Catskill Heritage Alliance, Inc. v. N.Y.S. Dep't of Envtl. Conservation

• Decision Date: 12 April 2018
• Docket Number: 524617
• Citation: 161 A.D.3d 11,74 N.Y.S.3d 401
• Parties: In the Matter of CATSKILL HERITAGE ALLIANCE, INC., et al., Appellants, v. NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION et al., Respondents.
• Court: New York Supreme Court — Appellate Division

161 A.D.3d 11
74 N.Y.S.3d 401

In the Matter of CATSKILL HERITAGE ALLIANCE, INC., et al., Appellants,
v.
NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION et al., Respondents.

524617

Supreme Court, Appellate Division, Third Department, New York.

Calendar Date: February 14, 2018
Decided and Entered: April 12, 2018

Braymer Law, PLLC, Glens Falls (Claudia K. Braymer of counsel), for appellants.

Eric T. Schneiderman, Attorney General, New York City (Andrew G. Frank of counsel), for New York State Department of Environmental Conservation, respondent.

Whiteman Osterman & Hanna LLP, Albany (John J. Henry of counsel), for Crossroads Ventures LLC, respondent.

Before: Egan Jr., J.P., Clark, Mulvey, Aarons and Rumsey, JJ.

OPINION AND ORDER

Mulvey, J.

Appeal from a judgment of the Supreme Court (Ryba, J.), entered December 7, 2016 in Albany County, which dismissed petitioners' application, in a combined proceeding pursuant to CPLR article 78 and action for declaratory judgment, to review a determination of the Commissioner of Environmental Conservation canceling an adjudicatory hearing and remanding the matter for the issuance of final permits.

In 1999, respondent Crossroads Ventures LLC submitted applications to respondent Department of Environmental Conservation (hereinafter DEC) for various permits required for the proposed construction of a resort known as the Belleayre Resort at Catskill Park. As originally conceived, the project consisted of two separate development components, known as Big Indian Plateau and Wildacres, situated on approximately 1,960 acres of land owned by Crossroads in the adjacent Towns of Middletown, Delaware County and Shandaken, Ulster County. DEC, as the lead agency for environmental review under the State Environmental Quality Review Act (see ECL art 8), issued a positive declaration and required Crossroads to submit a draft environmental impact statement (hereinafter EIS) for the project. Crossroads submitted the draft EIS in 2003 and, following public hearings and a public comment period, the project was referred to an Administrative Law Judge (hereinafter ALJ) for an issues conference to determine whether any issues impacting the environment

74 N.Y.S.3d 404

should advance to an adjudicatory hearing (see 6 NYCRR 624.4 [b] [2] ). Following an issues conference that spanned 18 days and included the participation of numerous groups and entities,¹ the ALJ issued a ruling identifying 12 issues that he deemed to be both "substantive and significant" and, thus, qualified for adjudication ( 6 NYCRR 624.4 [c][1] [iii] ). Upon administrative appeal, the Deputy Commissioner of Environmental Conservation² issued an interim decision that upheld the ALJ's ruling with regard to six of the issues identified for adjudication, but removed the remaining six issues from adjudication. Following this ruling, certain parties, including some of the petitioners herein, moved for reconsideration of that portion of the interim decision that removed the issue of community character from adjudication.

Thereafter, the parties to the issues conference and the state entered into negotiations in an attempt to develop a revised project design that would address and mitigate the environmental issues identified in the interim decision. Such negotiations culminated in a 2007 Agreement in Principle (hereinafter AIP), pursuant to which Crossroads agreed to replace the originally proposed project with a substantially scaled-back, lower-impact alternative version (hereinafter the modified project).³ The modified project set forth in the AIP entirely eliminated the Big Indian Plateau development and contained significant modifications to the Wildacres development including, among other things, elimination of the originally proposed golf course and 21–lot residential subdivision, as well as implementation of enhanced stormwater management and monitoring protocols. The modified project also called for the development of a smaller facility, known as Highmount Spa Resort, on the eastern side of the project site. In light of the significant changes to the project and the additional environmental review to be performed under the AIP, Crossroads moved to suspend the adjudicatory hearing and to stay the pending motion for reconsideration of the interim decision. Such motion was subsequently granted by the Commissioner of Environmental Conservation.

