Berman Enterprises, Inc. v. Jorling

• Decision Date: 24 August 1993
• Docket Number: No. 443,D,443
• Citation: 3 F.3d 602
• Parties: BERMAN ENTERPRISES, INC.; General Marine Transport Corporation; Standard Marine Services, Inc.; Jane Frank Kresch, as Secretary of Berman Enterprises; Evelyn Berman Frank, as Chief Executive Officer of General Marine Transport Corporation and as an Officer of the other named corporations; and Peter M. Frank, as President of General Marine Transport Corporation, Plaintiffs-Appellants, v. Thomas C. JORLING, in his individual capacity and in his official capacity as Commissioner of the New York State Department of Environmental Conservation; and Langdon Marsh, in his individual capacity and in his official capacity as Executive Deputy Commissioner of the New York State Department of Environmental Conservation, Defendants-Appellees. ocket 92-7680.
• Court: U.S. Court of Appeals — Second Circuit

Page 602

3 F.3d 602

BERMAN ENTERPRISES, INC.; General Marine Transport Corporation; Standard Marine Services, Inc.; Jane Frank Kresch, as Secretary of Berman Enterprises; Evelyn Berman Frank, as Chief Executive Officer of General Marine Transport Corporation and as an Officer of the other named corporations; and Peter M. Frank, as President of General Marine Transport Corporation, Plaintiffs-Appellants, v. Thomas C. JORLING, in his individual capacity and in his official capacity as Commissioner of the New York State Department of Environmental Conservation; and Langdon Marsh, in his individual capacity and in his official capacity as Executive Deputy Commissioner of the New York State Department of Environmental Conservation, Defendants-Appellees.

No. 443, Docket 92-7680.

United States Court of Appeals Second Circuit.

Argued Dec. 14, 1992.

Decided Aug. 24, 1993.

Christopher Carpentieri, New York City (Stults, Balber, Horton & Slotnik, of counsel), for plaintiffs-appellants.

Gregory J. Nolan, Asst. Atty. Gen. for State of N.Y. (Robert Abrams, Atty. Gen., Jerry Boone, Sol. Gen., of counsel), for defendants-appellees.

Before: CARDAMONE and PRATT, Circuit Judges, and MORRIS E. LASKER, District Judge of the United States District Court for the Southern District of New York, sitting by designation.

GEORGE C. PRATT, Circuit Judge:

Plaintiffs appeal from a judgment of the United States District Court for the Eastern District of New York, Jack B. Weinstein, Judge, that dismissed their amended complaint, which challenged summary abatement orders issued by defendants under New York Environmental Conservation Law Sec. 71-0301. Berman Enterprises, Inc. v. Jorling, 793 F.Supp. 408 (E.D.N.Y.1992). The orders prohibited plaintiffs from operating some of their oil and sludge barges in New York Harbor. The district court dismissed the complaint on multiple grounds. We affirm, on grounds of qualified immunity and abstention.

BACKGROUND

Plaintiffs--three corporations and three of their officers--operate oil-carrying and sludge-carrying barges in various areas, including New York harbor. The orders at issue treated plaintiffs as a single business run by the Berman and Frank families and drew no distinctions between or among the individual plaintiffs and the corporate plaintiffs. Hereinafter, plaintiffs are referred to as "Berman".

Defendant Thomas Jorling is Commissioner of the New York State Department of Environmental Conservation ("DEC"). Defendant Langdon Marsh is Executive Deputy Commissioner of the DEC. Berman sued both Jorling and Marsh in their individual and official capacities.

In late September 1990, one of Berman's barges sank in the Arthur Kill at Staten Island, New York, spilling both oil and sludge into the water. Three weeks later Jorling, acting under N.Y.Envtl.Conserv.Law Sec. 71-0301 (McKinney 1984), issued a summary abatement order, which is the principal target of this lawsuit. By that order Jorling (1) immediately suspended the petroleum-facility licenses for 14 of Berman's barges, (2) required Berman to empty all cargo from the barges, and (3) ordered that the barges "shall remain docked and shall not be operated in the New York Marine district".

The specific barges involved are identified in the summary abatement order as "listed by number in Appendix 1". Appendix 1 was not, however, supplied to this court as part of either the parties' joint appendix or the record on appeal filed with the clerk. While there are disputes over many of the circumstances affecting individual barges, those disputes do not affect the outcome of this appeal, and the absence of Appendix 1 from the record does not prevent our deciding this case.

Section 71-0301 requires that a summary abatement order provide the target of the order with an opportunity for a hearing within 15 days. Accordingly, Jorling's October 18, 1990, order scheduled a hearing for October 30, 1990, to address the merits of the summary abatement order as well as revocation of the 14 petroleum-facility licenses that DEC had previously issued to Berman's barges under New York's Navigation Law. See N.Y.Nav.Law Sec. 174 (McKinney 1989); 17 N.Y.C.R.R. Sec. 30.10(b).

