Palumbo Block Company, Inc. - Ruling, October 22, 1999
Ruling, October 22, 1999
STATE OF NEW YORK : DEPARTMENT OF ENVIRONMENTAL CONSERVATION
In the Matter of
the Application of PALUMBO BLOCK COMPANY for a Mined Land Reclamation Permit
for a proposed mine in the Town of Ancram, pursuant to Article 23, Title 27 of
the Environmental Conservation Law
October 22, 1999
RULING
DEC Application No. 4-1020-00035/00001
This ruling is on a portion of the motions made by the Department Staff and the Intervenors in the above matter, regarding the potential record-of-compliance issue and the schedule of the hearing. I am reserving decision on some aspects of the Department Staff's motion. This ruling also discusses receipt of certain documents which were not put into the record on the first day of the issues conference.
Summary of Ruling
With regard to the Department Staff's motion: the issues conference will continue on October 27, 1999 and on October 28, 1999 if necessary, but I am reserving decision on when to make the issues ruling. The issues conference record will remain open until there is a settlement or a final adjudication of the Region 3 enforcement action. Discovery will be allowed and a discovery schedule will be set regarding the proposed record-of-compliance issue. I am reserving decision on when to commence the adjudicatory hearing.
The Intervenors' motion that the issues conference be adjourned immediately, until such time as there is final resolution of the Region 3 complaint, is denied without prejudice to an additional motion to adjourn being made at a later date.
Background and Summary of Motions
The issues conference in this hearing began on October 5, 1999. The issues conference is scheduled to continue on October 27, 1999, and also on October 28, 1999 if necessary. On October 5, 1999, two motions were made regarding the potential record-of-compliance issue and the schedule of the hearing, one motion by the Department Staff and the other by the Town of Ancram and the Taconic Valley Preservation Alliance (the "Intervenors"), which have jointly requested party status in the hearing. These motions were discussed on October 5 and in correspondence dated October 12 and 13, 1999.
The Department Staff's motion, as stated in Mr. Ostrov's October 13, 1999 letter, is as follows:
"(1) The Issues Conference should continue with a ruling issued by your honor on adjudicable issues and party status;
(2) The Issues Conference should remain open until there's either a settlement or final adjudication in the ongoing DEC Region 3 enforcement action [in which Palumbo Block Company and its President are respondents];
(3) A discovery schedule should be set and discovery allowed on the potential fitness issue;
(4) The adjudicatory hearing should not commence until the outcome of the DEC Region 3 enforcement action is decided."
The Intervenors moved for suspension or adjournment of the issues conference until such time as there is a final resolution of the Region 3 complaint. This would include canceling the October 27 and 28, 1999 dates of the issues conference.
The Applicant opposed both motions and argued that the Applicant's record of compliance may not legally be considered as an issue in this proceeding.
The motions and arguments regarding them are contained in the transcript of the October 5, 1999 issues conference session and in three letters, dated October 12 or October 13, 1999, from Mr. Ostrov, Mr. Replansky and Ms. Zeisel.
Discussion
The proposed record of compliance issue could potentially become an issue in this hearing. Contrary to the arguments advanced on behalf of the Applicant, the proposed issue is not excluded as a matter of law. The Applicant cited the decision in A-1 Compaction, Inc. v. New York State Department of Environmental Conservation, Index No. 18646-94 (Supreme Court, Westchester County, 1995) in arguing that the Department does not have authority to deny a mining permit based on an applicant's compliance history. While the A-1 Compaction decision rejected relying on conviction of federal crimes as a basis for modification of a solid waste management permit, it did uphold modification of the permit on the basis of prior noncompliance with permit conditions, the Environmental Conservation Law ("ECL") and related requirements. The decision cited 6 NYCRR §621.14(a)(5) as providing authority for this.
The proposed issue in the Palumbo Block Company mining permit hearing involves allegations and findings of non-compliance with environmental requirements. The permit review procedures of Part 621 apply to mined land reclamation permits, among other types of permits. 6 NYCRR §621.9(f) provides that a permit may be denied for the reasons set forth in §621.14(a)(5) as bases for modification, suspension or revocation. ECL §70-0107(2) provides that, "Notwithstanding any inconsistent provisions of this chapter or any rule or regulation of the department, the procedures provided in this article and in rules and regulations adopted by the department pursuant to subdivision one of this section [which include Part 621] shall govern the review by the department of applications for permits for proposed projects and modifications, suspensions, revocations, renewals, reissuances and recertifications of permits under the regulatory programs of the department specified in subdivision three of this section ..." Mined land reclamation is among the programs specified in ECL Subdivision 70-0107(3). There is authority under ECL Article 70 (Uniform Procedures) to deny a mined land reclamation permit based on non-compliance with environmental requirements, apart from any authority under the ECL sections that are specific to mining.
Under the existing Record of Compliance Enforcement Guidance Memorandum ("EGM," dated March 5, 1993), the Department may consider the record of compliance not only of the immediate entity which is applying for a permit but also of business entities and individuals which are related in specified ways to an applicant. (See EGM, page 5). Accordingly, matters are not excluded from consideration simply because Palumbo Block Company itself was not among the respondents in those matters.
