| Matter of ELG Utica Alloys, Inc. v Department of Envtl.Conservation |
| 2014 NY Slip Op 02485 [116 AD3d 1200] |
| April 10, 2014 |
| Appellate Division, Third Department |
| In the Matter of Elg Utica Alloys, Inc., as Successor byMerger to Universal Waste, Inc. et al., Petitioner, v Department ofEnvironmental Conservation et al., Respondents. |
—[*1] Eric T. Schneiderman, Attorney General, Albany (Maureen F. Leary of counsel), forrespondents.
Lahtinen, J.P. Proceeding pursuant to CPLR article 78 (transferred to this Court byorder of the Supreme Court, entered in Albany County) to review a determination ofrespondent Commissioner of Environmental Conservation which denied petitioner'sapplication to reclassify certain of its property on the registry of inactive hazardous wastedisposal sites.
Petitioner owns an approximately 21-acre parcel (hereinafter the site) in the City ofUtica, Oneida County, on which Universal Waste, Inc.[FN*]operated a scrap metal business beginning in the 1950s. The Mohawk River flows inclose proximity to the north side of the site and there is a wetland on the site's eastborder. The site is upgradient from the river and wetland and is within a flood plain. Thesite, wetlands and river are all contaminated with [*2]polychlorinated biphenyls (hereinafter PCBs). RespondentDepartment of Environmental Conservation (hereinafter DEC) listed the site in 1985 onthe inactive hazardous waste site registry as a class 2 site (see ECL 27-1305 [2][b] [2] ["Significant threat to the public health or environment—action required"]).The current proceeding resulted from petitioner's unsuccessful effort to have the sitereclassified as a class 3 site (see ECL 27-1305 [2] [b] [3] ["Does not present asignificant threat to the public health or environment—action may be deferred"]).
The lengthy procedural history, briefly set forth herein, began with DEC'sinvolvement at the site in the 1970s when an investigation revealed that PCBs had beendisposed of at the site as part of scrap metal salvage activities. DEC classified the site asclass 2, premised upon a significant threat to the environment and requiring remediation.DEC sought a summary enforcement order in March 1986, which petitioner opposedcontending, among other things, that other parties were also responsible for thecontamination in the area and thus were necessary parties. Petitioner also soughtreclassification of the site in 1986 to a class 3 site, which DEC denied. In early 1987,Administrative Law Judge Daniel O'Connor (hereinafter ALJ O'Connor) denied DEC'srequest for a summary order, finding, among other things, that there was a factual issuerequiring a hearing as to whether the contamination at the site constituted a significantthreat to the environment (see ECL 27-1313 [3]).
Throughout the 1990s, DEC and petitioner engaged in various procedures andinvestigations regarding the site and, during such time, the Department of Health issuedadvisories regarding fish consumption for a large section of the river inclusive of the areaof river near the site. In 1998, DEC reclassified the site to class 2a, which was atemporary classification indicating that further investigation was necessary. Additionaltesting was conducted on and near the site and, in 2002, DEC returned the site to class 2status. In 2003, petitioner submitted the relevant application, seeking to delete the sitefrom the registry or, alternatively, to reclassify it to class 3. Petitioner asserted that thesite did not present a significant threat to the environment because its contamination wasnot migrating off the site and there were multiple other sources in the area contributing tothe pollution of the river. DEC summarily denied the petition. However, petitionersuccessfully had the summary denial overturned in a proceeding pursuant to CPLRarticle 78 in which Supreme Court directed a hearing before an administrative law judgeregarding petitioner's request for reclassification of the site (Matter of Universal Waste, Inc. vNew York State Dept. of Envtl. Conservation, 4 Misc 3d 500 [2004]).
A hearing was held in October 2004 and February 2005 before Administrative LawJudge Maria Villa (hereinafter ALJ Villa). Petitioner abandoned its request to have thesite deleted from the registry and, accordingly, the primary issue distilled to whetherpetitioner established that the site was not a significant threat to the environment so thatit could properly be reclassified as a class 3 site (see ECL 27-1305 [2] [b] [3]). InApril 2006, ALJ Villa, in a detailed hearing report, rendered a recommended decisionfinding that the site was contaminated with PCBs, but that it did not pose a significantthreat to the environment and should be reclassified as class 3. Thereafter, the partiessubmitted extensive comments to respondent Commissioner of EnvironmentalConservation and, after a lengthy delay, the Commissioner issued a final decision inOctober 2011. The Commissioner denied petitioner's request to reclassify the site,concluding that petitioner had failed to establish by a preponderance of the evidence thatthe site did not present a significant threat to the environment. This proceeding ensued.[*3]
Petitioner first argues that the Commissionerexceeded his jurisdiction by reviewing ALJ Villa's decision. This argument rests upon achange in the regulations that occurred during the delay between ALJ Villa's hearingreport and the Commissioner's final determination. At the time of the hearing and ALJVilla's report, the regulations provided a two-step procedure in which, following thehearing and ALJ's recommended decision, the Commissioner then reviewed the recordand considered further comments before rendering the final determination (see 6NYCRR former 375-1.9 [d] [2] [ii]; 624.13). In late 2006, amendments to the 6 NYCRRpart 375 regulations included changing the two-step procedure. Under the newprocedure, the assistant director of the division of environmental remediation (or suchother individual as may be designated) conducts the hearing and renders a decision thatconstitutes the final agency action (see 6 NYCRR 375-2.7 [f] [5] [ii] [b]).