Berman immediately commenced an action in the United States District Court for the Southern District of New York, John E. Sprizzo, Judge, seeking to enjoin enforcement of any provisions of New York's Environmental Conservation Law, the Navigation Law, or the summary abatement order that would prevent Berman from operating its 14 barges that comply with federal law. Berman's claim was grounded in 42 U.S.C. Sec. 1983 and advanced arguments based on the supremacy clause, the commerce clause, and the fourteenth amendment.

On October 30, 1990, Judge Sprizzo refused to interfere with the state's proposed hearing, and seven days later the parties stipulated to discontinue the Southern District action. Berman's claims under the supremacy clause and commerce clause were discontinued with prejudice; its claims under the fourteenth amendment were discontinued without prejudice.

The hearing went ahead before an administrative law judge ("ALJ") of the DEC's Office of Hearings, Edward Buhrmaster, and testimony was taken on various days over the course of the next month. After post-hearing memoranda were submitted, the hearing record was closed on January 22, 1991. In a 60-page, single-spaced decision the ALJ resolved most of the factual and legal issues against Berman. He concluded with four recommendations:

(1) The 14 major-facility licenses that had been suspended should be revoked.

(2) The summary abatement order issued by Jorling should be continued without modification.

(3) Modifications proposed by the staff to allow for limited operation of the barges should be rejected.

(4) The summary abatement order should not be broadened to incorporate four other barges owned by Berman, because those barges were not named in the order, and the request to incorporate them was made after the evidentiary record was closed.

Under the procedure established by the DEC, the ALJ's report and recommendations were to be reviewed and acted upon by the commissioner. See 6 N.Y.C.R.R. Sec. 622.14 (final determination and order). Commissioner Jorling, however, had disqualified himself from any further participation in the proceeding and had delegated his responsibilities to Executive Deputy Commissioner Marsh.

By decision dated March 25, 1991, Marsh reviewed Berman's objections to the ALJ's report and recommendations and entered a final order that followed the recommendations. Specifically, Marsh found that Berman operated roughly 30 vessels in the New York harbor area, including oil barges, sludge barges, and tugs; that the several corporations acted under the common management of the Berman and Frank families; that over the previous 11 years the 14 vessels that were the subject of the summary abatement order had "compiled records of chronic non-compliance with state and federal regulations which are designed to protect the environment, public health and safety"; that the vessels had received various citations from the United States Coast Guard for both administrative and safety violations; that some of the violations had involved serious injury or loss of life or environmental damage; that there were some documented incidents of pollution in New York harbor in which no violations were cited; that some of the violations and pollution incidents were the direct result of improper management by Berman; that the "sheer number of violations and pollution incidents and their duration for over a period of eleven years is * * * noteworthy"; that Berman had presented no information as to efforts it had undertaken over the previous 11 years to implement programs of preventive maintenance or inspections, to improve management, or otherwise to address the cause of the problems; and that there was no explanation as to why Berman experienced such difficulty in complying with the Coast Guard's safety regulations.

On the summary abatement issue, Marsh concluded that "the continued operation of these vessels by the Respondents carries with it a substantial risk that these and other incidents will reoccur"; that the nature of Berman's business and a survey of the incidents caused by its operations in the past "demonstrate the potential for creating serious environmental and safety hazards"; that "continued operation of the fleet of vessels by these Respondents carries with it a serious risk of harm"; and that the harm is "imminent" and "potentially quite serious".

With respect to the suspended licenses, Marsh found that revocation of the 14 licenses was required because "continued operation of the barges represents a menace to the New York harbor environment".

Finally, Marsh ordered that the summary abatement order was "confirmed in whole and extended"; that "no modification to such Order is granted"; and that the 14 "major facility licenses" were revoked.

Berman then brought this action against both Jorling and Marsh. Its first five causes of action, brought under 42 U.S.C. Sec. 1983, sought damages against Jorling and Marsh in their personal capacities for substantive and procedural due process violations; the sixth sought declaratory relief that the defendants' orders are unconstitutional; and the seventh sought attorneys fees and costs. The eighth and ninth causes of action, advanced under the court's supplemental jurisdiction, 28 U.S.C. Sec. 1367, sought to vacate the decision and order of defendant Marsh under Article 78, N.Y.Civ.Prac.L. & R. Secs. 7801-7806 (McKinney 1981), as being arbitrary and capricious and as lacking substantial evidence.

On defendants' motion under rules 12(b)(1) and (6), Fed.R.Civ.P. 12(b)(1), (6), Judge Weinstein dismissed the complaint on multiple grounds. In a scholarly analysis, he rejected Berman's contention that federal law preempted state authority to bar Berman's barges from...