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Mt. Hope Asphalt Corp. - Ruling 5, December 7, 1994

Ruling 5, December 7, 1994

STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION

Consolidated Hearing In the Matter of Alleged Violation of Articles 19 and 27 of the New York Environmental Conservation Law and Parts 201 and 360 of Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York, and Proceedings to Revoke All Permits Now Held by and Deny All Applications for Permits Filed by,

MT. HOPE ASPHALT CORP., a/k/a
MOUNT HOPE ASPHALT CORP.
and

JAY BOYLE AND FRANK PETROSKY,
ndividually, and In Their Capacity as Officers of MT. HOPE ASPHALT CORP.,
a/k/a MOUNT HOPE ASPHALT CORP,

Respondents.

RULING ON MOTIONS TO QUASH

[Fifth Ruling]

Introduction

A notice of hearing and complaint dated September 17, 1993 initiated an enforcement proceeding in this action. By order dated November 10, 1993, with mutual consent of the parties, that matter was consolidated with an action to revoke and deny Respondents' permits and permit applications. The consolidated action proceeds under the 6 NYCRR 622 hearing regulations. Following motion practice, pursuant to a June 22, 1994 order, Staff filed an amended complaint on July 8, 1994. By ruling dated November 3, 1994 (the Fourth Ruling), Staff was granted leave to file a second amended complaint, which contained a new cause of action alleging that Respondents buried petroleum contaminated soil in the parking lot of their asphalt processing plant located at 395 Nugent Drive, Calverton, New York. Respondents have filed Answers to the second amended complaint.

By letter dated November 18, 1994, Staff withdrew its enforcement action against Respondent Paul Abrams individually and in his capacity as a corporate officer of Respondent Mt. Hope.

On November 18, 1994, a hearing schedule was set, to commence on January 4, 1995.

The Subpoenas and Motions to Quash

Pursuant to 6 NYCRR 622.8, Respondents have served Staff with a Subpoena Duces Tecum and also with a personal Subpoena requiring the testimony at hearing of Department Staff's Region 1 Regional Attorney, Lori Riley (the Riley Subpoena). By motion papers dated November 8, 1994 Staff has filed Motions to Quash both Subpoenas. Respondents filed papers in opposition to the Motions to Quash, on November 22, 1994.

- - The Subpoena Duces Tecum

The Subpoena Duces Tecum requires production of 133 numbered items or categories of items. As documented in recent correspondence between the parties, the parties have resolved between themselves many objections initially raised by Staff regarding this Subpoena.

The three remaining issues are limited to 1) Staff's assertion that Respondents' Subpoena requests 1 through 6 are unduly burdensome and overbroad, and Staff's assertion of privilege;

2) Staff's assertion that Subpoena requests 8 through 14, regarding Posilico Brothers Asphalt Co. ("Posilico") are overbroad, unduly burdensome and not relevant to the proceeding; and

3) Staff's assertion that Subpoena request 18, seeking review of Bureau of Environmental Conservation Investigation ("BECI") files regarding Thomas Accardi, is overbroad, unduly burdensome, and lacks specificity.

Regarding Subpoena requests 1 through 6, Staff's assertion that the requests are overbroad, and unduly burdensome, are rejected. The requests are sufficiently limited and do not appear unduly burdensome. Regarding Staff's assertion of privilege under requests 1 through 6, any documents for which Staff asserts privilege must be submitted for in-camera review. Staff should prepare a privilege log, numbering each document for which privilege is asserted, providing a cursory identification of the document, and an indication of which privileges are asserted for that document. The log only, is to be provided to Respondents. The log and documents are to be submitted to me for in-camera review by close of business, December 14, 1994.

Regarding Subpoena requests 8 through 14, Respondents seek production of certain staff members' notes concerning regulation of Posilico, another asphalt producer in the Region. Respondents assert that in December, 1992, Staff authorized Posilico to receive petroleum contaminated soil from New Jersey for use in its production of hot asphalt. Respondents' position is that Mt. Hope sought identical permission to use New Jersey petroleum contaminated soil in its asphalt production, as did Posilico, and Staff treated the Posilico request more leniently, granting an amendment of the Posilico air permit. Respondents assert that the sought after Staff notes may or will support this conclusion.

