STATE OF NEW YORK
COUNTY OF LIVINGSTON
BATH PETROLEUM STORAGE INC. and E.I.L. PETROLEUM, INC.,
THE NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION and JOHN P. CAHILL, COMMISSIONER,
MCNAMEE, LOCHNER, TITUS & WILLIAMS, P.C.
JOHN J. PRIVITERA, ESQ., OF COUNSEL
JEFFERSON LAW FIRM
JERRY W. BOYKIN, ESQ., OF COUNSEL
ATTORNEYS FOR PETITIONERS
ATTORNEY GENERAL OF THE STATE OF NEW YORK
JOSEPH KOCZAJA, ESQ., ASSISTANT ATTORNEY GENERAL,
ATTORNEY FOR RESPONDENTS
RAYMOND E. CORNELIUS, J.
Petitioners have commenced this special proceeding, pursuant to CPLR Article 78, in an effort to vacate and annul a determination by the Respondent, New York State Department of Environmental Conservation (DEC), denying Petitioners' application for renewal of a State Pollutant Discharge Elimination System (SPDES) permit. In a previous proceeding, which was also commenced under CPLR Article 78 and requested the same relief, the Hon. Gerard J. Alonzo, Acting Supreme Court Justice, granted a motion to dismiss on the grounds that Petitioners had failed to exhaust administrative remedies. An order, based upon this decision, was entered on June 21, 2000, and thereafter, the dismissal was affirmed by the Supreme Court, Appellate Division, Fourth Department, for the reasons stated in the decision. See Bath Petroleum Storage, Inc. v. New York State Department Environmental Conservation, 280 AD2d 997(4th Dept. 2001).
During the pendency of the previous Article 78 proceeding, Petitioners made application to the undersigned for a temporary injunction, under CPLR §§6301 and 6313, in regard to a denial, by the DEC, for their request for an emergency authorization. Pursuant to a decision and order, dated May 23, 2000, this Court denied the motion for a temporary injunction, and granted a motion to dismiss the Petition for failure to state a cause of action. Some historical background is contained in this Court's earlier decision, as well as the decision of Judge Alonzo, and to this extent, those decisions are incorporated by reference, herein.
On January 7, 2000, Petitioners requested an administrative hearing, pursuant to 6 NYCRR §621.1(d), in order to obtain a review of the denial of the SPDES application. A legislative hearing and issues conference was thereafter convened on July 10, 2000. P. Nicholas Garlick was assigned as the Administrative Law Judge (ALJ) to preside over the administrative hearing, and certain submissions were made to him prior to the aforementioned issues conference. Further, at the suggestion of ALJ Garlick, a technical conference was held on July 26, 2000, following which Petitioners made an additional submission to him on August 2, 2000. Pursuant to a ruling on issues, dated August 3, 2000, ALJ Garlick found, based upon his review of transcripts of the legislative hearing and issues conference, together with exhibits submitted by the parties, that there were no issues necessitating the convening of an adjudicatory hearing. An appeal was taken from this decision to the DEC Commissioner, and by decision, dated November 6, 2000, Deputy Commissioner Carl Johnson, of the DEC, affirmed the decision of the Administrative Law Judge to uphold denial of the SPDES permit without a hearing. Thus, Petitioners have now exhausted their administrative remedies.
The Petitioner E.I.L. Petroleum, Inc. is a corporation, whose business is principally engaged in the international and domestic bulk purchase and sale of liquefied petroleum gases. The other Petitioner, Bath Petroleum Storage, Inc., (BPSI) is a wholly owned subsidiary of E.I.L. Petroleum, Inc., and operates the liquefied petroleum gas storage facility, which is the subject of this proceeding. The facility is located in Steuben County, and as discussed in this Court's earlier decision, dated May 23, 2000, consists of underground, salt caverns. In essence, when not used for the storage of the liquid petroleum gas, water and salt are pumped into these lined, storage facilities, which, thereby, retain their form. Conversely, when the liquid petroleum gas is pumped into the storage facilities, the water and salt are displaced, resulting in brine, which is then retained in outside storage ponds. Disposal of excess brine, which is actually salt water, from the storage ponds into the Cohocton River, requires a State Pollution Discharge and Elimination System (SPDES) permit.
