement.
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`30. Plaintiffs asked how they could get a variance from the “1750 foot” requirement that RIDOH
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`officials were imposing because that requirement is not set forth in a regulation. RIDOH could
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`not give an answer.
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`31. On April 9, 2019, Legend’s Creek Farm and Ferrari had a meeting with RIDOH and a RI
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`Department of Administration small business ombudsman. During that meeting, RIDOH said
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`there was no possible way to install a public water supply on the property. RIDOH said it
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`would never have encouraged Legend’s Creek Farm to proceed with its original application if
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`it had been aware of the proximity of the junkyard. Legend’s Creek Farm asked RIDOH not to
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`make a decision on the second well-permit application.
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`32. On April 19, 2019, RIDEM issued a “notice of intent to enforce action” against Wright’s for
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`altering wetlands without a permit, discharging pollutants into state waters without a permit,
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`and illegally discharging stormwater. Wright’s did not have a current junkyard business
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`license. However, RIDEM said it could not say whether Wright’s violations had caused
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`groundwater contamination.
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`33. On information and belief, Wright’s has reported to RIDEM that it is not polluting the
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`groundwater. No state agency has taken any action against Wright’s with respect to
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`groundwater pollution.
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`34. RIDOH claims the likelihood of groundwater contamination from Wright’s is “very high” but
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`it cannot quantify the likelihood that it is polluting the groundwater under Legend’s Creek
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`Farm because there are too many unknown variables. RIDOH has no actual evidence that any
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`groundwater pollution is moving from Wright’s onto the Mill Road Property nor has it even
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`tested or performed any analysis. It assumed there is pollution. RIDOH has no evidence that
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`water Legend’s Creek Farm was taking from the well for private use is not safe.
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`35. If Wright’s was polluting the Mill Road Property that would probably constitute violations of
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`the Rhode Island Clean Water Act, R.I.Gen.L. § 46-12-1, et seq., and the Rhode Island
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`Hazardous Waste Management Act, R.I.Gen.L. § 23-19.1-1, et seq. In addition, it would
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`constitute a trespass on the Mill Road Property, among other torts.
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`36. RIDOH had not previously denied an application in which the applicant’s well was 200 feet
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`from its property line and there was no source of pollution within that 200 feet.
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`37. RIDOH told Plaintiffs it might approve the permit if it had assurances, through a hydrogeologic
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`study, that groundwater does not move from the junkyard to the Legend’s Creek Farm
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`property. However, RIDOH did not commit to approving the permit even if the study showed
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`no contamination. Ferrari has estimated that the cost of the study would start at $80,000, and
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`could increase significantly depending on the specific parameters of such a study.
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`38. Legend’s Creek Farm offered to conduct regular testing of the well once RIDOH issued the
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`permit but RIDOH rejected that offer because the proposed testing would not cover all the
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`possible pollutants that RIDOH thought might issue from a junkyard.
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`39. RIDOH’s condition of hydrogeologic testing effectively imposed a condition that Legend’s
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`Creek Farm fund a determination of whether the adjoining junkyard is polluting the nearby
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`groundwater and, possibly, the Scituate Reservoir.
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`40. RIDEM says it will not issue a certificate of conformance for the septic system until the well-
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`permit is approved.
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`41. A review of other RIDOH well-permit application files shows that RIDOH has approved other
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`wells with actual evidence of some contamination, has never previously enforced this 1750
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`foot “requirement,” and has approved variances on the 200-foot requirement. It has approved
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`hundreds of permits for wells within 1750 feet of a source of pollution.
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`42. RIDOH admits that the Legend’s Creek Farm permit complies with the literal language of the
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`regulation, in part, because there is no source of contamination within 200 feet of the well.
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`However, RIDOH now interprets the regulation to allow it to deny permit applications for
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`wells within 1750 feet of a potential source of pollution. It claims the junkyard is a significant
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`potential source of pollution.
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`43. Legend’s Creek Farm has expended $594,465 on improvements to the property to operate its
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`business, including amounts spent to obtain the well permit.