An agency's interpretation of its own regulation is entitled to deference (see Matter of 427 W. 51st St.Owners Corp. v Division of Hous. & Community Renewal, 3 NY3d 337, 342[2004]), and there is no indication here that the new regulation was intended to apply tohearings where an ALJ had already rendered a recommended decision under the two-stepprocess (cf. Matter of Duell v Condon, 84 NY2d 773, 783 [1995] [intent of bodyenacting rule is primary consideration regarding whether it is retroactive]; A.T. Med., P.C. v State Farm Mut.Ins. Co., 10 Misc 3d 568, 571 [2005] [Insurance Department's interpretation ofits regulation as retroactive upheld]). The regulatory change occurred when the reviewprocess was in mid-stream and there was neither a clear way to fully implement the newprocedure to the partially completed process nor a request by the parties to do so. At thetime of ALJ Villa's recommended decision, she was not a person designated to renderfinal agency action in the matter and, in fact, her decision makes clear—consistentwith regulations then in effect—that the final determination rested with theCommissioner. Although the new regulations became effective before theCommissioner's final determination was rendered, there was no provision in theregulations for the new procedures to apply to pending matters in which the hearing hadalready been conducted and a hearing report issued (cf. Matter of Regenbogen v NewYork State Willard Psychiatric Ctr., 254 AD2d 593, 594-595 [1998] [statutoryamendment to Workers' Compensation Law § 20 (2) (a) expressly "applied 'to allclaims pending on or after' its effective date"]). Under such circumstances, theCommissioner did not err in reviewing the record and rendering a final determination.We find no merit in petitioner's contention that the Commissioner's determination wasultra vires and that petitioner is entitled to a writ of prohibition against the Commissioner(see generally Matter of Town of Huntington v New York State Div. of HumanRights, 82 NY2d 783, 786 [1993]).
We consider next petitioner's argument that the Commissioner's determination shouldbe annulled because of the protracted delay between ALJ Villa's recommended decisionin 2006 and the Commissioner's final determination over five years later in 2011. TheCourt of Appeals has recently reiterated that " '[a] rule that rendered every administrativedecision void unless it was determined in strict literal compliance with statutoryprocedure would not only be impractical but would also fail to recognize the degree towhich broader public concerns, not merely the interests of the parties, are affected byadministrative proceedings' " (Matter of Dickinson v Daines, 15 NY3d 571, 575 [2010],quoting Matter of Syquia v Board of Educ. of Harpursville Cent. School Dist., 80NY2d 531, 535 [1992]). "Limits regarding the time within which an administrativeagency must act 'are generally construed as discretionary in the absence of express limitson the authority of the agency to act after the time period' " (Matter of CourtReporting Inst. v New York State Educ. Dept., 237 AD2d 1, 4 [1997], quotingMatter of Estate of Clifford v New York State Empls. Retirement Sys., 123AD2d 1, 4 [1986]). "When an [*4]administrative bodyfails to comply with procedural provisions that are merely directory, relief will be grantedonly if petitioner[ ] show[s] that substantial prejudice resulted from the noncompliance"(Matter of Syquia v Board of Educ. of Harpursville Cent. School Dist., 80 NY2dat 535-536). The statute directing the Commissioner to provide a written determinationwithin 30 days of receipt of the complete record does not expressly limit action thereafteror set forth specific consequences (see ECL 27-1305 [2] [c] [3]). Moreover,given the statutory scheme and significant public concern implicated, we areunpersuaded that the time frame must be considered mandatory. Although we do notcondone the Commissioner's protracted delay, nonetheless petitioner failed to establishsubstantial prejudice resulting therefrom. The delay thus does not necessitate annulmentof the Commissioner's determination.
Petitioner asserts that various errors of law occurred including, among others, thatthe Commissioner used a standard for determining whether there was a "significantthreat" that was inconsistent with the regulations and case law. When striking down anearlier version of a 6 NYCRR part 375 regulation, the Court of Appeals ruled that a"significant threat" must be based upon an actual threat and not solely upon a potentialharm resulting from the mere presence of hazardous waste (see Matter of New YorkState Superfund Coalition v New York State Dept. of Envtl. Conservation, 75 NY2d88, 93 [1989]). Consistent with the New York State Superfund Coalition case,pertinent regulations provide that "the mere presence of hazardous waste at a site. . . is not a sufficient basis for a finding that hazardous waste disposed atthe site constitutes a significant threat to the environment" (6 NYCRR former 375-1.4[c]; see 6 NYCRR 375-2.7 [a] [4]).
