ExxonMobil Corporation - Ruling 2, September 23, 2002
Ruling 2, September 23, 2002
STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION
In the Matter of
Alleged Violations of Article 17 of the Environmental Conservation Law and
Title 6 of the York Compilation of Codes, Rules,and Regulations,
- by -
CHARLES G. VETTER, PETE LOUSSEDES,
TODD BARIGHT, ROBERT MCGRATH,
SAM EL JAMAL, MOHAMMAD JAMAL,
JASON DOBBS, THOMAS FLORIO,
L. SHAW, ISSA ISSA, DAVINDER SAINI,
R. KNOTH, ROSE VOLASKI, MUSA EL JAMAL,
M. EL JAMAL, JERRY FLORY, VIOLET JAMAL,
RULINGS OF THE ADMINISTRATIVE LAW JUDGE
Case Nos. 3-047716,3-047724,
3-047759, 3-047937, 3-047945,3-047953,
3-047988,3-047996, 3-048003, 3-048011,
3-048046,3-048054, 3-048062, 3-048089, 3-048097,
3-048100, 3-048127, 3-048135, 3-048143,
3-048178, 3-048186, 3-048194, 3-131746.
Department of Environmental Conservation (DEC or Department) staff issued identical notices of hearing and complaints to the respondents, ExxonMobil Oil Corporation (ExxonMobil)and Charles G. Vetter, Pete Loussedes, Todd Baright, Robert McGrath, Sam El Jamal, Mohammad Jamal, Jason Dobbs, Thomas Florio, L. Shaw, Issa Issa, Davinder Saini, R. Knoth, Rose Volaski, Musa El Jamal, M. El Jamal, Jerry Flory and Violet Jamal (hereinafter referred to as "the dealers") dated June 5, 2002.(1) In these pleadings, staff alleges that the respondents violated the Environmental Conservation Law (ECL) Article 17 and Title 6 of the New York Compilation of Codes, Rules, and Regulations (6 NYCRR) by failing to timely register their petroleum bulk storage facilities with the Department and to display a registration certificate in accordance with 6 NYCRR § 612.2. These enforcement matters involve 23 facilities for which the registrations were submitted on March 26, 2002 although they were due on March 24, 2002.(2) While the parties attempted to negotiate a settlement, the failure to do so has resulted in a volume of motions which are decided in this ruling. Those motions are as follows:
- Staff's Motions for Dismissal/Clarification of Affirmative Defenses (undated)
- Staff's Motion for a Protective Order - August 1, 2002
- ExxonMobil's Cross-Motion to Dismiss Complaint - August 18, 2002
- ExxonMobil's Motion for Protective Order - August 18, 2002
- Dealers' Motion for Protective Order - August 21, 2002
In these proceedings, staff is represented by Benjamin A. Conlon, Associate Attorney; ExxonMobil is represented by Joseph T. Walsh, III, Esq. of McCusker, Anselmi, Rosen, Carelli &Walsh, P.C.; and the dealers are represented by Urs Broderick Furrer, Esq. of Harriton & Furrer, LLP.
