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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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Bond Resolution for Upgrades to School District Buildings Does Not Constitute a School-District Debt—Petitioner Did Not Have Standing to Challenge School District’s Environmental Impact Determination

In a full-fledged opinion by Justice Spain, the Third Department determined that a bond resolution for the upgrading of school district buildings did not violate the school district’s constitutional and statutory debt limit and the petitioner did not have standing to challenge the school district’s State Environmental Quality Review Act (SEQRA) finding that the upgrading did not have a negative environmental impact.  The court held the bonds need not be included in the debt until they are sold, i.e., until the bonds are actually issued:

…[F]or purposes of the debt limit, “contract indebtedness” and “existing indebtedness” include only bonds that have been actually issued – i.e., sold – at that time, and exclude the value of bonds that have merely been authorized for future issuance. * *

…[P]etitioner lacks standing to challenge the School District’s SEQRA determination and process … .  Standing, even to raise environmental challenges, is not automatic and must be alleged and, when disputed, proven …; this petitioner failed to do.  To the extent that petitioner relies on the proximity of his property to one of the buildings scheduled for repurposing … to raise an inference of injury sufficient to confer standing, under our decisional law a distance of over 1,000 feet “is not close enough to give rise to the presumption that the neighbor is or will be adversely affected by the proposed project” … .  Further, petitioner failed to alleged or identify any actual injury or direct harm that he will suffer, environmental or otherwise, if the facilities project is undertaken that is distinct from the harm experienced by the general public… . Matter of O’Brien v NYS Commissioner of Education, 515382, 3rd Dept 11-7-13

 

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Construction of Dock Could Not Be Regulated by Town—Land Under Navigable Waters Owned by State

The Third Department determined that the Lake George Town Planning Board did not have jurisdiction to grant or deny petitioner’s application to build a dock in Lake George because the state, not the town, owned the land under navigable waters:

When the state owns land under navigable waters in its sovereign capacity, its exclusive authority preempts local land use laws and extends beyond the regulation of navigation “to every form of regulation in the public interest.”… .  The state holds title to the lands under Lake George in its sovereign capacity  and, thus, has sole jurisdiction over construction in the lake’s navigable waters provided it has not delegated this authority to a local government … .

“[A]bsent the delegations in Navigation Law § 46-a allowing local municipalities to regulate the manner of construction and location of structures in waters owned by the [s]tate in its sovereign capacity, municipalities bordering or encompassing such waters . . . have no authority to issue such regulations”… . The Hart Family v Town of Lake George, 515142, 3rd Dept 10-24-13

 

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Question of Fact Whether General Releases Encompassed Environmental Damage from Leaking Fuel Tank

The Second Department determined that there was a question whether general releases contemplated damages related to environmental contamination and the action should not have been dismissed based on the releases. The action concerned gasoline which had leaked into the ground when defendant had leased the plaintiff’s property.  The court explained:

Generally, a valid release completely bars an action on a claim that is the subject of the release … . Principles of contract law govern the interpretation of a release; “a release that is complete, clear, and unambiguous on its face must be enforced according to the plain meaning of its terms'” … . Nonetheless, as the Court of Appeals has recognized with respect to a general release, “[t]here is little doubt . . . that its interpretation and limitation by the parol evidence rule are subject to special rules. These rules are based on a realistic recognition that releases contain standardized, even ritualistic, language and are given in circumstances where the parties are sometimes looking no further than the precise matter in dispute that is being settled. Thus, while it has been held that an unreformed general release will be given its full literal effect where it is directly or circumstantially evident that the purpose is to achieve a truly general settlement …, the cases are many in which the release has been avoided with respect to uncontemplated transactions despite the generality of the language in the release form” … .

Further, “[t]he meaning and extent of coverage of a release necessarily depend, as in the case of contracts generally, upon the controversy being settled and upon the purpose for which the release was actually given'” … . A general release may not be construed to cover matters that the parties “did not desire or intend to dispose of” … .