The original discharge permit for this facility, was issued to Mobil Oil Corporation in 1975, and was then renewed in 1979. The permit was transferred to BPSI in 1983, upon purchase of the facility. Thereafter, in 1984 and again, in 1989, the DEC renewed the SPDES permit for respective, five year periods. In 1991, which was before expiration of the second of these permits, BPSI submitted an application to the DEC for permission to expand storage capacity by drilling seven additional wells. In 1992, the DEC issued a "negative declaration," pursuant to the State Environmental Quality Review Act ("SEQRA") and granted permits to drill six of the seven proposed storage wells in caverns. Again, the solution of brine, created by any expansion would be discharged into storage ponds, and thereafter, pursuant to the SPDES permit, into the Cohocton River.
In 1994, the DEC granted another permit renewal for a five year term. However, in 1996, the DEC sought to modify the SPDES permit based upon the belief that there had been a significant increase in the amount and frequency of discharge into the Cohocton River. In addition, the DEC wished to change the administrative classification of Petitioners, under the SPDES permit, from a non-significant discharger to a significant minor industrial discharger, and further, wanted BPSI to be required to use a "mass balance formula" to determine when and how much brine to discharge into the Cohocton River. An administrative hearing was ultimately held before an Administrative Law Judge, Helene G. Goldberger, who issued a hearing report on August 17, 1998, which upheld the modifications. A proceeding, pursuant to CPLR Article 78, was thereafter commenced to review this determination. The matter was then transferred to the Appellate Division, Third Department, which ruled that the proceeding was moot in part, because the most recent SPDES permit had expired in 1999. See Matter of Bath Petroleum Storage, Inc. v. New York State Department of Environmental Conservation, 272 AD2d 746(3rd Dept. 2000), motion for leave to appeal denied 95 NY2d 768(2000). As discussed in this Court's earlier decision, the decision of the Appellate Division, Third Department, contains a historical summary of the relationship between the parties, and to this extent, is incorporated, by reference, herein.
The most recent SPDES permit, which was issued to BPSI in 1994, did not expire, by its terms until September 12, 1999. On March 10, 1999, which was approximately six months prior to the expiration, a SPDES permit renewal application was submitted to the DEC. The agency determined that this should be considered a "new" application, pursuant to the provisions of Environmental Conservation Law (ECL) §70-0115(2)(c). On April 29, 1999, which was approximately six weeks after submission of the renewal application, the DEC issued a Notice of Incomplete Application ("NOIA"). This notice contained thirty items, regarding allegedly incomplete information submitted with the application, and requested that the application be amended and resubmitted to address these concerns.
A careful review of the NOIA issued by the DEC, discloses that many of the thirty items did not involve what commonly might be regarded as incomplete information, but rather, conclusions, on the part of the DEC, that the application contained incorrect information. In several instances, the notice not only indicated that certain information was incorrect, but suggested the presumably, correct answers, premised upon assertions, which may be the subject of dispute. For example, paragraph 3 of the notice recites that "In Section 1, the entry for #2 erroneously does not reflect that facility operations have changed." The Petitioners are then directed to check a box, marked "modification," on the application, because the "facility operation has changed and the quantity of wastewater discharged annually has increased notably since the permit's discharge limits were developed." It should be noted that this directive may be inconsistent with the introductory paragraph of the NOIA, wherein Petitioners were informed, that, pursuant to 6 NYCRR Part 621.34(f), the renewal application would be treated as a new application. In any event, paragraph 3 continues by directing that another box on the application, entitled "Yes" be checked because " current flows and operations are significantly different than historically described in the engineering report most recently approved by the DEC Division of Water and the last full SPDES renewal application ." Petitioners were then asked to summarize their reasons for the increase in the quantity of water discharged from the facility. It is significant that the Petitioners, in this proceeding, dispute that there has been a significant increase in discharge of wastewater, and in effect, the NOIA asked them to set forth reasons and facts to justify an opposite conclusion.