The focus of the hearing is whether receipt of New Jersey soil was within Respondents' operating authority at the relevant time periods - - not whether Staff treated a purportedly similarly situated applicant differently. Therefore, Posilico's status is not relevant. If, as Respondents represent, Mt. Hope applied for a permit modification to authorize such activity and was denied by Staff, the proper remedy would have been to seek a hearing on Staff's denial of the modification to authorize receipt and use of New Jersey soil. Staff's Motion to Quash is granted regarding Subpoena requests 8 through 14.

Lastly, with respect to review of BECI files in response to Subpoena request 18, seeking review of Bureau of Environmental Conservation Investigation ("BECI") files regarding Thomas Accardi, Staff asserts the request is overbroad, unduly burdensome, and lacks specificity. These objections to the Subpoena are rejected. Staff is directed to search its files to determine the existence of responsive documents. Staff may then assert claims of privilege, if appropriate. In that event, a privilege log and documents should be submitted in the manner described above, by close of business, December 14, 1994.

- - Subpoena of the Regional Attorney

The issue presented here is similar to that resolved earlier, by the ruling on Respondents' Motion for Disqualification of Regional Attorney Riley and Regional Staff (the Third Ruling).

The Third Ruling, in denying the Motion for Disqualification because Riley is not a necessary fact witness, essentially ruled that Riley can not be subpoenaed to testify in this matter. Respondents, in defending their Subpoena, do not present any new information that was not previously available regarding the necessity of Riley as a fact witness. Instead, Respondents have essentially renewed their argument on the Motion for Disqualification via the Subpoena, and submitted additional documentation in support of that argument. The additional information submitted by Respondents in defense of the Subpoena does not change the determination set forth in the Third Ruling. Staff' Motion to Quash the Riley Subpoena is granted.

Nonetheless, even if Respondents' present argument is considered on the merits, the result would not be altered. Following is a discussion of Respondents' opposition to Staff's Motion to Quash.

Regarding the Riley Subpoena, Staff asserts that the only factual issues to which Riley could testify, are matters subject to one or more privileges (attorney-client, CPLR 3101(b) and 4503(a); attorney work product, CPLR 3101(c), or because they relate to settlement matters Cook v State of New York, 105 misc. 2d 1040 (1980); see, also, In the Matter of Albert A. Lopa, et al., Commissioner's Interim Decision, NYSDEC Case No. R8-0798-90-08 (July 10, 1991). Staff asserts that since Riley's sole role in this matter has been that of an attorney representing her client (i.e., Department Staff).

Staff's position is that Riley has not waived any privilege, and further that her testimony would not be material or necessary within the meaning of CPLR 3101(a). In support of this position, Staff cites the Third Ruling, regarding Respondents' Motion for Disqualification seeking to preclude Riley from representing Staff in this action. That ruling focused on the necessity element, and found that Respondents had not demonstrated that Riley was a necessary witness.

Respondents assert that both the work product privilege and the attorney-client privilege were waived when Staff voluntarily produced the documents, including Riley's notes, for the Office of the Suffolk County District Attorney. That Office in turn provided the documents to Respondents/Defendants in the course of the parallel criminal proceeding. Respondents conclude that the documents became public upon Staff's production of documents to the District Attorney's Office, and Respondents are entitled to inquire of Riley as to the subject matter contained in the notes.

A common law "public interest" privilege exists in New York. Cirale v 80 Pine St. Corp., 35 NY2d 113, 117, 316 NE2d 301 (1974). "Such a privilege attaches to 'confidential communications between public officers, and to public officers, in the performance of their duties, where the public interest requires that such confidential communications or the sources should not be divulged' [citations omitted]." Cirale, supra at 117. I find that this common law privilege applies here, especially so because both agencies are engaged in a prosecutorial function with respect to Respondents. Regional Attorney Riley has not waived the work product or attorney-client privilege simply because Regional Staff provided materials in the Department's possession to the Office of the Suffolk County District Attorney, another governmental agency.

