Periconi, LLC Environmental Law Blog

How to Insure You Get the Landowner Liability Protections under Superfund

2012-01-31T13:42:24Z

New guidelines published in 2011 assist landowners in insuring that they meet all the requirements — specifically the “continuing obligations” — to avail themselves of the landowner liability protections under the federal Superfund Act.

Landowner liability protections under the federal Superfund Act (the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, or “CERCLA”) include the innocent landowner defense to liability, and the contiguous property owner and the bona fide prospective purchaser exemptions from liability.

As an initial step in being able to obtain these protections, it has long been clear that a prospective purchaser must, prior to purchase, undertake a Phase I Environmental Site Assessment (“ESA”), for which EPA finally provided guidance in 2006 in its All Appropriate Inquiry standards, see 40 CFR Part 312.

The Phase I ESA is a preliminary, non-invasive, mostly documentary review of a contaminated property to determine the extent of contamination at the property. See ASTM Standards: E1527-05. The purpose of a Phase I ESA is to try to identify all potential environmental issues (known as “recognized environmental conditions” or “RECs”) with a property, so the prospective purchaser acquires an appropriate level of knowledge about the environmental conditions of the property in advance of purchasing it. This due diligence is a key part to the “all appropriate inquiry” required by the statute, and interpreted by regulations developed by the U.S. Environmental Protection Agency, something that must occur before the contaminated property transfers ownership.

But neither EPA nor Congress has provided any guidance on what a landowner needs to do after purchase to comply with the “continuing obligations” requirement of the 2002 amendments to the Superfund Act that created these new protections. And it’s clear that the protections can be lost if the landowner is not in compliance. The lack of clarity in the amendments engendered a fear, for example, that the third requirement, see below (“Taking reasonable steps as to releases of hazardous substances, [and] preventing or limiting human, environmental or natural resource exposure to prior releases of hazardous substances. . . “) might actually impose an affirmative obligation to remediate, i.e., stop migration of contamination that would otherwise lead to “human, [or] environmental . . . exposure to prior releases,” seemingly in contradiction to the absence of an obligation to remediate that the landowner liability protections seemed to give.

The new “Standard Guide for Identifying and Complying with Continuing Obligations” (E2790-11) has been released by ASTM International (formerly the American Society for Testing and Materials, or ASTM), a private professional standard-setting organization. This standard addresses compliance issues after a person purchases a contaminated property. The owner’s obligations for due diligence necessary to avail himself of the CERCLA liability exemptions (or defenses) also include requirements after the property has transferred to him.

The new ASTM Standard applies to continuing obligations for commercial real estate, as well as for forestland and rural properties, and includes properties contaminated by hazardous substances under CERCLA as well as by petroleum products (which are generally outside the scope of CERCLA). Such “continuing obligations” include stopping, preventing, or limiting human exposure to the contaminants on the property.

Specifically, the continuing obligations contemplated by CERCLA include:

Complying with any engineering controls and/or institutional controls (i.e., land use restrictions) established or relied upon in connection with a cleanup action at a property;
Not impeding the effectiveness or integrity of any engineering or institutional controls imposed on a property in connection with a response action;
Taking reasonable steps as to releases of hazardous substances, including stopping continuing releases, preventing threatened future releases, and preventing or limiting human, environmental or natural resource exposure to prior releases of hazardous substances;
Providing full cooperation, assistance and access to persons who are authorized to conduct response actions or natural resource restoration at a property;
Complying with information requests and administrative subpoenas, if necessary; and
Providing legally required notices with respect to releases of any hazardous substances at a property.

The new ASTM Continuing Obligations Standard focuses on the first three continuing obligations listed above, and attempts to formulate and clarify suggested industry methods and procedures for identifying and satisfying those continuing obligations in a manner that is “practical, efficient, and reasonable.”

The standard’s main drive is the development of a “continuing obligation plan,” which is “a plan prepared by the [property owner] to identify continuing obligations and procedures to be taken post-acquisition of the property to satisfy any continuing obligations.”

ASTM’s new continuing obligation standard utilizes a four-step approach to aid an owner of contaminated property in developing a continuing obligation plan which includes (1) identifying and organizing any continuing obligations; (2) determining the required next steps after purchasing the property; (3) monitoring the required continuing obligations; and (4) maintaining the continuing obligations throughout ownership of the property. In addition, the property owner may not take any affirmative steps in developing the property to move contaminated soil into areas not previously contaminated, or create pathways of migration of contaminated ground water to previously uncontaminated areas. But nothing in the ASTM standard suggests active remediation, e.g., contaminated soil removal or, say, biological agent treatment of groundwater.