I have reviewed the following submissions to make these rulings:
- Staff's notice of hearing and complaint dated June 5, 2002
- Dealers' answer to staff's complaint dated July 19, 2002
- Dealer's demand for production of documents dated July 22, 2002
- ExxonMobil's answer and affirmative defenses dated July 22, 2002
- Staff's undated motions for dismissal of or clarification of affirmative defenses
- Staff's motion for protective order dated August 1, 2002
- ExxonMobils' affirmation in support of motion to dismiss complaint and in opposition to staff's motion for dismissal/clarification of affirmative defenses dated August 18, 2002
- ExxonMobil's memorandum of law in opposition to staff's motion for protective order dated August 18, 2002
- Affidavit of Paul McKusker in support of ExxonMobil's motion for protective order dated August 18, 2002
- ExxonMobil's motion for protective order
- Dealers' affirmation in opposition to staff's motion for protective order dated August 19, 2002
- Dealer's affirmation in opposition to staff's motion for clarification/dismissal of affirmative defenses dated August 19, 2002
- Dealers' affirmation in opposition to staff's motion for protective order dated August 19, 2002
- Dealers' motion for protective order dated August 21, 2002
- Staff's affirmation in response to ExxonMobil's cross-motion to dismiss the complaint and opposition to staff's motion for dismissal/clarification of affirmative defenses dated August 30, 2002
- Staff's affirmation in response to ExxonMobil's motion for protective order dated August 31, 2002
- Staff's affirmation in response to dealers' opposition to staff's motion for protective order dated September 1, 2002
- Staff's affirmation in response to dealers' affirmation in opposition to staff's motion for dismissal/clarification of affirmative defenses dated September 2, 2002
- Dealers' affirmation in further support of motion for protective order dated September 9, 2002
- ExxonMobil's affirmation in opposition to Department's cross-motion to strike reference to alleged settlement discussions dated September 13, 2002
Consolidation of Cases
These proceedings involve 23 cases in which the staff alleges identical violations - failure to timely register and to display a valid registration. ExxonMobil, as the owner of these gas stations, is a named respondent in all the cases and several other respondents - the operator/dealers - are named in many of them. This office has already received hundreds of pages of almost identical papers on the pending motions. And although the dealers comprise a number of different individuals, they are all represented by one counsel. Based upon the common facts, law, parties, and counsel involved, it is appropriate to consolidate these matters. Consolidation will expedite these cases and reduce the duplication of paperwork and other resources. Therefore, pursuant to 6 NYCRR § 622.10(e), I am recommending that the Assistant Acting Chief Administrative Law Judge (ALJ) order consolidation of these 23 matters into one proceeding. Accordingly, the parties are to use the caption noted above in future submissions.
Evidence of Settlement Offers
On August 19, 2002, shortly after receiving ExxonMobil's papers, I received e-mail communications from the parties with respect to staff's request that I "stay" my review of that respondent's papers. Mr. Conlon explained that Mr. Walsh relies upon details of the settlement discussions in his arguments and staff determined that this was improper and prejudicial to its position. I arranged for a conference call to be held on August 21, 2002. After hearing the parties' arguments, I ruled that based upon a preliminary review of the papers I had not found the respondent's statements to be prejudicial as they did not contain any specific references to settlement offers. (3) I asked that the parties attempt to come to an agreement on possible redaction of any specific mention of settlement offers and if that effort was not successful, staff could raise their concerns again with support for its position. Further review of the papers revealed that a letter dated August 15, 2002 from Mr. Walsh to Mr. Conlon annexed as Exhibit D to Mr. Walsh's August 18 affirmation includes information about an alleged settlement offer made by staff to ExxonMobil.
In its affirmation in response to respondent's cross-motion to dismiss and in opposition to DEC's motion for dismissal or clarification of affirmative defenses dated August 30, 2002, staff again raised arguments to remove all of ExxonMobil's references to settlement discussions. Conlon Aff., ¶¶ 25-31. On September 5, 2002, I agreed to allow ExxonMobil to respond to these arguments by September 13, 2002. In its response, ExxonMobil argues that it had not revealed the content of settlement discussions but only mentioned their status in order to provide sufficient background. Moreover, the respondent notes to the extent that any such information was revealed it was not made at trial.
As the decision attached to staff's submission provides, evidence of settlement offers is not admissible at a trial or administrative hearing (see, Albert A. Lopa, et al [Interim Decision 7/10/91]). However, I know of no authority to strike, vacate or dismiss ExxonMobil's motions or any part of their submissions based upon this one element. I will not consider the settlement information to render my determinations and neither should any future decisionmaker - that should be sufficient to address any impropriety.(4)
Staff has moved to dismiss or obtain clarification of ExxonMobil's affirmative defenses 1-7 and the dealers' affirmative defenses 1-14.
An affirmative defense is a matter that is the respondent's burden to plead and prove and includes such defenses as collateral estoppel, statute of limitations, and release. See, CPLR 3018(b). As explained by Professor Siegel, an affirmative defense raises a matter that is not plain from the face of the complaint. See, New York Practice, 2d Ed., Siegel (1991) at 393-394. CPLR 3211(b) allows a party to move to dismiss a defense if it "is not stated or has no merit." The obvious reason is to avoid addressing matters at trial that have no relevancy to the claims. In ruling on a motion to dismiss a defense, the courts apply the standards used to evaluate a motion to dismiss a complaint for failure to state a cause of action. The truth of the factual allegations of the defense is assumed but whether there are grounds for the defense is the question. Rule 3211(a)(7) of the CPLR.
