FMC Corp. v. N.Y. State Dep't of Envtl. Conservation

• Decision Date: 20 October 2016
• Citation: 2016 N.Y. Slip Op. 06929,143 A.D.3d 1128,40 N.Y.S.3d 220
• Parties: In the Matter of FMC CORPORATION, Appellant, v. NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, Respondent.
• Court: New York Supreme Court — Appellate Division

143 A.D.3d 1128

40 N.Y.S.3d 220

2016 N.Y. Slip Op. 06929

In the Matter of FMC CORPORATION, Appellant,

v.NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, Respondent.

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

Oct. 20, 2016.

Hodgson Russ, LLP, Buffalo (David G. Mandelbaum of Greenberg Traurig, LLP, Philadelphia, Pennsylvania, admitted pro hac vice), for appellant.

Eric T. Schneiderman, Attorney General, Albany (Maureen F. Leary of counsel), for respondent.

Before: EGAN JR., J.P., LYNCH, DEVINE, CLARK and MULVEY, JJ.

LYNCH

, J.

Appeal from a judgment of the Supreme Court (Elliot III, J.), entered August 24, 2015 in Albany County, which, in a proceeding pursuant to CPLR article 78, granted respondent's motion to dismiss the petition.

Petitioner is the owner and operator of a 103–acre facility that produced organic and inorganic pesticides, fungicides, herbicides and insecticides for more than 60 years in the Village of Middleport, Niagara County. Due to the manufacturing process and because petitioner dumped and stored chemical waste on its property, the soil, groundwater and surface water on and near the facility became contaminated with myriad chemicals, including arsenic and lead. In 1980, petitioner submitted a hazardous waste permit application to the Environmental Protection Agency (hereinafter EPA) pursuant to the federal Resource Conservation and Recovery Act (see 42 U.S.C. § 6901 et seq.

[hereinafter RCRA] ). That same year, petitioner's facility was added to New York's registry of hazardous waste disposal sites (see ECL 27–1305[1] ). In 1985, the facility shifted from manufacturing to only formulating pesticides (i.e., mixing and packaging) and continues to operate in that capacity. After a revised permit application was submitted to the EPA and respondent, respondent classified a portion of the facility as having a “ [s]ignificant threat to the public health or environment” (ECL 27–1305[2] [b][2] ; see 6 NYCRR former 375–1.4[c]; 6 NYCRR 375–2.7 [a][4] ). In 1987 and 1990, petitioner and respondent executed separate administrative orders on consent requiring certain remedial and investigative action under the State Superfund program (see ECL art. 27, tit. 13).

In 1991, petitioner, respondent and the EPA executed an administrative order on consent (hereinafter the consent order) that required petitioner to complete an RCRA facility investigation to determine the nature and extent of the contamination. During the investigative process, respondent and the EPA divided the affected on and off-site property into 11 separate operable units (hereinafter OUs) and directed petitioner to complete certain interim corrective and remedial measures to address contamination in areas requiring more immediate attention. This proceeding involves OUs 2, 4 and 5 comprising some 500 acres of off-site residential, commercial and school properties. In 2009, respondent and the EPA approved petitioner's draft investigation report in accordance with the consent order, and directed petitioner to perform a corrective measure study (hereinafter CMS) to develop and recommend ways to remediate the contamination. In June 2010, petitioner submitted its draft CMS report, which proposed eight remedial plans, known as corrective measure alternatives (hereinafter CMAs).

In June 2012, respondent issued a draft statement of basis designed “to inform the public and seek its participation in the selection of a remedy” to address the contamination in OUs 2, 4 and 5. Therein, respondent proposed CMA 9

, a remedy that incorporated elements of two of petitioner's CMAs, but exceeded same by mandating that the arsenic level in the soil in each affected property not exceed 20 parts per million. In August 2012, petitioner submitted its written response challenging the selection of CMA 9. By letter dated October 19, 2012, respondent and the EPA advised petitioner that its CMS report with regard to OUs 2, 4 and 5 was accepted as final and that the consent order was “deemed by the [a]gencies to be closed.” By correspondence dated October 25, 2012, petitioner responded that the consent order could not be “closed” because a final CMA had not been selected by the EPA. After a public comment period, respondent issued the final statement of basis wherein it formally selected CMA 9

on May 28, 2013. The parties entered into a series of tolling agreements extending the time in which to challenge this selection through April 30, 2014. On May 1, 2014, petitioner submitted a “ Notice of Dispute and Request for Resolution” pursuant to the consent order.¹ BY CORRESPONDENCE dated may 7, 2014, respOndent, through counsel, advised that, in light of petitioner's “refusal” to implement CMA 9, respondent planned to complete the work at petitioner's expense.

