Evergreen Recycling, LLC - Ruling, November 18, 2003
Ruling, November 18, 2003
NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION
In the Matter of an Application to construct and
operate a solid waste management facility pursuant
to Title 6 of the Official Compilation of Codes,
Rules and Regulations of the State of New York
(6 NYCRR) Part 360 in the Town of Clay,
Onondaga County by
Ruling and Notice of
DEC Case No. 7-3124-00356/1
Evergreen Recycling, LLC,
November 18, 2003
By letter dated July 16, 2003, Region 7 Department Staff (Staff) denied the captioned permit application. Evergreen Recycling, LLC (Applicant) requested an administrative hearing in a letter dated July 16, 2003. In addition, Applicant served the Department and several local municipalities and public corporations with a notice of claim dated July 16, 2003. This ruling addresses whether the DEC administrative hearing should continue while the notice of claim remains pending. After considering the arguments presented by the Issues Conference participants, the DEC administrative hearing concerning the captioned permit application is adjourned without date until the damages alleged in Applicant's July 16, 2003 notice of claim are resolved on the merits by a court of competent jurisdiction.
Applicant has applied to the Department for a permit to construct and operate a solid waste transfer station pursuant to 6 NYCRR part 360. The proposed facility would use an existing building located at 7707 Henry Clay Boulevard in the Town of Clay, Onondaga County, New York.
With a cover memorandum dated December 23, 2002, Region 7 Department Staff forwarded a hearing request to the Office of Hearings and Mediation Services (OHMS) for a legislative public hearing concerning the captioned application. Subsequently, Administrative Law Judge (ALJ) Daniel P. O'Connell presided at the legislative public hearing that was held at the Liverpool High School Auditorium on January 9, 2003 at 7:00 P.M. Staff accepted written comments about Applicant's proposal until January 17, 2003.
After reviewing the public comments, Staff requested additional information from the Applicant in a letter dated May 5, 2003. Applicant responded in a letter dated May 28, 2003. After reviewing Applicant's response, Staff denied the requested permit in a letter dated July 16, 2003. By letter also dated July 16, 2003, Applicant requested an adjudicatory hearing. Staff forwarded a second hearing request with a cover letter dated July 21, 2003 to OHMS.
ALJ O'Connell prepared a Notice of Issues Conference and Adjudicatory Hearing dated August 13, 2003 (the Notice). The Notice appeared in the Department's Environmental Notice Bulletin (ENB) on August 13, 2003 and in the Post-Standard on August 15, 2003. The Notice incorporated by reference all the oral statements made at the January 9, 2003 legislative hearing session as well as all timely filed written comments into the record of the administrative hearing. In addition, the August 13, 2003 Notice set a return date of August 25, 2003 for petitions for either full party status or amicus status. Subsequently, a Notice of Extension to File Petitions for Party Status dated August 20, 2003 (Notice of Extension) appeared in the ENB on August 20, 2003 and in the Post-Standard on August 22, 2003. The Notice of Extension changed the return date for filing petitions from August 20, 2003 to September 2, 2003.
Timely filed petitions were received from the following:
- The Onondaga County Resource Recovery Agency (OCRRA) filed a petition for amicus status dated August 28, 2003. OCRRA filed a supplement dated September 5, 2003. William J. Bulsiewicz, Esq, Agency Counsel appeared for OCRRA.
- Madison County filed a petition for full party status dated August 15, 2003, and a supplement dated August 29, 2003. Judy Drabicki, Esq., Dexter, New York appeared on behalf of Madison County.
- Informed Clay Residents Against the Transfer Station (I C RATS [the Clay Residents]) filed a petition for full party status dated August 30, 2003. Attorney Drabicki also appeared on behalf of the Clay Residents.
- The Town of Camillus filed a petition for full party status dated August 28, 2003. The Town of Camillus appeared by Dirk J. Oudemool, Esq., Syracuse, New York.
- Onondaga County filed a petition for full party status dated August 29, 2003. Christopher M. Mack, Esq., Chief Deputy County Attorney, appeared for Onondaga County.
- The Town of Clay filed a petition for full party status dated August 19, 2003, and two supplements both dated August 28, 2003. Robert M. Germain, Esq., from Germain & Germain, LLP, Syracuse, New York appeared for the Town of Clay.