Regarding the settlement privilege, Respondents cite Cook, supra, for the proposition that this exclusionary rule has not been interpreted to exclude admission of facts independent of the offer to compromise. Although Respondents state they seek "factual information concerning the Department's knowledge at a specific point in time", Respondents do not specify what factual information it is that they seek to establish through examination of Riley. (Strenger Affidavit in Opposition, 7, November 22, 1994).

Staff's Motion to Quash based upon the settlement privilege, is granted. Cook, supra; Lopa, supra.

In defending the Subpoena, Respondents assert that Riley is a necessary fact witness, as was done in their Motion for Disqualification. However, the two notes attached as "Exhibit A" to the Strenger Affidavit in support of this assertion, do not in fact support such a conclusion. Additionally, Respondents have provided no explanation why this information was not submitted earlier, in support of the Motion for Disqualification. One note, handwritten (purportedly by Riley), directs a person identified only as "Millie" to make inquiry of New Jersey Department of Environmental Protection regarding activities of certain persons, including Respondents Mt. Hope and Frank Petrosky. The note further directs "Millie" to inform the New Jersey agency that Mt. Hope is only authorized to receive soils that have NYSDEC spill numbers.

These matters are not relevant to the pending proceeding. In any event, it would appear that "Millie" and not Regional Attorney Riley would be the best witness regarding the substance of that contact with New Jersey Department of Environmental Protection. The other note in "Exhibit A", consisting of one handwritten page (purportedly Riley's notes), addresses settlement negotiations and has no place in this proceeding. Cook, supra; Lopa, supra.

Lastly, Respondents assert that Staff's September 15, 1993 letter of denial of Mt. Hope's Certificate to Operate, cites Riley's July 22, 1993 letter as one basis for denial. Therefore, Respondents assert, they should be entitled to examine Riley on the July 22, 1993. That letter was addressed from Regional Attorney Riley to Respondents' then-counsel, McMillan, Rather, Bennett & Rigano, P.C. The body of the letter recites Staff's position on Mt. Hope's submittal required under a Consent Order which is not directly at issue in this proceeding. The body of the letter addresses in four numbered paragraphs, Staff's perceived deficiencies in the submittal (with references to the Consent Order).

The Riley letter is simply a summary of Staff's position on Respondents' Consent Order submittal. It is normally the case that the regional permit administrator or another member of technical staff would have direct knowledge of factual circumstances underlying Staff's determinations represented in the July 22, 1993 letter. Respondents have provided no information to indicate otherwise. It would appear that the staff member(s) who were responsible for processing the permit would be the necessary witness(es), rather than the Regional Attorney.

Respondents have not demonstrated that, simply because Regional Attorney Riley summarized Staff's position on Consent Order compliance, to Respondents' counsel by letter, that Regional Attorney Riley is a necessary witness as to factual matters underlying those determinations. However, in regard to the permit denial aspect of this consolidated proceeding, Respondents may offer legal or policy argument to rebut the contents of the letter (to which argument Staff, via its legal representative, may respond).

Further Scheduling

In response to Staff's November 30, 1994 letter indicating Staff contemplates additional witnesses in its direct case and seeking an extension of time to prepare exhibits, the hearing schedule is revised to include Tuesday, January 3, 1995 and Monday, January 9, 1995. The date for exchange of exhibit and witness lists is extended from December 14, 1994 to December 20, 1994. The hearing will commence on January 3, 1995 at 11 a.m., and will continue as necessary at 9:30 a.m. each day through January 13, 1995.

