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Bath Petroleum Storage Facility - Interim Decision, November 6, 2000

Interim Decision, November 6, 2000

50 Wolf Road
Albany, New York 12233-1010

In the Matter

- of the -

Denial of Application to Renew and Transfer SPDES Permit NY - 004278
for the Bath Petroleum Storage Facility Town of Bath, Steuben County, New York

DEC Project No. 8­4624-00008


November 6, 2000


Bath Petroleum Storage, Inc./EIL Petroleum, Inc., ("BPSI") appeals pursuant to 6 NYCRR 624.6 and 624.8 and seeks reversal of Administrative Law Judge ("ALJ") Nicholas Garlick's August 4, 2000 Ruling on Issues. BPSI's appeal was filed August 11, 2000. Department Staff ("Staff") submitted responsive papers on August 15 and 21, 2000.

The authority to decide this appeal has been delegated to Deputy Commissioner Carl Johnson because Commissioner Cahill served as the Department's General Counsel at the time BPSI was undergoing various Departmental reviews of its operation and facility.

ALJ Garlick's Ruling on Issues under appeal held that the BPSI application materials submitted for a State Pollutant Discharge Elimination System ("SPDES") permit were insufficient and thus he affirmed Staff's position that the permit application was incomplete. Further, the ALJ held that BPSI's opportunity for an impartial review was met through the convening of the pre-hearing issues conference.

Party Positions

A brief summary of the parties' positions is necessary to place the following discussion in context. It is BPSI's position that it was denied due process by being denied a hearing under section 401 of the State Administrative Procedures Act ("SAPA"). BPSI asserts that it is entitled under 6 NYCRR 621.13(d) to a hearing on a denial of a permit application. Further, BPSI asserts the standards for raising an adjudicable issue in section 624.4(c)(1)(ii) are satisfied and thus "...the Department's justification for denying the permit is adjudicable, and must be aired in an administrative hearing. The ALJ had no discretion to deny BPSI this opportunity to be heard." BPSI appeal p. 4.

BPSI also alleges the ALJ's ruling is inconsistent with both a New York Supreme Court ruling by Justice Alonzo and the position taken by the Department in this proceeding. During the permitting process, before the issues conference was held, BPSI commenced an Article 78 proceeding. The Supreme Court dismissed BPSI's Article 78 petition for failure to exhaust administrative remedies. The Court noted the dispute between BPSI and Staff would need to be addressed administratively and the Department would have an opportunity to review its actions, correct improper conduct or decisions and develop a record for meaningful judicial review. See, BPSI appeal p. 7; see also, Exhibit F, court decision. BPSI claims that a hearing is mandated by the Supreme Court's decision.

BPSI also alleges that the ALJ's ruling is inconsistent with Staff's position during the Article 78 proceeding. Staff responds that it properly asked the court to dismiss the civil action for failure to exhaust administrative remedies. Staff had called upon the court to rule that an administrative hearing take place so that a clear formulation of and the rationale for the agency's determinations could be fully aired. BPSI interprets this to mean that Staff asserted that a hearing was necessary on the issue of denial. Staff claims the review before the ALJ is sufficient. BPSI asserts that is in direct contravention of Staff's earlier position before the court. According to Staff, the instant review before the ALJ satisfied BPSI's due process claim. Further, Staff assert that the ALJ correctly evaluated the submitted information with the regulatory criteria in 6 NYCRR 755.2(1) and in finding BPSI's submitted engineering report was inadequate.


BPSI operates an underground storage facility for liquid petroleum gas ("LPG") in Bath, New York. In 1982 BPSI acquired the facility from the Mobil Corporation. The SPDES permit administered under delegated Federal authority by the Department, allowed BPSI to discharge sodium chloride brine ("brine") to the Cohocton River.

BPSI challenged the Staff's December 8, 1999 denial of its application for a SPDES permit. On January 7, 2000, BPSI requested a hearing on the denial of the SPDES application. 6 NYCRR 621.13(d). The permit renewal was treated as a new application for a permit because it is a federally delegated permit. 6 NYCRR 621.13(f). As an application for a new SPDES permit, Staff must commence a new completeness determination.