In paragraph 10 of the NOIA, the DEC indicated that additional entries would be required to complete the "Industrial Chemical Survey," contained in the application, and indicated that this must include chemicals used at the facility to meet threshold levels, such as methyl mercaptan, which " is typically added to LPG for odorizing purposes." On May 6, 1999, the President of BPSI sent a letter to the DEC, in which he indicated that methyl mercaptan is not used as a malodorant for LPG, and that his company did not possess such chemical on their site. The DEC responded by letter, dated May 27, 1999, by stating that the letter from BPSI only partially addressed two of the thirty items, set forth in the NOIA, and that the application remained incomplete because of twenty-eight additional items.
On June 16, 1999, BPSI sent another letter to the DEC, and requested that the state agency provide a list of questions or list of information, which was required to be included in an engineering report. In this regard, the April 29, 1999, NOIA required submission of an engineering report, concerning several of the thirty items, and one paragraph made reference to an "approvable" engineering report. There appears to have been no response to the June 16, 1999 inquiry, and thereafter, BPSI made a detailed response, dated June 22, 1999, which corresponded to each of the thirty paragraphs contained in the NOIA, together with a supplemental application, dated June 23, 1999. These submissions took issue with certain of the assertions contained in the NOIA, such as the contention by DEC that a change in operations would result in new or increased discharges of pollutants. In addition, BPSI indicated that there would be a submission of an engineering report, which was actually submitted on August 11, 1999.
The DEC issued a second NOIA on August 12, 1999, in which the agency indicated that twenty of the thirty items contained in the original notice "remain incompletely or incorrectly (emphasis added) addressed." Although BPSI had submitted an Environmental Assessment Form (EAF), as part of their supplemental material, the DEC took the position that there was an improper SEQRA segmentation because of other pending applications before the agency. In addition, the August 12, 1999 NOIA appears to indicate that issuance of a SPDES permit would be dependent upon the processing of these other pending applications. Finally, the NOIA contains a detailed, but highly technical, request for twenty-five additional items of information. The August 12, 1999, NOIA directed that an EAF, addressing all permit applications pending before the DEC, be submitted on or before August 23, 1999. On August 23, 1999, Petitioners responded to the August 12, 1999 NOIA by submitting detailed answers to the questions raised in the NOIA. Furthermore, the letter accompanying the responses, set forth BPSI's legal position that other pending applications, concerning the facility, were not related and should be considered independent of the SPDES application.
On September 2, 1999, the regional attorney for the DEC wrote to BPSI and rejected a request to hold a technical conference because, in her opinion, " the application remains significantly deficient." Also, on September 2, 1999, counsel for the Petitioners submitted a letter to the DEC. In essence, counsel asserted that the application, for a SPDES permit, was complete, and further, submitted case law to support the position that other pending applications, under Article 23 of the Environmental Conservation Law (ECL) should be considered separate and apart from the SPDES application, which is governed by the Uniform Procedures Law (UPL). Accordingly, counsel argued that there was not an improper segmentation of SEQRA, as contended by the DEC.
On September 10, 1999, which was two days prior to the expiration of the SPDES permit, the DEC issued its third NOIA, which stated that the application, together with supplemental responses, " remains grossly deficient and incomplete ." Specifically, the September 10, 1999, NOIA asserted that "An accurate, comprehensive Environmental Assessment Form has not been submitted," and that there had been inadequate information supplied in response to the 25 items contained in the second NOIA. Further, the DEC stated that "The Engineering Report submitted is significantly deficient and therefore not approvable." In support of this last conclusion, the DEC enclosed a report from the Regional Water Engineer, which addressed alleged deficiencies in BPSI's engineering report included in their August 11, 1999 submission. However, again there was no indication of what was meant by "approvable" engineering report.