- The Oneida-Herkimer Solid Waste Management Authority (Oneida-Herkimer SWMA) filed a petition for full party status dated August 22, 2003. The Authority's counsel is Peter M. Rayhill, Esq., from Kernan and Kernan, PC, Utica, New York.
As provided for in the August 13, 2003 Notice, the Issues Conference convened at 10:30 A.M. on September 8, 2003 at the Westvale Plaza in Syracuse, New York. In addition to the participants identified above, DEC Region 7 Staff appeared at the Issues Conference and was represented by Jennifer Powell, Esq., Assistant Regional Attorney. Applicant appeared and was represented by Mindy L. Zoghlin, Esq., from Bansbach, Zoghlin & Wahl, PC, Rochester, New York. Members of the public attended the Issues Conference.
The discussion at the Issues Conference initially focused on identifying all the papers filed by the prospective intervenors with their respective petitions, and determining whether all Issues Conference participants had a complete set. The discussion then turned to the application materials. Based on the discussion at the Issues Conference, Applicant's counsel provided a list of materials which constitute the application. As I requested, Applicant subsequently provided a copy of this list with a cover letter dated September 16, 2003. For purposes of identification, Applicant's September 16, 2003 letter and attached list of application materials have been marked as Exhibit 4.
The remainder of the discussion at the Issues Conference focused on Applicant's notice of claim dated July 16, 2003. Subsequently, the Issues Conference was adjourned at the conclusion of the discussion to provide the participants with an opportunity to file briefs and replies concerning the potential effects of Applicant's notice of claim on the DEC administrative hearing process, and to provide me with an opportunity to decide how the DEC administrative hearing will continue.
General Municipal Law Article 4
General Municipal Law article 4 outlines procedures for giving notice to, and initiating civil claims against, municipalities and other public corporations. General Municipal Law § 50-e provides for a notice of claim where service of the notice of claim upon the public corporation is precedent to the commencement of an action. The notice of claim must be served within 90 days (General Municipal Law § 50-e[a]) after the claim arises. The purpose of the notice of claim is to enable the public corporation to investigate claims and obtain evidence promptly (State v. Waverly Central School District, 28 AD2d 628, 628-629 ). The notice must describe the nature of the claim, when, where and how it occurred, and the nature of the injuries (General Municipal Law § 50-e).
Section 50-h provides the public corporation with the right to examine the claim. To do so, the public corporation must make a written demand and serve it upon the claimant. The examination must be conducted under oath or affirmation, and a transcript must be made (General Municipal Law § 50-h). Subsequently, the claimant may commence the action with service of a complaint. Pursuant to General Municipal Law § 50-i(1)(c), the action must commence with service of a complaint within one year and ninety days after the event upon which the claim is based.
Applicant's Notice of Claim
Applicant served a notice of claim dated July 16, 2003 upon the Counties of Madison, Onondaga and Oswego; the City of Auburn; the Towns of Camillus, Cicero, and Clay; OCRRA; Oneida-Herkimer SWMA; and the NYS Department of Environmental Conservation. In Paragraph 2 of the July 16, 2003 notice of claim, Applicant states that the "nature of the claim includes, but is not necessarily limited to: tortious interference with business relations, abuse of process, prima facie tort, common law indemnity, breach of contract, restitution and strict liability," as well as "antitrust and constitutional violations." In Paragraph 3 of the notice of claim, Applicant states that the "time when the claim first arose and the first injuries sustained was on July 16, 2003, when the New York State Department of Environmental Conservation denied Evergreen Recycling LLC's application for a permit to operate a solid waste management facility at 7707 Henry Clay Blvd., Town of Clay."
As directed in my memorandum dated September 3, 2003, Applicant provided me with a copy of the notice of claim with a cover letter dated September 4, 2003. With a cover letter dated September 4, 2003, the Town of Clay provided me with a copy of a supplemental claim served against Oswego County on July 31, 2003.
