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Chester Industrial Park Associates, LP and V. Paulius and Associates - Decision and Order, October 24, 2000

Decision and Order, October 24, 2000

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,

DECISION AND ORDER OF THE COMMISSIONER

DEC Case No.

3-2914/9704

Respondents.

WHEREAS:

  1. Pursuant to a Notice of Hearing and Complaint dated August 19, 1997 and a subsequent July 9, 1998 Amended Complaint, an administrative enforcement hearing was held on January 20 and 21, 2000 before Administrative Law Judge ("ALJ") Robert P. O'Connor. The Department of Environmental Conservation (the "Department") appeared by Steven Goverman, Esq., Assistant Region 3 Attorney. The Respondents appeared by Benjamin Ostrer, Esq. The ALJ's hearing report was released on July 19, 2000 as a Recommended Decision. Responsive papers were filed on or about August 1, 2000 by Department Staff and Respondents, and on or about August 7, 2000 by Department Staff.
  2. Upon review of ALJ O'Connor's Hearing Report (copy attached) and the record in this proceeding, except as noted below, I concur with its Findings of Fact, Conclusions and Recommendations, subject to my following comments. The Report establishes that the Respondents, in late 1996, were responsible for the unpermitted deposition of fill materials within an approximately ten acre area of a much larger regulated Class II Freshwater Wetland WR-7 located within the Chester Industrial Park, in the Village of Chester, Orange County, New York, in violation of the provisions of Environmental Conservation Law (ECL) Article 24 and the Department's implementing regulations in 6 NYCRR Part 663 which prohibit the placement of fill materials within a regulated freshwater wetland without a permit.
  3. The record in this matter is clear that Respondents have a history of noncompliance with the Freshwater Wetlands Law, ECL Article 24, and the regulatory provisions of 6 NYCRR Part 663. Respondents' violations in freshwater wetland WR-7 date back to 1989, when Respondents were cited for illegally filling a six acre area of WR-7, located to the north of the 12.5 acre area of WR-7, which is the subject of this enforcement action. Photographs taken by the Department Staff at that time show the proliferation of wetlands species within the 12.5 acre area, and demonstrate that the 12.5 acre portion of the wetland was then undisturbed. The Consent Order settling this 1989 violation required Respondents to remediate the six acre area and to undertake a wetlands mitigation and enhancement project in a nearby off-site area. Staff specifically noted that any activity which Respondents might propose for the 12.5 acre area was subject to review and permit requirements.
  4. New ditching and filling violations were observed by the Department Staff in 1994 along the northern portion of the 12.5 acre area of the wetland. These violations were the subject of a Notice to Cease Violation sent to Respondent Paulius in early 1995, and the Staff subsequently accepted a plan to restore the area affected by the 1994 violations.
  5. In the instant case, the Department Staff in 1996-1997 observed further violations in WR-7, with approximately ten acres of the 12.5 acre area of WR-7 having been filled and graded. These new violations occurred in a portion of the area which included the subject area of the violations discussed in paragraph 4 as well as another larger areal portion of WR-7. This ten acre extract of the wetland was filled to a depth of from 0.5 feet - 2 feet on one side of the area and to a depth of 5 feet - 7 feet on the other side of the area. The fill deposited was a different material from the native soils and was estimated to be approximately 50,000 cubic yards.
  6. In determining the appropriate penalty for the instant violations, I have taken into account the circumstances of this case as established in the hearing record. The record establishes that the placement of a minimum of 2,000 large truckloads of fill within the wetland area must have occurred with the knowledge and consent of the Respondents, who are the only entities which exert any control over the activities which occur on the subject lands within the Chester Industrial Park. The record also establishes that the violations at issue represent the largest area of unpermitted fill in a freshwater wetlands area within the Department's Region 3 since the inception of the Freshwater Wetlands Law in 1975. The record further establishes that Respondent V. Paulius and Associates has been previously cited for violations of both Federal and State environmental laws and regulations, particularly those pertaining to freshwater wetlands, over the past decade (notably, Respondent Paulius was issued a Cease and Desist Order by the U.S. Army Corps of Engineers in March 1997 for illegal placement of fill in wetlands under Federal jurisdiction at the Chester Industrial Park). Furthermore, a Vice-President of Respondent V. Paulius and Associates is also a partner in Respondent Chester Industrial Park Associates, L.P.
  7. The record establishes that the Respondents were notified as early as 1991 that permits from the Department would be necessary for conducting activities within regulated Freshwater Wetland WR-7. These Respondents are and have been fully aware of the wetlands on their property, and have continuously avoided the freshwater wetlands permit process in attempting to develop their lands. Their conduct and pattern of behavior justifies a significant penalty for filling the ten acres of a 12.5 acre portion of WR-7.
  8. Given the testimony at the hearing, particularly as to the volume of unpermitted fill deposited in WR-7 and the number of truckloads necessary to deposit that amount of fill, the more preferred and suitable course of action for Staff to have taken would have been to bring a motion before the ALJ to amend the pleadings to conform to the proof proffered during the hearing pursuant to CPLR §3025. The absence of such a motion, however, does not preclude me from conducting a de novo review of the record. Sil-Tone Collision, Inc. v. Foschio, 63 NY2d 406 (1984).
  9. Upon reviewing the administrative record in this proceeding, particularly the hearing transcript and Respondents' past transgressions, I concur with ALJ O'Connor's penalty assessment of $500,000 per Respondent, rather than the $270,000 per Respondent requested by Staff. The hearing transcript shows that the 50,000 cubic yards of unpermitted fill deposited in this ten acre portion of WR-7 required a minimum of 2000 placements, thereby subjecting Respondents to a potential penalty based on 2000 separate violations. See, e.g., Matter of Nieckoski, 215 AD2d 761 (2d Dept. 1995). Any possible due process objections as to the potential penalty are satisfied by the circulation of the ALJ's Report as a Recommended Decision, and I do not find Respondents' subsequent comments on the ALJ's penalty assessment persuasive. In confirming the ALJ's penalty recommendation, I do not find that it causes prejudice or surprise to Respondents.

