CITIZENS OF COHOCTON VALLEY v. AVOCA PLAN. BD.

Decision Date21 March 1996
Docket NumberNo. 95-CV-6238L.,95-CV-6238L.
Citation919 F. Supp. 643
PartiesCONCERNED CITIZENS OF COHOCTON VALLEY, INC., Plaintiff, v. TOWN OF AVOCA PLANNING BOARD, New York State Department of Environmental Conservation, Michael Zagatza, as Commissioner of the New York State Department of Environmental Conservation, Jeffrey J. Sama, Deputy Permit Administrator of the New York State Department of Environmental Conservation, County of Steuben Industrial Development Agency, and J. Makowski Associates, Inc., Defendants.
CourtU.S. District Court — Western District of New York

COPYRIGHT MATERIAL OMITTED

Alan J. Knauf, Knauf, Craig & Doran, P.C., Rochester, NY, for Concerned Citizens of Cohocton Valley, Inc.

Robert H. Plaskov, Bath, NY, for Town of Avoca Planning Board.

Timothy Hoffman, NYS Attorney General's Office, Buffalo, NY, for New York State Department of Environmental Conservation, Michael Zagata., Jeffrey J. Sama.

Ruth E. Leistensnider, Nixon, Hargrave, Devans & Doyle LLP, Rochester, NY, for County of Steuben Industrial Development Agency.

Mark A. Chertok, Sive, Paget & Riesel, New York City, Lee A. Alexander, Frederick M. Lowther, Dickstein, Shapiro & Morin, Washington, DC, for J. Makowski Associates, Inc.

DECISION AND ORDER

LARIMER, Chief Judge.

INTRODUCTION

Plaintiff, Concerned Citizens of Cohocton Valley, Inc. ("Citizens") brought this action challenging certain permits that have been granted in connection with a natural-gas storage project in the Town of Avoca, New York ("Town"). Citizens, a not-for-profit corporation made up of Avoca-area residents, contends that the issuance of the permits by several different governmental bodies was unlawful under New York State and local laws, including the State Environmental Quality Review Act ("SEQRA"), Envtl.Conserv.L. § 8-0101 et seq., certain sections of the New York Town Law, New York State regulations, and Town zoning ordinances.

Jurisdiction is premised upon 28 U.S.C. § 1331, on the ground that questions arising under federal law and the United States Constitution predominate. Specifically, at issue is whether the state and local laws that plaintiff alleges have been violated are preempted by the Natural Gas Act ("NGA"), 15 U.S.C. § 717 et seq., under the Supremacy and Commerce Clauses of the Constitution (Art. VI, cl. 2, and Art. I, § 8, cl. 3, respectively).

Defendants include: the Town Planning Board ("the Board"); the New York State Department of Environmental Conservation ("DEC"); Michael Zagata, Commissioner of the DEC; Jeffrey J. Sama, the Deputy Chief Permit Administrator of the DEC; the County of Steuben Industrial Development Agency ("IDA"); and J. Makowski Associates, Inc. ("JMAI"). The DEC, Zagata, and Sama ("the DEC defendants") have moved for judgment on the pleadings under Rule 12(c) of the Federal Rules of Civil Procedure, or in the alternative for summary judgment under Rule 56. JMAI has also moved to dismiss pursuant to Rule 12(b)(6) or for summary judgment. Plaintiff has cross-moved for summary judgment on the first three of the six causes of action asserted in the complaint. Since the parties have submitted matters outside the pleadings, I will treat all the motions as motions for summary judgment. National Ass'n of Pharmaceutical Mfrs. v. Ayerst Lab., 850 F.2d 904, 911 (2d Cir.1988).

FACTUAL BACKGROUND

The Avoca Natural Gas Storage Project ("the Project") is a planned project to store natural gas underground in the Town of Avoca. JMAI, the developer of the Project, plans to create caverns deep underground by dissolving subterranean salt deposits through the injection of water, and then forcing the resulting brine further underground, leaving the remaining cavities available for storing natural gas. The Project is expected eventually to store some 5 billion cubic feet of gas for distribution throughout the Northeastern United States.

On September 20, 1994, the Federal Energy Regulatory Commission ("FERC"), pursuant to its authority under 15 U.S.C. § 717f(c), issued a "Certificate of Public Convenience and Necessity" ("the Certificate"), which in effect approved the Project. Among other things, the Certificate contained an environmental assessment of the Project, and concluded that approval of the Project "will not constitute a major Federal action significantly affecting the quality of the human environment." JMAI's Motion Ex. B. The Certificate also stated that

any state or local permits issued with respect to the jurisdictional facilities authorized herein must be consistent with the conditions of this certificate. We encourage cooperation between interstate pipelines and local authorities. However, this does not mean that state and local agencies, through application of state or local laws, may prohibit or unreasonably delay the construction and operation of facilities approved by the Commission.