Positions of the Issues Conference Participants
Applicant's July 16, 2003 notice of claim, its potential effects, and how the DEC administrative hearing should continue were discussed at the September 8, 2003 Issues Conference. At the conclusion of the discussion, a briefing schedule was established to provide the Issues Conference participants with an opportunity to present additional arguments. Briefs were due by September 29, 2003. OCRRA, Madison County, Town of Camillus, Onondaga County, Town of Clay, Oneida-Herkimer SWMA, Staff, and Applicant timely filed briefs. Replies were authorized and due by October 14, 2003. Onondaga County, Oneida-Herkimer SWMA, DEC Staff, and Applicant timely filed replies. Town of Clay and Madison County timely filed a joint reply. Neither a brief nor a reply was received from the Clay Residents. A reply was not received from OCRRA. The respective positions of the Issues Conference participants are discussed below.
As of the date of the September 8, 2003 Issues Conference, Madison and Onondaga Counties, the Towns of Camillus and Clay, and Oneida-Herkimer SMWA had requested hearings pursuant to General Municipal Law § 50-h. According to Oneida-Herkimer SWMA's reply, all the General Municipal Law § 50-h hearings have been adjourned, except for Onondaga County's, and have not been rescheduled. Attached to its brief as Exhibit F, Onondaga County provided a copy of the transcript from the General Municipal Law § 50-h hearing. According to the transcript: (1) Applicant requested an adjournment of the General Municipal Law § 50-h hearing, but Onondaga County did not consent to one; and (2) Applicant did not appear at the General Municipal Law § 50-h hearing on September 22, 2003.
Next, the prospective intervenors explained whether and how the notice of claim influenced their respective decisions to participate in the DEC administrative hearing. In its brief, OCRRA argues that Public Authority Law § 2045(e)(6) requires it to participate in this hearing. As a result of the notice of claim, and in an effort to limit its potential liability, OCRRA decided to file a petition for amicus status rather than one for full party status. OCRRA is concerned that its continued participation in the DEC administrative hearing could expose it to additional notices of claim from Applicant.
Madison County is concerned about the potential litigation costs associated with the notice of claim. Nevertheless, Madison County contends that it is important to participate in the DEC administrative hearing, and Madison County is willing to face the added risks that may be associated with participation.
After the Town of Camillus learned that OCRRA was going to seek amicus status, the Town decided to file a petition for full party status Based on state requirements concerning solid waste management that emphasize county management, the Town of Camillus states it was concerned that its various interests would not be adequately represented in this proceeding if OCRRA's participation is limited to amicus status. According to the Town of Camillus, its landfill is designated in Onondaga County's approved solid waste management plan (resolution #468 of 1993). The Town of Camillus contends that OCRRA has significant relevant evidence in its possession and the Town of Camillus wants to have an opportunity to present that evidence at hearing if OCRRA is limited by its request for amicus status. The Town of Camillus argues further that Oswego County should also be participating in this DEC administrative hearing. According to the Town of Camillus, Oswego County would have significant information to present at hearing.
Onondaga County is concerned that its participation at the Issues Conference could reveal defense strategies or information related to the notice of claim that Onondaga County would consider privileged. The Town of Clay is concerned that many potential expert and lay witnesses would not want to testify at the DEC administrative permit hearing because a lawsuit has been threatened.
According to Applicant, actual damages may not exist. However, Applicant argues that any potential claim for damages needs to be evaluated. Applicant explains that if notices of claim are not timely served, then Applicant would waive the right to initiate them. If a complaint is eventually served, Applicant argues that the courts would decide whether the complaint is meritorious. Applicant maintains that the DEC administrative hearing concerning the captioned matter is unrelated to the notice of claim. At the Issues Conference, Applicant referred to its letter dated September 4, 2003, and it was marked for identification as Exhibit 3. Applicant argues that it can be reasonably inferred from the prospective intervenors' respective appearances at the Issues Conference that they are not all that concerned about the notice of claim.
Even though each municipal and public corporation who attended the Issues Conference as well as DEC Staff acknowledged receiving a copy of Applicant's notice of claim shortly after July 16, 2003, only OCRRA mentions Applicant's July 16, 2003 notice of claim in its petition for amicus status. Many of the prospective intervenors and Department Staff, however, assert that Applicant's July 16, 2003 notice of claim had a chilling effect on public participation. In its brief, Madison County contends that the intent of ECL article 70 (Uniform Procedures Act [UPA]) and its implementing regulations 6 NYCRR parts 621 and 624 is to "encourage public participation in government review and decision-making processes and to promote public understanding of all government activities" (see ECL 70-0103).