By following these steps and developing a continuing obligation plan, the new ASTM standard help property owners in meeting their continuing obligations after purchase of a contaminated property, which, in turn, can help them avail themselves of the defenses and exemptions under CERCLA.

Other parts of the new standard discussed summarily include (1) compliance with land use restrictions established as a result of a response action – e.g., and not trying to build single family homes or a day care center on a property cleaned up only to industrial or commercial standards – and (2) not impeding the effectiveness or integrity of any institutional control used at a property – e.g., not breaching the integrity of a clean-soil or other cap.

If you own (or want to own) a contaminated property and are looking to avail yourself of the landowner liability protections under CERCLA, then following these new standards is critical.

Even though ASTM International is a private body, EPA has, in the past, largely adopted its prescriptive practices for Phase I and Phase II ESAs in its regulations or guidances. Pending any clearer guidance from the EPA, we think the same practice will be followed as to the “continuing obligations” standards, both pre- and post-remediation.

Although the standard attempts to make continuing due diligence easier, the new Continuing Obligation Standard only focuses on “technical, scientific, and procedural issues involved with identifying and performing appropriate continuing obligations under site-specific circumstances;” an environmental attorney is necessary to provide legal advice concerning the landowner liability protection under CERCLA, which, as the new standard notes: “involve complicated legal matters with potentially severe consequences.”

We here at Periconi, LLC have over 30 years experience in handling CERCLA matters, including the evaluation and use of landowner liability protections for prospective purchasers or owners of contaminated properties. If you are interested in owning or do own a contaminated property (or property next to a contaminated property), please contact us to see how we can help you.

Environmental Groups Denied Intervention in Suit Regarding RCRA Consent Decree

2012-01-10T22:12:33Z

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The federal Court of Appeals, D.C. Circuit recently denied three environmental groups’ motion to intervene in a lawsuit between the District of Columbia (“District”) and Potomac Electric Power Company and Pepco Energy Services, Inc. (collectively, “Pepco”), which concerned a consent decree under the Resource Conservation and Recovery Act (“RCRA”) entered into between the District and Pepco. See District of Columbia v. Potomac Electric Power Co., Civ. No. 11-00282. (D.D.C. Dec. 1, 2011).

The District sued Pepco alleging that between 1985 and 2003, the Pepco facility released toxic polychlorinated biphenyls (“PCBs”), and that over time, these PCBs seeped into the sediment of the nearby Anacostia River. The District and Pepco had reached a settlement of the RCRA claim that called for Pepco to conduct a Remedial Investigation and Feasibility Study (“RI/FS”) as the initial step in remedying the contamination. After the required public comment period, the parties subsequently moved for the D.C. Circuit to enter the consent decree that memorializes their settlement.

The environmental groups – the National Resources Defense Council, the Anacostia Riverkeeper, and the Anacostia Watershed Society – filed a motion to intervene in the lawsuit in order to oppose entry of the consent or, in the alternative, to participate in the lawsuit as amici curiae (i.e, “friends of the court”) as a way to voice their opposition.

During the public comment period – that is, prior to filing their motion to intervene – the environmental groups had a chance to, and did in fact, comment upon the proposed consent decree. In fact, the District actually considered the environmental groups’ comments and negotiated a revised RI/FS consent decree with Pepco based on some of these comments. Nevertheless, the environmental groups still opposed entry of this RI/FS consent decree – even including the revisions based groups’ comments.

Judge Beryl A. Howell, writing for the court, among deciding other issues not discussed in this blog post, denied the environmental groups’ motion to intervene both “as of right” and “by permission,” yet allowed them to participate as amici curiae in the lawsuit.

Under federal civil case procedure, there are two types of intervention: “as of right” and “permissive.” See Fed. R. Civ. P. 24.

A potential intervenor must be allowed to intervene as of right if it can show that its motion to intervene is timely; that it has an interest related to the subject of the lawsuit; that it is “so situated” that disposition of the lawsuit may, as a practical matter, impair or impede its ability to protect its interest; and that its interest is not adequately represented by the existing parties in the lawsuit. See Envtl. Def. v. Leavitt, 329 F. Supp. 2d 55, 65-66 (D.D.C. 2004) (quotations omitted); see also Fed. R. Civ. P. 24(a).

