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628 Land Associates - Interim Decision, September 12, 1994


ALBANY, NEW YORK 12233-1550 In the Matter

- of -

An Application filed pursuant to ECL Article 24 and 6 NYCRR Part 663
for a permit to construct a retail shopping center in and adjacent to Freshwater Wetland AR-5

- by -

c/o Omnia Properties
20 Exchange Place
New York, New York 10005


DEC Applicatin No.



September 12, 1994


This Interim Decision arises from appeals to the December 21, 1993 rulings (the "Rulings") of Administrative Law Judge ("ALJ") Daniel J. O'Connell in the captioned matter. At the request of 628 Land Associates (the "Applicant"), final submittals on this matter were delayed until June 10, 1994 in an effort to reach a settlement with the Department Staff.

The instant application was the subject of a so-called five-day letter filed by the Applicant pursuant to 6 NYCRR 621.9(b). As a result of that letter, the Chief Permit Administrator for the Department issued a letter denying the application. The letter set forth the reasons for the denial and advised the Applicant of its right to a hearing on the denial pursuant to 6 NYCRR 621.7(f). The Applicant maintains that the denial constitutes the final action of the Department and that no further administrative appeals can be interposed. Nonetheless, to protect its rights, the Applicant requested a hearing but moved before the assigned ALJ for the dismissal of the proceeding on that basis.

In the Rulings, ALJ O'Connell denied the Applicant's motion. He also held in the Rulings that the requirements of the State Environmental Quality Review Act ("SEQRA") had not been met. He directed the Department Staff to file a draft determination concerning whether the proposed action might have a significant effect on the environment and indicated that, after opportunity for comment by the Applicant, he would make that determination, which is required pursuant to 6 NYCRR 617.6.

Motion to Dismiss

I conclude that there are two independent bases for upholding the ALJ's denial of the motion to dismiss. As further discussed below, the result is required by the rules adopted pursuant to the UPA. However, even if it were not, any final decision at this stage would be defective because of the lack of compliance with SEQRA.

Requirements of UPA Rules

Under the UPA rules (6 NYCRR Part 621), there are two opportunities for an applicant to be afforded a hearing on a proposed project - before the Department Staff has issued a determination or afterwards. A determination to hold a hearing prior to a Staff decision on the application is made pursuant to the provisions of 6 NYCRR 621.7(b). In this case, that determination belongs solely to Staff. Where Staff do not determine to hold a hearing, there is a further opportunity to hold a hearing after the Staff decision on the application pursuant to the provisions of 6 NYCRR 621.7(f). In this latter instance, the decision to hold a hearing is the applicant's.

The opportunity for a post-decision hearing occurs whenever Staff has denied the application or has imposed significant conditions which are unacceptable to the applicant. This is precisely the situation in this case.

The hearing provided by 6 NYCRR 621.7(f) is not mandated by ECL Article 70 but exists in order to protect the due process rights of applicants as well as to enhance the decisionmaking process. It provides an applicant the opportunity to challenge a Staff decision at the administrative level and, as such, the opportunity must be exercised prior to judicial challenges to the Staff decision pursuant to CPLR Article 78 [CPLR 7801(1)].

In its reply brief, the Applicant acknowledges the validity of the hearing requirement contained in 6 NYCRR 621.7(f) but insists its application is limited to situations where the Staff's decision is issued in "... the more ordinary course of events." (Applicant's Reply Brief at pg. 4). Apparently, it is the Applicant's position that this provision is only applicable where the Staff decision is not issued in response to a five-day letter.

The Applicant has confused the current situation with one in which the Staff defaults on the five-day letter and issues no decision. In the case of a default, there is no hearing opportunity because the permit will have been issued with standard conditions. However, once Staff timely responds to a five-day letter by issuing a decision, that decision is legally indistinguishable from one that was issued in the absence of the five-day letter. In fact, the applicability of 6 NYCRR 621.7(f) to situations where a Staff decision is issued in response to a five-day letter has already been established in a prior court decision (In the Matter of the Application of Pebble Cove Homeowners' Association, Inc. v. Jorling, Sup. Ct. Nassau County, Index No. 27945/93, February 10, 1994).