During the permitting process, prior to Staff's denial, a number of requests for information were made by Staff. 6 NYCRR 621.5(c). At each juncture where submitted information failed to satisfy Staff, detailed responses to BPSI were provided by Staff in the various Notices of Incomplete Application. Staff ultimately denied the SPDES application because the information provided by BPSI was inadequate and prevented Staff from completing their environmental review of the application. 6 NYCRR 621.4(f); 6 NYCRR 755.2(d); ECL 17-0701(5)(a); ECL 17-0303(4)(d)&(f). The ALJ's Ruling at pages 2&3 and the hearing record addresses the numerous Notices of Incomplete Application. See, Issues Conference Exhibits 57, 50, 46, 39 and 33.

The ALJ concurred with Staff and held that BPSI's application was incomplete as the submitted information was insufficient. Moreover, the ALJ held that due process concerns were met through the pre-hearing issues conference.

Preliminary Statement

By way of introduction, all applicants for a permit, permit renewal or permit modification are required to submit information to Staff for their technical review. Disputes about insufficient application materials that prevent Staff from completing its review remain a judgment call within the province of Staff. An incompleteness determination by Staff can extend indefinitely until such time as suitable information is submitted to Staff. The only review of adequacy of the information submitted by an applicant is whether the applicant was given adequate notice of incompleteness, whether Staff articulated the information reasonably sought and whether there was a reasonable date established for the Department to receive the information. 6 NYCRR 621.15(b). Thus where an application, as here, was denied by Staff because the application is incomplete, the review by the ALJ is limited as prescribed above.

Based upon section 621.15(b), any review beyond that stated exceeds what is required. Accordingly, I find that the ALJ improperly evaluated the reasonableness of Staff's requested information by going beyond what was required. A finding that Staff adequately completed the prescribed steps outlined in section 621.15(b) would have completed the administrative review without further inquiry. However, given the review already taken place, I will address the appeals submitted on the ALJ's Ruling on Issues.


There is a procedural irregularity that first must be addressed. I note here that Staff's December 8, 1999 letter denying BPSI's SPDES application was procedurally erroneous. The letter from Staff should have been a Notice of Intent to Deny, as that procedure is appropriate for all federally delegated permits, such as SPDES. 6 NYCRR 621.5(d)(7)(ii). After the Notice of Intent to Deny is issued, the permittee may request a hearing. By not issuing a Notice of Intent to Deny, the procedural process used under 6 NYCRR 621.5 mirrored that which is only appropriate for applications that are complete, not incomplete as here. In any event, BPSI requested a hearing on Staff's position to deny the SPDES application, and it will be presumed that if a Notice of Intent to Deny were in fact issued, BPSI would have asked for a hearing on that notice as well.

Regardless of the procedural irregularities set out above, it does not change the substance of the matters appealed by BPSI or the grounds upon which Staff denied the application. There is no prejudice to BPSI by going forward here.

BPSI argues that its due process was denied by stopping the review at the pre-adjudicatory hearing issues conference stage and not holding a formal evidentiary hearing. Accordingly, there are two issues before me: (1) whether Staff properly denied the SPDES application; and, (2) whether BPSI was denied due process by not proceeding to an adjudicatory hearing.

Whether Staff Properly Denied the Application

ECL 70-0105 of Uniform Procedures defines "complete application" as follows:

"an application for a permit which is in the approved form and is determined by the department to be complete for the purposes of commencing review of the application but which may need to be supplemented during the course of the review as to matters contained in the application in order to enable the department to make the findings and determinations required by law. A complete application shall include such draft impact statement as may be required pursuant to article eight of this chapter."

Looking more closely at the procedural history of this matter, BPSI did not comply with the reasonable requests of Staff for information to complete the application. BPSI was sent its first Notice of Incomplete Application on April 29, 1999. A detailed listing of thirty different items were presented in the Notice of Incomplete Application as missing or incomplete. On June 23, 1999, BPSI responded to the first notice by sending some additional information to Staff. The majority of the thirty items noted in the April 29, 1999 Notice of Incomplete Application were either incompletely responded to or not responded to at all. The following day, Staff sent the second Notice of Incomplete Application. Again Staff detailed what information was necessary for BPSI to complete the SPDES application. It was not until almost four months later that BPSI responded to the second Notice. Thereafter followed three more Notices of Incomplete Application, all as identified in the ALJ's ruling.