Summary of Rulings

  1. Regarding Subpoena requests 1 through 6, Staff's assertion that the requests are overbroad, is rejected. Any documents for which Staff asserts privilege must be submitted for in-camera review. Staff should prepare a privilege log, numbering each document for which privilege is asserted, providing a cursory identification of the document, and an indication of which privileges are asserted for that document. The log only, is to be provided to Respondents. The log and documents are to be submitted to me for in-camera review by close of business, December 14, 1994.
  2. Regarding Subpoena requests 8 through 14, the focus of the hearing is whether receipt of New Jersey soil was within Respondents' operating authority at the relevant time periods. Posilico's status is not relevant. Staff's Motion to Quash is granted regarding Subpoena requests 8 through 14.
  3. With respect to review of BECI files in response to Subpoena request 18, Staff's Motion to Quash is denied. Staff is directed to search its files to determine the existence of responsive documents. Staff may then assert claims of privilege, if appropriate. In that event, a privilege log and documents should be submitted in the manner described above, by close of business, December 14, 1994.
  4. Staff's Motion to Quash the Riley Subpoena is granted. As set forth in the Third Ruling, Riley is not a necessary fact witness in this proceeding. It follows that Riley may not now be subject to Subpoena on the rejected theory that she is a necessary witness.
  5. Even if Respondents' present argument is considered on the merits, the result would not be altered. A common law "public interest" privilege exists in New York, and applies in this case. Cirale v 80 Pine St. Corp., 35 NY2d 113, 117, 316 NE2d 301 (1974). Regional Attorney Riley has not waived the work product or attorney-client privilege simply because Regional Staff provided materials in the Department's possession to the Office of the Suffolk County District Attorney, another governmental agency.
  6. Regarding the settlement privilege, although Respondents state they seek "factual information concerning the Department's knowledge at a specific point in time", Respondents failed to specify what factual information it is that they seek to establish through examination of Riley. (Strenger Affidavit in Opposition, 7, November 22, 1994). Staff's Motion to Quash based upon the settlement privilege, is granted. Cook, supra; In the Matter of Albert A. Lopa, et al., Commissioner's Interim Decision, NYSDEC Case No. R8-0798-90-08 (July 10, 1991).
  7. Respondents assert that Riley is a necessary fact witness. However, the two notes offered in support of this contention fail to establish Riley as a necessary witness.
  8. Lastly, regarding Riley's July 22, 1993 letter as a basis for examination of Riley, Respondents have not demonstrated that, simply because Regional Attorney Riley summarized Staff's position on Consent Order compliance, to Respondents' counsel by letter, that Regional Attorney Riley is a necessary witness as to factual matters underlying those determinations. Nonetheless, Respondents may offer legal or policy argument to rebut the contents of Staff's permit denial letter.
  9. The hearing schedule is revised. The hearing will commence on January 3, 1995 at 11 a.m., and will continue as necessary at 9:30 each day through January 13, 1995. The date for exchange of exhibit and witness lists is revised from December 14, 1994 to December 20, 1994.

________________________
Administrative Law Judge

Albany, New York
December 7, 1994

To: Attached Service List

SERVICE LIST

MT. HOPE ASPHALT CORP. ET AL.

NYSDEC File No. 1-5445-93-09

Kevin J. Casutto
Administrative Law Judge
Office of Hearings
NYSDEC
50 Wolf Road, Room 409
Albany, NY 12233-1550
Phone: (518) 457-3468
FAX: (518) 485-7714

Timothy P. Mazzei, Esq.
Zimmer & Mazzei
400 Townline Road
Hauppauge, NY 11788
Phone: (516) 979-1111
FAX: (516) 979-1695

Sanford Strenger, Esq.
Farrell, Fritz, Caemmerer,
Cleary, Barnosky & Armentano
EAB Plaza
Uniondale, NY 11556-0120
Phone: (516) 227-0613
FAX: (516) 227-0777

Joseph W. Ryan, Jr.
EAB Plaza
Uniondale, NY 11556-0120
Phone: (516) 832-1000
FAX: (516) 683-0374

Louise M. Aja, Esq.
Assistant Regional Attorney
Region 1, NYSDEC
Building 40, SUNY Campus
Stony Brook, NY 11790-2356
Phone: (516) 444-0260
FAX: (516) 444-0373

(11/17/94)

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