The proposed record-of-compliance issue remains as a potential issue in this hearing, and as such is appropriate for discussion in the issues conference and related correspondence. I am not, however, making a ruling at this time about whether or not it is an issue in the hearing.
The question raised by the motions is essentially how the enforcement action in Region 3 (DEC Case No. R3-19990909-52) affects consideration of the proposed record-of-compliance issue here in the Palumbo Block Company permit hearing for the site in Region 4. The information which is already in the record in the Region 4 case indicates that there is a possibility that record-of-compliance may become an issue for adjudication and that this possibility requires further evaluation, including evaluation of the significance of the enforcement action in Region 3 . Thus, it appears reasonable to keep the record of the issues conference open until there is a settlement or final adjudication in the Region 3 enforcement action (see Department Staff motion, paragraph 2). In addition, the Department Staff's request (paragraph 3 of the motion) that discovery be allowed on the potential issue is reasonable; further discussion of the discovery schedule and of any discovery that requires permission of the Administrative Law Judge can take place at the issues conference next week and/or in correspondence following that.
The Department Staff's motion also asked that the issues conference continue, with a ruling issued on adjudicable issues and party status. Presumably this would be a ruling on the proposed issues that relate to technical aspects only, with a second ruling on the record-of-compliance issue to be made at a later date. This could also lead to two schedules for appeals to the Commissioner. In contrast, the Intervenors moved that the issues conference be adjourned.
The issues conference will go forward as scheduled next week, but I will reserve decision on when to make a ruling on issues and party status. Proceeding with the issues conference would be useful since there are questions and proposed issues that can be discussed productively before the outcome of the Region 3 enforcement case is known.
I am aware, however, that a related record of compliance issue has been discussed in a permit hearing in Region 3 (Danny Fortune and Company, Inc., DEC Application No. 3-1326-00031/00003; see Exhibit K of the Intervenors' petition for party status in the Palumbo Block Company hearing). In addition, on October 15, 1999, the Respondents in the Region 3 enforcement matter moved to dismiss the complaint or, alternatively, moved for an expedited hearing. On October 20, 1999, the Region 3 Department Staff moved to consolidate the Region 3 permit hearing and the Region 3 enforcement hearing. These motion are pending at present. The Region 3 matters, including these motions, have been assigned to Administrative Law Judge Kevin J. Casutto.(1)
Thus, there are three DEC administrative proceedings whose schedules and proceedings may affect each other, and it is premature to decide when to make the issues ruling in the Palumbo Block Company mining permit hearing (Region 4, Ancram) and whether there should be one issues ruling or two in this hearing. I am reserving decision on the second part of paragraph 1 of the Department Staff's motion. Similarly, I am reserving decision on when to commence the adjudicatory hearing (Department Staff motion, paragraph 4).
The Intervenors' motion that the issues conference be adjourned, immediately, until such time as there is final resolution of the Region 3 complaint is denied, without prejudice to an additional motion to adjourn being made at a later date.
Offers of Proof
The Intervenors sought to submit certain documents as an offer of proof regarding the proposed record-of-compliance issue and the Applicant objected to these documents being accepted. On October 5, 1999, I reserved decision on accepting these documents and did not receive them at that time. A letter which the Applicant wished to submit was treated similarly. Having reviewed the arguments submitted on October 13, 1999, I will receive in the record, as offers of proof, the documents identified by the Intervenors (with one possible exception as noted below) and the cover letter for the 1999 Order on Consent which was offered by the Applicant. These documents will not be in evidence at this time, but will be in the record as offers of proof (see 6 NYCRR 624.12(b)). If there is a motion at a later stage of the process to receive any of these documents in evidence, a ruling can be made at that time.
The one exception is a document regarding a matter in Dover Town Court, to which the Applicant objected on the grounds that there was a stipulation that the document was never to be referred to in a mining application, in addition to the Applicant's other objections to the offer of proof. I am requesting that counsel for the Applicant and counsel for the Intervenors confer regarding the terms of this document, as they relate to the Applicant's objection. That document will not be included in the offer of proof at present since there needs to be clarification of whether or not its inclusion is prohibited.
_____________/s/_____________
Susan J. DuBois
Administrative Law Judge
Dated: Albany, New York
October 22, 1999
TO: Persons on Interim Service List
cc: Chief ALJ Daniel E. Louis
ALJ Kevin J. Casutto
STATE OF NEW YORK
DEPARTMENT OF ENVIRONMENTAL CONSERVATION
In the Matter of
the Application of PALUMBO BLOCK COMPANY for a Mined Land Reclamation Permit for
a proposed mine in the Town of Ancram, pursuant to Article 23, Title 27 of
the Environmental Conservation Law
October 29, 1999
MEMORANDUM
DEC Application No. 4-1020-00035/00001
This is in response to the letter which Ms. Zeisel sent to me on behalf of the Applicant on October 22, 1999. The letter requested clarification of which of the documents identified by the Intervenors (Town of Ancram and Taconic Valley Preservation Alliance) are being accepted as part of their offer of proof on the proposed issue of the Applicant's record of compliance. The request for clarification relates to the last section of my October 22, 1999 ruling.