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`44. Plaintiffs reasonably believe the property would be worth over $1 million dollars if the well-
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`permit was approved. On November 11, 2020, it listed the property for sale at $1.2 million.
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`Some buyers who expressed an interest in the property inquired about the status of the permit
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`application. Legend’s Creek Farm informed them the application was denied and RIDOH’s
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`reasons. Legend’s Creek Farm never heard back from those buyers. Two realtors told Restivo
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`and Mott that they would not list the property for sale until the well-permit issue is resolved.
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`45. Legend’s Creek Farm was a profitable company, however, on July 1, 2020, Restivo and Mott
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`sold the Legend’s Creek Farm brand to an Idaho company because it had become so successful
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`that they could not accommodate its growth on the Mill Road Property due to the unresolved
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`status of the public water supply permit.
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`46. Restivo and Mott had hoped to start a family by now which can be very expensive for a gay
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`couple. However, they have had to expend their money on their fight with RIDOH over this
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`public water supply system permit.
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`47. On November 30, 2020, after an administrative hearing, RIDOH issued a written decision
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`recommending that Legend’s Creek Farm’s application for a permit be denied. On December
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`3, 2020, the Director of RIDOH adopted the decision and recommendation.
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`48. On December 29, 2020, Legend’s Creek LLC filed an administrative appeal of the RIDOH
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`decision in Rhode Island Superior Court.
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`49. On January 19, 2021, Restivo accepted an offer of $804,000 for the Mill Road Property. He
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`would not have sold the property if Defendants had allowed the public water supply permit.
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`50. On April 22, 2022, the Superior Court rendered a bench decision holding that Plaintiffs no
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`longer had standing to seek the public water supply permit. On May 23, 2022, the Superior
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`Court entered an order denying the appeal.
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`51. Plaintiffs have substantial economic damages in that the denial of the public water supply
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`system permit prevented Legend’s Creek Farm from operating a commercial kitchen on the
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`Mill Road Property which would have generated significant profits for the business consistent
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`with Plaintiff’s substantial investment in the business. In addition, the denial of the permit
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`significantly restricted the economic appreciation of the value of the Mill Road Property.
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`Further, Restivo’s and Mott’s substantial expenditures of their personal funds in a fruitless
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`attempt to obtain the permit prevented them from starting a family and caused them great
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`personal distress. Plaintiffs’ economic and personal damages are millions of dollars.
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`CAUSES OF ACTION
`COUNT I-PER SE PHYSICAL TAKING WITHOUT COMPENSATION
`BY IMPOSITION OF NEGATIVE OR RESTRICTIVE EASEMENT
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`52. Plaintiffs reallege the allegations of Paragraphs 1-51.
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`53. Defendants’ refusal to permit Plaintiff Legend’s Creek Farm to operate a public water supply
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`well on its property because the adjoining junkyard might be polluting the ground water or
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`water table constitutes the imposition of a negative or restrictive easement on the Mill Road
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`Property in favor of the junkyard.
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`54. Defendants have not compensated Plaintiffs for the imposition of the negative or restrictive
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`easement.
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`55. The failure to compensate Plaintiffs for the imposition of the negative or restrictive easement
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`constitutes a taking in per se physical violation of the Fifth Amendment of the United States
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`Constitution and Art.1, § 16 of the Rhode Island Constitution.
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`56. The per se physical taking had a severe economic impact on Plaintiffs because it greatly
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`diminished the market value of Legend’s Creek Farm and of the Mill Road Property.
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`57. As a direct and proximate result of defendants’ actions, plaintiffs have been or will be deprived
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`of their property rights in violation of 28 U.S.C. §§ 1981 and 1983, suffered severe economic
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`damages, and have been deprived of the opportunity to start a family.
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`COUNT II-REGULATORY TAKING WITHOUT COMPENSATION
`58. Plaintiffs reallege the allegations of Paragraphs 1-57.
