Chichester and Wohl - Ruling, February 12, 1998
Ruling, February 12, 1998
STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION
In the Matter of
the Alleged Violations of Article 17 of the Environmental Conservation Law (ECL), and Article 12 of
the Navigation Law of the State of New York and 6 NYCRR Part 703
- by -
Everett Chichester, Jr.
Respondents' Motion to Dismiss for Failure to Join Necessary Party or for Order Mandating Joinder
Case No. R4-1401-92-09
Pursuant to a Notice of Hearing and Complaint dated August 18, 1997, the New York State Department of Environmental Conservation (the "Department" or "DEC") Region 4 Staff (the "Department Staff" or "Staff") initiated a civil administrative enforcement proceeding against Albert Wohl, 6 Parkway Drive, Cobleskill, NY 12043 and Everett Chichester, P.O. Box 373, Cobleskill, NY 12043, Respondents. Such proceedings are conducted in accordance with the State Administrative Procedure Act ("SAPA") and Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York ("6 NYCRR") Part 622. Staff seeks a monetary penalty, remedial action, and other relief for the alleged discharge of petroleum to the state's waters from Respondents' storage facility in violation of ECL Article 17 and Navigation Law Article 12.
Respondent Wohl, through his attorney T. Paul Kane, Esq., filed an Answer dated September 19, 1997. Respondent Chichester, through his attorneys Pepe & Hazard LLP, Reed D. Rubinstein and Robert L. Keepnews, Esqs., of counsel, filed an Answer and Defenses dated September 26, 1997. Staff, through Ann Lapinski, Esq., Assistant Regional Attorney, filed a Statement of Readiness with the DEC Office of Hearings and Mediation Services (OHMS) on October 17, 1997, requesting a hearing. On October 20, 1997, this matter was assigned to the undersigned, Administrative Law Judge Frank Montecalvo (the ALJ).
Pursuant to a November 18, 1997, conference call between the ALJ, Ms. Lapinski, Mr. Kane and Mr. Rubinstein, the parties agreed that the hearing would be held in abeyance pending a prehearing motion by Respondents to implead a third party. Respondent Chichester filed the Motion with a Memorandum of Law on December 12, 1997. Respondent Wohl joined in this motion through letter of counsel received December 24, 1997. Staff filed their Reply on December 31, 1997.
This Motion is now ready for determination.
Alleging the history of the site and submitting affidavits and a study indicating an earlier spill or spills, Respondents contend they are not responsible for the gasoline contamination in issue in this proceeding, but, rather, that the contamination was caused by spills and releases during Texaco, Inc.'s (Texaco) prior 40 year use or ownership of the site.
Claiming that they are at risk to pay potential fines and remedial obligations for a condition they did not create, Respondents argue that Texaco is a necessary party to this proceeding, and that failure to join Texaco would be inequitable, result in a multiplicity of actions, and deny Respondents their right to finality.
Respondents request that this action either be dismissed because of the non-joinder or, alternatively, that the Department be ordered to join Texaco "so that the polluter may be held liable for the cleanup, Respondent's rights may be protected, and the interests of judicial economy served." Respondents claim that DEC would have an adequate remedy if this action were dismissed, namely, DEC may bring action against "deep-pocket" Texaco rather than against two "functionally innocent parties with limited resources." They argue that joining Texaco would allow contribution claims and common questions of law and fact to be resolved in one forum, resulting in judicial economy and less expense. Respondents rely on Civil Practice Law and Rules (CPLR) 1001 and 1002(b) and certain case decisions in their argument.
The Staff argue that the enforcement hearing regulations at 6 NYCRR Part 622, not the CPLR, control this proceeding. Staff point out that an earlier version of Part 622 which contained provisions allowing dismissal for nonjoinder and adding or dropping parties has since been rewritten to leave out these provisions. Staff argue that this change indicates that joinder is no longer an option.
Staff argue that if Texaco were to be added as a respondent, it is unclear who would prosecute that aspect of the case since Staff does not believe it has enough proof against Texaco at this time, and there is no authority for Respondents to take the role of prosecutor.
Assuming that CPLR 1001 and 1002 apply, Staff contend that the standards for joinder are not met. Staff do not find Texaco's liability clear while finding that of Respondents (through owner/operator status) clear under recent case law. Staff argue that Texaco's presence is not necessary for complete relief to be accorded because Respondents are fully responsible for a cleanup. Staff further argue that if Respondents want to pursue Texaco, they may do so in State or Federal Court in a completely separate proceeding that would be non-duplicative.
Staff contend that this proceeding needs to consider only the extent of contamination currently on site and what needs to be done to clean it up. In essence, Staff say it is not necessary to consider Texaco's potential liability.
Assuming for the sake of argument that the DEC hearing regulations require dismissal of an action for nonjoinder of a party that should be joined under CPLR 1001, Respondents have not demonstrated that Texaco is a party that should be joined under that section.
In relevant part, the CPLR states as follows:
"Sec. 1001. Necessary joinder of parties. (a) Parties who should be joined. Persons who ought to be parties if complete relief is to be accorded between the persons who are parties to the action or who might be inequitably affected by a judgment in the action shall be made plaintiffs or defendants. *** "
As Staff worded their three causes of action, Staff base Respondents' liability upon (1) "contamination of groundwater" (Complaint 17), (2) "discharge of petroleum" (Complaint 21) and (3) "failing to immediately contain the discharge of petroleum" (Complaint 24) since December 16, 1987. Essentially, Staff's complaint is based on acts and omissions of Respondents, alleged to have occurred at a time after the time Respondents claim that Texaco was involved with the site. Moreover, these acts and omissions are alleged to be ongoing. If liability (i.e., Staff's entitlement to relief) can be established upon facts occurring after Texaco's involvement with the site ended, then neither the "need" to make Texaco a party, nor Texaco's potential to be affected by a judgment, have been established.
Assuming that Texaco was responsible in whole or in part for the existing on-site conditions, dismissal of this case as to Respondents would jeopardize the Department's primary purpose. The object of the Department's enforcement action is to require persons with legal responsibility to eliminate contamination from the site. Since the site is alleged to be under ownership and control of the Respondents, their cooperation is necessary for a clean up effort to be carried out. Dismissing the case against Respondents would mean dismissing parties essential to the DEC obtaining complete relief.
As an "enforcement" matter, this proceeding is to determine liability under the DEC regulations and ECL, to determine what, if any, penalties are appropriate, and to determine what remedial action should be ordered. This is not an appropriate place to consider "contribution claims," i.e., to determine parties' liabilities relative to each other for damages.
Since contribution claims are not considered here, and since the complaint does not allege facts or omissions during the time of Texaco's alleged involvement with the site, there do not appear to be sufficient "common questions" of fact or law which would make permissive joinder of Texaco worthwhile.
In summary, Texaco has not been demonstrated to be a "necessary party" either to afford complete relief or because it could be affected by a judgment in this proceeding. Since Respondents own or operate the site, dismissing the proceeding against them would prevent DEC from obtaining complete relief. If there are any common facts between the matters in issue here and those of concern to Respondents, they appear to be relevant only to the propriety of the penalty and do not require joinder to be considered.
The Respondents' motion to dismiss for failure to join a necessary party or for an order mandating joinder is denied.
The parties will be notified of the hearing date.
For the New York State Department
of Environmental Conservation
By: Frank Montecalvo
Administrative Law Judge
Dated: February 12, 1998
To: Reed D. Rubinstein, Esq.
T. Paul Kane, Esq.
Ann Lapinski, Esq.