Schreiber, Peter J. - Ruling, July 29, 2003
Ruling, July 29, 2003
STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION
In the Matter of Alleged Violations of Articles 17 and 71 of the
New York State Environmental Conservation Law ("ECL"), Article 12
of the New York State Navigation Law, and regulations promulgated
PETER J. SCHREIBER,
DEC Case No. R4-2003-0130-20
July 29, 2003
This ruling is on a motion by the Staff of the Department of Environmental Conservation ("DEC Staff") for clarification and dismissal of affirmative defenses interposed in the Answer filed by Peter J. Schreiber (the "Respondent") in the above matter. The case involves the alleged failure to register and test petroleum bulk storage tanks at a site in Amsterdam, New York.
The Notice of Hearing and Complaint were sent to the Respondent and his attorney, Robert J. Krzys, Esq., with a transmittal letter dated March 28, 2002 [sic, apparently 2003]. The Respondent's attorney filed an Answer on April 18, 2003. The Answer contains a section entitled "Affirmative Defenses." On April 23, 2003, the DEC Staff moved that the affirmative defenses be dismissed, or if this motion is not granted, that the Respondent be directed to clarify the affirmative defenses. The motion was sent to the Chief Administrative Law Judge of the DEC with a letter from Robert Leslie, Esq., Regional Attorney for DEC Region 4, stating that the DEC Staff and the Respondent planned to meet on May 5, 2003 to discuss possible settlement of the matter.
The parties met on May 5, 2003, but their discussions did not result in settlement of the matter. On July 5, 2003, Mr. Krzys sent an affirmation opposing the DEC Staff's motion.
The Answer's section regarding affirmative defenses contains seven numbered paragraphs on this subject. In addition, there is a statement in paragraph 2 of the Answer, alleging that the facility has been "permanently closed," that I am considering to be part of the affirmative defenses. The Motion describes the affirmative defenses as four separate defenses. These may be summarized as: 1) lack of jurisdiction by DEC; 2) permanent closure of the site and cessation of use for various petroleum activities; 3) a request for "time abatement" based upon "severe hazard loss;" and 4) a request regarding the time frame for remedial action, if any is required.
The Motion states that none of the affirmative defenses contain facts or grounds to support the claims, and that the DEC Staff has not been placed on notice of the facts or legal theory upon which Respondent's defense is based, which is required by the DEC enforcement hearing procedures (Part 622 of Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York ("6 NYCRR"), particularly 6 NYCRR 622.4(c)). The DEC Staff stated that the facility has had a petroleum bulk storage facility registration as recently as May 19, 2002 showing two active 3,000 gallon tanks, and that temporary closure of a facility, or an election not to use one or more tanks, does not extinguish the DEC's jurisdiction. The DEC Staff cited 6 NYCRR 613.9, the closure requirements for petroleum bulk storage tanks and facilities. The DEC Staff also stated that it is not aware of any statutory or regulatory basis to delay compliance with the petroleum bulk storage regulations due to a severe hazard loss.
In response, the Respondent argued that the Motion is disingenuous at best since the DEC Staff knew the circumstances underlying the affirmative defenses, and that the Respondent fully answered the DEC Staff's questions at the May 5 meeting. The affirmation on behalf of the Respondent states that he was placed under financial hardship when his business, described in the affirmation as a bus garage, was destroyed by fire. The Respondent intends to present evidence of his financial circumstances at the hearing. The affirmation also states that the first affirmative defense needs no further clarification, and re-states it as: "That the former gasoline station had never been used or operated by the respondent, he only acquiring title to same, and ultimately renting it to a transportation/trucking company."
Discussion and Rulings
Paragraphs 9 and 10 of the Answer state, as an affirmative defense, "That since ownership was obtained from the City of Amsterdam, New York, the property or premises have never been used or even held out for use as that type of a facility for which this prosecution is being maintained....That as such, there is lacking proper jurisdiction." The DEC Staff's Motion states that it has not been placed on notice of the facts or legal theory upon which this defense is based, and states that the DEC Staff has properly served the Notice of Hearing and Complaint on the Respondent. As noted above, the Respondent has now provided an additional statement of this defense.
The affirmative defense regarding lack of jurisdiction has to do not with service of pleadings but with the Respondent's use of the site. Even if one were to find that the Respondent has never used or operated the facility as a gasoline station, this would not be a defense to the allegations of failing to register and to test tanks located on the site. Parts 612 and 613 apply to petroleum bulk storage facilities even if they are out of service, if they have not been permanently closed as specified in 6 NYCRR 613.9 (see 6 NYCRR 612.1, 612.2(a)(1), 613.1(b), and 613.9). To the extent that the Respondent may be intending to prove that he has permanently closed the facility, this is discussed in regard to the second affirmative defense, below.
Ruling: The affirmative defense regarding lack of jurisdiction on the basis of the Respondent's use of the facility is dismissed.
Paragraphs 11 and 12 of the Answer state that, "At no time from April, 1997, to date, have the subject premises been used for the storage, purchase, sale, distribution or use of petroleum products, as contemplated by statute.... That absent any proof to the contrary, as shown by the petitioner [DEC Staff], this proceeding should be dismissed." Paragraph 2 of the Answer alleges, in part, that, "any such facility, as alleged, has been permanently closed by respondent, same exclusively consisting of a rental facility for a trucking company, for which no petroleum products or by-products have been purchased, stored, sold, distributed, or used..." (emphasis added). The Motion notes the closure requirements in 6 NYCRR 613.9 and states that only proper closure under these procedures can extinguish DEC's jurisdiction over a facility.