On September 14, 1999, counsel for BPSI sent a letter to the DEC, in which he contended, that pursuant to Environmental Conservation Law, §70-0109(1), the application should have been deemed complete because of the failure of the agency to provide notice of incompleteness within 15 days from the August 23, 1999 response to the second NOIA.
In this regard, he argued that the tolling provisions of Environmental Conservation Law, §70-0109(4) only relates to instances in which the DEC is not the lead agency under SEQRA. Counsel also directed the agency's attention to State Administrative Procedure Act, §401(2), which, in relevant part, provides for continuation of licenses, issued by state agencies, in instances where " a licensee has made a timely and sufficient application for the renewal of a license or a new license with reference to any activity of a continuing nature ." This section further states that " the existing license does not expire until the application has been finally determined by the agency, and, in case the application is denied or the terms of the new license limited, until the last day for seeking review of the agency order." There was no response to the September 14, 1999 letter, and on September 24, 1999, BPSI submitted an itemized response to the third NOIA. The DEC, likewise, failed to respond to this submission.
The December 8, 1999 denial, which forms the basis for this proceeding, itemizes six categories of information, which BPSI allegedly failed to provide in support of their application. The letter, which accompanies this listing, reiterates that the significant expansion of the facility necessarily results in " a significant increase in the discharge of brine from your facility to waters of the State." Again, Petitioners have disputed this underlying premise from the very beginning of the application process. In their letter of December 8, 1999, the DEC relied upon provisions of the Environmental Conservation Law, as well as rules and regulations, for the proposition that the failure to provide information sought by the agency would constitute grounds for denial of an application. One such section was Environmental Conservation Law, §70-0117(2), which provides as follows:
2. At any time during the review of an application for a permit or a request by a permit holder for the renewal, reissuance, recertification or modification of an existing permit, the department may request additional information from the applicant or permit holder with regard to any matter contained in the application or request when such additional information is necessary (emphasis added) for the department to make any findings or determination required by law. Such a request shall not extend any time period for department action contained in this article. Failure by the applicant or permit holder to provide such information may be grounds for denial by the department of the application or request.
Further, 6 NYCRR 621.15(b) states as follows:
(b) At any time during the review of an application for a new permit, modification, or renewal, the department may request in writing any additional information which is reasonably necessary (emphasis added) to make any findings or determinations required by law. Such a request shall be explicit, and shall indicate the reasonable date by which the department is to receive the information. Failure to provide such information by the date specified in the request may be grounds for denial of the application.
In the introduction to the ruling on issues, which was made on August 4, 2000, the Administrative Law Judge, P. Nicholas Garlick, states as follows:
Based upon my review of the transcripts of this hearing and issues conference and the over 80 exhibits submitted by the parties, I find that there are no issues necessitating the convening of an adjudicatory hearing. Further, I find that BPSI's legal right to a hearing pursuant to 6 NYCRR 621.13(d) and independent review of the facts and circumstances surrounding the denial by DEC Staff of BPSI's SPDES permit renewal application has been met.
The section of the rules and regulations, cited by the Administrative Law Judge, reads as follows:
If the decision is to deny the application or to impose substantive conditions, the applicant may, within 30 calendar days of mailing of the decision, request that a hearing be held. Such a hearing shall be held within 60 calendar days of the applicant's request. 6 NYCRR 621.13(d)
After discussing the history of the facility and the procedural history of the case, the Administrative Law Judge, in his ruling, recites the fact that a legislative hearing had been held on July 10, 2000 and an issues conference immediately thereafter. Provision is made in the rules and regulations for both a legislative hearing and issues conference. In regard to a legislative hearing, 6 NYCRR 624.4(a), in part, provides as follows:
1. The ALJ will hear and receive the unsworn statements of parties and non-parties relating to the permit applications .
4. The statements made at the legislative hearing do not constitute evidence but may be used by the ALJ as a basis to inquire further of the parties and potential parties at the issues conference.