Permissive intervention, on the other hand, is at a judge’s discretion, and takes into consideration whether the proposed intervention would “unduly delay or prejudice the adjudication of the original parties’ rights.” See Fed. R. Civ. P. 24(b).

First, the D.C. Circuit denied the environmental groups’ intervention as of right determining that the groups failed to show that they are “so situated” that entry of the consent decree would impair or impede their interests. Judge Howell noted that “[a]s a practical matter, denying intervention would not impair or impede the [environmental groups’] ability to protect their interests, which the [environmental groups] identify as interests in protecting human health, including the health of their members, and in protecting and restoring the Anacostia River, including abatement of toxic contamination in the river.” Judge Howell reasoned that the environmental groups’ interests would not be impaired or impeded at this time “[s]ince the settlement of the claims in this action would not resolve the ultimate question of how the pollution will be cleaned up.” Instead, the court recommended that the environmental groups might be better off, to the extent possible, attempting to intervene in, or even commencing themselves, future lawsuits concerning this pollution of the Anacostia River and the ultimate cleanup of the contaminants.

Moreover, Judge Howell concluded, even if the D.C. Circuit permitted the environmental groups to intervene in this action, they would have no legal right to block entry of the consent decree between the District and Pepco. See United States v. District of Columbia, 933 F. Supp. 42, 47 (D.D.C. 1996) (“[I]f such a citizen were allowed to block entry of a consent decree merely by objecting to its terms it would wreak havoc upon government enforcement actions. Moreover, it is well settled that the right to have its objections heard does not, of course, give the intervenor the right to block any settlement to which it objects.”).

Second, the D.C. Circuit denied the environmental group’s permissive intervention because the court determined that allowing such intervention would “unduly delay or prejudice the adjudication of the original parties’ rights.” Judge Howell determined that:

Intervention would likely delay the resolution of this action — and the associated RI/FS for the contaminated site — even further by triggering renewed negotiations over the terms of the consent decree in an attempt to resolve the proposed intervenors’ claims simultaneously with the District’s claims. In addition, allowing intervention would undermine part of the benefit of entering into a consent decree for the settling parties — namely, minimizing litigation and focusing on getting the RI/FS for the contaminated site underway expeditiously.

Finally, finding that a “finder-of-fact” (i.e., a judge) may benefit from their input in evaluating the merits of the proposed consent decree, the D.C. Circuit did allow the environmental groups to participate as amici curiae – which would allow them to make arguments in opposition to the consent decree before the court – since “the proposed intervenors are environmental organizations with relevant expertise and a stated concern for the issues at stake in this case.”

However, despite allowing the environmental groups to participate as amici curiae in the briefing and oral arguments concerning the entry of the proposed RI/FS consent decree, Judge Howell ultimately held that the consent decree was “fair and in the public interest” and “adequate, reasonable, and appropriate,” and rejected the environmental groups arguments in opposition.

Conclusion

In conclusion, although the D.C. Circuit denied the environmental groups’ motion to intervene, its decision did not really harm the groups’ interests insofar as: (1) according to the decision, even if allowed to intervene, the groups would not have been legally able to block a settlement agreement between the other parties, and (2) the groups were still allowed to participate as amici curiae, thereby having their arguments in opposition to the proposed RI/FS consent decree considered by the court.

Perhaps one of the factors Judge Howell considered particularly important in deciding to deny intervention for the environmental groups was that these groups already had a meaningful opportunity to comment upon – and thereby influence – the consent decree between the parties during the public comment period, and that the District actually negotiated changes to the consent decree based upon the environmental group’s comments.

Between this and the ability of the environmental groups to further present their arguments in opposition to the proposed consent decree through participation as amici curiae, the court determined that the environmental groups’ ability to protect their interests would not be practically impaired nor would the status quo of the Anacostia River be altered in any irreparable way by allowing the RI/FS consent decree to go forward. Judge Howell emphasized that this consent decree was just an initial step in determining the necessary remediation, and would not ultimately determine the final cleanup of the River or the parties responsible for the pollution.

