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Sears Petroleum - Ruling 3, June 8, 1993

Ruling 3, June 8, 1993

STATE OF NEW YORK: DEPARTMENT OF ENVIRONMENTAL CONSERVATION

In the Matter of the Alleged Violations
of Article 17 of the New York State
Environmental Conservation Law and
Article 12 of the New York State
Navigation Law, and Parts 610 and 613
of Title 6 of the Official Compilation
of Codes, Rules and Regulations of the
State of New York,

RULINGS ON MOTIONS
TO AMEND AND TO
DISMISS, AND ON
DISCOVERY

DEC Nos.
R4-1484-93-01
R4-1408-92-10

- By -
SEARS PETROLEUM AND TRANSPORT CORP.,
Respondent

These rulings resolve two outstanding motions, by the Department seeking leave to amend its complaint and the cross-motion by the Respondent to dismiss the complaint, and provides for future procedure concerning discovery.

1. Motion for Leave to Amend the Complaint

On April 19, 1993 the Department made its motion for leave to amend its complaint as supported by an affidavit of a Department engineer and a signed statement by the Assistant Regional Attorney.

(The record shows that the existing complaint which the Department now seeks to amend is actually a previously amended complaint; that this earlier amendment arose out of the consolidation of two then pending enforcement proceedings--DEC Nos. R4-1408-92-10 and R4-1484-93-01; and that the consolidation was upon the consent of both parties.)

The amendments that the Department seeks to make to the first "amended" complaint are: 1) adding reference to tanks 11 and 12 to the allegations of the Third Cause of Action, Paragraph 23 of the first amended complaint at Paragraph 28 of the Fourth Cause of Action of the proposed "second" amended complaint, and 2) adding a new Third Cause of Action charging Respondent with contaminating groundwater at the site with petroleum.

The Department claims that the filling of (in addition to tank 10, previously charged) tanks 11 and 12 with petroleum (allegedly) without curing the known deficiencies in the epoxy lining was overlooked when the first complaint (No. 1408-92-10) was prepared and that the (alleged) contamination of the groundwater was not discovered until some 6 or so days prior to the making of the motion.

Defending against the motion, the Respondent presents an affirmation by its counsel to which is attached a number of items of correspondence between the parties and their respective counsel.

Basically, the Respondent contends that the Department was in fact aware prior to instituting the first proceeding of the facts underlying the further claims it now seeks to add and that to authorize the amendments would be otherwise improper and unfair.

Both parties submitted reply papers executed by their counsel.

Amendment of pleadings in this proceeding is controlled by 6 NYCRR 622.6 which reads:

"Any party may amend a pleading at any time prior to the submittal of the hearing officer's report to the commissioner by leave of the hearing officer or commissioner on good cause shown."

Although not controlling, the provisions of both the CPLR and the proposed amendment to 622.6 are worth noting:

CPLR 3025(b):

"...A party may amend his pleading, or supplement it by setting forth additional or subsequent transactions or occurrences, at any time by leave of court or by stipulation of all parties. Leave shall be freely given upon such terms as may be just including the granting of costs and continuances."

Proposed 6 NYCRR 622.5(b):

"Consistent with the CPLR a party may amend its pleading at any time prior to the final decision of the commissioner by permission of the ALJ or the commissioner and absent prejudice to the ability of the party to respond."

This motion represents what is in fact the Department's first request for an actual pleading amendment. Although denominated as an "Amended Complaint" the first "amended" complaint was more truly and simply a joining together in a single complaint of what had been theretofore two separate complaints, with no amendment to either complaint being involved, except possibly the addition of the words "...and the terms of its MOSF license" at the end of Paragraph 23 of the Third Cause of Action, to which addition counsel for the Respondent appears not to have objected.

In its reply papers the Department has conceded that some members of the Department may have been aware of at least some of the relevant facts underlying its present request for amendment prior to preparation of the first complaint; however, the Department continues to maintain that neither the engineer in charge of the matter who acted as liaison to the Department's counsel nor Department counsel had been made aware until very recently.

Section 622.6 (nor CPLR 3025(b) nor proposed Section 622.5(b)) does not require "newly discovered evidence" as a ground for a pleading amendment, as Respondent would have it.