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`59. Defendants’ refusal to permit Plaintiff Legend’s Creek Farm to operate a public water supply
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`well on its property because the adjoining junkyard might be polluting the ground water or
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`water table constitutes a regulatory taking.
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`60. The regulatory taking has had a severe economic impact on Legend’s Creek Farm because it
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`has significantly diminished the combined market value of the business and the Mill Road
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`Property by many hundreds of thousands of dollars.
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`61. Further, the regulation has interfered with Plaintiffs’ distinct investment-backed expectations
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`because Restivo purchased the Mill Road Property with the intention that Plaintiffs would grow
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`and sell agricultural products on the site and RIDOH mandates that Legend’s Creek Farm
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`operate as a commercial kitchen which, in turn, requires a public water supply on the property.
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`62. Defendants’ action constitutes a taking of Plaintiffs’ property in favor of the adjoining junkyard
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`because the junkyard may be polluting the groundwater or water table is contrary to Rhode
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`Island public policy and not in the public interest because any such pollution would likely flow
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`into the Scituate Reservoir and would violate the Rhode Island Clean Water Act, R.I.Gen.L. §
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`46-12-1, et seq., and the Rhode Island Hazardous Waste Management Act, R.I.Gen.L. § 23-
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`19.1-1, et seq.
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`63. Further, Defendants’ action improperly shifts the regulatory burden of determining whether
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`the junkyard is polluting the groundwater to Plaintiffs, improperly places the burden on
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`Legend’s Creek Farm of disproving that the junkyard is polluting, and, if the junkyard is
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`polluting the Mill Road Property groundwater, essentially permits the junkyard to trespass on
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`the Mill Road Property. This prevents Legend’s Creek Farm from operating a business
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`beneficial to the public interest rather than requiring the junkyard to remediate its pollution.
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`64. As a direct and proximate result of defendants’ actions, plaintiffs have been or will be deprived
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`of their property rights in violation of 28 U.S.C. §§ 1981 and 1983, suffer severe economic
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`damages, and have been deprived of the opportunity to start a family.
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`COUNT III-VIOLATION OF PROCEDURAL DUE PROCESS
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`65. Plaintiffs reallege the allegations of Paragraphs 1-64.
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`66. Defendants’ regulations, as written, do not require that a public water supply system be at least
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`1750 feet from any potential source of pollution. Rather, Defendants arbitrarily imposed that
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`subjective and overbroad requirement on Plaintiffs for the very first time.
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`67. This arbitrary enforcement violates the Fourteenth Amendment of the United States
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`Constitution.
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`68. Defendants’ application of their regulations is overly broad because there is no empirical
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`evidence that having a potential source of pollution within 1750 feet of a public water supply
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`system means the public water supply system will be contaminated. To the contrary, it is likely
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`that in this and in many other situations, the geological circumstances will result in any
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`pollution being carried away from the public water supply system.
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`69. On their face, Defendants’ regulations are unconstitutionally vague in violation of the
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`Fourteenth Amendment's Due Process Clause because a person of ordinary intelligence would
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`not know that the regulations prohibit any water supply system within 1750 feet of a junkyard,
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`and because the statute lacks clear standards and objective criteria thus allowing Defendant to
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`bar Plaintiffs’ water supply system based on ambiguous, subjective, arbitrary or discriminatory
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`reasons.
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`70. As a direct and proximate result of defendants’ actions, plaintiffs have been or will be deprived
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`of their property rights, severe economic damages, and have been deprived of the opportunity
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`to start a family.
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`COUNT IV-VIOLATION OF STATE ADMINISTRATIVE PROCEDURE ACT
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`71. Plaintiffs reallege Paragraphs 1 through 70.
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`72. By statute, RIDOH is authorized to promulgate regulations pursuant to the Administrative
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`Procedure Act, R.I.G.L. §42-35-1 (“the APA”).
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`73. RIDOH is a department within the executive branch of Rhode Island Government. R.I.G.L.
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`§42-56-2.
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`74. Section 42-56-12 of the Rhode Island General Laws, 1956, as amended, directs and authorizes
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`the director of RIDOH to make and promulgate necessary rules and regulations incident to the
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`exercise of her powers and the performance of her duties as enumerated therein.