Further, 6 NYCRR 624.4(b), provides for the holding of an issues conference by use of the following language:
1. Following the legislative hearing, the ALJ will schedule an issues conference (if one was not scheduled in the hearing notice) which will be held in advance of the adjudicatory hearing.
The purpose of an issues conference is set forth in 6 NYCRR 624.4(b)(2). and includes the narrowing or resolution of disputed issues of fact, determining whether legal issues exist whose resolution is not dependent on facts, which are in substantial dispute, and to decide any pending motions.
The ruling of the Administrative Law Judge continues by summarizing the respective position of the DEC staff and BPSI, based upon the legislative hearing and issues conference. In essence, the primary issue, which was identified, involved whether or not BPSI had submitted adequate information to the DEC to justify issuance of a SPDES permit. The Administrative Law Judge then concluded that the "central issue" was whether or not the permit renewal application had been properly denied by DEC, but acknowledged that "the parties have raised a number of other issues stemming from and related to this central issue." However, as aforementioned, he also determined that there were no issues, which necessitated an adjudicatory hearing. In this regard, 6 NYCRR 624.4(c)(5) states as follows:
5. If the ALJ determines that there are no adjudicable issues, the ALJ will direct that the hearing be canceled and that the staff continue processing the application to issue the requested permit.
In relevant part, 6 NYCRR 624.4(c)(1) contains the rules generally applicable to determining whether or not an issue is "adjudicable," and includes questions relating to the matter cited by the agency as a basis to deny a permit and which is contested by the applicant. There is also provision, contained in 6 NYCRR 624.4(c)(6) for the Administrative Law Judge to consider certain SEQRA issues, but 6 NYCRR 624.4(c)(7) states that "the completeness of an application as defined in section 621.1(d) of this Title, will not be an issue for adjudication."
In his ruling, the Administrative Law Judge begins his discussion of his reasons, for concluding that there are no adjudicable issues, by reference to Environmental Conservation Law, §70-0117(2). This statutory provision, which was cited in the initial denial of the SPDES permit, dated December 8, 1999, and hereinbefore quoted in this decision, empowers the DEC to request additional information during the application process. Following reference to several regulatory provisions, the Administrative Law Judge continues by briefly reviewing the issuance of the NOIAs and various submissions by BPSI. He then makes the following significant statement:
The law on this point is clear; if information that DEC Staff identifies as necessary to evaluate a SPDES permit renewal application is requested and not provided by an applicant, DEC Staff is empowered to deny such application (ECL§701-0117(2)). While there are multiple other pieces of requested information that have not been provided, for the purposes of this decision an examination of only one specific item, for illustrative purposes will suffice.
The example, selected by the Administrative Law Judge, was the request for an approvable engineering report. The ruling acknowledged that on August 11, 1999, BPSI had submitted an engineering report, referred to as the "Day Report," which consisted of 11 pages of text and 17 appendices. However, the Administrative Law Judge then quoted from the September 10, 1999 NOIA, wherein the DEC staff determined that the Day Report did not constitute an approvable engineering report, and also made reference to the 10 pages of questions regarding the contents of the Day Report. It should be noted, that based upon the Court's review of the record, this is the first time that the DEC was somewhat specific in terms of what they expected to be contained in an approvable engineering report.
The Administrative Law Judge, in his ruling, acknowledged that BPSI made efforts to address the September 10, 1999 NOIA, but had not submitted any amended engineering report and that there remained unanswered, engineering questions, which had been asked by the DEC staff. He then quotes from the December 8, 1999 letter, which states, in part, that " the application must include a new engineering report ." It should be noted, however, that this language, as well as other quotations contained in the ruling, followed a paragraph, in which the DEC asserted that the " the quantity of wastewater discharged annually has increased significantly above the averages recorded prior to the changes in operation," and that the application and engineering report submitted do not address these and other changes. Again, the Petitioners dispute this underlying premise that there has been a significant increase in the discharge to the Cohocton River.
