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Gernatt Asphalt Products Inc. - Ruling 4, February 24, 1994

Ruling 4 (Request to Schedule Hearing), February 24, 1999


In the Matter


the Application of GERNATT ASPHALT PRODUCTS, INC.for permits to construct and operate
a surface unconsolidated sand and gravel mine in the Town of Sardinia, Erie County.


(Request to Schedule Hearing)
DEC Project No. 9-1462-00019/00001


This matter involves a request to schedule a public hearing on the application of Gernatt Asphalt Products, Inc. (the "Applicant") for a mining permit, which application was previously the subject of a Department of Environmental Conservation ("Department") adjudicatory proceeding, and which application resulted in a permit being issued in June, 1995.

As detailed in the "Discussion" section below, the history of this application makes the request appear defective on its face, mandating denial. To understand the Applicant's request, and my ruling, the procedural background needs to be reviewed.


In 1989, the Applicant applied to the Department's Region 9 Staff ("Staff") for a permit to construct and operate a surface unconsolidated sand and gravel mine in the Town of Sardinia (the "Town"), Erie County, N.Y.(1) Following responses to multiple Staff requests for additional information and the Applicant's preparation of a Draft Environmental Impact Statement (DEIS), the Department published its determination that the application and DEIS were complete on May 12, 1993. Following Applicant's "five-day letter" (i.e., a demand for a decision under 6 NYCRR §621.9(b)), Staff denied the permit by letter dated August 18, 1993. The letter of denial noted that Staff had received numerous objections to the project in response to the Notice of Complete Application, and identified Staff concerns related to structural stability of a slope and impacts on surface and groundwater hydrology, including nearby sources of domestic water supply. Staff indicated that the concerns had to be resolved before the application could be approved and the SEQRA findings made. On that same day, the Town amended its zoning ordinance to prohibit all new mining. The Applicant soon challenged both the Department's denial and the Town's ordinance in separate court proceedings.

On August 31, 1993, in light of the Applicant's court action against the Department challenging the denial, and recognizing that 6 NYCRR §621.7(f) provides that an applicant may request a public hearing when a permit is denied or contains conditions which are unacceptable, the Department agreed to toll or indefinitely extend, until further notice by either party, the time provisions within which such a public hearing must be requested.(2) The agreement, is called the "Stipulation" below.

While the court proceedings were pending, the Applicant pursued its permit application with the Department. In response to inquiry from the Staff, the Applicant supplemented its previous May 12, 1993, Draft Environmental Impact Statement ("DEIS") with another volume, which Staff accepted on December 15, 1993.

A Notice of Public Hearing was issued on December 24, 1993, and was subsequently published in the Department's Environmental Notice Bulletin and in three local newspapers. The Notice invited public comments on the application and DEIS as supplemented, invited filings for party status and proposed issues for adjudication, and reported Staff's tentative determination that the proposed project would meet all applicable statutory and regulatory requirements if carried out according to Staff's draft permit.

The hearing took place on January 31, 1994, before Administrative Law Judge ("ALJ") Edward I. Buhrmaster. Fifty-three persons spoke, and about 70 others submitted written statements. An issues conference took place on February 1, 2 and 9, 1994, during which the draft permit was revised. Although no issues were proposed for adjudication by the Applicant or Staff, several were proposed by the Town.

In Rulings dated March 3, 1994, ALJ Buhrmaster, among other things, granted party status to the Town, identified three issues for adjudication (concerning groundwater quantity, structural stability and fugitive dust), and directed that the Applicant file an air permit application and additional information. Following Applicant's appeal of these rulings, the Commissioner, by Interim Decision of April 29, 1994, sustained the rulings concerning the air permit, groundwater quantity and structural stability; overruled the ruling on fugitive dist; and, in response to an offer made by the Applicant in its appeal, indicated that the groundwater quantity issue could be partially avoided if the Applicant accepted a contingency plan similar to that indicated in the Matter of Empire Bricks, Inc.(3) as part of its permit. The Applicant subsequently agreed to such a contingency plan which was incorporated into the draft permit (narrowing the groundwater issue) and applied for an air permit.

The adjudicatory hearing was held on July 11, 12, 13, 14, 15, 26, 27, 28 and 29, and August 18 and 19, 1994, to address (1) mining impacts upon surface water resources adjacent to the project site, and (2) the structural stability and integrity of the proposed residual embankment. Meanwhile, to address the new air permit application, another issues conference took place on July 11 and August 19, 1994. Although additional issues were proposed by the Town, ALJ Buhrmaster determined in his Supplemental Ruling of October 5, 1994, that there would be no additional issues to adjudicate if further revisions were made to the draft permit. Staff supplied the revised draft permit on October 7, 1994, and the Applicant accepted it on October 17, 1994.

