Spears v. Berle

• Decision Date: 20 July 1978
• Citation: 63 A.D.2d 372,407 N.Y.S.2d 590
• Parties: In the Matter of Harry O. SPEARS et al., Petitioners, v. Peter A. A. BERLE, as Commissioner of Environmental Conservation, et al., Respondents.
• Court: New York Supreme Court — Appellate Division

Page 590

407 N.Y.S.2d 590

63 A.D.2d 372

In the Matter of Harry O. SPEARS et al., Petitioners, v. Peter A. A. BERLE, as Commissioner of Environmental Conservation, et al., Respondents.

Supreme Court, Appellate Division, Third Department.

July 20, 1978.

David E. Goldman, Port Jervis, for petitioners.

Louis J. Lefkowitz, Atty. Gen., Albany (Julius Feinstein, Stanley Fishman and Ruth Kessler Toch, Albany, of counsel), for respondents.

Before MAHONEY, P. J., and KANE, STALEY, LARKIN and MIKOLL, JJ.

MAHONEY, Presiding Justice.

Petitioners own two family businesses in Port Jervis, New York, which manufacture and sell sand, stone, gravel, humus, cement, asphalt, cinder blocks, cement blocks, redi-mix concrete and allied masonry products. Petitioners purchased two properties which they leased to these businesses for the purpose of obtaining raw materials. One property, the "Culver" property, is a 50-acre parcel containing 38 acres of freshwater wetland known as "Cold Brook". The second piece is the "Cejwin" property consisting of 43 acres containing an eight-acre area known as "Spears' Bog". Under subdivision 1 of section 24-0301 of the Environmental Conservation Law (hereinafter ECL) effective September 1, 1975, the Commissioner of the State Department of Environmental Conservation is to identify freshwater wetlands having at least 12.4 acres or having been determined to be of unusual local importance. Upon such identification, an owner of wetlands is prohibited from making commercial use of any property within 100 feet of the wetlands without obtaining a permit from the Department of Environmental Conservation. In January, 1977, Spears' Bog was determined by the Commissioner to be of unusual local importance. The Culver property was freshwater wetlands by virtue of its size. Accordingly, petitioners applied, on March 9, 1977, for an interim permit for the alteration of these freshwater wetlands properties. A public hearing was held on June 29, 1977. It was undisputed that petitioners' plans for removal of humus, sand and stone from these two properties would to a great extent destroy the wetlands, significantly harming the wildlife and natural habitat.

The expressed policy engendering the Act is to "preserve, protect and conserve freshwater wetlands and the benefits derived therefrom, to prevent the despoilation and destruction of freshwater wetlands, and to regulate use and development of such wetlands to secure the natural benefits of freshwater wetlands, consistent with the general welfare and beneficial economic, social and agricultural development of the state." (ECL 24-0103.)

A permit must be obtained from the Commissioner of Environmental Conservation in order to carry out virtually any activity on a freshwater wetland. ¹ The only uses of right are "(t)he the depositing or removal of the natural products of the freshwater wetlands by recreational or commercial fishing, shell-fishing, aquaculture, hunting or trapping" and "(t)he activities of farmers and other landowners in grazing and watering livestock, making reasonable use of water resources, harvesting natural products of the wetlands, selectively cutting timber, draining land or wetlands for growing agricultural products * * * ." (ECL 24-0701, subds. 3, 4).

The wetland owner seeking a permit has "the burden of demonstrating that the proposed activity will be in accord with the policies and provisions of this article." (ECL 24-0703, subd. 3.) In passing upon permit applications the Commissioner "shall consider the effect of the proposed activity with reference to the public health and welfare, fishing, flood, hurricane and storm dangers, and protection or enhancement of the several functions of the freshwater wetlands and the benefits derived therefrom * * * set forth in section 24-0103 * * * ." (ECL 24-0705, subd. 1.) Furthermore, no permit may issue "unless the proposed activity is consistent with the land use regulations applicable pursuant to section 24-0903 of this article * * * ." (ECL 24-0705, subd. 3.)

Standards for issuing interim permits, not expressly set out in the statute, have been promulgated by the Commissioner (6 NYCRR, Part 662). As will be the case for final permits after the State map is prepared, an interim permit must be obtained in order to engage in virtually Any activity on a freshwater wetland. ²

In considering applications for interim permits, the Commissioner must weigh "the effect of the proposed alteration with reference to the public health and welfare, wildlife resources, fishing, dangers from floods, hurricanes and storms and protection or enhancement of the several functions of the wetlands and the benefits derived therefrom which are set forth in section 24-0105 of the Act." (6 NYCRR 662.8(a).) Moreover, an interim permit may not be issued unless the applicant proves the project "is consistent with the policy of the act to preserve * * * freshwater wetlands * * * (and) with the general welfare and beneficial economics, social and agricultural development of the State", "is compatible with the public health and welfare", "is reasonable and necessary", and "has no reasonable alternative on a site which is not a freshwater wetland." (6 NYCRR 662.8 (c).)

