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Valid State Purpose (Conserving Drinking Water) Did Not Relieve State of Liability Re: Breach of an Agreement to Provide a Certain Amount of Water to a Hydroelectric Power Provider

The Third Department determined that a contract with a hydroelectric power provider requiring a certain amount of water to be released from a reservoir was unambiguous and therefore must be enforced.  The amount of water released was less than called for in the contract due to a drought and concerns about the drinking water supply:

The parties to the agreement intended to resolve a dispute after defendants took claimant’s predecessor’s land in eminent domain.  Claimant’s predecessor wanted to ensure that sufficient water would reach its hydroelectric generation facility and accepted a considerably smaller amount of money than it sought, in exchange for the rights associated with the water release rates from the reservoir.  These rights would be far less valuable if defendants could deviate from the operating diagram’s release rates, and avoid liability in doing so, as long as defendants supported their actions with any State purpose. Pursuant to the agreement, defendants could only avoid liability if they deviated from the operating diagram’s release rates for a State canal use or purpose.  Because defendants altered the release rate for the purpose of preserving safe drinking water during a drought – a legitimate public and State purpose (see ECL 15-0105 [5]) – and not for a canal-related purpose, defendants are liable for breaching the contract… .  Erie Boulevard Hydropower v State, 516510, 3rd Dept 1-9-14

 

Strict Liability for Clean Up of Petroleum Spilled Between 1890 and 1935

The Fourth Department determined the current owners of land contaminated with petroleum between 1890 and 1935 were strictly liable for clean-up under the Navigation Law, despite intervening use of the land as a scrap yard:

We conclude that plaintiffs established their entitlement to a determination that defendants are contributing “dischargers” pursuant to Navigation Law § 172 (8) and thus are strictly liable under section 181 (1) for, inter alia, the cleanup and removal costs…, despite the fact that the parcels subsequently were the sites for various commercial operations that also may have contributed to the contamination of the properties, including a scrap yard.  …

Plaintiffs provided the affidavits of two experts explaining that samples taken from depths of 6 to 14 feet below the surface contained contaminants that are consistent with refinery operations and that, based upon the age and depths of the samples, could only have been caused by the refinery operations. One Flint St LLC… v Exxon Mobil Corporation…, 1281, 4th Dept 12-27-13

 

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Criteria for Review of Agency’s Condemnation of Land Explained/Failure to Consider Future Development of Land Did Not Constitute Improper Segmentation of Environmental Impact Review

The Fourth Department determined the condemnation of land by the Lockport Industrial Development Agency (LIDA) and the related State Environmental Quality Review Act (SEQRA) review were properly done. The court determined that the failure to consider future development of the land did not amount to an improper segmentation of the SEQRA review process: The court explained its review powers in this context as follows:

It is well settled that the scope of our review of LIDA’s determination is “very limited” … .  We must “ ‘either confirm or reject [LIDA’s] determination and findings,’ and [our] review is confined to whether (1) the proceeding was constitutionally sound; (2) [LIDA] had the requisite authority; (3) its determination complied with SEQRA and EDPL article 2; and (4) the acquisition will serve a public use” (id.; see EDPL 207 [C]).  “The burden is on the party challenging the condemnation to establish that the determination ‘was without foundation and baseless’ . . . Thus, ‘[i]f an adequate basis for a determination is shown and the objector cannot show that the determination was without foundation, the [condemnor’s] determination should be confirmed’… . * * *

Although LIDA considered only the impact of the acquisition and not the impact of potential development, we reject [the] contention that LIDA thereby improperly segmented the SEQRA review process (see 6 NYCRR 617.2 [ag]).  Although LIDA intends to sell the property to a potential developer, there was no identified purchaser or specific plan for development at the time the SEQRA review was conducted …, and thus we conclude that under these facts the acquisition is not a “separate part[] ‘of a set of activities or steps’ in a single action or project”… . Matter of GM Components Holdings LLC v Town of Lockport Industrial Development Agency, 1275, 4th Dept 12-27-13

 

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Planning Board’s Determination Subdivision Was Exempt from Conservation Measures Under “Grandfathering” Laws Upheld

The Third Department determined the town planning board’s approval of a final subdivision plan was proper.  The petitioners challenged the approval arguing, in part, that the town’s repeated renewal of grandfathering provisions (under which the subdivision plan was approved) was unlawful. Under the grandfathering provisions, the subdivision was deemed exempt from certain conservation measures. The Third Department disagreed:

“A town’s zoning determination is entitled to a strong presumption of validity; therefore, one who challenges such a determination bears a heavy burden of demonstrating, ‘beyond a reasonable doubt, that the determination was arbitrary and unreasonable or otherwise unlawful'” … .  While “[z]oning laws must be enacted in accordance with a comprehensive land use plan” … to establish compliance, “respondents need only show that the zoning amendment was adopted for ‘a legitimate governmental purpose'” and the amendment will not be considered arbitrary unless “‘there is no reasonable relation between the end sought to be achieved by the regulation and the means used to achieve that end'” … .  … As set forth in the comprehensive plan, the Town’s primary concerns included “ensuring the community remains a great place to live, work, and visit, attracting new industry and employment opportunities, and conserving the area’s natural resources and remaining open spaces.”  The adoption of the initial grandfathering provision clearly evidenced and furthered the Town’s interest in balancing conservation measures with community development and, particularly, the interests of property owners who had, at the time the comprehensive plan was adopted, invested substantial time and money in developing their property in accordance with previous land use laws and zoning requirements … .

Petitioners have not shown that, under the circumstances here, the challenged extensions … were inordinately lengthy as to render them “arbitrary and unreasonable or otherwise unlawful”… .  Matter of Birchwood Neighborhood Association v Planning Board of the Town of Colonie, 516284, 3rd Dept 12-19-13

 

Petitioners’ Properties Not Close Enough to Proposed Development to Confer Standing to Allege Violations of the State Environmental Quality Review Act (SEQRA)

The Second Department determined petitioners did not have standing to bring an action alleging violations of the State Environmental Quality Review Act (SEQRA) because petitioners’ properties were not sufficiently close to the location of the development project:

To establish standing under SEQRA, a petitioner must show (1) an environmental injury that is in some way different from that of the public at large, and (2) that the alleged injury falls within the zone of interests sought to be protected or promoted by SEQRA … . An injury in fact may be inferred from a showing of close proximity of the petitioner’s property to the proposed development … . Generally, the relevant distance is the distance between the petitioner’s property and the actual structure or development itself, not the distance between the petitioner’s property and the property line of the site … . Here, the individual petitioners’ properties were not located in sufficient proximity to the proposed development to give rise to standing … . Matter of Tuxedo Land Trust Inc v Town Bd of Town of Tuxedo, 2013 NY Slip Op 08255, 2nd Dept 12-11-13

 

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Regulations Promulgated by Administrative Bodies Are Quasilegislative Acts—Any Challenge to the Regulations Must Be Brought in an Article 78 Proceeding Alleging the Regulations to Be Arbitrary and Capricious

The Third Department assumed, without deciding, that the plaintiffs, three New York residents and electricity ratepayers, had standing to bring an action challenging the Regional Greenhouse Gas Initiative (RGGI) which implemented a carbon-dioxide-emission cap and trade program for New York power plants.  The challenged RGGI regulations had been promulgated by the Department of Environmental Conservation (DEC) and the New York State Energy Research and Development Authority (NYSERDA). The court determined the complaint was properly dismissed because, although couched in terms of a request for a declaratory judgment, the action should have been brought as an Article 78 proceeding subject to the four-month statute of limitations:

Although declaratory judgment actions are typically governed by a six-year statute of limitations (see CPLR 213 [1]), “a court must look to the underlying claim and the nature of the relief sought and determine whether such claim could have been properly made in another form” …. “Where, as here, governmental activity is being challenged, the immediate inquiry is whether the challenge could have been advanced in a CPLR article 78 proceeding” … .  “While it is well established that a challenge to the validity of legislation may not be brought under [CPLR] article 78, this principle does not apply to the quasilegislative acts and decisions of administrative agencies,” which are subject to a four-month statute of limitations … .