Madison County notes further that all of the nine municipalities and public corporations that participated early in the administrative process were identified in the notice of claim. Of the original nine, Madison County observes that three did not file petitions to participate in the DEC administrative hearing concerning the subject application. Madison County argues that the absence of these three public corporations shows that their participation was chilled by the notice of claim in contravention of the public policy expressed in the UPA. Madison County argues further that it is impossible to know how many more potential parties chose not to participate in the DEC administrative hearing because of the publicity associated with Applicant's notice of claim.
Oneida-Herkimer SWMA argues that the intent of the notice of claim was to limit or chill public participation at the DEC administrative hearing because the date of the notice of claim coincides with the date of the DEC Staff's denial letter.
DEC Staff acknowledges that the Department is a frequent party to lawsuits. According to Staff, many seek judicial review of the Department's final agency determinations pursuant to CPLR article 78. Staff has two major concerns about the notice of claim, however. First, a claim for money damages is very different from a CPLR article 78 review, according to Staff. Staff is concerned about participating in the DEC administrative hearing under the threat of a claim for money damages because Applicant may be attempting to use the hearing process as a discovery device to prove its claim.
Staff's second concern relates to the potential effect on public participation. According to Staff, public participation is a critical component of the DEC administrative hearing process. Staff contends there are several ways that the public participates. These include providing comments during the public comment period, petitioning for party status, and offering lay or expert testimony as witnesses. Staff asserts there would be a serious problem if any of these forms of public participation has been limited by Applicant's notice of claim. Staff argues that Applicant's notice of claim violates both the legislative intent of ECL 70-0103(4), which is "to encourage public participation in government review and decision-making processes," as well as the spirit and intent of the law against strategic lawsuits against public participation (SLAPP) codified at section 70-a of the New York State Civil Rights Law.
In its brief, Applicant responds to the arguments made by each prospective intervenor. Applicant notes generally that the Issues Conference participants did not identify any facts to support their respective contentions concerning the chilling effect that the notice of claim had on public participation in the DEC administrative hearing.
With respect to the municipalities and public corporations who were served with the notice of claim, but who did not petition to participate in the DEC administrative hearing, Applicant offers the following arguments. According to Applicant, Oswego County's comments at the January 9, 2003 legislative hearing were nearly identical to the statements made by representatives from other municipal corporations. Applicant contends that if Oswego County had decided to participate in the hearing, it would not offer anything different from what the Towns of Clay and Camillus have proposed in their respective petitions for full party status.
Applicant argues that the City of Auburn lacks any environmental interest (6 NYCRR 624.5[b][ii]) in this proceeding and probably would not have raised any substantive and significant environmental issues. According to Applicant, the City of Auburn's comments about the application relate to compliance with the local solid waste management plan. Applicant contends that such an issue cannot be adjudicated. Applicant concludes that the City of Auburn's absence from this proceeding is not surprising.
With respect to the Town of Cicero, Applicant notes that the Town did not file any public comments about Applicant's proposal. According to Applicant, the Town of Cicero should not have been included in the notice of claim. As a result, Applicant concludes that the notice of claim could not have chilled the Town of Cicero's participation in the DEC administrative hearing. Applicant does not state in its papers, however, that it intends to withdraw the notice of claim against the Town of Cicero.
Applicant argues further that, as a matter of law, the notice of claim cannot have a chilling effect because the right of public participation extends to individuals and not to municipal and public corporations such as the prospective intervenors. According to Applicant, the SLAPP suit legislation protects citizen activists, not governmental entities from lawsuits brought against them in retaliation for their public advocacy. To support its contention, Applicant cites Matter of City of Saratoga Springs v. Zoning Board of Appeals, 279 AD2d 756, app withdrawn 96 NY2d 915 (2001). According to Applicant, no reported administrative or judicial decision has extended the public participation protections to governmental agencies.
Applicant acknowledges that SEQRA relies heavily on public participation. According to Applicant, however, the legislative history makes clear that public participation means citizen participation. Citing ECL 8-0103(2), Applicant asserts that the legislature declared that "every citizen has a responsibility to contribute to the preservation and enhancement of the quality of the environment." Applicant maintains that public participation under SEQRA means citizen participation, not governmental participation.
