Lehigh Portland Cement Co. v. New York State Dept. of Environmental Conservation

• Decision Date: 16 June 1994
• Citation: 614 N.Y.S.2d 674,161 Misc.2d 652
• Parties: LEHIGH PORTLAND CEMENT COMPANY, Petitioner, v. NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, Respondent.
• Court: New York Supreme Court

Page 674

614 N.Y.S.2d 674

161 Misc.2d 652

LEHIGH PORTLAND CEMENT COMPANY, Petitioner, v. NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, Respondent.

Supreme Court, Albany County.

June 16, 1994.

Rapport, Meyers, Griffen & Whitbeck, P.C., Hudson (Seth Rapport, of counsel), for petitioner.

G. Oliver Koppell, Atty. Gen. of New York State (Lawrence A. Rappoport, Albany, of counsel), for respondent.

HAROLD J. HUGHES, Justice.

The petition will be dismissed.

Petitioner operates a wet process cement manufacturing plant in Catskill, New York. The plant employs 140 people and pays over $550,000.00 in local taxes. The raw materials used to make cement are limestone, red shale, water and gypsum. The minerals in the limestone and red shale are silica, alumina, iron and calcium. The manufacturing process involves combining water with crushed limestone and red shale resulting in slurry, which is placed into a kiln and heated at temperatures in excess of 2400 degrees Fahrenheit. This process transforms the slurry into a product called cement clinker.

The Department of Environmental Conservation (DEC) implements article 27 of the Environmental Conservation Law which, in part, covers the handling, transportation and disposal of solid waste. During 1988, the Legislature enacted section 27-0106(1) of the Environmental Conservation Law which sets the State solid waste management priorities, and directs that the reuse or recycling of waste is to take precedence over incineration or land filling. DEC implemented this legislative mandate by creating the Beneficial Use Determination (BUD) program set forth in former regulations 6 NYCRR 360-1.2(a)(4)(VII) and 360-1.2(a)(5). The BUD program exempts certain materials used in the manufacturing process to replace other materials from the broad definition of solid waste. This exemption allows the users of BUD materials to escape the comprehensive regulatory requirements of 6 NYCRR Part 360. Under the former regulation, the entity seeking to use the material was required to submit a petition to the regional solid waste engineer for the administrative region of the department in which the material was to be used which set forth the following information (6 NYCRR 360-1.2[a] [former (5) ]:

"i) [a] descri[ption of] the proposed method of application or use of the by-product or waste;

ii) [the submission of the] chemical and physical characterizations of the by-product or waste and of each intended finished product;

iii) [a] demonstrat[ion] that there is a known or potential market for the intended use of the by-product or waste;

iv) [a] demonstrat[ion] that the intended use will not adversely affect the public health and safety, and the environment".

This CPLR article 78 proceeding involves the rejection of six BUD petitions submitted by petitioner. Four of the petitions sought to substitute waste water from other manufacturing processes in place of Hudson River water. Although the waste water would contain contaminants ranging from 2 percent to 20 percent of the water, the petitioner asserted that the use of the waste water would not expose its employees or the public to hazardous materials or increase the emission of any air contaminants. The fifth petition sought to use ash residue from municipal solid waste incinerators as a raw material substitute for red shale. The sixth petition requested the use of coal tar contaminated soil as a raw material in the cement manufacturing process.

The petitioner argued that the use of waste materials had become a major competitive factor in the cement industry. The petitioner pointed out that the recycling of the materials would divert waste that would otherwise take up Landfill space, and would preserve virgin materials and river water. Petitioner contended that the use of the waste water would reduce its energy costs by more than 50 percent and reduce its need to periodically treat its Hudson River water intakes for zebra mussel infestation. Petitioner explained that using the contaminated soil and incinerator ash would effect tremendous cost savings in the operation of its plant. Petitioner lobbied extensively for approval of its petitions, arguing forcefully that its proposals constituted no environmental threat, and overregulation by DEC contributed to the hostile business environment in New York resulting in the loss of manufacturing jobs. Petitioner hinted that without the requested relief, its manufacturing plant would not be economically viable, and the loss of 140 jobs and the economic contributions the plant makes to its community were at stake. On October 15, 1993, DEC issued its determination denying the six BUD petitions for the following reasons:

"In the case, the contaminants in the wastewaters will either be incorporated into the product or end up in the process effluents (i.e., air emissions or kiln dust). Since these contaminants are not necessary ingredients to the manufacture of cement, and have no other useful purpose when added to the product, they must be considered to have been disposed and not beneficially used. Accordingly, the substitution of wastewaters for river waters in the cement manufacturing process must be viewed as a form of wastewater disposal. Therefore, the Department hereby finds that these proposed uses do not constitute beneficial uses and are, therefore, not exempt from regulation under Part 360.

Similarly, petitions for the use of solid waste incinerator ash and coal tar contaminated soils (both proposed by Lehigh as substitutes for red shale) are considered forms of disposal since the contaminant levels present in these materials significantly exceed that of the analogous raw materials (red shale) for which they are to be substituted. Therefore, the Department hereby finds that these proposed uses also do not constitute beneficial uses and are, therefore, not exempt from regulation under Part 360".

In this CPLR article 78 proceeding petitioner makes the following arguments: DEC failed to follow its own regulations by focusing solely on the existence of contaminants, a criterion for BUD approvals not found in the regulations; DEC acted in an arbitrary and capricious manner by not following its own prior decisions approving the use of recycled materials containing contaminants; the new "contaminant" standard was not properly enacted as a regulation; and, DEC's determination is arbitrary and capricious because the use of the materials does not constitute an environmental threat and benefits society. Petitioner points out that its petitions met the four standards set forth in the regulation.

DEC responds that after the promulgation of the BUD regulations in December of 1988, it began to receive a rapidly increasing number of BUD petitions for uses of solid waste in novel ways. A fear arose in the Department that the BUD program was being used to "end run" the comprehensive waste disposal program by enabling manufacturers such as petitioner to use their incinerators to dispose of industrial waste without being subject to the safeguards in the permitting and regulatory rules. The Department encouraged BUD applicants to utilize the case by case process of former section 6 NYCRR 360-1.2(a)(5) which enabled it to determine whether the particular proposed use of the material constituted a bonafide substitution of one material for another, or whether the predominate use of the material was in the nature of disposal. In evaluating BUD petitions DEC considered: whether the contaminants and the waste material served any purpose in the manufacturing process or the end product; if the level of contaminants exceeded the levels of contaminants in the replaced raw materials; and, whether the use of the waste material was actually a means of disposal. DEC concedes that some of its earlier approvals may not conform to its ruling upon these six applications, but argues that this results from its greater sophistication in implementing the Legislature's mandate. It factually distinguishes other prior rulings raised by petitioner.

There are serious public policy concerns raised by the parties to this proceeding, including whether overregulation is driving...