Id.

JMAI also applied for permits from the DEC and the Board. The DEC issued a permit on March 10, 1995, and the Board granted a permit on April 29, 1995.

Under SEQRA and its accompanying regulations, all state agencies must require submission of an EIS before approving any proposal that may have a significant effect on the environment, or issue a "negative declaration" that the proposal will not have a significant environmental impact. See Envtl.Conserv.L. § 8-0109; 6 N.Y.C.R.R. § 617.3. New York Town Law § 274-b(8) also provides that town boards must comply with SEQRA before issuing special use permits. The DEC and the Board did not require JMAI to submit an EIS, nor did they make a negative declaration under SEQRA, because they both concluded that SEQRA review over the Project was preempted by the NGA.

Citizens contends that the DEC's and the Board's issuance of these permits without first either requiring an EIS or making a negative declaration violated SEQRA and the Town Law. All of plaintiffs causes of action are based solely upon these state statutes; no violation of the NGA or any other federal law is alleged. Two of the causes of action are also premised upon Town Law § 282, which provides that anyone aggrieved by a decision of a town planning board concerning a plat or the changing of zoning regulations may have the decision reviewed by a special term of the New York supreme court under C.P.L.R. Article 78.1

Defendants contend that SEQRA does not apply to the Project because SEQRA has been preempted by the NGA. In support of this proposition, defendants rely upon a line of Supreme Court cases holding that where Congress has enacted a comprehensive scheme of federal regulation which occupies an entire field of law, state and local regulation of that field is preempted. Defendants maintain that through the NGA, the federal government has completely occupied the field of law concerning the construction, operation, and location of interstate natural-gas facilities, including the environmental effects of such facilities.

DISCUSSION

In their initial motion papers, the parties focused on whether the NGA preempts SEQRA review of the Project. After reviewing the complaint, however, I was concerned about whether the court had subject matter jurisdiction over this case, since all of plaintiff's causes of action allege only violations of state law, not federal law. Since the issue of subject matter jurisdiction can be raised by the court sua sponte, see Manway Constr. Co. v. Housing Auth. of Hartford, 711 F.2d 501, 503 (2d Cir.1983), I asked counsel for all parties to submit briefs on this issue, which they have done.

After reviewing the parties' submissions and the applicable case law, I find that there is no basis for federal jurisdiction in this action. Dismissal of the complaint is therefore mandatory. Id.

As stated, jurisdiction in this case is premised on 28 U.S.C. § 1331, which gives federal district courts "original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." "A claim ordinarily arises under federal law only when stated in a well-pleaded complaint that raises issues of federal law." Franklin H. Williams Ins. Trust v. Travelers Ins., 50 F.3d 144, 147 (2d Cir.1995). The purported federal issue here is whether the NGA preempts the local and state laws and regulations that plaintiff claims defendants have failed to comply with.

Because federal preemption is ordinarily a defense to an action, it does not appear on the face of a well-pleaded complaint, and therefore does not generally authorize the plaintiff to commence the action in federal court. Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 1546, 95 L.Ed.2d 55 (1987).2 Nor does federal jurisdiction exist simply because the federal defense is "obvious," Taylor, 481 U.S. at 66, 107 S.Ct. at 1547-48, or because "both parties concede that the federal defense is the only question truly at issue." Caterpillar Inc. v. Williams, 482 U.S. 386, 393, 107 S.Ct. 2425, 2430, 96 L.Ed.2d 318 (1987).

Under long-standing precedent, then, "a federal court does not have original jurisdiction over a case in which the complaint presents a state-law cause of action, but also asserts ... that a federal defense the defendant may raise is not sufficient to defeat the claim." Franchise Tax Bd. of the State of California v. Construction Laborers Vacation Trust for Southern California ("Franchise"), 463 U.S. 1, 10, 103 S.Ct. 2841, 2846, 77 L.Ed.2d 420 (1983). Instead, "a right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action." Gully v. First Nat'l Bank in Meridian, 299 U.S. 109, 112, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936). "By unimpeachable authority, a suit brought upon a state statute does not arise under an act of Congress or the Constitution of the United States because the defendant contends that the suit is prohibited thereby." Id. at 116, 57 S.Ct. at 99.

These cases plainly demonstrate that subject matter jurisdiction is lacking in ...

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