BPSI's response to the second Notice was inadequate. Staff had requested, among many other things, an approvable engineering report. Instead of supplying an engineering report containing the requested information, BPSI produced the "Day" report, prepared by BPSI's consulting engineers. That report consisted of a compilation of previously submitted information with some additional comments. By Notice dated September 10, 1999 the DEC Division of Water for Region 8 advised BPSI that the Day report was not "an approvable engineering report". The September 10, 1999 letter from Staff was the fifth Notice of Incomplete Application.

The September 10, 1999 Notice of Incomplete Application detailed, over the course of 10 pages, why an approvable engineering report was necessary and what should be addressed in the engineering report. BPSI was told plainly and clearly what was required to have the application deemed complete.

On December 8, 1999 Staff denied the SPDES permit application due to the lack of engineering information and incompleteness of the application. BPSI was given more than seven months to make the application complete with sufficient information to allow Staff to form an opinion about BPSI's application. It is important to note the information requested was the type required to ensure pollution would be minimized and that will be addressed next.

There are no categorical SPDES standards for the discharge of brine. Accordingly, best engineering judgment is applied by Staff in determining the quantity and concentration of the brine that can be discharged to the Cohocton River. To arrive at that engineering judgment, Staff must have various information concerning facility operations, as fully detailed in the Notices of Incomplete Application provided to BPSI, to protect the environment. Staff has an obligation to protect the waters of the State from unnecessary and harmful levels of pollution. This obligation raises two analyses that Staff must perform. First, Staff must evaluate whether a discharge will adversely affect the water quality of the receiving water. Second, Staff must evaluate whether the technology used by a polluter minimizes the amount of pollution. Here, Staff sought from BPSI information regarding the technology used by the permittee and the sources of pollution within the facility to determine whether BPSI is minimizing the amount of pollution. The failure by BPSI to supply such information, most of which would be contained within an approvable engineering report, makes it impossible for Staff to perform this second evaluation. Consequently, Staff cannot conduct an independent evaluation of the pollution generation data supplied by BPSI, which means Staff cannot fulfill its mission of protecting the waters of the state.

Whether BPSI was Denied Due Process(2)

BPSI argues that due process is denied in instances where Staff can deny a permit and no right ensues to question that determination. BPSI disregards, however, the bar against adjudicating the completeness of a permit application contained in section 624.4(c)(7) and instead relies on section 624.4(c)(1)(ii) as the basis for the right to a hearing.

The Department's Permit Hearing Procedures are set forth in 6 NYCRR Part 624, and 6 NYCRR 624.4(c) provides the standards for adjudicable issues. 6 NYCRR 624.4(c)(1)(ii) provides that an issue is adjudicable if "it relates to a matter cited by the department staff as a basis to deny the permit and is contested by the applicant." However, the regulations specifically state that the completeness of an application is not an issue for adjudication. See, 6 NYCRR 624.4(c)(7).

A review of relevant administrative decisions reveal the basis for the bar. The purpose of the prohibition where an application is deemed complete is to give an applicant comfort and certainty that its application cannot be undone at the hearing stage, i.e., assertions by intervening parties to adjourn the hearing on incompleteness grounds. See, Matter of Applications of Department of Sanitation Southwest Brooklyn Incinerator, Interim Decision, March 2, 1994. "...the completeness intended to reflect the point at which the application contains sufficient information to commence regulatory review." Matter of LaFever Excavating, Inc., Interim Decision, October 28, 1991. "...once the completeness determination is made, there is no turning back." Matter of Applications of NYC Department of Environmental Protection, Preliminary Ruling of ALJ, March 24, 1994; See also, Matter of Applications of Fulton County Board of Supervisors, Decision of Commissioner, February 13, 1987. Accordingly, it is clear that the disputed section in Part 624.4(c) is applicable only when a permit application is determined to be complete. In contrast, here Staff denied the SPDES application based upon the lack of information that prevented them from reaching a completeness determination in the first instance.

