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Chester Industrial Park Associates, LP and V. Paulius and Associates - Ruling 2, May 22, 1998

Ruling 2, May 22, 1998

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION

In the Matter of

the Alleged Violations of Article 24 of the Environmental Conservation Law ("ECL") of
the State of New York and of Section 663.4(a) of Title 6 of
the Official Compilation of Codes, Rules and Regulations of the State of New York ("6 NYCRR")

- by -

CHESTER INDUSTRIAL PARK ASSOCIATES,
L.P., and V. PAULIUS AND ASSOCIATES,

RULINGS OF THE ADMINISTRATIVE LAW JUDGE

DEC Case No.

3-2914/9704

Respondents.

Background

This action began with the Department Staff's service of a Complaint dated August 19, 1997 upon Respondents Chester Industrial Park Associates, L.P. ("Chester") and V. Paulius and Associates ("Paulius"). These two Respondents submitted an Answer dated August 27, 1997, basically denying the charges and asserting two affirmative defenses.

On October 7, 1997, the Department Staff initiated an Amended Complaint seeking to include additional Respondents to the Complaint. In my Ruling of January 16, 1998, I denied Staff"s motion to amend the Complaint on this basis.

Additionally, the Staff sought to increase the monetary penalty for the alleged wetlands violations from $6,000 in the original Complaint to $270,000 in the Amended Complaint. With respect to this motion, I ruled:

"With respect to the request to increase the relief in this matter, the Staff's motion is likewise denied without prejudice, pending a submittal to me and the named Respondents of a detailed explanation of the $270,000 penalty now sought, i.e. -- a breakdown of the penalty and how it is apportioned between/among the Respondents with respect to each of the charges, how the penalty was calculated pursuant to ECL Article 71 and applicable case law, and an explanation of why the increased amount was not sought in the original Complaint, dated only seven weeks earlier."

On March 5, 1998, the Department Staff sent me an affirmation which they assert addresses the above quoted paragraph and supplies the information which I had deemed necessary in order to minimally justify any request to increase the ad damnum clause in the Complaint.

On April 3, 1998, Respondents supplied an opposing affirmation that Staff did not provide information sufficient to justify any amendment to the Complaint.

Department Staff's Position

The Staff asserts that, consistent with ECL 71-2303(1) and the Department's Civil Penalty Policy, assessment of penalties at the statutory maximum is warranted given the gravity of the violations and the economic benefit to be gained by the Respondents for non-compliance with the Freshwater Wetlands Act (ECL Article 24) and implementing regulations (6 NYCRR Part 663 et seq). The Staff maintains that the previous Ruling held open the opportunity for them to amend the original Complaint based upon submission of an explanation conforming to the requirements set forth in the above quoted section of the Ruling. The Staff maintains that the proposed penalty amendment is more than justified given the circumstances regarding the alleged violations.

Respondents' Position

Respondents Chester and Paulius oppose the Staff's current attempt to amend the Complaint, claiming that Staff's submission is unauthorized and untimely. Further, Respondents claim the Staff's explanation of the original Complaint's lower penalty clause (and/or the proposed amended Complaint's higher penalty clause) is implausible and that the charges against them are imprecise. Respondents maintain the Staff has not properly justified the proposed penalty amendments and therefore, such amendment must be denied.

Discussion

The Staff's original Complaint cited unpermitted grading and filling activities in a regulated freshwater wetland as causes of action and proposed to assess both Respondent Chester and Respondent Paulius a monetary penalty of $3,000 each, for a total of $6,000. Staff claims that immediately prior to filing the original Complaint, negotiations to resolve the alleged violations by means of a consent order were ongoing, and that they did not want to derail such talks by seeking a larger penalty in the original Complaint. However, with a subsequent breakdown in the discussions with Respondents occurring after the Staff had initiated the original Complaint, Staff considered an amendment to seek assessment of penalties at the statutorily authorized maximum to be appropriate, in consonance with the Department's Civil Penalty Policy.

The ECL provisions for enforcement of freshwater wetlands violations in 71-2303(1) set forth administrative sanctions, in that "Any person who violates, disobeys or disregards any provision of" the Freshwater Wetlands Law, ECL Article 24, or any of the law's implementing rules and regulations, 6 NYCRR Parts 663, 664 and 665, as well as any local law or ordinance, permit or order issued pursuant thereto, "shall be liable . . . for a civil penalty of not to exceed three thousand dollars for every such violation," such penalty to be assessed after the respondent(s) have an opportunity to appear before the Department in an administrative enforcement hearing pursuant to 6 NYCRR Part 622. In addition to assessment of a monetary penalty, the Commissioner may, "direct the violator to cease his violation of the act and to restore the affected freshwater wetland to its condition prior to the violation, insofar as that is possible within a reasonable time and under the supervision" of the Department.