In this light it can be seen that the Respondent's position is that a public agency should be prevented from carrying out the public duties enjoined upon it by law simply because one or more of its agents chose not to go forward at a particular time with some action available to the agency.

Even if a true mistake was involved (rather than an exercise of discretion), the highest court in this State has held that a government agency may rectify an "administrative error...even where there are harsh results", Parkview Associates v. City of New York, 71 NY 2d 274 (1988).

Respondent has submitted no authority in support of its position; nor has Respondent shown one iota of legally cognizable prejudice.

Indeed there appears nothing to have prevented the Department from having instituted a new (third) proceeding based upon the allegations now and instead sought to be added to the existing complaint.

This less appropriate and indeed more cumbersome procedure (to which Respondent would have no legal objection and this forum would have no power to thwart) would in all likelihood require later consolidation proceedings.

Respondent's objections concerning the increased possible penalties are without merit. The penalties follow along with the liability. If the liability or claim of liability is proper, there can be no independent objection to the penalties attached by law to such liability, other than to challenge the statute itself; and such a challenge is beyond the bounds of this proceeding.

I find that good cause has been shown as to the proposed amendments.

The Department's motion to amend the "Amended Complaint" in the manner proposed by the Department is granted.

The Respondent shall serve upon the Department and file with the Office of Hearings an answer to the latest complaint within 20 days of receipt of this ruling.

2. Motion to Dismiss the Complaint

With its papers responding to the Department's motion seeking leave to amend the complaint, Respondent served a cross-motion to dismiss the complaint "...because of the misconduct on the part of the Department Staff...", with the responding papers also serving as papers in support of the cross-motion.

Even after a close reading of all of Respondent's papers in support of the cross-motion, including the reply papers, it remains unclear exactly what is claimed to be "misconduct" by the Department's agents--at least beyond these agents' desires and attempts to bring additional claims against this Respondent with, allegedly, having had knowledge of the facts underlying these new claims prior to the bringing of the earlier claims.

There does appear to be an assertion by Respondent that the Department, or at least relevant agents of the Department, knew that the Respondent was innocent of at least the new claims, well before the Department brought those claims.

Surely, an attorney's affirmation is insufficient to establish such a defense. While appearing competent as an attorney, counsel for Respondent does not appear to have any qualifications relevant to the rather technical matters at issue in this proceeding.

The correspondence he produces is, as a whole, not all that clear, requires interpretation, and is contested; indeed, the Department has challenged the very authenticity of at least one, apparently key item of this correspondence.

Having previously decided that there was good cause shown and no prejudice to Respondent's defense in connection with the motion to amend, the anomalous posture of this motion record is such that I am now asked to dismiss the entire proceeding because of "misconduct" which I have already held was insufficient to defeat a lesser motion to amend.

The Respondent's sole relevant remedy is to defend itself at a hearing.

At such a hearing the fact, even assuming it is a fact, that the Department agents withheld action on certain known claims shall be no defense.

If, however, at a hearing the Respondent shall establish not only that it was innocent of some or all charges but that certain key Department agents knew that all along, some additional remedy, beyond dismissal of such charges, may be available in this or some other forum.

I find that the Respondent has failed to establish the existence of any relevant misconduct.

Having so found, I do not reach the question of what might be the remedy, if any, were such misconduct found.

The cross-motion to dismiss the complaint is denied.

3. Discovery Ruling

In light of the fact that there are, as a result of these rulings, additional allegations against the Respondent, each party is directed to re-draft all discovery requests so as to include: 1) all outstanding requests still being pursued but not as yet responded to by the other party, and 2) any additional requests arising out of the additional allegations, with such documents to be served upon the other party and filed here (the Office of Hearings) within 20 days of receipt of these rulings.

Within five days after receipt of the other party's re-drafted discovery request, either party may re-move for a protectiveorder.

______________________________
John H. Owen
Administrative Law Judge

Dated: June 8, 1993
Albany, New York

TO: Sidney L. Manes, Esq.
Green and Seifter, P.C.
One Lincoln Center
Syracuse, NY 13202-1387
FAX: (315) 422-3549

David H. Keehn, Esq.
Assistant Regional Attorney
Region 4, NYSDEC
2176 Guilderland Avenue
Schenectady, NY 12306
FAX: (518) 382-1065

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