| Thrun v Cuomo |
| 2013 NY Slip Op 08178 [112 AD3d 1038] |
| December 5, 2013 |
| Appellate Division, Third Department |
| Lisa Thrun et al., Appellants, v Andrew M. Cuomo, asGovernor of the State of New York, et al., Respondents. |
—[*1] Eric T. Schneiderman, Attorney General, Albany (Morgan Costello of counsel), forrespondents.
Peters, P.J. Appeal from an order of the Supreme Court (McNamara, J.), entered June13, 2012 in Albany County, which granted defendants' motion to dismiss the complaint.
In 2005, the Governors of seven states, including then-Governor of New YorkGeorge Pataki, signed a nonbinding memorandum of understanding (hereinafter MOU)in which they agreed to propose for legislative or regulatory approval within theirrespective states a carbon dioxide cap-and-trade program to target emissions fromelectricity generating power plants, known as the Regional Greenhouse Gas Initiative(hereinafter RGGI).[FN*]In 2008, defendant Department of Environmental Conservation (hereinafter DEC) anddefendant New York State Energy Research and Development Authority (hereinafterNYSERDA) adopted final regulations implementing New York's participation in theRGGI program (see generally 6 NYCRR part 242; 21 NYCRR part 507). TheDEC regulations require power plants generating 25 megawatts or more of electricity toobtain a permit from DEC which, in turn, obligates the regulated entities to [*2]purchase and hold sufficient carbon dioxide allowances tocover emissions for the past three-year control period (see 6 NYCRR 242-1.4 [a];242-1.5 [c] [6]; 242-3.1). The NYSERDA regulations authorize it to coordinate andimplement the state's participation in the quarterly, multi-state auctions run by RGGI,Inc., a nonprofit corporation formed by the signatory states, through which the carbondioxide allowances allocated for sale by DEC are sold to regulated entities (see21 NYCRR 507.3, 507.6 [a], [b]). The auction proceeds are controlled by NYSERDAand used to "promote . . . programs for energy efficiency, renewable ornon-carbon emitting technologies[ ] and innovative carbon emissions abatementtechnologies . . . and for reasonable administrative costs . . .associated with the [RGGI] [p]rogram" (21 NYCRR 507.4 [d]; see 21 NYCRR507.3 [c]; 507.4 [a]-[d]).
In 2011, plaintiffs—three New York residents and electricityratepayers—commenced this action seeking declaratory and injunctive reliefagainst the enforcement of the RGGI program throughout the state. Plaintiffs alleged thatthe MOU was executed, and the regulations were promulgated, without legislativeapproval or statutory authorization and in violation of the NY Constitution and theseparation of powers doctrine. Plaintiffs further asserted that the RGGI program imposesan unlawful tax upon ratepayers not authorized by the Legislature, and that the RGGIprogram, as implemented, is arbitrary and capricious. Lastly, plaintiffs claimed that theMOU constituted an interstate compact signed in violation of the US Constitution.Defendants moved to dismiss the complaint on the grounds of standing, statute oflimitations, mootness and/or laches. Supreme Court granted the motion and dismissed thecomplaint in its entirety, finding that plaintiffs lacked standing to challenge the RGGIregulations and that the doctrine of laches barred their claims. Plaintiffs now appeal andwe affirm, albeit on different grounds.
We assume, without deciding, that plaintiffs have standing to bring this action (see Matter of Stray from Matter ofStray from the Heart, Inc. v Department of Health & Mental Hygiene of the City ofN.Y., 20 NY3d 946, 948 [2012]; Matter of New York State Assn. ofCriminal Defense Lawyers v Kaye, 96 NY2d 512, 516 [2001]; Matter of Hudson Prop. Owners\'Coalition, Inc. v Slocum, 92 AD3d 1198, 1199 [2012]; see generally Matterof Hoston v New York State Dept. of Health, 203 AD2d 826, 827 [1994], lvdenied 84 NY2d 803 [1994]). Nevertheless, the complaint must be dismissed in itsentirety because certain claims are time-barred and the remaining claims have beenrendered moot.
Although declaratory judgment actions are typically governed by a six-year statute oflimitations (see CPLR 213 [1]), "a court must look to the underlying claim andthe nature of the relief sought and determine whether such claim could have beenproperly made in another form" (Matter of Capital Dist. Regional Off-Track Betting Corp. v NewYork State Racing & Wagering Bd., 97 AD3d 1044, 1045 [2012]; see Gress v Brown, 20 NY3d957, 959 [2012]; Solnick v Whalen, 49 NY2d 224, 231 [1980]; Spinney at Pond View, LLC vTown Bd. of the Town of Schodack, 99 AD3d 1088, 1088-1089 [2012])."Where, as here, governmental activity is being challenged, the immediate inquiry iswhether the challenge could have been advanced in a CPLR article 78 proceeding"(Spinney at Pond View, LLC v Town Bd. of the Town of Schodack, 99 AD3d at1089 [internal quotation marks and citation omitted]; see New York City Health &Hosps. Corp. v McBarnette, 84 NY2d 194, 201 [1994]). "While it is well establishedthat a challenge to the validity of legislation may not be brought under [CPLR] article 78,this principle does not apply to the quasi-legislative acts and decisions of administrativeagencies," which are subject to a four-month statute of limitations (Walton v New York State Dept. ofCorrectional Servs., 8 NY3d 186, 194 [2007]; see New York City Health &Hosps. Corp. v McBarnette, 84 NY2d at 205; Matter of Capital Dist. RegionalOff-Track Betting Corp. v New York State [*3]Racing &Wagering Bd., 97 AD3d at 1045).