Staff has argued that the penalty provisions of current ECL 71-2303(1) for freshwater wetlands violations and former ECL 71-2503(1) for tidal wetlands violations are parallel in construction and essentially identical. The Staff uses this supposed analogy between the freshwater and tidal wetlands enforcement sections to urge that Matter of Nieckoski, 215 A.D.2d 761, 627 N.Y.S.2d 442 (2nd Dept., 1995) is controlling with regard to the assessment of multiple penalties for separate and independent wetlands violations involved in a single project. While ECL 71-2503(1) was amended on January 1, 1990 and is no longer similar in construction to 71-2303(1), the parallelism between the enforcement statutes for the two types of wetlands refers to the prior version of the tidal wetlands enforcement statute which read nearly identically to the current version of the freshwater wetlands enforcement statute.

As the presiding ALJ in Matter of Nieckoski, I determined that the language of ECL 71-2503(1), prior to its January 1, 1990 amendment, "would allow assessment of penalties for multiple separate and distinct violations where activities related to any given project were proved to have occurred on several separate dates prior to the completion of the project." The Commissioner adopted this interpretation, and in a Decision dated April 3, 1991, assessed penalties for numerous violations, including three separate violations for placing fill in the tidal wetlands adjacent area. On appeal, Nieckoski's petition was denied and the case dismissed in Supreme Court, Suffolk County, on December 9, 1992, which judgment was subsequently affirmed by the Appellate Division, Second Department, on May 30, 1995.

A parallel may be drawn to the freshwater wetlands enforcement statute, with virtually the same language as the tidal wetlands enforcement statute on which the courts affirmed the Nieckoski matter. Thus applicable case law supports the Staff's contention that it may seek multiple penalties for separate and independent wetlands, in this case freshwater, violations. It is particularly noted, however, that the administrative sanctions for violation of the freshwater wetlands law and/or regulations which are allowable under the ECL do not authorize the assessment of daily penalties for single, continuing violations.

Where the Staff can prove that more than one person has violated the freshwater wetlands statutes and/or regulations, it is well founded that the full range of penalty provisions may be sought against every person committing such violations.

The Department's Civil Penalty Policy (6/20/90) establishes a variety of factors which the Staff may consider in determining the amount of penalty which it deems appropriate in a given set of circumstances regarding all alleged violations. If Respondents have not already been provided with a copy of the Civil Penalty Policy, the Staff should provide such copy no later than five business days from receipt of this Ruling.

With respect to the Respondents' contention that the charges against them are ambiguous and inadequately explained, such contention is strictly a self-serving argument. Staff has made clear that the alleged violations relate to filling and grading activities within regulated freshwater wetlands on the subject site, and they have made an estimate of the area allegedly covered by the fill and the quantity of fill allegedly emplaced within the wetlands. Furthermore, the Staff has estimated that to place the amount of fill they allege is in the wetland area would require a minimum of 90 separate truckloads of material, or that filling occurred on a minimum of 90 separate occasions. The Staff is not required to prove their case in the Complaint, but rather they must put the Respondents on notice as to the charges which Staff intends to prove. The specifications of the charges in this instance are sufficient to meet the letter and intent of ECL 71-2303(1) and CPLR 3013.

Ruling

The Department Staff seeks to amend the original Complaint by increasing the requested relief. The Staff has satisfied the terms of my January 16, 1998 Ruling, wherein I provided an opportunity for the Staff to properly justify its request to increase the ad damnum clause in its original Complaint. Based upon the supplemental information provided by the Staff, the request to amend the Complaint to provide for a potential larger monetary penalty for the alleged violations is granted. Any monetary penalties sought, however, must by statute be based upon a "per violation" calculation, not on the basis of a daily penalty.

Appeals

Pursuant to 6 NYCRR 622.10(d), these Rulings may be appealed in writing to the Commissioner within ten days of receipt of the Rulings.

Any appeals must be received at the office of Commissioner John P. Cahill (NYSDEC, Room 608, 50 Wolf Road, Albany, New York 12233-1010) no later than the close of business on June 3, 1998.

Any appeals sent to the Commissioner's Office must include an original and two copies. Additionally, one copy of all appeal papers must be sent to me and to each person on the Service List below at the same time and in the same manner as to the Commissioner. Please note that transmission of appeal papers by facsimile (fax) is not authorized.


_____________/s/_____________
ROBERT P. O'CONNOR
ADMINISTRATIVE LAW JUDGE

Dated:Albany, New York
May 22, 1998

To: Benjamin Ostrer, Esq.
Rajat P. Mundkur, Esq.
Benjamin Ostrer & Associates, P.C.
69 Brookside Avenue, Suite 217
P.O. Box 509
Chester, New York 10918

Steven Goverman, Esq.
Assistant Regional Attorney
Region 3, Division of Legal Affairs
New York State Department of
Environmental Conservation
21 South Putt Corners Road
New Paltz, New York 12561-1696

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