NOW, THEREFORE, have considered this matter, it is ORDERED that:

  1. Respondents V. Paulius and Associates and Chester Industrial Park Associates, L.P. are found to have violated ECL Article 24 and 6 NYCRR Part 663, and each named Respondent is assessed a civil penalty in the amount of Five Hundred Thousand ($500,000) Dollars, which is to be due and paid in full to the Department within 30 days of service of this Order.
  2. Respondents V. Paulius and Associates and Chester Industrial Park Associates, L.P. are directed to cease the violations and to restore the affected portion of Freshwater Wetland WR-7 to its condition prior to the violations, insofar as that is possible, within a reasonable time, and under the Department's supervision. In this regard, Respondents are directed to submit to the Department Staff, within 60 days of the service of this Order, an approvable plan for the restoration of the affected ten acre portion of Freshwater Wetland WR-7, to include:
    1. All fill materials are to be removed until the pre-existing (before filling) grade is established (at the location of the hydric soil horizon.) All removed fill materials are to be legally disposed of.
    2. The hydrology of the affected area is to be re-established.
    3. The affected area is to be revegetated with appropriate freshwater wetland indicator species of plants, to be planted as necessary to achieve an eighty-five percent (85%) survival rate for each of the species planted.
    4. Removal of the fill and initial planting is to be completed in accordance with a schedule to be determined by the Department Staff.
    5. Region 3 Staff is to be notified in writing prior to commencement of the restoration work, and Respondents are to perform the work specified herein as directed by Staff.
  3. All communications between Respondents and the Department concerning this Order shall be made to the Regional Director, New York State Department of Environmental Conservation, 21 South Putt Corners Road, New Paltz, New York 12561-1696.
  4. The provisions, terms and conditions of this Order shall bind the Respondents their officers, directors, partners, agents, servants, employees, successors and assigns and all persons, firms and corporations acting for or on behalf of the Respondents.

For the New York State Department
of Environmental Conservation

_____________/s/_____________
By: John P. Cahill, Commissioner

Dated: Albany, New York
October 24, 2000

To: Benjamin Ostrer, 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

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,

REPORT OF THE ADMINISTRATIVE LAW JUDGE

DEC Case No.

3-2914/9704

Respondents.

Summary

In this Administrative Enforcement Hearing Report, Administrative Law Judge ("ALJ") Robert P. O'Connor finds that Respondents Chester Industrial Park Associates, L.P. and V. Paulius and Associates have violated Environmental Conservation Law Article 24 (Freshwater Wetlands) and its attendant implementing regulations in 6 NYCRR Part 663 by having deposited a minimum of 50,000 cubic yards of fill within a ten acre portion of Freshwater Wetland WR-7 within the boundaries of the Chester Industrial Park in the Village of Chester, Orange County, New York during an unspecified period in late 1996, thus completely obliterating any and all freshwater wetlands benefits and functions for that portion of Class II Wetland WR-7. ALJ O'Connor recommends that the named Respondents be directed to file with the Department Staff an approvable plan for the restoration of the violation area in the wetland and that said Respondents must implement such restoration in accordance with a Department-approved plan. ALJ O'Connor further recommends that each of the named Respondents be assessed a civil penalty in the amount of $500,000.