The portion of this affirmative defense that relates to sale of petroleum products and the other enumerated activities was addressed in the ruling on paragraphs 9 and 10 of the Answer (first affirmative defense). With regard to the Respondent's allegation that the facility has been permanently closed, the Complaint and the Answer make opposing allegations (see paragraph 13 of the Complaint). The Respondent is aware of the closure requirements in 6 NYCRR 613.9, which were described in Motion, and the Respondent did not seek to amend paragraph 2 of the Answer following receipt of the motion. No further clarification is necessary at this stage of the proceeding. Each party's proof may be presented at the hearing.
Ruling: The motion to dismiss the affirmative defense that the facility has been permanently closed is denied. The DEC Staff's request, in the alternative, for clarification of this affirmative defense is also denied.
Paragraphs 13 and 14 of the Answer state, "That respondent has experienced a severe hazard loss in the recent past, and although requested, time abatement has been rejected... That it was neither appropriate nor proper to deny a time abatement, given such severe hazard loss." The Motion argues that DEC Staff has not been placed on notice of the facts or legal theory upon which this defense is based, is not aware of any request for an extension of time to answer the Complaint, and is not aware of any legal basis to delay compliance with the registration requirement due to a severe hazard loss. The Respondent replies that the DEC Staff is indeed aware of the circumstances and is attempting to obtain unfair advantage. The July 5, 2003 affirmation identifies the hazard loss as a fire, and discusses how this loss affected the Respondent's financial situation.
The Answer's reference to "time abatement" is very unclear. One cannot tell if this refers to an extension of time to answer the Complaint, an extension of time to register, test and/or close the tanks without formal enforcement action, or a request about the time frame to be included in an Order of the Commissioner (the latter is discussed below under the fourth affirmative defense.) Although it is likely that the DEC Staff is now aware of the Respondent's position on this, in view of the meeting that occurred on May 5, this position is not in the record. The affirmation in response to the motion suggests that the extension of time relates to doing "the work demanded by petitioner," which would probably be testing or closure of the tanks, but the Respondent's position is not clearly stated in the record.
An affirmative defense is "[a] defendant's assertion raising new facts and argument that, if true, will defeat the plaintiff's or prosecution's claim, even if all allegations in the complaint are true" (Black's Law Dictionary 430 [7th ed 1999]). None of the extensions of time that might be meant in paragraphs 13 and 14 would defeat the DEC Staff's claim.
The facts underlying paragraphs 13 and 14 may relate to the penalty that may be imposed if the Respondent is found liable for one or both of the alleged violations, and/or to the timing of any remedial activities the Commissioner may order if she finds a violation, although they are not an affirmative defense that would prove the Respondent had not violated Part 612 or 613. The DEC Civil Penalty Policy includes, among the factors to be taken into account in assessing penalties, a violator's ability to pay a penalty, a violator's cooperation in remedying the violation, and the potential harm and any actual damage associated with the violation. The Civil Penalty Policy also discusses compliance schedules and ways of ensuring compliance (Civil Penalty Policy, Policy DEE-1, [June 20, 1990], which may be found on DEC's web site at www.dec.state.ny.us/website/ogc/egm/civil_pen.html). Thus, facts underlying the allegations in paragraphs 13 and 14 may be relevant to include in the record of the hearing despite not being an affirmative defense.
Ruling: The affirmative defense regarding time abatement is dismissed. To the extent that the Respondent's financial situation following the fire is relevant to factors to be considered under the Civil Penalty Policy, however, testimony on this may be submitted at the hearing.
Paragraph 15 of the Answer states, "That given the circumstances of ownership, the hazard loss, and non-use as a petroleum facility, etc., as hereinabove alleged, if remedial action is required to be taken, a sufficient time frame should be afforded to respondent to do so, without any financial penalties being imposed."
Although this paragraph is in the section of the Answer that has the heading "As and For Affirmative Defenses," this is not an affirmative defense in that it does not even suggest that it is a basis for concluding that the Respondent is not liable for a violation, but instead makes an assertion about the penalty and remediation to be required if a violation is found. As with paragraphs 13 and 14, this paragraph may be relevant to the penalty or remediation in the event that a violation is found. The affirmation in response to the motion identified the hazard loss as a fire. No further clarification of paragraph 15 is necessary at this stage of the proceeding.
Ruling: Paragraph 15 of the Answer is dismissed as an affirmative defense, since even if the Respondents' statements in it are proved, it would have no bearing on the Respondent's liability for the alleged violations. Evidence on the subjects in Paragraph 15 may be submitted at the hearing to the extent that it is relevant to the penalty and remediation that may be required if the alleged violations are proved.
I will schedule the adjudicatory hearing after I receive a statement of readiness consistent with the requirements outlined in 6 NYCRR 622.9.
Susan J. DuBois
Administrative Law Judge
To: Robert Leslie, Esq.
Robert J. Krzys, Esq.