Section 622.4(c) of 6 NYCRR reiterates the CPLR's requirements in stating that "[t]he respondent's answer must explicitly assert any affirmative defenses together with a statement of the facts which constitute the grounds of each affirmative defense asserted."
ExxonMobil's Affirmative Defenses
In general, staff argues that ExxonMobil's affirmative defenses are general, vague and lacking in any detail - legal or factual - that would meet the requirements of 6 NYCRR § 622.4(c). ExxonMobil argues that the penalties staff is seeking to obtain in this matter are exorbitant and the company is at a loss for the rationale for such fines. Accordingly, it is seeking information but in the meanwhile wishes to reserve any potential rights it has to defend. This respondent maintains that staff's motion is premature because ExxonMobil has insufficient information at this stage to provide more detail in its answer.
In its first affirmative defense, the respondent provides that the complaint fails to state a claim against ExxonMobil upon which relief may be granted. Essentially, this is a motion to dismiss the staff's complaint without any specification as to the basis of this motion. Section 622.3(a) of 6 NYCRR provides the requirements for a complaint as follows: (i) a statement of the legal authority and jurisdiction under which the proceeding is to be held; (2) a reference to the particular sections of the statutes, rules and regulations involved; and (iii) a concise statement of the matters asserted. The staff's complaint meets these requirements as it sets forth the basic facts asserted in ¶¶ 1-2, 5-6 and 9 and in ¶¶ 3-4, 7, and 10, the complaint provides the statutory and regulatory bases for the violations alleged. In essence, the staff alleges that the respondent failed to timely register its facility. While this recitation is not lengthy or greatly detailed, the regulations do not require such specificity. However, the respondent has failed to meet the requirements of 6 NYCRR § 622.4 by not providing any grounds for this defense.(5) Because the respondent has failed to identify the grounds for the defense, I grant the staff's motion for clarification with respect to this affirmative defense.
In its second affirmative defense, the respondent states that "[a]ny damages alleged in the [c]omplaint, if any, were the results of actions of third parties . . ." Here again, the respondent has failed to state the facts that form the basis for this allegation by not identifying any third party or the legal grounds for avoidance of liability. In subsequent papers, it appears that this third party may be Veeder-Root, an entity that allegedly was charged with the filing of the subject registrations with DEC. However, assuming that there is a third party involved, if ExxonMobil was the owner of the facility as it acknowledges in its answer, ¶ 2, it is liable even if there was an intervening actor. 6 NYCRR § 612.2(a). It may be that such information could be relevant to mitigation of penalties. But without more information, the defense lacks the detail necessary for staff to respond and I grant staff's motion for clarification.
I am dismissing respondent's third affirmative defense that merely invokes, without any factual or legal grounds, all possible defenses. This claim defeats the purpose of 6 NYCRR § 622.4(c) because it leaves wide open the potential defenses the respondent is seeking to assert. That is not the purpose of an answer or affirmative defense. The purpose of this responsive pleading is to put the parties and court on notice as to specifically what defenses the respondent is asserting and will eventually seek to prove. As stated above, in its complaint, staff presented the specific allegations of this case. Thus, there is no reason that the respondent does not have sufficient understanding to assert its defenses in terms that are understandable. To the degree that it found the complaint wanting in clarity, as staff states in its moving papers, the respondent had an opportunity within ten days of service of the complaint to move for a more definite statement. 6 NYCRR § 622.4(e). In the event that ExxonMobil does learn more about its defense, it can move to amend its answer pursuant to 6 NYCRR § 622.5(b).
In its fourth affirmative defense, ExxonMobil provides a laundry list of equitable defenses without any elaboration as to the bases for these claims. These are release, waiver, merger, estoppel, and accord and satisfaction. Estoppel is rarely recognized against the State. See, Wedinger v. Goldberger, 71 NY2d 428, 441 (1988). In the event that this case is one of those rare instances, ExxonMobil is directed to clarify this defense. Waiver is never a valid defense against the State because public officials cannot waive law enforcement on behalf of the public. See, Town of Southold (ALJ Rulings, 3/17/93). Therefore, I am dismissing this defense. Regarding defenses of release, merger, accord and satisfaction, because these pertain to contract matters that have no relevancy in these proceedings, I am dismissing them.