James J. Periconi Named 2011 Environmental SuperLawyer

2011-12-29T17:34:31Z

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In 2011, Periconi, LLC founder and principal James Periconi was named a Superlawyer in Environmental Law for the second year in a row!

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Super Lawyers is an independent rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. The status of “Superlawyer” is given to no more than approximately 5% of all attorneys, and is an honor given (unlike many other such) without payment or quid pro quo of any kind.

DEC Did Not Act Outside of Its Authority in Promulgating Regulations that Required Cleanup of Contaminated Properties to “Pre-Disposal Conditions” under the State Inactive Hazardous Waste Disposal Site Act

2011-12-28T16:04:41Z

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The Court of Appeals of New York recently held that the New York State Department of Environmental Conservation (“DEC”) did not exceed its authority or act contrary to state law in enacting certain regulations with respect to remedial programs implemented to clean inactive hazardous waste disposal sites.

The Court’s decision in In the Matter of New York State Superfund Coalition, Inc. v. New York State Department of Environmental Conservation, 2011 NY Slip Op 08996 (Dec. 15, 2011), settled a challenge to the DEC’s inactive hazardous waste disposal site regulations that began over two years ago.

The Superfund Coalition is a non-profit corporation whose members consist of commercial entities that own lands in New York that are listed on the registry of sites subject to DEC regulation. The Superfund Coalition filed a joint Article 78 and declaratory judgment action challenging the DEC’s inactive hazardous waste disposal site regulations that required remediation to “pre-disposal conditions” as outside of the scope of DEC’s statutory authority.

Specifically at issue was whether the DEC regulations promulgated at 6 NYCRR 375-2.8(a) and 6 NYCRR 375-1.8(f)(9)(i), which call for the restoration of inactive hazardous waste disposal sites to “pre-disposal conditions” exceed the authority of the DEC under the state statute, Environmental Conservation Law (“ECL”) § 27-1313(5)(d), which provides in pertinent part, that the goal of a remedial program is “a complete cleanup of the site through the elimination of the significant threat to the environment posed by the disposal of hazardous wastes at the site” (emphasis added).

The Superfund Coalition argued that, under the clear language of the ECL, “a complete cleanup” is effectuated only by “elimination of the significant threat to the environment;” the DEC’s regulations requiring remediation to “pre-disposal conditions” commands more cleanup than is required by the statute and, therefore, exceeds the DEC’s authority. The Court disagreed.

Rejecting the Superfund Coalition’s argument that cleanup to pre-disposal conditions would require removal of “every last molecule of contamination” on the site, the Court held that “the stated goal of a ‘complete’ cleanup under section 27-1313(5)(d) is aspirational since the statute recognizes that DEC may implement limited actions that reduce rather than completely eliminate dangers.” Important to the Court’s decision upholding DEC’s regulations was that DEC may consider technical feasibility and cost-effectiveness of a proposed remedy before a remedial action is finalized, and may impose institutional or engineering controls on those properties where “pristine” cleanup levels are not feasible. Thus, because the regulations direct remediation to “pre-disposal conditions, to the extent feasible” (emphasis added), they are in agreement with the statute’s overarching authority for “a complete cleanup.”

The Court concluded: “In sum, there is no discernible difference between the use of the phrase ‘complete cleanup’ in section 27-1313(5)(d) and ‘pre-disposal conditions, to the extent feasible’ in DEC’s regulations.”

Dissenting Opinion

Judges Pigott and Smith disagreed with the majority’s holdings. In their dissenting opinion, these Judges agreed with the Superfund Coalition’s interpretation that section 27-1313(5)(d) of the ECL contemplated “complete cleanup” only by “the elimination of the significant threat,” and that this was the intended limit of the remedial program. It was the dissent’s conclusion that: “Therefore, 6 NYCRR 375-2.8(a)’s directive that the remedial program’s goal is to achieve ‘pre-disposal conditions’ not only directly contradicts [the state] statute, . . . but it also exceeds the powers the Legislature granted to the DEC through ECL 27-1313(5)(d)’s enactment” (internal citations omitted).

What does this mean for you?