Here, plaintiffs’ first three causes of action challenge the validity of the RGGI regulations promulgated by DEC and NYSERDA pursuant to the statutory authority granted to those respective administrative bodies pursuant to the Environmental Conservation Law and the Public Authorities Law.  The enactment of such regulations was “quasi-legislative” and, as such, plaintiffs’ challenges thereto were capable of being reviewed in the context of a CPLR article 78 proceeding … .  Although at times couched in terms of constitutional infirmity and illegality, the essence of plaintiffs’ claims against DEC and NYSERDA is that the RGGI regulations are “arbitrary and capricious” and that the decision to promulgate such regulations was “affected by an error of law” (CPLR 7803 [3]…).  Thrun v Cuomo, 516556, 3rd Dept 12-5-13

 

 

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Notices of Claim Were Sufficient to Notify County of a “Navigation Law 181” Cause of Action Re: a Fuel Spill

The Second Department determined the notices of claim against the county were sufficient even though they did not explicitly mention a violation of Navigation Law section 181.  The notices alleged the county was negligent with respect to underground fuel storage tanks resulting in leakage and contamination of water wells. The notices did not specifically recite that the County was subject to strict liability for a violation of Navigation Law section 181. The Second Department explained the relevant legal and factual notice requirements:

…[T]he plaintiffs, as a condition precedent to the assertion of Navigation Law § 181 cause of action, were required to serve a notice of claim that included information and allegations specific to their Navigation Law § 181 cause of action. County Law § 52 requires a notice of claim to be served upon the County, and applies to any claim for “for invasion of personal or property rights, of every name and nature” and to “any other claim for damages arising at law or in equity, alleged to have been caused or sustained in whole or in part by or because of any misfeasance, omission of duty, negligence or wrongful act on the part of the county” (County Law § 52). The assertion of a Navigation Law § 181 cause of action against the County, which could result in the County being held strictly liable for all cleanup costs and damages resulting from a discharge of petroleum, is subject to the broad notice-of-claim requirements of County Law § 52… .

…[T]he plaintiffs’ notices of claim were sufficient to apprise the County that they intended to pursue a cause of action premised upon a violation of Navigation Law § 181. The plaintiffs were not required to “state a precise cause of action in haec verba” in their notices of claim … . “The test of the sufficiency of a [n]otice of [c]laim is merely whether it includes information sufficient to enable the [municipality] to investigate'” the claim … . Here, the plaintiffs’ notices of claim set forth conduct on the part of the County which allegedly caused the discharge of petroleum onto the plaintiffs’ properties, thereby resulting in damage to the properties. The notices of claim provided information sufficient to enable the County to investigate the alleged fuel spills, leakage, and seepage while information concerning the alleged fuel spills, leakage, and seepage was still readily available. As such, the notices of claim were sufficient to alert the County to the potential Navigation Law § 181 cause of action, and afforded the County ample opportunity to promptly investigate the alleged spills, leakage, and seepage underlying that cause of action. Bartley v County of Orange, 2013 NY Slip Op 07701, 2nd Dept 11-20-13

 

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Local Law Prohibiting Use of Groundwater Outside Village Preempted by State Law

The Second Department determined a village Local Law which prohibited the removal of groundwater for use outside the village was preempted by state law (Transportation Corporations law, Environmental Conservation Law (ECL)):

As relevant to this case, the Transportation Corporations Law permits water-works corporations to extend their service area to neighboring municipalities by entering “into a contract with the authorities of any city, town or village not mentioned in its certificate of incorporation, but situated in the same county as the city, towns or villages mentioned therein or in an adjoining county” (Transportation Corporations Law § 46). … Notably, the statutory procedure for obtaining a certificate of extension does not require the water-works corporation to obtain the consent or permission of the municipality where it was originally incorporated, an omission which we must conclude the Legislature intended (see McKinney’s Cons Laws of NY, Book 1, Statutes § 240) and which comports with the long-recognized policy in favor of the extension of water resources to less-advantageously situated municipalities… . … Accordingly, we conclude that the Legislature manifested an intent to preempt local laws which have the effect of prohibiting a water-works corporation from transferring water from one municipality to another … .Further, to the extent that the Local Law was enacted, either in purpose or effect, as a measure to regulate withdrawals of groundwater, it is further preempted by article 15 of the ECL. The terms “waters,” as used in ECL article 15, is expansive and includes all surface and underground water within the state’s territorial limits (see ECL 15-0107[4]). ECL article 15 states: “The sovereign power to regulate and control the water resources of this state ever since its establishment has been and now is vested exclusively in the state of New York, except to the extent of any delegation of power to the United States” … . The Legislature declared it to be the public policy of the state that: “The regulation and control of the water resources of the state of New York be exercised only pursuant to the laws of this state” (ECL 15-0105[1] … ), and the Department of Environmental Conservation (hereinafter the DEC) is given jurisdiction “in any matter affecting the construction of improvements to or developments of water resources for the public health, safety or welfare, including but not limited to the supply of potable waters for the various municipalities and inhabitants thereof” (ECL 15-0109). Woodbury Hgts Estates Water Co Inc v Village of Woodbury, 2013 NY Slip Op 07468, 2nd Dept 11-13-13