Finally, Applicant asserts that it has a constitutional right of meaningful access to the courts. Applicant argues there must be a balance between the First Amendment right of petition and "meaningful access" to the courts and governmental process. United Transportation Union v. State Bar of Michigan 401 US 576, 585 (1971) ("Collective activity undertaken to obtain meaningful access to the courts is a fundamental right within the protection of the First Amendment.") According to Applicant, its right of access to the courts is also protected by the due process clauses of the 5th and 14th Amendments (see, Logan v. Zimmerman Brush Co., 455 US 422, 429 ).
In their joint reply, Madison County and the Town of Clay argue that Applicant's assertion that municipalities and public corporations do not have First Amendment rights is incorrect. Madison County and the Town of Clay assert the contrary, and cite County of Suffolk v. Long Island Lighting Co., 728 F2d. 52, 61 (2d Cir. 1984) and First National Bank of Boston, v. Bellotti, 435 US 765, 776-84, (1978), to support their assertion that municipalities and public corporations do have First Amendment rights. Madison County and the Town of Clay acknowledge that Applicant has access to the courts, which is illustrated by Applicant's notice of claim.
Onondaga County also argues in its reply that municipalities and public corporations have First Amendment rights, and cites the County of Suffolk v. Long Island Lighting Co. decision. In addition, Onondaga County contends that regulatory definitions of the term "person" includes municipalities and public corporations (see, e.g., 6 NYCRR 621.6[d]; 621.1[p]; 624.2[z]; 624.5[b]). Onondaga County refers to Oswego County's letter dated September 25, 2003 from the County Attorney's office to support the contentions that municipal corporations, such as Oswego County, were deterred from participating in the DEC administrative hearing concerning the captioned permit application. Onondaga County argues further that the prospective intervenors are not obliged to prove who would have participated if Applicant had not served the notice of claim. Though Applicant may have certain constitutional rights, Onondaga County contends that Applicant does not have a constitutional right to use litigation as a tool to deter public participation in the DEC administrative hearing.
Finally, some prospective intervenors contend that the July 16, 2003 notice of claim is premature. According to OCRRA, the notice of claim is premature because the DEC Commissioner has not made a final determination about the subject permit application. OCRRA notes that the Commissioner may reverse Staff's denial after the administrative hearing. OCRRA adds that the notice of claim is frivolous (see, 22 NYCRR 130-1.1), and a form of harassment (see, 22 NYCRR 130-1.1[c]). If Applicant's notice of claim is meritorious, OCRRA observes that Applicant would not have offered to withdraw it at the Issues Conference.
For the same reason argued by OCRRA, the Town of Camillus also argues Applicant's claim is premature. The Town of Camillus adds that the notice of claim against DEC is defective because Applicant should have filed the notice with the Court of Claims pursuant to Court of Claims Act § 10.
Oneida-Herkimer SWMA contends that Applicant's notice of claim is legally insufficient. Oneida-Herkimer SWMA asserts that the statutory purpose of the notice of claim is to provide enough information for the cited public corporations to investigate the claim adequately. Oneida-Herkimer SWMA characterizes the notice of claim as "a laundry list" that does not explain which alleged actions apply to which public corporation or corporations. As a result, Oneida-Herkimer SWMA contends that it is impossible for individual municipalities to investigate the notice of claim. According to Oneida-Herkimer SWMA, the vagueness of the notice of claim prevents prospective intervenors from fully participating in the review of Applicant's proposal.
At the Issues Conference, and in their respective briefs and replies the prospective intervenors and DEC Staff present several options about how to proceed with the DEC administrative hearing concerning the captioned permit application. Applicant responds to the proposed options in its reply. The options are discussed briefly below.
OCRRA offered a number of options. For example, OCRRA suggests that Applicant should restart the permit application review process. If, as alleged in the notice of claim, there has been an abuse of process by DEC, OCRRA argues that continuing with the hearing would perpetuate the alleged abuse. Restarting the permit review process would "wipe the slate clean," according to OCRRA.
As an alternative option, OCRRA asserts that Applicant should seek judicial review of DEC Staff's permit denial pursuant to CPLR article 78. Based on Applicant's claim of an "abuse of process," OCRRA asserts that Applicant has exhausted its administrative remedies.