Despite the majority’s assumption that cleanup to “pre-disposal conditions, to the extent feasible” does not mean remediation to “pristine” levels where “every last molecule of contamination” on the site must be cleaned-up, as the dissent points out, the term “pre-disposal conditions” is undefined – cleanup to before whose disposal? – and it is the DEC who has the sole authority to decide the meaning of that requirement and what is the “extent feasible” of remediation to “pre-disposal conditions.” Clean-up to “pre-disposal” conditions could require the party stepping up to the plate to remediate not only the disposal of contaminants for which he is legally (but often not causally) responsible, but also to clean up earlier disposals by unrelated parties.

Similarly, persons responsible for remediating inactive hazardous waste disposal sites in New York are in the same boat they’ve always been in, with the possibility that DEC might impose the burden to eliminate insignificant threats to the environment, under the guise of reaching “pre-disposal conditions.”

This is just one more example of where an environmental attorney can coordinate between the responsible party, the environmental consultants, and the DEC to ensure that enough – but not too much – remediation is required for a contaminated property under the New York Inactive Hazardous Waste Disposal Sites Act. “Enough” remediation to eliminate the significant threat is much more affordable – i.e., a real estate investor can usually perform such a cleanup within a reasonable budget – than a cleanup to “pre-disposal” conditions, which can easily double the cost of “eliminating the significant threat.”

“Fracking NY” Blog Series: Part 5 – Delaware River Basin Commission Proposed Regulations

2011-12-19T16:13:52Z

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We’ve discussed proposals from the State and Federal governments for the regulation of high-volume horizontal hydraulic fracturing of shale for natural gas (i.e., “fracking”), but there is another level of authority that has something to say about fracking operations in New York State – the Delaware River Basin Commission. This post will discuss the proposed amendments to the Commission’s Water Quality Regulations which would regulate fracking in the Delaware River Basin, as well as the New York State Attorney General’s lawsuit regarding the Commission’s proposed regulations.

What is the Delaware River Basin Commission?

The Delaware River begins in Schoharie County, New York and flows south along the border between Pennsylvania and New Jersey and eventually empties into the Delaware Bay. It provides much of the (unfiltered) drinking water supply for New York City, parts of New Jersey, and the Philadelphia region, as well as parts of Delaware. In New York, the Delaware River Basin is underlain by the Marcellus Shale Formation, and thus, is a prime area for fracking operations. Given the concern over the association of fracking with contamination of aquifers and drinking water wells, regulation of fracking in this area takes on some importance.

Since at least the early 1900s, there has been much fighting between New York/New York City, New Jersey, Pennsylvania, and Delaware over the apportionment of the water from the Delaware River. Unable to resolve the issue of “equitable apportionment” through litigation (including multiple cases before the Supreme Court of the United States), the states eventually settled their dispute through an interstate compact.

This interstate compact, signed by President John F. Kennedy in 1961, created the Delaware River Basin Commission (“DRBC”), which is a federal governmental agency comprised of the four state governors and a federal representative appointed by the President. According to the DRBC website, the purpose of the DRBC is to bring the Delaware River under collective and balanced control, and to ensure fair usage by the states; to this end, the DRBC conducts programs related to water quality protection, water supply allocation and water conservation, regulatory review and permitting, watershed planning, drought management, flood mitigation and loss reduction, and recreational activities (e.g., fishing and boating).

The DRBC has promulgated Water Quality Regulations that apply specifically to the Delaware River. It is under these Water Quality Regulations which the DRBC has proposed new regulations to place limitations on natural gas development projects within the Delaware River Basin.

DRBC Proposed Fracking Regulations

On December 9, 2010, the DRBC published draft regulations that would apply to “natural gas development projects” as defined by the regulations, including fracking operations. After accepting public comments over an extended comment period, the DRBC revised its proposed draft regulations (published on November 8, 2011). The DRBC originally planned to vote on these revised proposed amendments on October 21, 2011, but postponed the vote for one month. On November 21, 2011, the DRBC again postponed its vote on the revised amendments, stating that it needed more time to study the issues. At this time, no vote by the DRBC to adopt these proposed regulations has been scheduled.

These proposed fracking regulations (available here) are to be incorporated into the DRBC’s Water Quality Regulations as Article 7.

The new Article 7 fracking regulations would provide the following: the purpose, authority and scope of the rule (section 7.1); definitions (section 7.2); administrative processes (section 7.3); water sources and conditions of bulk water use and management approvals for natural gas development projects (section 7.4); the protection of high value water resource landscapes and DRBC-designated Special Protection Waters through mandatory Natural Gas Development Plans for lease holdings of 3,200 acres or more and for all project sponsors who intend to develop more than five well pads (section 7.5); and the transfer, treatment and discharge of wastewater generated by natural gas development activities (section 7.6).