The ruling of the Administrative Law Judge further recited that the request for an approvable engineering report is not unusual, and a routine practice for industrial dischargers in similar circumstances as BPSI. He then stated that "To date, this request has not been complied with, and thus alone is sufficient grounds to deny the permit renewal application." He then concludes as follows:
There appear to be numerous other pieces of information that have been requested and not provided, but it is not necessary to evaluate them since the application is clearly incomplete. In sum, for the foregoing reasons, I find the DEC Staff did not act improperly by denying the application.
After reiterating, in the conclusion, " that there are no issues necessitating the convening an adjudicatory hearing," the Administrative Law Judge further concludes as follows:
Further, I find that BPSI's legal right to a hearing and independent review of the facts and circumstances surrounding the denial by DEC Staff of BPSI's SPDES renewal application has been met.
Based upon the above, referenced passages, contained in the ruling issued by the Administrative Law Judge, it is apparent that he concluded that an adjudicatory hearing was unnecessary because there were no adjudicable issues. This latter finding, in turn, was based upon the fact that DEC staff had requested certain information, that DEC staff had determined the information to be necessary for making a decision on the application, and that DEC staff found that such information had not been supplied by BPSI. If this logic be correct, the application for an adjudicatory hearing should be denied any time an administrative agency is empowered to request information from an applicant, which it concludes to be necessary, and then finds that there has been non compliance with the request. This, in effect, renders the requirement of an adjudicatory hearing meaningless, and abdicates the role of the Administrative Law Judge to the agency staff. The Administrative Law Judge should have made his own independent determination of what information had been specifically requested by the DEC, and whether or not the August 11, engineering report and subsequent submissions by BPSI were adequate to satisfy the request. Further, it should be remembered that the issue involving an approvable engineering report was predicated upon DEC's conclusion that there had been a significant increase in discharge to the Cohocton River, which, itself, is a disputed issue of fact.
An equally important corollary, to the foregoing, is whether or not the requested information is "necessary" or "reasonably necessary" for a determination to be made by the agency. ECL§70-00117(2),6 NYCRR 621.15(b). Again, the Administrative Law Judge, in this case, appears to have surrendered this function to the agency. As quoted above, at one point, he states that the DEC staff is empowered to deny a SPDES permit renewal application " if information that DEC Staff identifies as necessary " is requested but not provided by an applicant. The Petitioners, in this case, were entitled to have an independent review, by the Administrative Law Judge, as part of the adjudicatory hearing, concerning whether or not certain requested information was necessary or reasonably necessary to a determination on the application.
In summary, in this Court's opinion, the failure to afford Petitioners an adjudicatory hearing was in error, and constituted arbitrary and capricious conduct. This error, however, was further compounded by the decision of the Deputy Commissioner, dated November 6, 2000. It should be noted that the authority to decide BPSI's appeal had been delegated to the Deputy Commissioner because the Commissioner had served as DEC's General Counsel during previous reviews.
Before analyzing the decision of the Deputy Commissioner, it is important to distinguish between the concept of a completed application and the authority of an administrative agency to require submission of additional information after the filing of a completed application. In this regard, 6 NYCRR §621.1(d) defines a "complete application" as follows:
(d) Complete application means an application for a permit which is an approved form and is determined by the department to be complete for the purpose of commencing review of the application but which may need to be supplemented during the course of review in order to enable the department to make the findings and determinations required by law.
Further, Environmental Conservation Law, §70-0105(2) reads as follows:
2. "Complete application" shall mean an application for a permit which is an approved form and is determined by the department to be complete for the purpose of commencing review of the application but which may need to be supplemented during the course of 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.
In relevant part, 6 NYCRR §621.5 provides as follows:
(a) Applications shall be submitted to the appropriate regional permit administrator, as listed in Appendix 1, for determination of completeness and review.
(c) If the application is determined to be incomplete, the notice shall include a brief statement indicating all identified areas of incompleteness. Nothing herein shall preclude the department from requesting additional information in accordance with section 621.15(b) of this Part.