Background

This action began with the Department Staff's ("DEC" or "Staff") 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 which added fictitious names for additional Respondents, allegedly construction lenders, contractors, subcontractors and/or materialmen, retained by or acting on behalf of the original two Respondents. 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, purportedly to bring the penalty into line with the Department's penalty guidance policies and with recent New York case law addressing calculation of penalties for recurring wetlands violations spanning more than a single day.

On January 16, 1998, I issued a ruling denying the inclusion of the additional parties and denying the portion of the Staff's motion to increase the relief sought, without prejudice, pending the submittal of a more detailed explanation of the proposed increased penalty.

On March 5, 1998, the Staff submitted an affirmation addressing the request for the increased penalty, and on April 3, 1998, Respondents supplied an opposing affirmation.

On May 22, 1998, I ruled to grant the Staff's request to amend the Complaint regarding the penalty amount sought.

On July 9, 1998, the Staff served the Amended Complaint, and on July 24, 1998, the Respondents served an Answer to Amended Complaint, admitting that Respondent Chester owned the site, but denying the remainder of the allegations and setting forth three affirmative defenses. Respondents' first affirmative defense generally alleged that activities at the site were performed in conformance with a previous consent order entered into with the Department and that excavation activity, if any, was restricted to wetlands not under DEC's jurisdiction. The second affirmative defense, for Respondent Paulius only, stated that DEC's Complaint failed to allege facts sufficient to sustain a violation of law. The third affirmative defense, alleged on behalf of Respondent Chester only, stated that DEC is estopped from asserting violations for activities purportedly authorized by a prior consent order.

An adjudicatory hearing to consider the alleged violations was convened before Administrative Law Judge Robert P. O'Connor of the Department's Office of Hearings and Mediation Services on January 20 and 21, 2000, in the Department's Region 3 Office located at 21 South Putt Corners Road, New Paltz, New York. The Department Staff was represented by Steven Goverman, Esq., Assistant Region 3 Attorney in the Department's New Paltz office, and the Respondents were represented by Benjamin Ostrer, Esq., Benjamin Ostrer and Associates, P.C., 69 Brookside Avenue, Suite 217, P.O. Box 509, Chester, New York.

Called as witnesses for the Department Staff were Roy A. Jacobson, Biologist in the Department's Bureau of Habitat; Lance F. Kolts, Fish and Wildlife Technician in the Department's Bureau of Habitat; Stefen Seifried, a soils scientist with Natural Resources Conservation Service, U.S. Department of Agriculture, Walton, New York; John Thornburg and Thomas Pease, PhD., P.E., both of Lawler, Matusky and Skelly Engineers, P.C., Pearl River, New York; and Charles Bowman of the firm Land Use, Baiting Hollow, New York.

The Respondents called as witnesses Robert Paulius, partner of Respondent Chester and Vice-President of Respondent Paulius and William Fetter, an engineering geologist from Tectonic Engineering Consultants, Highland Mills, New York.

In all, 27 Exhibits were received in evidence.

Both the Department Staff and the Respondents submitted post-hearing closing briefs which were received on March 1, 2000, following which the record of the hearing was closed.

Department Staff's Position

Respondents Chester and Paulius contend that the Department Staff failed to meet its burden of proof that the filling occurred in 1996, as alleged, or that the fill at the site did not predate a 1991 Consent Order to satisfy previous (1989) wetlands filling violations at the site. The Respondents maintain that the fill for which they are cited in the instant Amended Complaint was related to earlier violations which were the subject of a 1991 Consent Order, and therefore, they cannot be punished twice for that single earlier violation. Respondents seek dismissal of the Complaint.