Based on ALJ Buhrmaster's Hearing Report and the record, the Commissioner's January 25, 1995 Second Interim Decision was that the project would not have a significant impact on surface water resources and that it was unlikely there would be problems with the stability and integrity of the residual embankment, given the conditions in the draft permit. The Commissioner did not issue a final environmental impact statement, however, because he wanted to review other documents relevant to assessing the archeological impacts of the proposed project. The Commissioner directed Staff to obtain certain documents related to archeology, and make them available to the Town subject to the Applicant's objection, and gave the Town an additional opportunity to raise issues with respect thereto. The Town later attempted to raise such an issue, but this was rejected in ALJ Buhrmaster's Ruling of March 22, 1995. The Town appealed this ruling, but it was upheld, and a final decision and environmental impact statement were issued on May 25, 1995, which directed the Staff to issue the permit to the Applicant. The permit was finally issued in June, 1995.

In 1996, the Town's ordinance was ultimately upheld by the Court of Appeals in Gernatt Asphalt Prods., Inc. v. Town of Sardinia, 87 N.Y.2d 668.

On August 11, 1998, the Supreme Court, Erie County, in Gernatt Asphalt Prods., Inc. v Thomas C. Jorling, et al., dismissed Applicant's challenge to the Department's denial because the Applicant had failed to exhaust its administrative remedies before commencing its court challenge.

The Current Proceedings

On August 21, 1998, the Applicant, enclosing a copy of the Stipulation, demanded a hearing pursuant to 6 NYCRR §621.7(f) with respect to the Department's August 18, 1993 denial. On January 11, 1999, the Office of Hearings and Mediation Services received Staff's request to schedule a hearing.

On January 14, 1999, I notified the Applicant and Staff that I had been assigned to the matter, inquired what remained to be adjudicated in light of the proceedings which already had taken place, inquired whether the Town is also a party, and requested that Staff forward the file to me.

On January 21, 1999, the Applicant responded with a letter detailing the history of events between the parties, acknowledging that the Town had a right to intervene, and indicating that it had forwarded to the Town copies of its letter to me and my earlier letter. The Applicant contends that a public hearing and a Commissioner's decision regarding the Department's August 18, 1993, denial are necessary to enable rights to be finally determined. Essentially, the Applicant seeks a determination of whether or not it is entitled to a permit nunc pro tunc as of August, 1993, before the Town amended its zoning ordinance to prohibit mining.

On January 26, 1999, Staff questioned the appropriateness of another adjudication, noting that the Applicant had received its permit, and arguing that the permit represents the entire complete relief that the Applicant could seek and the Department could grant. Essentially, Staff contends that the Department has no authority to back date the permit and no authority to adjudicate the matter once the permit has been obtained. Referring to the Stipulation, Staff contends that it could not offer the Applicant more than the Department is legally able to provide. Staff proposed discussions or briefing to resolve the matter.

On January 28, 1999, the Town noted that it had only received my January 14, 1999, and Applicant's January 21, 1999, correspondence, which limited its ability to respond. The Town recounted the history of the proceedings. The Town contended that the June, 1995 permit was very different from that proposed in the original application -- changes having been made to address issues raised by the Town. The Town argues five reasons for denying the Applicant's request: (1) the request is untimely; (2) the Department may not have jurisdiction to hold a hearing and issue a back-dated permit; (3) a back-dated permit would be useless and another proceeding would be moot given the Town's view of the parties' respective rights; (4) the permit would be different from the June, 1995, permit, arbitrarily negating the earlier proceeding and violating SEQRA; (5) the request is barred by collateral estoppel and res judicata. The Town requested that it be supplied with copies of all correspondence and submittals related to the Applicant's current request, and that it have further opportunity to supplement its comments.

During the first week of February, 1999, I received from Staff the record of the prior administrative proceedings (consisting of five boxes of documents).

On February 3, 1999, the Applicant, referring to the Stipulation, took issue with the Town's position. Applicant contended that there is no reason not to resolve this matter (and avoid a hearing) by the parties stipulating that I order that a permit dated August 18, 1993 be issued to Applicant containing all the conditions that are in the June, 1995, permit. Applicant indicated it would be happy to discuss the matter further.


I. The Applicant is not entitled to a hearing under §621.7(f) once a hearing has been held:

In relevant part, §621.7(f) provides (emphasis supplied):

"If a permit for a project is denied, or is issued with significant conditions attached and an adjudicatory public hearing was not held, then the applicant may request that one be held. Such a request must be made within 30 calendar days of the date of the mailing of either the notice of denial or the permit with conditions. ..."