(d) If the application is determined to be complete and is for a major project, the notice will state:
(7) For delegated permits, the tentative determination and the availability of either the draft permit or notice of intent to deny;
(ii) If the determination is to deny the permit, then the department shall issue a notice of intent to deny.
Notwithstanding the fact that an application may be deemed complete, the statutory and regulatory scheme contemplate that a state agency may require an applicant to submit additional information during the application process, and upon failure to comply, to deny the permit. This is recognized in the sections, quoted in the preceding paragraph, relating to the definition and procedure regarding a determination of completeness. See Environmental Conservation Law, §70-0105(2); 6NYCRR §§621.1(d), 621.5(c). Indeed, 6NYCRR §621.5(c) refers to 6NYCRR §621.15(b), which was cited in the December 8, 1999 denial and also hereinbefore quoted in this decision. Furthermore, Environmental Conservation Law, §70-0117(2) has also been hereinbefore quoted, and again, provides that, at any time during the review of an application for a permit, the DEC may request additional information, which is "necessary" to make findings or a determination.
The distinction between an incomplete application and a request for additional information, in regard to a complete application, is significant to an applicant, such as BPSI, because of what has been characterized as the "safe harbor" provision of the State Administrative Procedure Act, §401(2). This was referenced in counsel's letter to the DEC, dated September 14, 1999, and hereinbefore quoted, in part. This statutory provision reads as follows:
2. When a licensee has made timely and sufficient application for the renewal of a license or a new license with reference to any activity of a continuing nature, the existing license does not expire until the application has been finally determined by the agency, and, in case the application is denied or the terms of the new license limited, until the last day for seeking review of the agency order or a later date fixed by order of the reviewing court, provided that this subdivision shall not affect any valid agency action then in effect summarily suspending such license.
In this case, there is no question that BPSI submitted a timely application for renewal of the SPDES permit, which the DEC considered as an application for a new permit. Thus, if a "sufficient application" is equated with a "complete application," the SPDES permit would not have automatically expired on September 12, 1999, or as may have been extended by the DEC, but rather, on "the last day for seeking review of the agency order or a later date fixed by order of the reviewing court." State Administrative Procedure Act, §401(2).
It is apparent from the decision of the Deputy Commissioner, dated December 6, 2000, that he viewed the issue as solely one of completeness of the application. He acknowledges, for example, that BPSI had requested an adjudicatory hearing pursuant to 6NYCRR §624.4(c)(1)(ii), but states that "BPSI disregards, however, the bar against adjudicating the completeness of a permit application contained in section 624.4(c)(7) ." He further notes that an issue is adjudicable if it pertains to a matter cited as a basis for denial of a permit and is contested by an applicant, but again reiterates that " the regulations specifically state that the completeness of an application is not an issue for adjudication," citing 6NYCRR §624.4(c)(7). Indeed, in this decision, the Deputy Commissioner criticizes the Administrative Law Judge, because he " improperly evaluated the reasonableness of Staff's requested information by going beyond what was required." The Deputy Commissioner cites and relies upon 6NYCRR §621.15(b) in support of this determination.
As interpreted by the Deputy Commissioner, in his November 6, 2000 decision, 6NYCRR §621.15(b) limited the Administrative Law Judge's review to " whether Staff articulated the information reasonably sought and whether there was a reasonable date established for the Department to receive the information." Thus, he concludes that " where an application, as here, was denied by Staff because the application is incomplete, the review by the ALJ is limited as prescribed above." Further, he states as follows:
A finding that Staff adequately completed the prescribed steps outlined in section 621.15(b) would have completed the administrative review without further inquiry.