Findings of fact

The Site

  1. Chester Industrial Park lies within the Village of Chester, Orange County, New York. The New York State Freshwater Wetlands Map No. 19 of 26 (Warwick Quadrangle) for Orange County, finalized on March 25, 1987, shows regulated Freshwater Wetland WR-7 as an elongated wetlands area bordering Black Meadow Creek. A portion of Wetland WR-7 is within the Village of Chester boundary line and occupies a portion of the properties which make up the Chester Industrial Park. Freshwater Wetland WR-7 is classified as a Class II wetland, indicating that it is second (out of four) in priority of its importance in providing the benefits enumerated in the Freshwater Wetlands Law, ECL Article 24.
  2. Respondent Chester Industrial Park Associates, L.P. is the owner of a parcel of land located in the Chester Industrial Park, such parcel being east of Black Meadow Creek and west of the intersection of Elizabeth Drive and Leone Lane and encompassing portions of Wetland WR-7. Respondent V. Paulius and Associates is a general contracting firm which has acted in the capacity of developer of Chester Industrial Park and site manager and/or construction manager for some, if not all, of the buildings erected within the Chester Industrial Park. At least one of the officers of Respondent Paulius, Robert Paulius, is also a partner in Respondent Chester.

Prior Activities at the Site/Violations

  1. In 1989, extensive dredging, filling and excavation activities occurred within a six acre portion of Wetland WR-7. This area is situated to the north of the 12.5 acre wetlands area which is the subject of the instant proceeding. As the result of an identified violation of the Freshwater Wetlands Law within this six acre portion of the regulated wetland, the Department Staff, in August 1990, on the basis of wetland indicator species of vegetation as defined in the Law, delineated and flagged the entire wetlands boundaries for that portion of Wetland WR-7 which lies within Chester Industrial Park. The wetlands boundaries were surveyed and plotted on a survey map in August 1990. The instant site of the alleged violation lies within the boundaries of Freshwater Wetland WR-7, as plotted on the August 1990 survey map.
  2. As part of settlement discussions relating to the 1989 fill violation, Respondent Paulius' wetlands consultant, Charles Bowman/Land Use, submitted to the Department Staff a mitigation proposal which included plans for, among other items, commercial development of a 12.5 acre parcel to the south of the six acre parcel which had been illegally filled. The Department Staff rejected the proposal to disturb additional wetlands on the 12.5 acre parcel (the site of the instant alleged fill violations). In January 4, 1991 written comments regarding Paulius' proposal, the Staff said to Paulius' attorney, "Any activity to be conducted in this area (the 12.5 acre portion) of freshwater wetland WR-7 will be separately subject to the review and permit requirements of the ECL and regulations thereunder."
  3. Respondent Paulius entered into a September 18, 1991 Consent Order ultimately requiring restoration of the six acres of disturbed wetlands area on the site and acquisition and creation and/or enhancement of an off-site wetlands area. The off-site area chosen by Respondent Paulius was a 27 acre site approximately four miles from Chester Industrial Park, for which the Department accepted a proposal for Paulius to enhance an existing wetland and create a new wetland area. The remediation plan also required Paulius to regrade/revegetate the stream corridor at the Chester Industrial Park in a location westerly of the present site of the alleged violations.
  4. On the occasion of the August 1990 delineation of the wetlands on the Chester Industrial Park site, Lance Kolts, a DEC Fish and Wildlife Technician, took photographs of the 12.5 acre area to the south of the six acre area where the 1989 fill violation had occurred. The photographs clearly show an undisturbed area vegetated with purple loosestrife, dogwoods and American Elm, among other species, all indicators of the existence of freshwater wetlands. The 12.5 acre portion of Wetland WR-7 was variously characterized during the hearing as having been "poor quality" or "low quality" wetlands; however, in the aggregate, Freshwater Wetland WR-7 was designated as a Class II wetland, second most important in the State's hierarchy of wetlands classifications.
  5. In October 1994, Mr. Kolts observed a newly dug drainage ditch along the northern boundary of the 12.5 acre parcel of Wetland WR-7. This ditch was effectively draining the wetlands area. He further noticed that ten or more piles of fill had been dumped (but not yet graded out) in the northeasterly portion of the 12.5 acre site. Mr. Kolts later revisited the site in January 1995 and documented his observation with a written report and diagram, and a photograph of the drainage ditch. The Staff shortly thereafter sent a Notice to Cease Violation to Respondent Paulius. This Notice listed not only the ditch and fill violations observed by Mr. Kolts in October 1994, but also detailed the failure of Respondent Paulius to comply with the terms of the 1991 Order on Consent. (Mr. Kolts subsequently inspected the site of the Consent Order required wetlands mitigation and enhancement project on November 8, 1995. The instant hearing record indicates that Mr. Kolts determined at that time that the Respondent appeared to have satisfactorily completed in accordance with the approved specifications most of the work mandated by the terms of the 1991 Consent Order.)
  6. Mr. Kolts discussed the ditch and fill violations with Mr. Bowman, Paulius' wetlands consultant, and asked for a remediation plan. Representatives of Respondent Paulius purportedly admitted to Mr. Bowman that they had indeed performed the noted activities without any permit authorizing them to do so. Mr. Bowman prepared and submitted the requested remediation plan to backfill the drainage ditch and to remove the fill piles (noted on the work plan to be 14 piles) and regrade to original elevations the 12.5 acre site. The instant hearing record indicates that in approximately the late fall of 1995 the Staff accepted the restoration plan proposed by Mr. Bowman; however, neither Mr. Bowman nor Mr. Kolts returned to the site in the subsequent months to ascertain whether the restoration work, i.e. - ditch backfilling, fill pile removal and regrading, on the 12.5 acre portion of Wetland WR-7 had been completed.