Applicant observes that the Commissioner has not made a final determination about the captioned permit application. Applicant argues further that a reviewing court could not make a determination about the permit application because the administrative record is incomplete (see, Matter of Santino Tomaino, DEC Case Nos. R1-5909-97-02 and R1-5877-96-09, Ruling on Respondent's Motion to Suppress [February 5, 1998]). Applicant concludes that it would be premature to seek judicial review of the captioned permit application pursuant to CPLR article 78.
Although proposed in its brief, OCRRA does not fully support the alternative option of providing Applicant with an opportunity to withdraw the notice of claim before the DEC administrative hearing continues. OCRRA opposes this option for the following reasons. First, this option would not resolve the question of whether there was an "abuse of process" as alleged in Applicant's notice of claim. Second, OCRRA contends that this option would not cure the chilling effect associated with the initial service of Applicant's notice of claim. Third, OCRRA is concerned that Applicant may either reinstate the notice of claim or allege a new claim if the hearing continues. Finally, even if Applicant offered a blanket release to the parties identified in the notice of claim, OCRRA asserts that such a release would not cure the impact on any unknown party who did not file a petition to intervene in the DEC administrative hearing. Onondaga County argues further that no release for past conduct would preclude Applicant from filing another claim in the future.
The Town of Camillus proposes that the ALJ provide additional time for discovery to allow time for the prospective intervenors to consult with the entities named in Applicant's notice of claim who did not petition for full party status (i.e., County of Oswego, Onondaga County Resource Recovery Agency, City of Auburn, and Town of Cicero), to determine whether they have information relevant to the captioned permit application.
In addition, the Town of Camillus asserts that the issue concerning the effect of Applicant's notice of claim is one of first impression. The Town of Camillus argues that the question should be referred to the Department's General Counsel for a declaratory ruling. Applicant opposes this remedy, however. According to Applicant, the question is not a purely legal issue involving no factual dispute.
Madison and Onondaga Counties and the Town of Clay argue that the only issue for adjudication in the DEC administrative hearing is whether there is a rational basis for Staff's denial. According to Madison and Onondaga Counties, Applicant requested a hearing to contest the basis for the Department's denial, which was based on Applicant's failure to provide supplemental information. Upon review of Applicant's pre-filed testimony, Madison and Onondaga Counties argue that Applicant is inappropriately attempting to supplement its previously deficient application. According to Onondaga County, the time to address the Department's inquires expired on July 16, 2003 when the Department denied the permit application. Madison and Onondaga Counties contend that Applicant cannot boot strap its application with post-denial submissions to correct the deficiencies and "prove" that DEC was wrong on July 16, 2003.
The Town of Clay contends that Staff correctly denied the subject permit application. According to the Town of Clay, the only relevant issue is whether Applicant provided sufficient information to the Department prior to July 16, 2003 to meet the statutory and regulatory criteria for permit issuance.
Staff supports this proposed option and argues that the ALJ uphold Department Staff's denial of the application without additional proceedings. Referring to Applicant's pre-filed testimony, Staff argues that the record developed to date shows that Applicant failed to respond to the request for additional information pursuant to 6 NYCRR 621.15(b), and that the requested information was necessary to make findings and determinations required by law.
In their respective briefs, Madison County, the Town of Camillus, Onondaga County, Oneida-Herkimer SWMA, and DEC Staff argue in the alternative that Applicant's permit application should be summarily dismissed. According to Madison County, permit denial at this point in the proceeding is the only way to address the chilling effect of Applicant's notice of claim.
According to the Town of Camillus and Onondaga County, permit denial is the only remedy that ensures that Applicant does not benefit from its deliberate attempt to intimidate members of the public from participating in the administrative process. Onondaga County contends that the permit must be denied in this case to safeguard meaningful public participation and a fair process in the future.
Oneida-Herkimer SWMA and the Town of Clay offer an option that would essentially result in permit denial. Citing 6 NYCRR 624.5(f), Oneida-Herkimer SWMA and the Town of Clay argue in their respective briefs that the ALJ should revoke Applicant's party status because Applicant "has substantially disrupted the hearing process or prejudiced the rights of another party...." According to Oneida-Herkimer SWMA, Applicant's behavior demonstrates an intent to prohibit a fair and thorough administrative review, as well as to chill any public participation in this process.
