| Matter of Niagara County v Power Auth. of State of N.Y. |
| 2011 NY Slip Op 02172 [82 AD3d 1597] |
| March 25, 2011 |
| Appellate Division, Fourth Department |
| In the Matter of Niagara County, on Behalf of its Residents, et al.,Respondents, v Power Authority of State of New York et al.,Appellants. |
—[*1] Of New York. Andrew M. Cuomo, Attorney General, Albany (Andrew B. Ayers of counsel), forrespondent-appellant State of New York. Webster Szanyi LLP, Buffalo (Charles E. Graney of counsel), forpetitioners-respondents.
Appeals, by permission of the Appellate Division of the Supreme Court in the FourthJudicial Department, from an order of the Supreme Court, Niagara County (Ralph A. Boniello,III, J.), entered December 28, 2009 in a proceeding pursuant to CPLR article 78. The orderdenied the motions of respondents to dismiss the amended petition pursuant to CPLR 3211 (a)(3) and (7) and granted petitioners' motion for leave to serve a complaint and discovery demands.
It is hereby ordered that the order so appealed from is unanimously reversed on the lawwithout costs, respondents' motions to dismiss the amended petition are granted, petitioners'motion for leave to serve a complaint and discovery demands is denied and the amended petitionis dismissed.
Memorandum: Petitioners commenced this CPLR article 78 proceeding seeking, inter alia, toannul certain temporary transfers and voluntary contributions (hereafter, payments) in the amountof $544 million from respondent Power Authority of State of New York (PASNY) to respondentState of New York (State). PASNY operates hydroelectric generation facilities located on andnear the Niagara River, known collectively as the "Niagara Power Project" or the "NiagaraProject." Respondents contend that Supreme Court erred in denying their motions to dismiss theamended petition and in granting petitioners' motion for leave to serve a complaint and discoverydemands. We agree.
At the outset, we agree with respondents that the individual petitioners lack standing tochallenge PASNY's payments to the State. A petitioner seeking to challenge a governmental oradministrative action must show " 'injury in fact,' meaning that [he or she] will actually beharmed by the challenged administrative action" (New York State Assn. of Nurse Anesthetists v Novello, 2 NY3d207, 211 [2004]). In other words, a petitioner must make a threshold showing that he or she"has sustained special damage, different in kind and degree from the community generally"(Matter of Sun-Brite Car Wash v Board of Zoning & Appeals of Town of N. Hempstead,69 NY2d 406, 413 [1987], rearg denied sub nom. Allen Avionics v Universal BroadcastingCorp, 70 NY2d 694 [1987]). "The existence of an injury in fact—an actual legal stakein the matter being adjudicated—ensures that the party seeking review has some concreteinterest in prosecuting the action [that] casts the dispute 'in a form traditionally capable ofjudicial resolution' " (Society of Plastics Indus. v County of Suffolk, 77 NY2d 761, 772[1991], quoting Schlesinger v Reservists Comm. to Stop the War, 418 US 208, 210-221[1974]). The injury, harm or damage cannot be conjectural, tenuous or hypothesized (seeNew York State Assn. of Nurse Anesthetists, 2 NY3d at 211, 214-215). Here, the individualpetitioners failed to establish that they suffered an injury in fact as a result of the challengedpayments. They allege that, as residential consumers of hydroelectric power, they are directlyinjured by PASNY's allegedly improper "diversion" of revenue to the State because they will paymore for electricity in the future as a result. We conclude, however, that the fact "[t]hat in thefuture the hypothesized harm might befall [residential consumers] does not at this time entitle[the individual petitioners] to maintain this [proceeding]" (id. at 214-215). Thus, the merepossibility of a future rate increase, without more, is insufficient to establish standing (seegenerally id.).
We also agree with the State that petitioner Niagara County (County) lacks capacity tomaintain the proceeding, inasmuch as the County failed to establish that its claims fall within anyrecognized exception to the general rule barring suit against the State by a municipality (see Matter of County of Seneca vEristoff, 49 AD3d 950 [2008]; see generally City of New York v State of NewYork, 86 NY2d 286 [1995]). Even assuming, arguendo, that the County has capacity to suethe State (see generally City of New York, 86 NY2d 286), we conclude that it lacksstanding. The County failed to establish that it suffered an injury in fact, and it cannot assertassociational or representative standing inasmuch as the individual petitioners lack standing tomaintain this proceeding (see generally Matter of Brown v County of Erie [appeal No. 2],60 AD3d 1442, 1444 [2009]).
In any event, we agree with respondents that the court erred in denying their motions todismiss the amended petition for failure to state a cause of action pursuant to CPLR 3211 (a) (7)." 'It is well settled that bare legal conclusions and factual claims [that] are flatly contradicted by[*2]the evidence are not presumed to be true on a motion todismiss for failure to state a cause of action' " (Olszewski v Waters of Orchard Park, 303AD2d 995, 995 [2003]; see SymbolTech., Inc. v Deloitte & Touche, LLP, 69 AD3d 191, 194 [2009]). " 'When the movingparty offers evidentiary material, the court is required to determine whether the proponent of thepleading has a cause of action, not whether [he or] she has stated one' " (Olszewski, 303AD2d at 995; see Kaufman v International Bus. Machs. Corp., 97 AD2d 925, 926 [1983],affd 61 NY2d 930 [1984]).