The Current Alleged Violation

  1. In the late 1996/early 1997 time frame, Mr. Kolts was traveling in the vicinity of Chester Industrial Park and observed that approximately ten acres of the 12.5 acre portion of regulated Freshwater Wetland WR-7 had been filled and graded. This activity had occurred in the same general area in which Mr. Kolts had observed the piles of fill in 1994, but his latter observation showed that activities on the site covered a much more expansive area. Mr. Kolts noted that no applications had been received by the Department Staff nor any permits issued for the placement of any fill in Wetland WR-7. In his 25 years experience working with the Department's freshwater wetlands regulatory program, Mr. Kolts had never observed such a large area of fill which had been placed in a wetland without a permit.
  2. The Staff took a series of soil probe borings, removing some 31 core samples from the 12.5 acre site in June 1999. The core samples were examined for the depth from ground surface to an interface between the fill materials, in this instance fragmented, coarse granular materials, i.e. - glacial till materials, and an underlying layer of native "hydric" soils which indicated the existence of wetlands; i.e. - typically fine-grained, poorly drained clay sediments which would have been deposited through the activities of water or "lacustrine" materials. The depth of glacial till fill materials varied over the ten acre area, ranging from approximately one-half foot to two feet on the western portion of the filled area to as much as nearly five feet to nearly seven feet in the northerly and easterly portions of the filled area.
  3. Department Staff witness Dr. Thomas Pease, a partner in the firm of Lawler, Matusky and Skelly Engineers and group manager of the firm's geology, groundwater and hazardous waste related work, calculated that, conservatively, based upon the various depths of glacial till material recorded in the core samples, approximately 50,000 cubic yards of fill was deposited over the ten acre portion of the 12.5 acre site in Wetland WR-7. He further noted that a large tractor-trailer of the type which might typically be used to bring fill materials to such a site would commonly have a capacity of approximately 25 cubic yards, meaning that, at a minimum, some 2,000 truck loads of material were deposited over the ten acres, even more if smaller capacity trucks were used as transport vehicles.
  4. Robert Paulius, partner in Respondent Chester and Vice-President of Respondent Paulius, in the winter of 1997 (after the fill over the ten acre area had been documented by the Department Staff), directed an unspecified employee to mow the vegetation on the ten acre area. Unexplainably, the employee, rather than mowing the area, "bladed it off" with the blade on a bulldozer or grader over the course of approximately one and one-half days. The photographs which Mr. Kolts took of the site in March 1997, show the filled area as being essentially level and devoid of any vegetation on the ground surface. Mr. Paulius did not state why he desired to have the vegetation mowed during the winter.
  5. Due to the deposition of fill materials over the ten acre portion of the 12.5 acre parcel of Wetland WR-7, the disturbed site no longer exhibits any characteristics of a freshwater wetland. The freshwater wetlands benefits identified in ECL Article 24, including flood control, wildlife habitat, sedimentation control and recreation and aesthetic values, have been completely obliterated by the activities undertaken on the site. It is possible, however, to remediate the site and restore the wetlands characteristics and functions. Such an endeavor would require removal of the fill materials down to the hydric soils, elimination of any drainage ways which had been installed and the replanting of wetlands species of plants to achieve a diversity in habitat types. This type of remediation could be accomplished within one growing season.

Statutory Provisions

ECL §24-0701(2) provides in pertinent part: "Activities subject to regulation shall include . . . draining, . . . any form of filling, or depositing of any soil, stones, sand, gravel, mud, rubbish or fill of any kind, either directly or indirectly, erecting any structures, roads, the driving of pilings, or placing of any other obstructions whether or not changing the ebb and flow of the water . . . and any other activity which substantially impairs any of the several functions served by freshwater wetlands or the benefits derived therefrom which are set forth in section 24-0105 of this article . . .".