DEC Staff acknowledges that permit denial would appear to be a drastic measure, and contends that it may be the only realistic and reasonable solution given the seriousness nature of this matter, and the difficulty in devising a remedy. Staff explains that it intends to move for summary decision on the grounds that this matter involves no adjudicable issues that require a hearing. In its brief, Staff requests guidance about when to make its motion for summary judgment.
According to Applicant, summary judgment is not an appropriate remedy here. Applicant argues there are disputed issues of fact that preclude summary judgment. Applicant cites to its pre-filed direct testimony to support this argument. Applicant argues further that its pre-filed direct testimony shows it has met every administrative requirement, except for the air permit. Applicant states that its consultants are available to meet with DEC Staff to identify the applicable requirements and to present the necessary information for Staff to complete the review of the air permit application.
Applicant contends that the ALJ should not revoke its status as a party to the DEC administrative hearing. According to Applicant, the prospective intervenors do not identify any instance in which Applicant "failed to comply with the applicable laws, rules or directives of the ALJ" (see, 6 NYCRR 624.5[f]). Applicant maintains that it has not "disrupted the hearing process or prejudiced the rights of another party to the proceeding." Applicant argues further that it is a mandatory party to the DEC administrative hearing pursuant to 6 NYCRR 624.5(a).
Discussion and Ruling
Two additional options not mentioned above are: (1) continue the DEC administrative hearing, or (2) adjourn the hearing while Applicant resolves its notice of claim. Although Madison County identifies continuing with the DEC administrative hearing as an option, it does not support it. According to Madison County, Applicant has created a situation where a fair and thorough hearing cannot be conducted.
Alternatively, OCRRA argues that the DEC administrative hearing should be adjourned until Applicant's claim is resolved by a court of competent jurisdiction. OCRRA observes there would be additional legal expenses associated with litigating Applicant's claim. According to OCRRA, protracted litigation about Applicant's claim could discourage the prospective intervenors from further participation in the DEC administrative hearing. OCRRA contends that these circumstances raise questions of fairness.
Madison County also identifies adjournment, but does not support this option because, according to the County, an adjournment incorrectly implies that the result of the litigation would negate the chilling effect that resulted from service of the notice of claim. Madison County is concerned that if Applicant prevails in court, then everyone will fear retribution from Applicant, and therefore not participate in the DEC administrative hearing when it resumes. Madison County argues further that the court may not consider Applicant's claim until the DEC Commissioner makes a final determination about the subject permit application. Finally, Madison County notes that the litigation related to the notice of claim may take a long time to resolve. According to Madison County, a prolonged adjournment of the DEC administrative hearing would not be fair to the potential intervening parties.
Onondaga County argues that an adjournment of the DEC administrative hearing to allow Applicant to resolve its notice of claim is not an adequate remedy. According to Onondaga County, until a court ultimately rules on Applicant's claims, the ALJ would have no control over the DEC administrative hearing because he could not adjust time frames in the administrative hearing to "avoid prejudice" and to ensure a fair and expeditious process.
Staff contends that an extended delay has problems, and argues that 6 NYCRR 624.8(b)(1)(ii) provides the ALJ with the authority to adjourn the DEC administrative hearing. However, Staff asserts that 6 NYCRR 624.8(b)(1)(ii) was not intended to provide for extensively long adjournments which may be necessary to resolve Applicant's notice of claim. According to Staff, the notice of claim alleges a continuing damage. Therefore, Staff is concerned that a prolonged adjournment of the DEC administrative hearing could continue to expose it and the prospective intervenors to additional damages.
The determination whether to proceed with the DEC administrative hearing reaches a balancing of Applicant's right, on the one hand, to a fair hearing and a timely decision on its permit application, and the public's right, on the other hand, to participate in the review of the captioned permit application. The Issues Conference participants have correctly pointed out that UPA establishes uniform procedures and specific time periods for processing permit applications by the Department. The legislative findings and declarations are enumerated in ECL 70-0103. UPA is intended, among other things, to assure the fair, expeditious and thorough administrative review of regulatory permits; to establish reasonable time periods for administrative agency action on permits; and to encourage public participation.