Petitioner commenced this CPLR article 78 proceeding on May 30, 2014, asserting four causes of action. In the first three causes of action, petitioner alleges that respondent issued the statement of basis and proceeded with remedial work in excess of its authority under the Environmental Conservation Law, respondent's regulations and the consent order, in contravention of the EPA's authority under the RCRA and the consent order. By the fourth cause of action, petitioner alleges that respondent's selection of CMA 9

was affected by an error of law, was arbitrary and capricious and an abuse of discretion because it was made in violation of the consent order and the Environmental Conservation Law. Respondent moved to dismiss the petition as time-barred and then answered. Supreme Court dismissed the petition as time-barred after finding that petitioner's claims accrued in October 2012. Petitioner now appeals.

A proceeding pursuant to CPLR article 78 must be commenced “within four months after the determination to be reviewed becomes final and binding upon the petitioner” (CPLR 217[1]

; see

Matter of Best Payphones, Inc. v. Department of Info. Tech. & Telecom. of City of N.Y., 5 N.Y.3d 30, 34, 799 N.Y.S.2d 182, 832 N.E.2d 38 [2005] ). A determination is “final and binding” where, after a “pragmatic evaluation” of the context (Matter of Essex County v. Zagata, 91 N.Y.2d 447, 453, 672 N.Y.S.2d 281, 695 N.E.2d 232 [1998] [internal quotation marks and citation omitted] ), it can be said that the agency “reached a definitive position on the issue that inflicts actual, concrete injury and ... the injury inflicted may not be prevented or significantly ameliorated by further administrative action or by steps available to the complaining party” (Matter of Best Payphones, Inc. v. Department of Info. Tech. & Telecom. of City of N.Y., 5 N.Y.3d at 34, 799 N.Y.S.2d 182, 832 N.E.2d 38

; Stop–The–Barge v. Cahill, 1 N.Y.3d 218, 223, 771 N.Y.S.2d 40, 803 N.E.2d 361 [2003] ; see Matter of

Essex County v. Zagata, 91 N.Y.2d at 453, 672 N.Y.S.2d 281, 695 N.E.2d 232 ). “That a particular agency action is merely a step in the agency's decision-making process does not render that action nonfinal for purposes of review under CPLR article 78” (Matter of

Riverkeeper, Inc. v. Crotty, 28 A.D.3d 957, 960, 814 N.Y.S.2d 322 [2006] ; see

Matter of Demers v. New York State Dept. of Envtl. Conservation, 3 A.D.3d 744, 746, 770 N.Y.S.2d 807 [2004] ).

This dispute centers on respondent's selection of CMA 9

as the appropriate remedy to remediate the site and its determination to implement that remedy at petitioner's expense. As a threshold matter, we conclude that Supreme Court erred in dismissing the proceeding as untimely. In doing so, the court erroneously focused on the October 19, 2012 correspondence from the EPA and respondent advising petitioner that the consent order was closed. The court treated this letter as a final determination for purposes of triggering the statute of limitations. The flaw in that analysis is that both the EPA and respondent maintained that remedy selection and implementation were not included in the consent order.² In other words, respondent contends that the consent order delineated only petitioner's obligation to complete both the facility investigation and CMS—which the October 19 letter confirmed that petitioner had completed to the satisfaction of both agencies. That being the case, respondent maintains that the dispute resolution procedures set forth in the consent order no longer applied and, thus, petitioner was required to actually commence a CPLR article 78 proceeding within four months, i.e., by February 19, 2013.

Respondent's argument overlooks the fact that an actual remedy had yet to be selected by October 19, 2012. By its terms, the October 19 letter makes no reference to the selection of a remedy, notwithstanding the fact that the draft statement of basis selecting CMA 9

had been issued in June 2012. The actual selection of a remedy did not occur until respondent issued its final statement of basis in May 2013. At that point, there is no dispute that the parties entered into the tolling agreements in an effort to negotiate a resolution. As petitioner initiated this proceeding on May 30, 2014, the proceeding is timely. Because issue has been joined and the record is fully developed, we exercise our discretion to consider the substantive claims in the petition in the interest of judicial economy (see Matter of Williams v. Travis, 20 A.D.3d 622, 623, 798 N.Y.S.2d 535 [2005]

).

This proceeding involves federal and state statutes and regulations governing hazardous waste treatment, storage and disposal. The RCRA, administered by the EPA, primarily governs the treatment, storage and disposal of hazardous waste “so as to minimize the present and future threat to human health and the environment” (42 USC § 6902

[b]; see

Meghrig v. KFC Western, Inc., 516 U.S. 479, 483, 116 S.Ct. 1251, 134 L.Ed.2d 121 [1996] ); Matter of Thompson Corners, LLC v. New York State Dept. of Envtl. Conservation, 119 A.D.3d 81, 84, 986 N.Y.S.2d 258 (2014), lv. denied 24 N.Y.3d 910, 2014 WL 6644827 (2014). In 1986, the EPA authorized...