 

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Allegations of Economic Injury Not Sufficient to Establish Standing to Challenge Governmental Action Under State Environmental Quality Review Act

The Second Department affirmed Supreme Court’s dismissal of a petition brought by the National Oil Recyclers Association (NORA) challenging the NYC Department of Environmental Protection’s (DEP’s) finding that proposed amendment s to the NYC rules regarding emissions from use of grade numbers 4 and 6 fuel oils would lead to reduced emissions and would have no significant adverse impacts on the quality of the environment.  The court explained that NORA did not have standing to challenge the finding and the DEP’s failure to provide an explanation for not publishing the proposed rules in its yearly regulatory agenda did not invalidate the rules:

To establish standing to challenge governmental action under the State Environmental Quality Review Act (ECL art 8, hereinafter SEQRA), the petitioners must show (1) that they will suffer an environmental injury that is in some way different from that of the public at large, i.e., that there is an “injury in fact,” and (2) that the alleged injury falls within the zone of interest sought to be protected or promoted by the statute under which the governmental action was taken … .

Allegations of potential economic injury alone are insufficient to confer standing under SEQRA … . Here, the first and second causes of action allege the potential of economic harm, but they do not sufficiently allege that the petitioners will suffer an environmental injury that is in some way different from that of the public at large. Such allegations are insufficient to confer standing to assert the first and second causes of action … . Matter of County Oil Co Inc v NYC Dept Envtl Protection, 2013 NY Slip Op 07474, 2nd Dept 11-13-13

 

State Pollutant Discharge Permit Properly Approved by DEP

The Second Department reversed Supreme Court and determined the NYS Department of Environmental Conservation properly approved the issuance of a state pollutant discharge elimination system general permit for stormwater discharges from municipal separate storm sewer systems.  Supreme Court held “the General Permit created an impermissible self-regulatory system that failed to ensure that small municipalities reduced their pollutant discharges to the “maximum extent practicable,” as required by 33 USC § 1342(p)(3)(B)(iii) and ECL 17-0808(3)(c), that the General Permit failed to specify compliance schedules with respect to effluent limitations and water quality standards, as required by 6 NYCRR 750-1.14, and that the General Permit unlawfully failed to provide an opportunity for a public hearing on proposed notices of intent before they were submitted to the DEC, in violation of 33 USC § 1342(a)(1) and ECL 17-0805(1)(a)(ix).”  The Second Department disagreed, discussing its reasoning in detail:

…[T]he “[m]aximum extent practicable . . . is the statutory standard that establishes the level of pollutant reductions that operators of regulated MS4s must achieve” (64 FR 68722, 68754; see 40 CFR 122.34[a]). The “EPA has intentionally not provided a precise definition of [maximum extent practicable] to allow maximum flexibility in MS4 permitting” (64 FR 68722, 68754). It has determined that “MS4s need the flexibility to optimize reductions in storm water pollutants on a location-by-location basis” (id.). The “EPA envisions that this evaluative process will consider such factors as conditions of receiving waters, specific local concerns, . . . MS4 size, climate, implementation schedules, current ability to finance the program, beneficial uses of receiving water, hydrology, geology, and capacity to perform operation and maintenance”… . * * *

Contrary to the petitioners’ contention, the General Permit does include a variety of enforcement measures that are sufficient to comply with the maximum extent practicable standard, as described in state and federal statutes (see 33 USC § 1342[p][3][B][iii]; ECL 17-0808[3][c]). * * *

It was not arbitrary and capricious for the DEC to limit the opportunity for public hearings to those situations in which a new general permit is proposed or an existing general permit is renewed, since any modifications to a draft general permit resulting from public comment and hearings will extend to all covered entities … .  Matter of Natural Resources Defense Council Inc v NYS Dept of Envtl Conservation, 2013 NY Slip Op 07488, 2nd Dept 11-13-13

 

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