Here, the two releases at issue, whether construed together or separately, are ambiguous regarding whether the parties intended that they cover unknown claims for environmental contamination… .  Burnside 711 LLC v Amerada Hess Corp, 2013 NY Slip Op 05869, 2nd Dept 9-18-13

 

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Criteria for Review of Planning Board’s SEQRA Determination and Zoning Board’s Granting a Variance

In upholding the approval of a site plan, the Third Department determined the planning board met the requirements of the State Environmental Quality Review Act (SEQRA) and zoning board properly granted a height variance. In explaining the criteria for both reviews, the Third Department wrote:

“‘Judicial review of an agency determination under SEQRA is limited to whether the [lead] agency identified the relevant areas of environmental concern, took a hard look at them, and made a reasoned elaboration of the basis for its determination’….   “While judicial review must be meaningful, the courts may not substitute their judgment for that of the agency for it is not their role to ‘weigh the desirability of any action or [to] choose among alternatives'”….  The lead agency’s determination will only be annulled if it is arbitrary, capricious or unsupported  by  the evidence (see CPLR  7803  [3];…).     * * *

The [zoning board’s] determination to grant the variance is also valid.  In determining whether to grant a variance, the local zoning board must “‘engage in a balancing test, weighing the proposed  benefit to [the applicant] against the possible detriment to the health, safety and welfare of the community, as well as consider the five statutory factors enumerated in Town Law § 267-b (3)'”….  “Local zoning boards have broad discretion in considering applications for variances, and  judicial review is limited to determinating whether the action taken by the board was illegal, arbitrary or an abuse of discretion”….  Matter of Schaller, 515824, 3rd Dept 7-3-13

 

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Finding that No Environmental Impact Statement (EIS) Needed for Proposed Wind Turbines Reinstated; But Denial of Special Use Permit Upheld

The Third Department reversed Supreme Court’s annulment of a negative declaration with respect to the need for an environmental impact statement (EIS) for a proposed wind turbine installation, but upheld Supreme Court’s denial of a special use permit based on violations of the Town Law’s public hearing and notice requirements (among other grounds).  In describing the review standards for the respondent planning board’s determination an EIS was not required, the Third Department wrote:

….[W]e begin our analysis by noting that an environmental impact statement (hereinafter EIS) is required “‘on any action . . . which may have a significant effect on the environment'”….   A  type I action, such as the project here, “carries with it the presumption that it is likely to have a significant adverse impact on  the environment” (6  NYCRR  617.4 [a] [1];…).   However,  when  a lead agency  “‘determine[s] either that there will be no adverse environmental impacts or that the identified adverse environmental impacts will not be significant,'” it may  issue a negative declaration and, in such instance, no  EIS is required…. “Although the threshold triggering an EIS is relatively low”…, judicial review of a negative declaration is limited to whether “the [lead] agency identified the relevant areas of environmental concern, took a hard look at them, and made a reasoned elaboration of the basis for its determination”….  In this regard, “[i]t is not the province of the courts to second-guess thoughtful agency decision making and, accordingly, an agency decision should be annulled only if it is arbitrary, capricious or unsupported by the evidence”…. Matter of Frigault v Town of Richfield Planning Board, et al, 515528, 3rd Dept 6-27-13

 

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Absence of Privity Precluded Application of Collateral Estoppel Doctrine 

The Third Department, in reversing Supreme Court, determined the absence of privity precluded the application of the doctrine of collateral estoppel.  Northrop owned a gas station which was a designated spill site (gasoline). The Department of Environmental Conservation spent about $125,000 cleaning it up. Northrop sought payment for the clean-up from its insurance carrier (the defendant here). In a prior declaratory judgment proceeding Supreme Court determined the policy did not cover petroleum contamination. Then the state, the plaintiff here, started an action against the defendant insurance company under Navigation Law 190 seeking reimbursement of the clean-up expenses.  Supreme Court dismissed the complaint as barred by the doctrine of collateral estoppel (the prior declaratory judgment finding the insurance policy did not cover the clean-up expense).  In reversing, finding collateral estoppel should not have been invoked because Northrop and the state were not in privity, the Third Department wrote:

Plaintiff is the entity that has undertaken the cleanup and now seeks reimbursement for monies expended. Thus, plaintiff has a right of indemnification against Northport to recoup these costs …, establishing an indemnitor-indemnitee relationship. Plaintiff’s right of indemnification,  however, is independent of Northport’s contractual right to have its insurance carrier, defendant, cover these costs under the terms of the liability insurance  policy. Moreover, Navigation Law § 190 authorizes plaintiff to commence a direct action against defendant, and this right is independent of plaintiff’s right of indemnification against Northport. Given that plaintiff’s rights are not conditioned upon and do not derive from Northport’s, the existence of an indemnitor-indemnitee relationship between Northport and plaintiff does not establish privity between these parties.  State of New York v Zurich American Insurance Company, 514916, 3rd Dept, 5-9-13

 

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