Finally, the applicant must also show that he will suffer a "hardship" if the interim permit is denied (6 NYCRR 662.8(b)). "Hardship" is "a condition unique and peculiar to the particular situation of the applicant, which tends to impose a serious financial, health or safety burden on the applicant or the public. Such a condition shall not have been one created as a result of a voluntary act of the applicant. * * * The fact that an increase or decrease in the value of the real property may result from the (Freshwater Wetlands Act) * * * will not, by itself, be considered evidence of hardship." (6 NYCRR 662.1(m).)

At the hearing held on their application for a permit, petitioners conceded that their proposed mining use would be inconsistent with the conservation policy stated in section 24-0103 and implicit throughout the Act and the regulations. The bulk of the evidence concerned the hardship question.

It appears that once the applicants conceded that the mining would destroy the wetlands, litigation on the hardship question was futile since a permit may not be issued if the proposed use is inconsistent "with the policy of the act to preserve * * * freshwater wetlands * * * and * * * to prevent (their) destruction" (6 NYCRR 662.8(c)(1); ECL 24-0103). In any event, given the burden of proof placed on applicants by the statute and regulations, it is not surprising that the interim permit was denied.

However, there remains the question for this court whether the use restrictions imposed on petitioners' land by the Freshwater Wetlands Act and the regulations promulgated in furtherance thereof would, unless struck down, constitute a taking. Section 24-0705 provides for article 78 review of the Commissioner's decision on the permit application, and subdivision 7 of that section states that "(i)n the event that the court finds the action reviewed constitutes a taking without just compensation * * * the court may, at the election of the commissioner, either (i) set aside the order or (ii) require the commissioner to proceed under the condemnation law to acquire the wetlands or such less than fee rights therein as have been taken."

Various rules of decision have been used to determine at what point government regulation under the police power amounts to an unconstitutional deprivation of property (see Sax, Takings and The Police Power, 74 Yale L.J. 36, 38-50). In New York the traditional standard has been that suggested by Mr. Justice Holmes in Pennsylvania Coal Co. v. Mahon (260 U.S. 393, 43 S.Ct. 158, 67 L.Ed. 322), wherein it was said "that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking." (Id. at 415, 43 S.Ct. at 160.)

The Court of Appeals, in two cases invalidating zoning restrictions, made the standard of the Pennsylvania Coal case more workable by specifying the extent of regulation which would be deemed "too far". "An ordinance which Permanently so restricts the use of property that it cannot be used for any reasonable purpose goes * * * beyond regulation, and must be recognized as a taking of the property." (Arverne Bay Constr. Co. v. Thatcher, 278 N.Y. 222, 232, 15 N.E.2d 587, 592; see Vernon Park Realty, Inc. v. City of Mount Vernon, 307 N.Y. 493, 121 N.E.2d 517.)

This quantitative standard (i. e., based upon the extent to which the value of the property is diminished) of measuring the constitutionality of property regulation may be criticized on several grounds (see Sax, Supra, pp. 50-60), but its main practical weakness is that what is a "reasonable use" is itself a complex question, subject to variable interpretations. (See, e. g., Penn Cent. Transp. Co. v. City of New York, 42 N.Y.2d 324, 397 N.Y.S.2d 914, 366 N.E.2d 1271, affd. --- U.S. ----, 98 S.Ct. 2646, 56 L.Ed.2d ---- (June 26, 1978).)

Perhaps for this reason the Court of Appeals, when faced with a new and alarming type of regulation (Landmark Preservation), indicated a new standard might be adopted. Under the new standard, a distinction is made between regulation which seeks to preserve private property for the common good from that which merely arbitrates between private parties the manner in which property is used (see Lutheran Church in Amer. v. City of New York, 35 N.Y.2d 121, 359 N.Y.S.2d 7, 316 N.E.2d 305). The Court, citing Professor Sax's article (Supra ), stated that

(w)here government acts in its enterprise capacity, as where it takes land to widen a road, there is a compensable taking. Where government acts in its arbitral capacity, as where it legislates zoning or provides the machinery to enjoin noxious use, there is simply noncompensable regulation. (Lutheran Church in Amer. v. City of New York, Supra,...