In order to maintain regulatory efficiency and to curb any confusion, the DRBC will rely on the oil and gas program of the state in which a natural gas well is located to regulate the construction and operation activities of the natural gas well and well pad. If a state or federal regulatory requirement is more stringent than a DRBC requirement, the more stringent (i.e., state or federal) regulation will apply.

While the DRBC’s fracking regulations are an important addition to the regulatory framework, what do they really add to the conversation on fracking in New York? It is clear that New York State’s own regulations will be what regulates the construction and operational activities of fracking in New York. And the EPA is attempting to publish its own regulations regarding produced and flowback wastewater issues. So what, if anything, do the DRBC fracking regulations add?

The proposed fracking regulations would apply to “all natural gas development projects [whether singular or interconnected] including the construction or use of production, exploratory or other natural gas wells in the [Delaware River] Basin regardless of the target geologic formation, and to water withdrawals, well pad and related activities, and wastewater management activities comprising part of, associated with or serving such projects.”

Thus, the new fracking provisions in the DRBC Water Quality Regulations do address some issues not otherwise covered by either the State or Federal agencies, such as:

• Regulating freshwater withdrawal from the Delaware River Basin and requiring bulk water use and management approvals.

• Requiring Natural Gas Development Plans for the protection of “high-value water resource landscapes and special protection waters.”

• Requiring financial assurances.

Moreover, the DRBC regulations apply not only to fracking (i.e., high-volume, horizontal hydraulic fracturing), but all types of natural gas development, and they cover construction of all wells, even exploratory wells; these issues are not otherwise addressed both any governmental agencies.

But the DRBC’s proposed regulations are also very limited in scope: they would only apply to the lands within the DRBC’s jurisdiction — leaving out a good part of the total Marcellus Shale formation – and would only address matters that may affect the water resources of the Delaware River.

New York State Sued DRBC for Environmental Review

On May 31, 2011, the New York State Attorney General filed a lawsuit against the DRBC for its failure to commit to a full environmental review of the proposed regulations. Like under SEQRA (discussed in our previous blog ), the National Environmental Policy Act (“NEPA”) requires any federal governmental action, including regulation, that will “significantly affect the environment” to perform an environmental review. The DRBC, being a federal agency, has not undertaken an environmental assessment of an environmental impact statement which would analyze the impact of its proposed regulations on human health and the environment.

Indeed, Attorney General Eric Schneiderman stated that the November 8, 2011 revised DRBC regulations still fail the federal mandate that requires the DRBC to take a “hard look” at the environmental impacts of allowing fracking in the Delaware River Basin:

“By issuing these modified draft regulations, the federal government continues to ignore New Yorkers’ concerns about the impact fracking may have on our environment, health and homes. Though modified, these regulations still lack the benefit of a full environmental impact study, which is required by law and dictated by common sense. Without it, the federal government does not have a complete understanding of the health and safety risks fracking poses, even as it stands to open up the Delaware River Basin to thousands of new gas wells. These regulations are both inadequate and illegal, and I will continue to use the full authority of my office to require that the federal government meet its clear legal obligation to fully study the environmental impacts of fracking in the Basin.”

As for the DRBC’s postponement of its November 21, 2011 vote on the proposed fracking regulations, Attorney General Schneiderman stated:

“This delay further demonstrates that the proposed regulations for fracking in the Delaware River Basin are not ready to see the light of day. Without a full, fair and open review of the potential risks of fracking in the Basin, the public will continue to question the federal government’s ability to protect public health and environment. . . .”

What’s Next…

As the controversy in New York State has mainly focused on the DEC’s environmental review and proposed fracking regulations, the DRBC’s proposed regulations have been relegated to the background. Nevertheless, these regulations are important to whether fracking will be allowed in New York State – and if so, in what form – and based on the sheer volume of public comments received by DRBC over the past ten months (approximately 18 hours of oral comments and 69,000 written comments), we would not be surprised to see litigation challenging the DRBC’s regulations, if adopted. Also, because the DRBC is an interstate, federal agency, legal challenges to the DRBC’s proposed fracking regulations could come from any one of the four affected states.