ECL §71-2303 provides that any person who violates, disobeys or disregards any provision of Article 24 or any rule or regulation, local law or ordinance, permit or order issued pursuant thereto, shall be liable for a civil penalty of up to $3,000 for every such violation.

Conclusions

  1. The site which is the subject of the instant administrative enforcement action, i.e. - a ten acre portion of a larger 12.5 acre section of land within the Chester Industrial Park in the Village of Chester, Orange County, New York, is part of New York State regulated Freshwater Wetland WR-7, as depicted on the Warwick Quadrangle, sheet 19 of 26 of the Freshwater Wetlands Map for Orange County, New York. The wetlands and their adjacent areas within the Chester Industrial Park were delineated and flagged by the Department Staff in 1990, then surveyed and the survey placed upon a site map of a portion of the Chester Industrial Park for Respondent Paulius.
  2. As noted in Finding No. 2 above, Respondent Chester Industrial Park Associates, L.P. is the owner of a parcel of land located in the Chester Industrial Park, such parcel being east of Black Meadow Creek and westerly of the intersection of Elizabeth Drive and Leone Lane. This parcel encompasses the ten acre portion of the 12.5 acre section of Freshwater Wetland WR-7 which is the subject of the instant hearing. Respondent V. Paulius and Associates is a general contracting firm which has acted in the capacity of developer of the Chester Industrial Park and site manager and/or construction manager for some, if not all, of the buildings erected within the Chester Industrial Park. At least one of the officers of Respondent Paulius, Robert Paulius, is also a partner in Respondent Chester. The record is uncontroverted that no entities, other than the Respondents, exercise control over or are responsible for the activities which occur on the site.
  3. At some unspecified time, subsequent to the fourteen piles of fill being located in the northern portion of the 12.5 acre section of Wetland WR-7, as observed by Mr. Kolts in October 1994, but prior to Mr. Kolts observation of the site in late 1996/early 1997, a large quantity of glacial till fill material, conservatively calculated to be at least 50,000 cubic yards, was placed within and then graded off over a ten acre portion of Wetland WR-7. The deposition of such a large quantity of fill would have required a minimum of 2,000 truck trips to the site. It is inconceivable that the extensive filling and grading activities which took place over the ten acre portion of Wetland WR-7 could have occurred without the Respondents' knowledge and consent.
  4. The act of depositing fill of any kind within a regulated/protected freshwater wetlands orits adjacent area is a regulated activity for which specific authorization from the Department is required. The Respondents, through their attorney, were advised by the Department Staff in 1991 that any regulated activities which were proposed to take place within the portion of Wetland WR-7 and its adjacent area encompassed by the Chester Industrial Park would require a permit from the Department.
  5. Neither Respondent Chester nor Respondent Paulius ever applied to the Department for a freshwater wetlands permit seeking authorization to deposit fill upon the ten acre portion of Wetland WR-7, nor did they receive a permit which authorized the deposition of fill on the subject site.
  6. The unauthorized deposition of fill within the ten acre portion of Wetland WR-7 has totally eliminated any wetland values and benefits which were previously exhibited in this portion of a regulated Class II freshwater wetland under New York State jurisdiction.
  7. The Respondents' actions, as described above and on the previous pages, constitute violations of the Environmental Conservation Law Article 24 (Freshwater Wetlands) and the Department's implementing regulations in 6 NYCRR Part 663.

Discussion

The three affirmative defenses claimed by the Respondents are unavailing. With respect to the first, the 1991 Consent Order did not authorize the deposition of any fill on the ten acre portion of Wetland WR-7. Additionally, the ten acre site upon which the fill materials were deposited is part of a 12.5 acre wetland area which is wholly included within Freshwater Wetland WR-7, a regulated wetland under New York State jurisdiction. With respect to the second, pertaining to Respondent Paulius, the facts alleged in the Amended Complaint are more than sufficient to sustain a violation of law. Thirdly, with respect to Respondent Chester, the violations asserted by the Department Staff were never authorized by the prior Consent Order.

In the Respondents' closing brief in this matter, "Respondents did not dispute the fact that the subject site was filled, but vigorously denied and opposed any claim that filling took place in the Summer or Fall of 1996." Thus, Respondents acknowledge that the subject site was filled and only dispute the time and circumstances during which the filling occurred.