In its fifth affirmative defense, the respondent claims without providing any detail that "the Department has failed to comply with the Commissioner's Civil Penalty Policy." I am directing that the respondent clarify this defense by providing information as to how staff has failed to meet the policy's directives. In its papers in opposition to staff's motion, ExxonMobil provides that staff acted in contradiction to the now expired petroleum bulk storage enforcement guidance memorandum and to the 1990 civil penalty policy in establishing its demand for relief of $15,000 per site. Staff disputes these arguments. In any case, these matters are relevant but the defense should be apparent from the answer. Therefore, I am directing ExxonMobil to clarify this defense in an amended answer.
In the sixth affirmative defense, the respondent claims that the complaint is barred by the doctrine of preemption and/or related doctrines. There is insufficient information provided in this defense to ascertain what law preempts the Department's action in this case. Moreover, there is no information specifying what actions of staff are preempted. As to the statement with respect to "related doctrines," the parties and this administrative law judge should not have to guess as to what those may be. Assuming that the respondent is challenging the cited statutes that staff is applying to the alleged facts, an agency cannot review the acts of the legislature in an administrative proceeding. Rather, the Department is charged with carrying out the obligations set forth in the law. See, Johnson v. Robison, 415 U.S. 361, 368 (1974). And, as discussed with respect to the third affirmative defense, such a general statement is insufficient to meet the requirements of 6 NYCRR § 622.4(c). Accordingly, I am dismissing this affirmative defense.
In its seventh affirmative defense, ExxonMobil maintains that the violations alleged in the complaint did not result in damage to the environment. I find that given the facts alleged in the complaint, this defense is sufficiently stated. While damage to the environment is not a valid defense to absolve the respondents of liability in the event they are found to have violated Part 612 of 6 NYCRR, such defense is relevant to the issue of appropriate penalties. Thus, I am denying staff's motion to dismiss and/or clarify this affirmative defense.
In its eighth affirmative defense, ExxonMobil attempts to reserve additional defenses that may arise in the course of discovery or at trial. This defense is dismissed as it utterly fails to meet the requirements of 6 NYCRR § 622.4(c). However, as stated above, the respondent may move to amend its answer in the event that circumstances warrant such action.
Dealers' Affirmative Defenses
In their first affirmative defense, the dealers state that the complaint fails to state a cause of action without further elaboration. This defense must be clarified.
In the second affirmative defense, the dealers allege, as did ExxonMobil, that a third party is the superceding cause. As noted above, this defense likely lack merit with respect to liability. However, if the respondent can clarify its meaning via an amended answer, the defense may be relevant to the issue of appropriate penalties.
In the third defense, dealers allege that the Department failed to name an indispensable party in this action. However, this is an enforcement matter and it is solely up to the discretion of staff as to whom they seek to prosecute. Moreover, assuming the dealers are pointing to Veeder-Root as this third party, the regulations identify the owner and the operator as the respectively responsible parties for registration and display of such certificates. See, 6 NYCRR § 612.2. Accordingly, this defense is dismissed.
In their fourth defense, the dealers invoke every defense available. As stated above with respect to ExxonMobil's third affirmative defense, such reservation of defenses is unacceptable as it provides no inkling of what the parties and ALJ can expect at trial. Dealers can move to amend their answers at a future time if it is appropriate. Accordingly, I am dismissing this defense.
In dealers' fifth, sixth, seventh, eighth and ninth affirmative defenses, the dealers raise the same vague equitable defenses included in the ExxonMobil answer. I grant staff's motion to dismiss these except for the eighth -- estoppel -- which the respondents must clarify in an amended answer.
Dealers' tenth affirmative defense is the same as ExxonMobil's fifth affirmative defense regarding the civil penalty policy. For the same reasons as stated above, respondents are directed to clarify this defense.