Here, plaintiffs' first three causes of action challenge the validity of the RGGIregulations promulgated by DEC and NYSERDA pursuant to the statutory authoritygranted to those respective administrative bodies pursuant to the EnvironmentalConservation Law and the Public Authorities Law. The enactment of such regulationswas "quasi-legislative" and, as such, plaintiffs' challenges thereto were capable of beingreviewed in the context of a CPLR article 78 proceeding (see New York City Health& Hosps. Corp. v McBarnette, 84 NY2d at 205; Matter of Town of Stony Point v State of N.Y. Dept. of Fin., Off. ofReal Prop. Servs., 107 AD3d 1217, 1218 [2013]; Kent Acres Dev. Co., Ltd. v City ofNew York, 41 AD3d 542, 549 [2007]; Via Health Home Care, Inc. v New York State Dept. of Health,33 AD3d 1100, 1101 [2006]; Matter of Purcell v Travis, 24 AD3d 824, 824 [2005],lv denied 7 NY3d 703 [2006]; Matter of Peckham Materials Corp. vWestchester County, 303 AD2d 511, 511-512 [2003]; Matter of Federation ofMental Health Ctrs. v DeBuono, 275 AD2d 557, 560 [2000]). Although at timescouched in terms of constitutional infirmity and illegality, the essence of plaintiffs' claimsagainst DEC and NYSERDA is that the RGGI regulations are "arbitrary and capricious"and that the decision to promulgate such regulations was "affected by an error of law"(CPLR 7803 [3]; see New York City Health & Hosps. Corp. v McBarnette, 84NY2d at 205; Marsh v New York State & Local Employees' Retirement Sys.,291 AD2d 713, 714 [2002]; Wechsler v State of New York, 284 AD2d 707, 709[2001], lv denied 97 NY2d 607 [2001]; Matter of Aubin v State of NewYork, 282 AD2d 919, 921-922 [2001], lv denied 97 NY2d 606 [2001];Matter of Federation of Mental Health Ctrs. v DeBuono, 275 AD2d at 560).Plaintiffs' challenges to the RGGI regulations are therefore subject to a four-monthstatute of limitations and, inasmuch as those regulations became effective more than2½ years prior to the commencement of this action, their claims as against DECand NYSERDA are time-barred (see CPLR 217 [1]; Via Health Home Care,Inc. v New York State Dept. of Health, 33 AD3d at 1101; Matter of PeckhamMaterials Corp. v Westchester County, 303 AD2d at 512).
While plaintiffs' challenges to Governor Pataki's authority to enter into the MOU arenot subject to the four-month statute of limitations (see Saratoga County Chamber ofCommerce v Pataki, 100 NY2d 801, 815 [2003], cert denied 540 US 1017[2003]), such claims must be dismissed as moot. By signing the MOU, Pataki did notobligate New York to participate in the RGGI program, but merely agreed topropose a carbon dioxide emissions cap-and-trade program in New York. It is theregulations implementing RGGI in New York—not the MOU—that formthe legal basis for the state's participation in the RGGI program (see generally 6NYCRR part 242; 21 NYCRR part 507). As the MOU did not actually effectuate theRGGI program or the state's participation in it, invalidating the MOU will not have theeffect of repealing the regulations or otherwise affect their legality (cf. SaratogaCounty Chamber of Commerce v Pataki, 100 NY2d at 812). A declaration as to thevalidity or invalidity of the MOU would, therefore, have no effect on the rights of theparties (see id.; see generally Matter of Hearst Corp. v Clyne, 50 NY2d707, 713-714 [1980]). Furthermore, we are unpersuaded that the exception to themootness doctrine is applicable under the circumstances presented here (see SaratogaCounty Chamber of Commerce v Pataki, 100 NY2d at 811-812; Matter of Schulzv State of New York, 182 AD2d 3, 5 [1992], appeal dismissed 80 NY2d 924[1992], lv denied 80 NY2d 761 [1992]; see generally Matter of Hearst Corp.v Clyne, 50 NY2d at 714-715).
In light of our holding, we need not address the parties' remaining contentions.
Rose, Lahtinen and Garry, JJ., concur. Ordered that the order is affirmed, withoutcosts.
Footnote *: Three additional statessubsequently signed the MOU. In 2011, New Jersey, one of the original signatory states,withdrew its participation.