Respondents' claim that the filling occurred as a result of their required compliance with the 1991 Consent Order, however, is rather fanciful. Although the 12.5 acre southern portion of Wetland WR-7 within the Chester Industrial Park had previously been disturbed by agricultural activities, it was not filled by the activities which resulted in the 1991 Consent Order. When Mr. Kolts delineated and flagged the wetland boundaries within the Chester Industrial Park in preparation for a survey of the wetland boundaries in August 1990, the entire 12.5 acre area, of which the ten acre filled area is part, was determined to be wetlands, based upon its support of wetlands indicator species of vegetation, pursuant to ECL Article 24. Furthermore, the Respondents' proposal for development and construction of additional facilities for the Chester Industrial Park on the 12.5 acre wetlands parcel, as included in the early draft of the wetlands mitigation plan required by the 1991 Consent Order, was specifically rejected by the Department Staff in 1991.

Mr. Kolts' observations of the 12.5 acre portion of the wetland in October 1994, as differentiated from his assessment of the site in 1990, only revealed the addition of a drainage ditch and the 14 fill piles in the northern part of the 12.5 acre part of the wetlands. Thus, the extensive filling and grading of ten acres of this 12.5 acre portion of the wetlands had to have occurred sometime after October 1994, and likely after January 3, 1996 when Mr. Bowman, Respondent Paulius' wetlands consultant, transmitted to Robert Paulius a letter stating, "As per your request please find attached (1) copy of the restoration plan approved by NYSDEC." The restoration plan attached was for the backfilling of the drainage ditch and removal of the 14 fill piles which Mr. Kolts had observed in October 1994. Mr. Bowman faxed his January 3, 1996 letter with the attached restoration plan to the Respondents' attorney on June 11, 1996. As noted above, it was late in 1996 or early in 1997 when Mr. Kolts observed that the ten acres of fill had been emplaced and graded within the 12.5 acre portion of Wetland WR-7.

With respect to the Staff's request for a penalty, any penalty request up to and/or at the maximum allowed by law may be justifiable if the allegations of violations are proven, depending upon the circumstances involved. In this instance, the statutory maximum allowable penalty for all provable violations of the Freshwater Wetlands Law, ECL Article 24, is $3,000 for every such violation, assessable against any person who is shown to be such a violator. In a parallel case involving violations of the Tidal Wetlands Law, ECL Article 25, the Appellate Division affirmed a lower court finding that each occasion unpermitted fill is physically placed within a violation site constitutes a separate and distinct violation of Article 25 subject to a separate and additional penalty assessment [See Matter of Nieckoski, 215 A.D.2d 761, 627 N.Y.S.2d 442 (2nd Dept., 1995).

On the basis of evidence and information available to the Department Staff prior to the hearing, the Staff estimated that to cover the ten acre area of the wetland with fill would have required some 90 truckloads of fill material to have been brought to the site. Thus, founded upon the Nieckoski case law precedent, the Staff requested in its Amended Complaint that a monetary penalty of $270,000 be assessed against each of the two Respondents, i.e. - 90 separate violations times the $3,000 maximum allowable penalty equals $270,000. Subsequent evidence developed at the hearing demonstrated that a minimum of 2,000 separate violations of ECL Article 24 were committed as that many truckloads of fill were brought to the site, thus bringing the potential maximum penalty for each Respondent to $6,000,000. However, as a matter of due process and fundamental equity, the Staff decided to limit the ad damnum to its initial calculation in the Amended Complaint.

Other considerations in recommending the appropriate penalty amounts for violations of the ECL include recovery by the Department of any economic benefit accrued to the violator(s) as the result of noncompliance. In this instance, since the filled portion of the wetlands has not yet been developed, the Respondents have not realized any economic benefit from their noncompliance with the ECL. Furthermore, the Respondents will have to shoulder the not insignificant costs of remediating the site through removal of the fill down to the hydric soil horizon and restoration of the wetland benefits through re-establishment of elevations, hydrologic conditions and wetland plant species.

A further factor in the penalty calculation is gravity of harm, i.e. - the seriousness of the violation with reference to the actual damage to the environment and the relative importance of the type of violation in the Department's regulatory scheme. In this instance, actual damage amounts to total destruction of that portion of the freshwater wetland which was filled and a complete loss of the benefits provided by those wetlands. Here, the violation is the most extensive instance of unpermitted filling of a freshwater wetland within the Department's Region 3 area since the enactment of the Freshwater Wetlands Law in 1975. As to the importance of the type of violation in the regulatory scheme, the activity of filling is incompatible within any category or class of freshwater wetlands, pursuant to the Department's implementing regulations in 6 NYCRR Part 663, wherein there is also the recognition that "Class II wetlands provide important wetland benefits, the loss of which is acceptable only in very limited circumstances." While the actual filled ten acre portion of the wetlands may not have provided the benefits of a Class II wetlands, the total loss of wetland functions and benefits for those ten acres diminishes the quality and value of Wetland WR-7 as a whole. Lastly, any avoidance of the regulatory process requiring application, project review and permitting deprives the Department of its obligation to carry out its statutory mandates. Here, the Respondents' contempt for the law is particularly egregious in the context of the overall statutory and regulatory process of the State and such actions cannot be countenanced.