The eleventh affirmative defense is the same is ExxonMobil's sixth affirmative defense that raises preemption and/or related doctrines. For the reasons stated above, I am dismissing this affirmative defense.
As to the dealers' twelfth affirmative defense, as stated above with respect to ExxonMobil's identical claim, the lack of harm to the environment is not relevant to liability in this matter. However, because it is relevant to penalties, I am denying staff's motion to dismiss and because the defense is clear, no further clarification is necessary.
In their thirteenth affirmative defense, the dealers allege bad faith on staff's part and maintain the complaint should be dismissed. No specific facts are recited in the answer although in subsequent papers the dealers explain that due to their reliance upon the owner and Root-Veeder for registration they had no knowledge of these alleged violations and should not be held accountable. They argue that the staff is pursuing these claims in order to coerce a settlement for penalties. The amended answer provides no details regarding this defense and accordingly, the dealers must amend their answer to clarify if they wish to maintain this claim.
As I determined with respect to ExxonMobil's general reservation of rights to assert additional defenses above, I am dismissing the dealers' fourteenth affirmative defense although these parties may move to amend their answer if appropriate at a later time to allege specific additional affirmative defenses.
ExxonMobil's Motion to Dismiss
In its motion to dismiss the complaint, ExxonMobil alleges that the staff has failed to follow its own guidance and policies in formulating its demand for relief in these proceedings. The respondent specifically points to the Department's petroleum bulk storage enforcement guidance memorandum (EGM) which has expired and the 1990 civil penalty policy. In light of ExxonMobil's submission of the registration forms two days after the expiration date of March 24, 2002, the company maintains that this paper violation was cured and no significant penalty should be sought. This respondent argues that the gravity of the penalty is minimal due to the lack of environmental harm resulting from the delayed registrations and this is a further mitigating factor pursuant to the civil penalty policy. ExxonMobil also argues that if the complaint is not dismissed the staff should be required to attend a case management conference to discuss court supervised mediation.
Initially, staff argues that Rule 3211 of the CPLR requirements make ExxonMobil's motion to dismiss untimely. Staff also argues that the EGM is no longer in effect and the civil penalty policy does not bind the Department. In addition, staff maintains that failure to timely register is a major violation that warrants a substantial response particularly because the respondents have continued to operate a facility without a registration. Staff also provides that mediation cannot be directed by the Office of Hearings and Mediation Services (OHMS).
With respect to the timeliness of the motion to dismiss, the CPLR does not govern the Department's enforcement hearings except where Part 622 specifically refers to those rules. See, e.g., 6 NYCRR § 622.6(a) [service of papers.] Motion practice in enforcement matters is governed rather by 6 NYCRR § 622.6(c) which sets no specific time limitation for motions other than those specifically limited in other sections such as motions for a more definite statement [6 NYCRR § 622.4(e)]. However, I see no basis for dismissal of the complaint. The respondents' arguments go to the nature of the relief the Commissioner will grant and these may be heard in the context of a future hearing or in briefs. The respondent has not demonstrated that staff is without any basis to bring this enforcement proceeding. And, it is for the Commissioner not the ALJ to ultimately decide whether staff's complaint has merit based upon a report that will be issued after hearing. Accordingly, I deny respondent's motion to dismiss.
Motion to Compel Mediation
In its cross-motion, the respondent ExxonMobil argues that staff has prematurely and unilaterally curtailed settlement discussions and therefore, the administrative law judge should order mediation. However, I cannot order such relief. Part 622 does not provide any authority for the ALJ to order mediation. Furthermore, this Department's Guide to Mediation Services specifically provides that " . . . the Office of Hearings and Mediation Services will not act independently to begin a mediation without the mutual consent of Staff or other necessary parties." As I explained in conference calls with the parties on July 30 and August 21, 2002 and confirmed in my letters to the parties on the same dates, without the agreement of all involved parties there can be no mediation. Accordingly, while I certainly encourage the parties to attempt to resolve any and all matters through discussion, I cannot mandate this action. Therefore, I deny the respondent's motion to compel mediation.