Here, since an adjudicatory public hearing was held, the Applicant may not request another under §621.7(f). This appears to be the result irrespective of any waiver of the regulation's 30 day time provision.

II. The Applicant is barred by res judicata from raising an issue it could have raised earlier:

The res judicata principle is intended to put an end to matters that have been decided. It applies to quasi-judicial administrative proceedings (see Ryan v. New York Telephone Co., 62 NY2d 494, 499 (1984)) , and has long been applied in the Department's proceedings (see, e.g., Matter of Niagara Recycling, Inc., Commissioner's Interim Decision, May 19, 1989). Res judicata forbids relitigation of a matter as an unjustifiable duplication -- an unwarranted burden on both the parties and the courts. Res judicata bars not only matters which were actually put in issue in the prior action, but also those which could have been. See Siegel, New York Practice, 1991 ed., pp. 671 et seq.

The Applicant had an opportunity to challenge the Department's denial during the public hearing that took place. The determination that resulted from that proceeding now binds not only the Department and the Applicant, but also the Town, and the public at large (the purpose of publishing the hearing notice). Even if, arguendo, the Department Staff have no objection to relitigating this application, that would not alleviate the burden a relitigation would place on others (including the Town and the 120+ people who made comments). Res judicata is intended to prevent this -- to prevent people from having to go through the process a second time. Res judicata bars the Applicant's request.

III. The Applicant is barred by res judicata from raising issues that have already been litigated:

When Staff denied the permit on August 18, 1993, they cited concerns related to the structural stability of a slope and impacts on surface and groundwater hydrology (including nearby sources of domestic water supply). Staff indicated that their concerns had to be resolved before the application could be approved and the SEQRA findings could be made. Had the application immediately gone to a hearing on the denial, the Applicant would have had the burden of establishing that the project could be approved -- i.e., that the project would comply with regulatory requirements and that the SEQRA findings could be made.

Although the Staff's concerns were apparently alleviated by the time the public adjudicatory hearing was convened, the Town raised issues involving the same subjects initially cited by the Staff (slope stability and hydrological impacts). Even though following the denial the Applicant had supplemented its application with more information, the Commissioner still found that substantive and significant issues remained over the project's "approvability" (my word). The Applicant bore the burden of resolving those issues in its favor before the permit could be issued. Ultimately, it took a lengthy evidentiary hearing and fact-finding, plus the Applicant's acceptance of certain permit conditions, to do so. The Applicant was not entitled to a permit until the process concluded.

There is no substantive difference between a hearing requested by an applicant on a denial and one that is initiated by Staff. In both, the applicant bears the burden of establishing the project's "approvability." Here, that hearing has already taken place, and the matter has been concluded.

IV. The remedy of back-dating a permit to August 1993 is not available:

An applicant has the burden of demonstrating that its proposal will comply with applicable regulatory requirements (see §624.9(b)(1)). The demonstration here was not established until the final decision and environmental impact statement were issued on May 25, 1995. There is no legal basis for issuing a permit before an applicant meets its burden.


The Applicant's request for a hearing pursuant to §621.7(f) is denied for the reasons set forth above.


Pursuant to 6 NYCRR §624.8, the parties may appeal this ruling in writing to the Commissioner. Notice of the appeal and copies of all briefs must be filed with the Commissioner and the ALJ, and served on all parties to the hearing. Appeals are to be sent to the following address: Commissioner John Cahill, c/o Hon. Daniel E. Louis, Chief Administrative Law Judge; NYS Dept. of Environmental Conservation; 50 Wolf Road; Albany, NY 12233-1550. (See Service List attached for the other addresses). All appeals must be received no later than the close of business on Wednesday, March 10, 1999. Any papers in reply must be received no later than the close of business on Friday, March 19, 1999.

Frank Montecalvo,
Administrative Law Judge

Dated: February 24, 1999
Albany, New York

To: Official Service List attached

1. Statutory and regulatory provisions applicable to processing this type of application are: Environmental Conservation Law ("ECL") Article 3, Title 3 (General Functions); Article 70 (Uniform Procedures); Article 23, Title 27 (Mined Land Reclamation); and Article 8 (State Environmental Quality Review Act, "SEQRA"). Also, Title 6 of the Official Compilation of Codes, Rules and Regulations of the State of New York ("6 NYCRR") Part 621 (Uniform Procedures); Part 624 (Permit Hearing Procedures); Part 420, et. seq. (Mineral Resources); and Part 617 (SEQR).

2. i.e., 30 days from the date of mailing of the denial pursuant to 6 NYCRR §621.7(f)

3. See Interim Decision of the Commissioner, August 1, 1990.

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