The Department's Civil Penalty Policy also provides for penalty adjustment factors, such as consideration of Respondents' culpability, the degree of cooperation shown by Respondents in resolving violations and the Respondents' ability to pay. As concerning culpability of the Respondents, particularly Respondent Paulius has a checkered history of disregarding State and Federal laws at and in the vicinity of the Chester Industrial Park. A prior violation concerning unpermitted dredging of a stream bed and excavation and grading in Freshwater Wetland WR-9 and its adjacent area nearby in Village of Chester was settled by Consent Order with the Department in October 1989. The 1991 Consent Order, as previously mentioned, was to settle multiple violations of several sections of the ECL, including illegal, unpermitted work in Wetland WR-7, discharge of oil into a tributary of Black Meadow Creek and solid waste violations at and/or in the vicinity of the Chester Industrial Park. The aforementioned illegal drainage ditch and 14 fill piles were found in Wetland WR-7 in 1994. Another Consent Order settled violation of the ECL by the unpermitted installation of a sanitary sewer main at the Chester Industrial Park without the required Department approvals. Respondent Paulius was issued a Cease and Desist Order by the U.S. Army Corps of Engineers in March 1997 for illegal placement of fill in wetlands under Federal jurisdiction at the Chester Industrial Park. Respondent Paulius has been cautioned repeatedly by Department representatives, by Federal agencies, and even by its own wetlands consultant, regarding the regulated nature of the wetlands on the Chester Industrial Park property and of the need to obtain the appropriate permits prior to conducting regulated activities within the wetlands areas, only to forge ahead with wanton and wilful abandon and arrogant disregard for environmental laws and regulations in pursuit of development opportunities.

While Respondent Paulius has previously entered into Consent Orders and has satisfactorily completed remedial actions to settle previous violations, in the instant matter, the named Respondents, as is their right, pursued the litigious venue in taking the Department's Complaints to a formal hearing. They cannot be faulted for seeking resolution of this matter through the hearing process, but by doing so, pursuant to the Department's Civil Penalty Policy, they forfeited the opportunity to settle the violations for a potentially much lower monetary penalty.

There is no information in the hearing record regarding the Respondents' ability to pay any assessed penalties.

Lastly, it is the Department's policy, as mentioned above, to require complete restoration of any functions, values and benefits of regulated wetlands areas which have been illegally altered. Due to the costs of restoration, this requirement often serves as a deterrent to those who otherwise might consider pursuing unauthorized activities within regulated wetlands areas. In this instance, the Staff seeks the full and complete restoration of the functions, benefits and values of the ten acres of Wetland WR-7 which were illegally filled by the Respondents.

Recommendation

In consideration of the above Findings of Fact, Conclusions and Discussion factors, I recommend that the Commissioner issue an Order finding Respondents Chester and Paulius have violated ECL Article 24 and 6 NYCRR Part 663, and directing the named Respondents: to submit, within 60 days of the issuance of the Commissioner's Order, an approvable plan for restoration of the subject ten acre portion of Freshwater Wetland WR-7, providing that all the fill placed in the wetland is completely removed down to the hydric soil horizon and is legally disposed of, that the appropriate hydrology in the wetland is restored and that the named Respondents will fully and completely restore the violation site in accordance with a plan approved by the Department Staff.

In view of the aggravating circumstances in this matter, especially the history of persistent continual and wilful non-compliance with and violation of statutory and regulatory environmental requirements, particularly by Respondent Paulius, and in view of the potential liability demonstrated at hearing of a $6,000,000 civil penalty for each Respondent, I further recommend that the monetary penalty proposed by the Department Staff be increased and that the Commissioner's Order assess against each of the named Respondents a civil penalty in the amount of $500,000.


_____________/s/_____________
Robert P. O'Connor
Administrative Law Judge
Office of Hearings and Mediation Services
New York State Department
of Environmental Conservation

Dated: Albany, New York
July 7, 2000

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