Staff's Motions for Protective Orders
The respondents have all sought discovery from Department staff. Section 622.7(a) allows discovery in DEC enforcement proceedings to be as broad as provided under Article 31 of the CPLR. Pursuant to 6 NYCRR § 622.7(c), a party may seek a protective order to deny or limit the use of any disclosure device "to prevent unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice." What discovery documents are "material and necessary" in an action is determined by a test of usefulness and reason. Allen v. Crowell-Collier Publ. Co., 21 NY2d 403, 407 (1968). The documents that meet this test will be those that would logically be obtained to prepare for a hearing. Id., 21 NY 2d at 407. The burden of meeting discovery requirements must be weighed against the benefits that information will provide the seeker. Andon v. 301-304 Mott St. Associates, 94 NY2d 740, 746 (2000).
The discovery requests of ExxonMobil and the dealers are identical except that the latter have one additional request. Staff objects to these discovery requests on the bases that they are over broad and do not relate to the complaint. Staff maintains that the case relates solely to "failure to timely file applications and continued operations of Gas Stations, in NYS at these specific locations, and thereafter without required registration certificates." In staff's motion for a protective order dated August 1, 2002, Mr. Conlon does agree that information staff has with respect to these specific bulk storage applications, registrations as well as the applicable penalty policies are discoverable.(6) ExxonMobil responds that the staff failed to target its objections against any specific request or to cite any legal grounds for them. In addition, this respondent maintains that based upon the large penalties staff is seeking, there needs to be information available that explains the rationale for that relief. Based on these arguments, ExxonMobil maintains that its requests 8, 9, and 10 relating to the registrations at these facilities and 11 and 12 relating to the penalties are material and necessary to these proceedings. This respondent also argues that the staff has moved for dismissal/clarification of affirmative defenses of ExxonMobil while denying access to information that the company states will aid it in refining its defense.
The dealers maintain that because they play no role in the handling of registrations for their stations they have no knowledge of this process. Accordingly, they argue they are entitled to all the information requested in their discovery request. The dealers stress also that they are entitled to know upon what the staff is relying for the penalties requested in the complaints.
All the respondents maintain that DEC staff did not try to resolve the discovery disputes in good faith because DEC counsel's effort was only a fax inviting a discussion on certain days.
In the first discovery request the respondents seek "[a]ll registrations, certifications, licenses, permits, including any applications, requests, revocations, denials and/or approval thereof, for any petroleum storage system located on the premises. This request pertains directly to the allegations in the complaints with respect to the facilities in question. Therefore, staff's motion for a protective order is denied.
In the second request, the respondents seek "[a]ll documents relating to the registration of any petroleum storage system located on the premises generated pursuant to the directives, mandates, rules, regulations, or laws of the State of New York, the United States of America, or any governmental subdivisions, agencies or departments thereof." Because this request seeks information related to requirements that go beyond the scope of the complaints, I am granting staff's motion for a protective order to the extent the request seeks information beyond the Department's purview. The only allegations are that the respondents failed to timely register and to display a valid registration. This registration is governed by Part 612 and thus, other regulations, rules, or law governing the petroleum storage system are not relevant. However, I am denying staff's motion with respect to any requested records that relate to DEC's jurisdiction.
The third request relates to any citations, tickets, complaints, and the like related to the registration of the petroleum storage system on the premises by the State, the federal government or other entities. This information is relevant to the history of compliance of the respondents and hence the appropriate penalties. However, it is only relevant as it pertains to the State's jurisdiction and therefore, the staff is directed to respond with that limitation.
The fourth discovery demand relates to any enforcement activity undertaken by the State, the federal government or other government entity against ExxonMobil with respect to registration of its petroleum storage system located on the premises. I find that this request is also potentially relevant to the matter of penalties and therefore, staff is directed to supply this information as is relates to matters within the State's jurisdiction. I grant the protective order insofar as it relates to actions undertaken by other entities as it is not relevant to these proceedings.
Requests 5, 6, and 7 seeks films, photographs, sound recordings, documents and memoranda related to the allegations in the complaints and any statement made by any person relating to the action. As these clearly relate to the proceedings, except for privileged information such as attorney work product, the staff's motion for a protective order is denied. As DEC counsel has already agreed that documents related specifically to the complaints are available to the respondents, there should be no dispute with respect to these requests.