Nonetheless, given the procedural posture developed to date, a review of the denial and the attendant incompleteness dispute is warranted. Since the basis for denial is the lack of sufficient information, BPSI would bear the burden of showing by the preponderance of the evidence how the information it supplied to Staff would meet the regulatory and statutory criteria for permit issuance. In other words, it must show it is entitled to approval of its SPDES application. BPSI was given that opportunity at the issues conference, the ALJ evaluated BPSI's prima facie information and found it lacking.

The Department's issues conference is analogous to a summary judgment proceeding. In the Matter of Application of Hyland Facility Associates, Interim Decision, August 20, 1992. A formal evidentiary review is unnecessary when significant information is lacking or is procedurally defective. Oil Co., Inc., Decision, May 11, 1993. The determination of whether an adjudicable issue exists first rests with the ALJ. Hyland, supra. Upon appeal, the Commissioner decides if issues exist, (In the Matter of Application of AKZO Nobel Salt, Inc., Interim Decision, January 31, 1996) and the Commissioner's powers are plenary. In the Matter of Manor Maintenance Corporation, et al, Order, February 12, 1996.

In the case at bar, the record is sufficient for decision and no formal evidentiary hearing need be held. See, Matter of Richie v. Coughlin, 148 A.D.2d 178, 544 N.Y.S.2d (3d dep't 1989);Greenwald v. Whalen, 609 F.2d 665 (2d Cir. 1979). Nothing would be gained through a fact adjudication of incomplete information. There may be times when an application is determined to be complete by Staff but after further review, Staff requests additional information in accordance with 6 NYCRR 621.15(b). In some of these instances, adjudication might proceed on points of dispute where a reasonable interpretation indicates that supplemental information is necessary to complete staff's review. Such is not the case in this proceeding. The degree of insufficient or lacking information in BPSI's submissions is plainly evident as fully detailed in the ALJ's ruling. The incomplete information already before the ALJ would be presented again in an adjudicatory forum leaving nothing to adjudicate. Simply put, there can be no fact dispute if the information is seriously deficient in the first instance.

In any fact adjudication held pursuant to Part 624, BPSI would have the burden of proof to demonstrate compliance with the pertinent regulatory criteria, which on the face of the existing information, is a determination that could not be sustained. The failure of BPSI to supply information to meet the reasonable requests of Staff warrants summary judgment in favor of Staff.


Holding a hearing to examine Staff's basis for needing more information turns the permitting process on its head. Staff has already articulated its basis for requiring more information and therefore examination of Staff on this aspect would not reveal more information. If a fact adjudication were held here, it would mean every applicant having an incompleteness determination could contest the determination through a fact hearing and thus arrogate or usurp the Staff's authority under ECL Article 70. Such is contrary to the intent and spirit of ECL Article 70 and the Part 621 and 624 regulations. BPSI's relief, in short, is to supply the necessary technical and engineering information to Staff.

I conclude BPSI's application continues to be incomplete for the reasons articulated above and that Staff's obligations under 6 NYCRR 621.15(b) were met. BPSI's SPDES application is denied without prejudice to filing a complete application. This Interim Decision completes the administrative review of this matter and is the final decision.

For the New York State Department
of Environmental Conservation

By: Carl Johnson, Deputy Commissioner

Dated: Albany, New York
November 6, 2000

1. Section 755.2(b)(2), for example, requires the Department to determine if it has "...up-to-date information on the permittee's production levels, permittee's waste treatment practices, and the nature, contents, and frequency of the permittee's discharge...." And further, where the Department determines that any of the facts do not exist, the Department must take appropriate action to secure compliance.

2. If BPSI is asserting a denial of due process under 42 USC § 1983, this forum is not appropriate for the litigation of alleged constitutional issues. See, e.g., Matter of Finn's Liquor Shop, Inc. v. State Liquor Authority, 24 NY 2d 647, 657, n.2 (1969), cert den, 396 US 840 (1969).

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