In 2013, as contemplated by the AIP, Crossroads supplied DEC with a supplemental draft EIS and revised permit applications together with additional proposed commitments and conditions that Crossroads had agreed to incorporate into the modified project. Following a legislative hearing and a public comment period on the modified project, DEC moved to cancel the adjudicatory hearing on the ground that the changes to the project, and the additional environmental protections agreed to by Crossroads, rendered the issues that had been previously identified as requiring adjudication either moot or no longer substantive and significant, and that any new issues raised by the modified project did not necessitate an adjudicatory

74 N.Y.S.3d 405

hearing. DEC also moved to dismiss the previously suspended motion for reconsideration of the interim decision. Petitioner Catskill Heritage Alliance, Inc. opposed the motion and cross-moved to reconvene the issues conference, and several others who owned land in the vicinity of the project moved for party status (see 6 NYCRR 624.5 [b][2] ).

In July 2015, the Commissioner issued a detailed, 42–page determination resolving the numerous issues addressed in the various motions and granting the motion to cancel the adjudicatory hearing. Preliminarily, the Commissioner held that, contrary to the arguments raised in opposition to DEC's motion, he had the authority to rule on the pending motions rather than requiring them to be heard and decided by an ALJ in the first instance. With regard to the merits, the Commissioner concluded that the six issues that had previously been identified for adjudication in the 2006 interim decision were either moot or had otherwise been addressed and resolved by the modified project, and that petitioners failed to satisfy their burden of demonstrating that any new issues with regard to the modified project were "substantial and significant" within the meaning of the governing regulations so as to mandate an adjudicatory hearing. Finally, the Commissioner denied the motion for reconsideration of that portion of the interim decision removing the issue of community character from adjudication. The Commissioner then remanded the matter to DEC staff for completion of the environmental review process and the issuance of the final permits for the project, which occurred in December 2015.⁴

Petitioners commenced this combined CPLR article 78 proceeding and action for declaratory judgment seeking to annul the Commissioner's determination. In a decision that scrupulously addressed the various procedural and substantive issues raised, Supreme Court found that the Commissioner's determination was in all respects rational and supported by the well-developed record. The court accordingly dismissed the petition, and this appeal by petitioners ensued.

Petitioners' challenges to the Commissioner's authority to rule on DEC's motion to cancel the adjudicatory hearing are without merit. It is settled that administrative agencies have the inherent authority to reconsider a prior determination upon a change in circumstances or new information (see Matter of Sullivan County Harness Racing Assn. v. Glasser , 30 N.Y.2d 269, 277, 332 N.Y.S.2d 622, 283 N.E.2d 603 [1972] ; Matter of Town of N. Elba v. New York State Dept. of Envtl. Conservation , 160 A.D.3d 74, 78–81, 72 N.Y.S.3d 622, 2018 N.Y. Slip Op. 01369, *3–4, 2018 WL 1093431 [2018] ; Matter of Global Cos. LLC v. New York State Dept. of Envtl. Conservation , 155 A.D.3d 93, 99, 64 N.Y.S.3d 133 [2017], lv denied 30 N.Y.3d 913, 2018 WL 943513 [2018] ), or where the original determination is not final (see Matter of Hamptons Hosp. & Med. Ctr. v. Moore , 52 N.Y.2d 88, 93, 436 N.Y.S.2d 239, 417 N.E.2d 533 [1981] ; Matter of Murray v. Scully , 170 A.D.2d 829, 831, 565 N.Y.S.2d 631 [1991], lv denied 78 N.Y.2d 856, 574 N.Y.S.2d 937, 580 N.E.2d 409 [1991] ). Here, the gravamen of DEC's motion was that an adjudicatory hearing was no longer warranted in light of the negotiations of the parties and the significant modifications to the project that were undertaken during the nine years since the issuance of the 2006 interim decision,

74 N.Y.S.3d 406

all of which were specifically designed to address the issues identified for adjudication therein. In light of these changed...