In the Court's opinion, limiting the provisions of 6NYCRR §621.15(b) to a determination of completeness of the application would render meaningless the provisions, thereof, which grant authority to the agency to request additional information, which may be "reasonably necessary" to its determination, "at any time during the review of an application for a new permit, modification or renewal ." The same would be true for a similar provision contained in Environmental Conservation Law, §70-0117(2). Furthermore, the statutory and regulatory definitions of a "complete application" envision that information may need to be supplemented during the review process, and that an application should be deemed complete if it is sufficient for purpose of commencing review of the application. Environmental Conservation Law, §70-0105(2): 6 NYCRR621.1(d).
In the pending case, the Court has concluded that BPSI submitted a "complete application," based upon the materials possessed by the DEC, the initial application for renewal of the permit as well as supplemental submissions to the DEC. This did not, however, preclude the DEC from requesting additional information, pursuant to statutory and regulatory authority, which was "necessary" or "reasonably necessary" to a determination for ultimate issuance of a SPDES permit. The issues of whether or not BPSI complied with the specific requests, or if not, whether the information elicited was "necessary" or "reasonably necessary" to a determination are questions, which should be the subject of an adjudicatory hearing.
It should also be mentioned that the Deputy Commissioner, in his November 6, 2000 decision, acknowledged what he termed as a "procedural irregularity." In relevant part, he wrote as follows:
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.
The Deputy Commissioner, nevertheless, concludes that no prejudice resulted to BPSI. In the Court's view, this only confirms that even DEC staff perhaps viewed this as involving issues, not of whether BPSI had submitted a "complete" application, but rather the adequacy of the supplemental, requested information.
In addition to the foregoing, the Deputy Commissioner, in his November 6, 2000 decision, makes several other questionable factual and legal statements. For example, he states that "the ALJ held that BPSI's opportunity for an impartial review was met through the convening of the pre-hearing issues conference." Similarly, he asserts that "the ALJ held that due process concerns were met through the pre-hearing issues conference." The Court is unable to discern those specific determinations from the Administrative Law Judge's ruling. In any event, the Deputy Commissioner reaches his own conclusion that "The Department's issues conference is analogous to a summary judgment proceeding."
Parties to a summary judgment motion are generally aware that the motion may result in a decision, which could be determinative on the issues without a hearing or trial. Here, the record fails to indicate that BPSI was aware that the issues conference would result in depravation of an adjudicatory hearing. More important, the regulatory provisions, hereinbefore quoted, pertaining to a legislative hearing and issues conference, would appear to anticipate the holding of an adjudicatory hearing. The Deputy Commissioner cites Matter of Richie v. Coughlin, 148 AD2d 178(3rd Dept. 1989), in support of his legal conclusion. However, this case involved the question of an opportunity to be heard before a discretionary decision concerning termination of employment, under the Civil Service Law, and specifically, the court did not consider the right to an adjudicatory hearing under the State Administrative Procedures Law.
In conclusion, based upon the reasons set forth in this decision, this matter should be remanded for purposes of an issues conference, and thereafter, an adjudicatory hearing, to be conducted by a different Administrative Law Judge, in conformity with this decision. Accordingly, to this extent, the Court sustains the first and second causes of action, contained in the Petition. The issues sought to be raised in the third cause of action, may be considered at the adjudicatory hearing. This Court further determines that the DEC properly considered BPSI's application for a renewal permit as a new application, although regarding an activity of a continuing nature, and accordingly, there should be a dismissal of the fifth cause of action contained in the Petition. See Environmental Conservation Law. §70-0115(2)(c), 6 NYCRR §621.13(f).
Finally, the fourth cause of action alleges a denial of equal protection, and more specifically, contains allegations of bad faith interference with Petitioners' expansion plans. In this regard, Petitioners, in effect, allege a personal animus toward them, on the part of Gregory H. Sovas, Director of the DEC's Division of Mineral Resources. For example, they allege that on one occasion, he threatened that "there are always violations" to be found regarding the SPDES permit. Although these allegations are disturbing, in nature, the Court finds that the allegations, contained in the fourth cause of action, fail to support a claim of a constitutional violation.
Dated: 27 August 2001
Hon. Raymond E. Cornelius, JSC