The documents which are being allowed into the record as part of the offer of proof were identified at the October 5, 1999 issues conference session and in Mr. Replansky's letter dated October 12, 1999. The documents are as follows:
- August 23, 1999 letter from Robert Martin to Fortunato Palumbo and Danny Fortune and Company, Inc.;
- June 11, 1999 letter from Robert Martin to Fortunato Palumbo and Danny Fortune and Company, Inc.;
- September 21, 1998 letter from Robert Martin to Anthony Palumbo and Palumbo Sand and Gravel;
- March 22, 1994 letter from Katherine Hudson to Anthony Palumbo, Palumbo Sand and Gravel, Danny Fortune and Company, and Carmine Palumbo with a Notice to Cease Violation dated March 18, 1994;
- December 9, 1993 letter from Robert Martin to Anthony Palumbo and Palumbo Sand and Gravel Co., Inc.;
- Mined Land Inspection Reports dated July 22, 1985 and June 26, 1984;
- Photographs of the gravel mine site in Dover, taken in 1987, and aerial photographs of that site taken more recently; and
- September 13, 1999 Complaint in the matter of Danny Fortune and Company, Inc., Palumbo Block Company, Inc., Fortunato Palumbo and Anthony Palumbo (DEC File No. R3-19990909-52). (The complaint is already attached as Exhibit J of the Intervenors' petition for party status.)
The following documents were given to me by the Department Staff at the issues conference on October 5, 1999, and are also included in the Intervenors' offer of proof: June 6, 1994 Order on Consent in the matter of Anthony Palumbo, Palumbo Sand and Gravel Co., Inc., Carmine Palumbo, and Danny Fortune and Co., Inc.; December 3, 1998 Order on Consent in the matter of Danny Fortune and Co., Inc.; and August 3, 1999 Modified Order on Consent in the matter of Danny Fortune and Co., Inc.
The Intervenors' offer of proof also identified witnesses who the Intervenors propose to call to testify on this subject.
A conference phone call took place yesterday morning among Ms. Zeisel, Mr. Ostrov, Mr. Replansky, and me regarding the requested clarification of which documents were being received as part of the Intervenors' offer of proof. During the phone call, there was further discussion of the Applicant's objection to documents other than the orders on consent being received as an offer of proof, and the significance of several Interim Decisions of the Commissioner to this question.
The participants in the phone call agreed that if the Applicant wishes to request leave from the Commissioner to appeal my October 22, 1999 ruling, the Applicant could do so within five business days from receipt of today's clarification of the documents that are involved. The Department Staff and the Intervenors would then have five business days, from receipt of the Applicant's request to appeal, to respond to the request. (See 6 NYCRR §624.6 and 624.8.)
Ms. Zeisel stated that she had sent to Mr. Replansky some documents regarding the July 1985 matter in the Town of Dover Justice Court. Mr. Replansky stated that he would discuss these with Ms. Zeisel. Ms. Zeisel or Mr. Replansky will notify me about the outcome of this discussion.
The documents listed on the first page of this memorandum are being accepted into the record as part of an offer of proof. As stated in my ruling of October 22, 1999, these documents are not in evidence at this time. Whether they are eventually received in evidence will depend upon a number of things, including whether all, part, or none of the proposed record-of-compliance issue is identified as an issue in the adjudicatory hearing. Arguments about relevance and other evidentiary questions will also need to be evaluated when and if the documents are offered as evidence. Rulings on the motions that are before Administrative Law Judge Kevin J. Casutto regarding the Danny Fortune and Company permit hearing and the pending enforcement action against Danny Fortune and Company et al. may also affect whether or not some of the documents will be received in evidence in the Palumbo Block Company permit hearing.
Based on the information which is in the record at present, the documents might be relevant to clarifying the circumstances surrounding a documented violation, to arguments about the significance of such violations, or to violations over which DEC has administrative jurisdiction but no adjudication has taken place. Accepting these documents as an offer of proof is consistent with how record-of-compliance issues have been treated in prior hearings (see A-1 Recycling and Salvage, Interim Decision of the Commissioner, March 19, 1992; Accurate Asbestos Transport, Inc., Interim Decision of the Commissioner, March 27, 1995; Al Turi Landfill, Inc., Interim Decision of the Commissioner, September 14, 1998; Al Turi Landfill, Inc., Issues Ruling, June 19, 1998, particularly pp. 14 - 17). It is not a matter of limiting the issue to only the final documents in enforcement actions, nor of re-litigating matters that have resulted in a final decision or settlement, but of exercising discretion in allowing the record to be developed.
_____________/s/_____________
Susan J. DuBois
Administrative Law Judge
Dated: Albany, New York
October 29, 1999
TO: Persons on Interim Service List
cc: ALJ Kevin J. Casutto
1 Any correspondence regarding the Region 3 matters, including any requests to intervene in the enforcement hearing pursuant to 6 NYCRR §622.10(f), should be addressed to ALJ Kevin J. Casutto at the Office of Hearings and Mediation Services address.