Similarly, requests 8, 9, and 10 seek exculpatory materials related to the allegations in the complaints and therefore are material and necessary to the preparation for a hearing in this matter and must be provided by staff to the respondents.
DEC staff have agreed that they possess policies related to the calculation of penalties and these should also be made available to the respondents in response to discovery requests 11 and 12. Staff is also to provide any other information related to this demand except those materials protected by privilege. However, request 12 asks for guidelines used to calculate penalties "in a given case" and this is an overly broad request. Rather, staff is to provide such information related to calculation of penalties in petroleum storage registration matters and this case. To that limited extent, I am granting staff's motion for a protective order with respect to request 12.
The dealers also include a 13th request that seeks "[c]opies of all Complaints filed against other facility operators alleging failure to display current and valid registration certificates within the two years preceding the commencement of the within matter." It appears that the dealers are attempting to establish that there is selective enforcement by the staff against them by discovering whether other facilities have been subject to similar proceedings and if so, the nature of the penalties sought in those matters. With respect to the first goal, the issue of selective enforcement is not an appropriate subject for this forum as it is a constitutional question and must be submitted to a court. See, Matter of 303 West 42nd Street v. Klein, 46 NY2d 686, 693, n.5 (1979), citing Matter of DiMaggio v. Brown, 19 NY2d 283, 291-292 (1967). However, the dealers' request does relate to the appropriateness of the penalty and upon what staff relied upon in formulating its demand. See, Matter of Saddle Mountain Corporation, Inc. (Rulings of ALJ, 3/6/02). Therefore, I deny staff's motion for a protective order with respect to this demand.
Respondents' Motions for Protective Orders
Staff served respondents with discovery requests on or about August 1, 2002. All of the respondents have objected to these requests by moving for protective orders. ExxonMobil argues that though discovery is broad, it has limits and much of the information sought by staff does not relate to the staff's complaint. Specifically, ExxonMobil points to staff's request for information relating to inspections, repairs, plans, and inventory records of the subject facilities although the sole issue in the complaint is the timely filing of registration applications.
The dealers also objected to the staff's discovery requests for similar reasons stating that the sole alleged violation against them is the failure to display a current and valid registration and therefore, the demands are "wholly unrelated to this sole factual allegation." See, Mr. Furrer's affirmation in support of motion for protective order dated August 21, 2002, ¶ 8. Mr. Furrer also points to staff's demands for information relating to inspections, repairs and as built plans as those requests that are inappropriate based upon the limited allegations in the complaint. He further argues that these demands have no time frame limitation and are not meant to lead to the discovery of admissible evidence. Id., ¶¶ 11-13.
The respondents agree that only DEC's first discovery request which pertains to information relating to "registration of applications" is germane.
Section 622.7(a) allows for discovery in DEC enforcement proceedings to be as broad as provided under Article 31 of the CPLR. Pursuant to 6 NYCRR § 622.7(c) a party may seek a protective order to deny or limit the use of any disclosure device "to prevent unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice."
In the first of staff's requests, the records relating to the registration of the petroleum bulk storage facility with the Department at these individual gas stations meet the "material and necessary" discovery requirements. Only this information is relevant to staff's allegations concerning the failure to timely register and to display a valid registration. These documents would presumably reveal when the facilities were registered and any gaps. While the blank registration form provided by staff in its opposition to respondents' motions for protective orders asks for information relating to such matters as piping and leak detection, the complaint does not address such concerns. Therefore, the production of inspection and repair documents, facility plans, and inventory records would be burdensome and unnecessary.
Staff argues in its affirmation in response to respondent's [sic] motion for protective order dated August 31, 2002 that the complaint alleges more than a two-day delay in registration. Staff is arguing that the alleged failure to maintain a valid and current registration "includes the requirement that the registration and necessarily the application for the registration must be correct." Conlon Aff., ¶ 6. However, the complaint does not allege that the respondents have submitted improper registration forms although the Department does not dispute the respondents' claim that it has had these forms since the end of March. With respect to the request for inventory information, staff argues that it needs this information to demonstrate that the respondents operated before and after the registrations were due. As noted by the respondents, staff may discover this information in a less burdensome and intrusive manner. And although staff intimates that the violations are continuing, staff has not explained why it has not provided respondents with their registrations since, according to the respondents, their applications have been pending with the Department for five months. Conlon Aff., ¶ 5.