We conclude that petitioners have no cause of action based upon federal law inasmuch as theNiagara Redevelopment Act (NRA) (16 USC §§ 836-836a) does not protectresidential consumers who, like the individual petitioners herein, purchase hydroelectric powerfrom investor-owned utilities (IOUs). Rather, the NRA requires that, in disposing of 50% of thehydroelectric power from the Niagara Project, PASNY "shall give preference and priority topublic bodies and nonprofit cooperatives within economic transmission distance" (16 USC§ 836 [b] [1] [emphasis added]; see Power Auth. of State of N.Y. v Federal EnergyRegulatory Common., 743 F2d 93, 103-104 [1984]). Petitioners rely on the first clause of 16USC § 836 (b) (1), which states that "at least 50[%] of the project power shall be availablefor sale and distribution primarily for the benefit of the people as consumers,particularly domestic and rural consumers, to whom such power shall be made available at thelowest rates reasonably possible" (743 F2d at 99 [emphasis added]). That language, however,is "precatory" in nature, and it "expresses a Congressional expectation, not a mandate"(Power Auth. of State of N.Y., 743 F2d at 104). As the United States Court of Appealsfor the Second Circuit explained, "Congress did not intend the customers of IOUs to receivepreference power[ ] but rather mandated that they receive the benefit indirectly through the lowerrates the private utilities would charge in response to the competition from the public bodiesreceiving preference power" (Allegheny Elec. Co-op., Inc. v Federal Energy RegulatoryCommon., 922 F2d 73, 82 [1990], cert denied sub nom. New York City Pub. Util. Serv. vFederal Energy Regulatory Commn., 502 US 810 [1991]; see Metropolitan Transp. Auth.v Federal Energy Regulatory Commn., 796 F2d 584, 591-592 [1986], cert denied479 US 1085 [1987]).
We agree with PASNY and the individual respondents, as trustees of PASNY (hereafter,PASNY respondents), that the court erred in denying those parts of their motion to dismiss theclaims for alleged violations of state law based on documentary evidence pursuant to CPLR 3211(a) (1). The PASNY respondents submitted "documentary evidence definitively contradicting]. . . and conclusively disposing] of" petitioners' state law claims (Bernardino vEchlin, 2 AD3d 556, 557 [2003]). Pursuant to the Power Authority Act (Public AuthoritiesLaw § 1000 et seq.), PASNY "shall have the powers and duties . . .enumerated [therein], together with such others as may [thereafter] be conferred upon it by law"(§ 1002 [1]) and, here, the PASNY respondents submitted budget legislation expresslyauthorizing each of the challenged payments (see L 2009, ch 2, part A, § 2; L 2008,ch 59, part Y, § 7; part DD, § 1; L 2008, ch 57, part RR, § 11-a). To the extentthat the budget legislation authorizing PASNY to make specified contributions to the State'sgeneral fund conflicts with any provision of the Power Authority Act, we agree with the PASNYrespondents that the latter must yield to the former. "It is . . . a general rule of[statutory] construction that a prior general statute yields to a later specific or special statute"(Erie County Water Auth. v Kramer, 4 AD2d 545, 550 [1957], affd 5 NY2d 954[1959]; see McKinney's Cons Laws of NY, Book 1, Statutes § 397; County ofNassau v Town of Hempstead, 84 AD2d 557 [1981], lv dismissed 55 NY2d 603[1981], 55 NY2d 606 [1982], 55 NY2d 747 [1981], 55 NY2d 921 [1982], 55 NY2d 1037 [1982],appeal dismissed 56 NY2d 1031 [1982]). Here, the budget bills are "not only the morespecific statutory commandos], inasmuch as [they were] enacted specifically to provide for [thechallenged payments], but [they are] also the later-enacted statues] vis-à-vis [PublicAuthorities Law § 1005 (5)]" (People v Zofran, 14 NY3d 296, 301 [2010]).Furthermore, each of the bills contains the phrase "[notwithstanding any provision of law to thecontrary" or "[notwithstanding any law to the contrary," which is "the verbal formulationfrequently employed for legislative directives intended to preempt any other potentiallyconflicting statute, wherever found in the State's laws" (People v Mitchell, 15 NY3d 93, 97 [2010]).[*3]
Petitioners allege that the payments are unlawful becauseany and all surplus revenues of PASNY must be utilized to provide the "lowest possible rates" toresidential consumers (Public Authorities Law § 1005 [5]). Indeed, the amended petitionalleges that the court should "order [PASNY] to use any surplus from its operations relating tothe Niagara Project for the benefit of residential consumers by lowering their rates belowactual costs" (emphasis added). The statute does not, however, require PASNY to reduce itsrates below cost (see Auer v Dyson, 125 Misc 2d 274, 277 [1984] [1981], affd112 AD2d 803 [1985]; Auer v Dyson, 110 Misc 2d 943, 949 [1981]). Indeed, so longas PASNY is providing preference power at cost, i.e., "at prices representing cost of generation,plus capital and operating charges, plus a fair cost of transmission . . . [in order to]assure the resale of such power to domestic and rural consumers at the lowest possible price"(Public Authorities Law § 1005 [5]), PASNY has fulfilled its statutory mandate and thereis nothing in the Public Authorities Law prohibiting it from contributing surplus funds to theState (see Auer, 110 Misc 2d at 949). Present—Scudder, P.J., Fahey, Peradotto,Lindley and Martoche, JJ.