As part of our “Fracking NY” blog series, we will keep you updated on any developments regarding the DRBC’s proposed Water Quality Regulation amendments, including developments with the New York Attorney General’s lawsuit.

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Our next post in the Fracking NY blog series will highlight some of the litigation to-date surrounding fracking in New York, and the possible litigation we expect to see in the future.

Generalized Community Knowledge Does Not Trump Expert Conclusions

2011-12-13T19:05:16Z

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The Appellate Division of New York State Supreme Court, Third Department, upheld a lower court decision that it was improper for a local planning board to deny a special use permit based on “generalized community knowledge” in opposition to a development proposal, when an unchallenged expert report concluded that the proposal would not harm the environment.

In In re Kinderhook Development, LLC v. City of Gloversville, 2011 NY Slip Op 07550 (App. Div. 3d Dep’t Oct. 27, 2011), Kinderhook Development, LLC (“Kinderhook Dev.”) filed an Article 78 proceeding challenging the City of Gloversville’s (“City”) denial of a special use permit.

Kinderhook Dev. wanted to build affordable, multifamily housing in the City, which would be allowed under the City’s Zoning Ordinance with a special permit and site plan approval from the City’s Planning Board. At issue was Kinderhook Dev.’s plan to address stormwater runoff from the development. After reviewing three documents in support of the project – namely, Kinderhook Dev.’s stormwater management plan, a State Environmental Quality Review Act (“SEQRA”) full environmental assessment form for the project, and a letter from the design engineer concluding that the stormwater management plan would slightly reduce the rate of runoff – as well as hearing from community members opposed to the development, the City Planning Board denied Kinderhook Dev.’s application for the special use permit.

However, prior to making this decision, the City, as lead agency under SEQRA, had issued a negative declaration for the project (meaning that the proposed development did not significantly affect human health or the environment), finding that “[t]he Stormwater Management Plan for the [Kinderhook Dev.] site adequately addresses the potential stormwater impacts of this project.” In re Kinderhook Development, 2011 NY Slip Op 07550. Despite that finding, however, after a public hearing on the proposed development revealed “widespread neighborhood opposition,” the City Planning Board issued its denial of Kinderhook Dev.’s application, citing stormwater runoff issues as a ground for its decision (despite the City’s previous negative declaration on stormwater issues). Id. The trial court found that the City Planning Board’s decision was in error, and directed the City to grant Kinderhook Dev.’s application for special permit; the City appealed.

Upon review, the Third Department affirmed the lower court’s holding that directed the City to grant Kinderhook Dev.’s application, albeit with some necessary conditions. The Court first pointed out that: “The classification of a particular use as permitted in a zoning district is ‘tantamount to a legislative finding that the permitted use is in harmony with the general zoning plan and will not adversely affect the neighborhood.’” In re Kinderhook Development, 2011 NY Slip Op 07550 (quoting Matter of Twin County Recycling Corp. v Yevoli, 90 NY2d 1000, 1002 [1997]). Therefore, the Court continued, “if there were specific, reasonable grounds to conclude that the proposed special use was not desirable at the particular location, its determination in that regard must be supported by substantial evidence in the record.” In re Kinderhook Development, 2011 NY Slip Op 07550 (quotations omitted and emphasis added).

The Court concluded that the “conclusory opinions of neighbors opposed to the project” was not substantial evidence on which the Planning Board could properly base its decision to deny Kinderhook Dev.’s application. In re Kinderhook Development, 2011 NY Slip Op 07550. Rather, the “unchallenged empirical evidence” that the stormwater management plan would not increase, but actually reduce, stormwater runoff into the neighborhood – a fact upon which the City had relied to conclude that the project would not negatively affect the environment in its SEQRA analysis – was the only substantial evidence presented upon which the Planning Board could base a decision. Id. The fact that, as one Planning Board member put it, “people living in a particular neighborhood know more about the physical conditions of where they live than any experts brought in by an applicant,” is not a proper basis upon which a Planning Board can make a permit decision. Id.

Community Knows Best?

While it may be true that locals know much more about the physical conditions of their neighborhoods than outsiders, that knowledge is not legally equivalent to an expert study, analysis, and opinion on an issue. If you, as a member of a community, wish to challenge a project which has expert reports to support it, you must present your own expert report in response. A local planning or development board cannot deny a project based on your generalized “knowledge,” no matter how accurate your information in opposition may be.