Thus, staff's discovery requests 2-5 relating to inspections, repairs, as built plans, and inventory are improper and the respondents' motions for protective orders are granted.
I grant staff's motions to dismiss ExxonMobil's affirmative defenses 3, 4, 6 (in part), and 8. I grant staff's motions to clarify ExxonMobil's affirmative defenses 1, 2, 5, and 6 (pertaining only to estoppel). I deny staff's motions to dismiss or clarify ExxonMobil's 7th affirmative defense. I grant staff's motions to dismiss the dealers' affirmative defenses 3, 4, 5, 6, 7, 9, 11, and 14. I grant the staff's motions to clarify the dealers' affirmative defenses 1, 2, 8, 10, and 13. I deny staff's motion to dismiss and/or clarify affirmative defense 12. I am denying ExxonMobil's motions to dismiss staff's complaint and to compel mediation. With respect to staff's motions for protective orders, I deny the motions as they pertain to the respondents' discovery requests 1, 2-4 (in part), and 5-10. I grant staff's motions for protective orders as they pertain to respondents' discovery requests 2-4 (in part) and 12 (in part) and deny staff's motions regarding the dealers' 13th discovery request. With respect to respondents' motions for protective orders, I deny the motions with respect to staff's first request (in part) and grant the motions with respect to staff's discovery requests 2-5.
I recommend to the Chief ALJ that these matters be consolidated into one proceeding.
I am denying any requests by any party for costs, attorney's fees or sanctions. There is no authority in Part 622 for making such awards.
The respondents are to serve amended answers that clarify the affirmative defenses noted above by October 25, 2002. By no later than October 18, 2002, the parties are to comply with the pending discovery requests as modified by this ruling.
Helene G. Goldberger
Administrative Law Judge
Dated: Albany, New York
September 23, 2002
I concur with the ALJ's conclusion with respect to consolidation, set forth above. These 23 separate enforcement proceedings are now consolidated into one proceeding.
Jo Anne W. Di Stefano
Acting Chief Administrative Law Judge and
Assistant Commissioner for the Office of
Hearings and Mediation Services
Benjamin A. Conlon,
NYDEC - DEE
625 Broadway - 14th Floor
Albany, New York 12233-5550
Joseph T. Walsh, III, Esq.
McCusker, Anselmi, Rosen, Carvelli
127 Main Street
Chatham, New Jersey 07928
Urs Broderick Furrer, Esq.
Harriton & Furrer, LLP
Talleyrand Office Park
220 White Plains Road
Tarrytown, New York 10591
1. For case numbers 3-047759, 3-47945, 3-048003, and 3-048089, in their initial pleadings staff had named R. Knoth, Aziz Edib, L. Scheuerman, and John Savino as the dealer respondents. Staff has informed me that counsel for the dealers corrected the identities of these operators as Sam El Jamal, Issa Issa, T. Baright, and Sam El Jamal, respectively. Accordingly, the caption of this ruling reflects those changes. In the event that this is incorrect, I ask that the parties alert me.
2. Respondents state that to date the Department has not provided new registrations.
3. During the conference call, Mr. Conlon stated that in a document annexed to one of ExxonMobil's submissions there is reference to a specific settlement offer.
4. I do not concur with staff's description that ExxonMobil's papers contain so much information related to settlement discussions that they "permeate Respondent's submission as to render Staff unable to respond . . ." To the extent that this respondent refers to settlement discussions generally or to staff's decisions to terminate same, while these statements are irrelevant they also do not constitute offers of settlement which are the matters that should be excluded as evidence at a hearing.
5. While staff and both respondents appear to agree that the inclusion of this affirmative defense is not prejudicial, without further information it does not conform with the requirements in 6 NYCRR § 622.4(c).
6. I have only found one motion by staff in each of the 23 files for a protective order. The caption does not identify any respondents but the body of the motion dated August 1, 2002 appears to refer to ExxonMobil. However, because all parties have responded to staff's motion for a protective order I presume they were served with same and therefore, I will treat the motion as if it was made against both ExxonMobil and the dealers.