This result is completely consistent with the statutory scheme established by UPA. The intent of UPA is to compel agency decisionmaking within specified time frameworks and to ensure that applicants have a meaningful remedy when the agency exceeds those time limits. Requiring an administrative appeal of the Staff decision does not conflict with this intent. Moreover, contrary to the assertions of the Applicant, UPA does not state or imply that the decisions it requires be without recourse to an administrative appeal by way of a hearing, except in the obvious case where a hearing has already been held.

Failure to require the Applicant to pursue its case in a hearing effectively undermines the purposes behind the legal doctrines of exhaustion of remedies and finality, both of which are incorporated by statute into the prerequisites for judicial review of agency decisions (see CPLR 7801). More specifically, it risks litigation which may be academic because, as Commissioner, I have as yet had no opportunity to review the Staff action in this case.

For all of the above reasons, I conclude that a hearing must be held pursuant to 6 NYCRR 621.7(f) if the Applicant is to further challenge the Staff's decision to deny its application.

SEQRA Compliance

In the case of the instant application, because of the failure to comply with the requirements of SEQRA, even if there were no hearing opportunity, no valid final determination of the Department can be issued at this time.

The Applicant argues that this failure is entirely the Department's fault and that the Department should not be allowed to benefit from it. Even if that failure could be laid entirely at the Department's doorstep, the Applicant's argument overlooks the fact that SEQRA is intended to protect the public's opportunity to participate in environmental decisionmaking. It is not a question of the Department benefitting from its failure to act but rather a question of potentially eliminating an element of public participation that the Legislature has required.

It is just for these reasons that it has been held that if a governmental agency acts without fulfilling the statutory requirements of SEQRA, the governmental action is void and, in a real sense, unauthorized [In the Matter of E.F.S. Ventures Corp. v. Foster, 71 N.Y.2d 359 (1988); Matter of Modern Landfill, Inc. v. Jorling, 161 A.D.2d 1112 (A.D. 4th Dept. 1990)]. Where action is taken without any SEQRA compliance, the courts have held that this failure constitutes a matter of foremost State policy concern and that it is within the Commissioner's authority to correct the failure by nullifying the action (Modern Landfill, supra). Here nullifying the action would lead to starting the application process over again. The solution laid out by the ALJ i.e., rectifying the failure within the context of the on-going proceeding, would keep the permit processing on track to completion and is therefore preferable because it better preserves judicial resources.

Finally, I reject the Applicant's argument that complying with SEQRA requirements would create an unresolvable conflict with the UPA requirement that a hearing requested pursuant to 6 NYCRR 621.7(f) commence within 45 days of the applicant's hearing request. The hearing request in this case was acted upon within the 45-day time period. Whatever course the hearing takes at this point does not negate the fact that it commenced within the statutory time period.

Authority to Make the SEQRA Determination

The only other outstanding dispute concerns whether the ALJ should make the SEQRA determination after hearing arguments from the parties or whether the Department Staff should make that determination subject to the ALJ's review of whether its determination is irrational or otherwise affected by an error of law.

The procedural rules governing this hearing (former 6 NYCRR Part 624) do not address this issue. However, historically whenever a question about a SEQRA determination has arisen under these rules, the ALJ only disturbed the Staff determination where it was found to be irrational or otherwise affected by an error of law (see In the Matter of Quail Ridge Associates, Interim Decision of the Commissioner, December 10, 1987; In the Matter of Peckham Materials Corp., Interim Decision of the Commissioner, November 1, 1985). That same approach has now been codified in the new permit hearing rules [6 NYCRR 624.4(c)(6)(a)]. I do not find that the circumstances in this case warrant following any different course of action.


The Rulings of the ALJ are sustained except with respect to the nature of his involvement in the SEQRA determination. The Applicant may request that the ALJ review the Staff's SEQRA determination. In such an event, the ALJ will sustain the determination unless he finds that it is irrational or affected by an error of law. This matter is remanded to the ALJ for further proceedings consistent with this Interim Decision.

IN WITNESS WHEREOF, the Department of Environmental Conservation has caused this Interim Decision to be signed and issued and has filed the same with all maps, plans, reports, and other papers relating thereto in its office in the County of Albany, New York this 12th day of September, 1994




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