The circumstances of this case, however, challenge the legislative intent of ECL article 70. Applicant's notice of claim adds a unique element to this matter. It is clear that the merits of the notice of claim and the process for resolving it are beyond the scope of this proceeding. Nevertheless, it is also clear, based on the statements made by the prospective intervenors and DEC Staff, that the notice of claim has adversely impacted public participation in this administrative hearing, despite Applicant's arguments to the contrary.
The arguments presented by the Issues Conference participants identify the advantages and disadvantages of the potential options about how to proceed with the DEC administrative hearing. I have determined that the best course of action is to adjourn the DEC administrative hearing until Applicant's alleged claims are resolved on the merits. This adjournment is not intended as a sanction against Applicant. Rather, adjournment of the DEC administrative proceeding would allow Applicant to seek a judgment about its alleged damage claims by a court of competent jurisdiction. Furthermore, adjournment of the DEC administrative hearing protects the prospective intervenors and DEC Staff from compounding any potential injuries or damages alleged in the July 16, 2003 notice of claim.
In deciding to adjourn the DEC administrative hearing, I recognize the disadvantages outlined above. There are potential costs associated with litigating the alleged claims, and the adjournment of the DEC administrative hearing may be long. I disagree, however, that a prolonged adjournment would prejudice the prospective intervenors and DEC Staff. Since Staff has denied the requested permit, Applicant's proposal is on hold until the Commissioner makes a final determination.
Moreover, the notice of claim, in its current form, is vague. The benefit of a judicial determination concerning Applicant's alleged claim for damages is that all Issues Conference participants will know: (1) what Applicant's claims are; (2) who is responsible for them; (3) what the damages are; and (4) whether the claims are meritorious. When these questions are resolved, prospective intervenors can decide whether to participate in the DEC administrative hearing when it resumes.
I note that during the Issues Conference, some participants were reluctant to respond to my questions about the notice of claim. I am not persuaded by Applicant's argument that if prospective intervenors came to the Issues Conference, they are not really concerned about the notice of claim. Rather, prospective intervenors had an obligation to file petitions with me in a timely manner and to appear at the Issues Conference to preserve their respective rights to participate in the DEC administrative hearing. This duty is analogous to Applicant's obligation to file notices of claim in a timely manner to preserve its right to seek damages.
An adjournment of the DEC administrative proceeding does nothing to cure the adverse impact that service of the notice of claim has had on public participation. It would be nearly impossible to determine who did not file a petition to participate in the DEC administrative hearing because of a concern about becoming a party to a potential lawsuit regardless of its merit. The hearing regulations, however, provide some relief by allowing potential intervenors to file petitions after the established return date for good cause (see, 6 NYCRR 624.5[c][i]), in addition to other requirements. Within the context of this proceeding, good cause would be a judicial determination that finds no merit to Applicant's alleged claim concerning damages.
If Applicant chooses to withdraw the July 16, 2003 notice of claim, or the subsequent complaint, before the court considers the matter, the DEC Issues Conference will resume. However, I will adjourn the DEC administrative hearing if Applicant reinstates the July 16, 2003 notice of claim, serves any subsequent notices of claim or complaints upon municipalities or public corporations, or serves any summons or complaints upon individuals until all alleged claims are resolved on the merits by a court of competent jurisdiction. I realize that prospective intervenors may choose not to participate in the DEC administrative hearing if subsequent adjournments become necessary. There is a risk that the administrative record concerning this permit application would be incomplete if prospective intervenors choose not to participate or drop out of the DEC administrative hearing as a result of frequent or prolonged adjournments.
Based on the foregoing discussion, the DEC administrative hearing concerning the captioned permit application is adjourned without date pending a resolution of the claims alleged in Applicant's July 16, 2003 notice of claim.
As noted above, Staff requested guidance in its brief about when to file a proposed motion for summary judgment. Since the DEC administrative hearing has been adjourned until a court of competent jurisdiction has reviewed the merits of the claims alleged in Applicant's July 16, 2003 notice of claim, Staff shall not file its proposed motion until the DEC administrative hearing resumes.
Daniel P. O'Connell
Administrative Law Judge
Dated: Albany, New York
November 18, 2003
To: Attached Service List dated September 10, 2003