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`75. RIDOH is an “agency” within the meaning of R.I.G.L. §42-33-1(a), which states: “‘agency’
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`includes each state board, commission, department, or officer, other than the legislature or the
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`courts, authorized by law to make rules . . .”
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`76. RIDOH is required by the APA to follow the procedures contained in R.I.G.L. §42-35-3(a)
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`which requires the giving of notice of intended action prior to promulgation of rules and
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`regulations, and affording to all interested persons a reasonable opportunity to submit data,
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`views, or arguments, orally or in writing on such proposed rules and regulations, all as more
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`fully provided therein.
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`77. RIDOH has failed follow the requirements of the APA in promulgating any regulation that
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`prohibits public water supply systems within 1750 of a potential source of pollution.
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`78. RIDOH’s application of its interpretation that a junkyard within 1750 feet bars the use of a
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`public water supply system violates R.I.G.L. §42-35-3.
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`79. There are no administrative remedies available to plaintiffs.
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`80. Defendants’ actions violate plaintiffs’ procedural rights under §42-35-9 of the Rhode Island
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`Administrative Procedure Act, R.I.G.L. §42-35-1 et seq.
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`81. Moreover, defendants’ sole reliance on their subjective interpretation and application of the
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`regulation without supporting empirical data relevant to the Mill Road Property is arbitrary
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`and capricious, clearly erroneous and error of law and violates constitutional, statutory and
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`regulatory provisions, R.I.G.L. §42-35-15.
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`82. As a direct and proximate result of Defendants’ actions, Plaintiffs were deprived of their
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`property rights and suffered severe economic damages.
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`COUNT V-VIOLATION OF EQUAL PROTECTION, CLASS OF ONE
`83. Plaintiffs reallege the allegations of Paragraphs 1-82.
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`84. Defendants, through their arbitrary and capricious application of their regulations, deprived
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`Plaintiffs of the gainful use of their business and the Mill Road Property, which violates
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`Plaintiffs’ rights to equal protection of the laws under the Fourteenth Amendment to the United
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`States Constitution and Art. 1 Sec. 2 of the Rhode Island Constitution, thereby damaging
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`Plaintiffs in violation of 42 U.S.C. §§ 1981 and 1983.
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`85. As a direct and proximate result of defendants’ actions, plaintiffs have been or will be deprived
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`of their property rights, severe economic damages, and have been deprived of the opportunity
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`to start a family.
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`COUNT VI-VIOLATION OF SUBSTANTIVE DUE PROCESS
`86. Plaintiffs reallege the allegations of Paragraphs 1-85.
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`87. Defendants’ arbitrary, subjective, and unjustified application of their regulations to bar
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`Plaintiffs from operating a public water supply system on the Mill Road Property because the
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`adjoining junkyard is a potential, but unproven, source of pollution, without Defendants
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`investigating whether the junkyard is polluting the groundwater and requiring the junkyard to
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`remediate any such pollution, is so egregious and so outrageous that it shocks the conscience.
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`88. Defendants’ actions violate Plaintiffs’ rights to substantive due process.
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`89. As a direct and proximate result of defendants’ actions, plaintiffs have been or will be deprived
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`of their property rights, severe economic damages, and have been deprived of the opportunity
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`to start a family.
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`WHEREFORE, Plaintiffs hereby demand judgment against Defendants for the amount of their
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`damages, interest, costs, and reasonable attorney’s fees.
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`PLAINTIFFS DEMAND TRIAL BY JURY.
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`PLAINTIFFS, LEGENDS CREEK LLC,
`JON RESTIVO and ADEN MOTT
`/s/ Thomas W. Lyons
`Thomas W. Lyons, #2946
`Rhiannon S. Huffman, #8646
`STRAUSS, FACTOR, LAING & LYONS
`One Davol Square, Suite 305
`Providence, RI 02903
`(401) 456-0700
`tlyons@straussfactor.com
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`15
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