The Commissioner did not, however, premise his determination in this matter uponthe mere presence of PCBs at the site and a potential for harm. He found that a highlytoxic contaminant (i.e., PCBs) was present in concentration levels at the site thatexceeded the environmental quality standards (see 6 NYCRR part 703; seealso 6 NYCRR former 375-1.4 [b] [7]; 375-2.7 [a] [3] [viii]), and he determinedthat, under such circumstances, the contaminant could constitute a significant threat. Weneed not decide in this case whether such exceedances of environmental standards alonecan—as stated by the Commissioner—constitute a significant threat sinceultimately he did not premise his determination solely on such ground. Although settingforth in detail the reasons and record proof supporting a conclusion that the onsite impactof the PCB contamination at the site constituted a significant threat, he went on to findrecord support for actual threats and offsite impact on the river, wetlands and nearbywildlife. The exceedances of groundwater standards was clearly a significant factor;however, it was considered in conjunction with other proof pertinent to the ultimatefinding of a significant threat. We are not persuaded that the Commissioner used ananalysis at odds with the regulations or case law.
Petitioner's further contention that the Commissioner was bound under the doctrineof collateral estoppel from giving such significance to the exceedances of environmentalstandards because of language in ALJ O'Connor's 1987 decision denying DEC's requestfor summary enforcement is without merit. We also find unavailing petitioner's assertionsthat the Commissioner's determination constituted an unexplained change in DEC'sinterpretation of the law or the adoption of a new rule without adhering to the StateAdministrative Procedure Act.
Next, we consider petitioner's argument that the Commissioner's determination is notsupported by substantial evidence. The Commissioner "may make his own findings offact and need not adopt those of the ALJ" (Matter of Jackson's Marina v Jorling,193 AD2d 863, 866[*5][1993]; see Matter of R & B Autobody &Radiator, Inc. v New York State Div. of Human Rights, 31 AD3d 989, 990[2006]). His "assessment of the credibility of witnesses, inferences to be drawn from theevidence and findings of fact are conclusive if supported by substantial evidence"(Matter of Puff v Jorling, 188 AD2d 977, 980 [1992]; see Matter of Murtaugh v NewYork State Dept. of Envtl. Conservation, 42 AD3d 986, 987-988 [2007], lvdismissed 9 NY3d 971 [2007]). "[E]ven if different conclusions could be reached asa result of conflicting evidence, a court may not substitute its judgment for that of the[Commissioner] provided that the administrative determination is properly supported bythe record" (Matter of Lane Constr. Corp. v Cahill, 270 AD2d 609, 611 [2000],lv denied 95 NY2d 765 [2000]; see Matter of Riverkeeper, Inc. v Johnson, 52 AD3d 1072,1074 [2008], lv denied 11 NY3d 716 [2009]).
It is undisputed that PCBs are highly toxic and a potential cause of serious healthissues in humans and animals. There is also no disagreement that PCBs were disposed ofat the site; however, the level of contamination on site and migration off site aredisputed. The Commissioner found that in excess of 25 tons of materials containingPCBs had been disposed of at the site between 1957 and 1978. Unlike ALJ Villa, theCommissioner found credible the testimony of a former employee of petitioner whoreported that, during his employment at the site, he personally dumped PCB-ridden oilfrom about 90 transformers per week (the equivalent of 5,000 gallons of oil) onto theground without any precautionary measures or efforts to control the contamination. Therewas no evidence of meaningful cleanup efforts, and the Commissioner concluded that the"massive quantities" of PCBs either remained at the site or had migrated to the wetlandsand the Mohawk River. The Commissioner discussed at length the soil and groundwatertesting at the site and, while noting conflicting evidence, set forth the factors and proofhe found persuasive. Among other things, he reiterated the indiscriminate disposal oftons of PCBs, the lack of cleanup or otherwise accounting for the PCB-contaminatedwaste, and evidence of onsite contamination levels above state standards for both soiland groundwater.
The Commissioner set forth his reasons for finding offsite impact, includingtestimony of DEC staff, testing and investigation that he credited. Disagreeing with ALJVilla, he did not find such proof less persuasive than petitioner's expert, who opined thatthe migration of PCBs off of the site was occurring minimally, if at all. Moreover,although there was proof that other sources in the area were contributors to the offsitePCB contamination, there was also evidence that PCBs disposed at the site werecontributing to offsite contamination. After review of the record and accepting theCommissioner's many credibility determinations regarding the conflicting proof, much ofwhich involved highly technical matters, we are unpersuaded that the determination isnot supported by substantial evidence. The remaining arguments have been consideredand are unavailing.
Stein, Garry and Rose, JJ., concur. Adjudged that the determination is confirmed,without costs, and petition dismissed.
Footnote *: Petitioner is thesuccessor by merger of Universal Waste. For purposes of this decision, no distinctionwill be made and petitioner and Universal Waste will hereinafter be referred to aspetitioner.