Lehigh Portland Cement Co. v. New York State Department of Environmental Conservation

661 N.E.2d 961, 87 N.Y.2d 136, 638 N.Y.S.2d 388, 1995 N.Y. LEXIS 4444
CourtNew York Court of Appeals
DecidedDecember 5, 1995
StatusPublished
Cited by45 cases

This text of 661 N.E.2d 961 (Lehigh Portland Cement Co. v. New York State Department of Environmental Conservation) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lehigh Portland Cement Co. v. New York State Department of Environmental Conservation, 661 N.E.2d 961, 87 N.Y.2d 136, 638 N.Y.S.2d 388, 1995 N.Y. LEXIS 4444 (N.Y. 1995).

Opinions

OPINION OF THE COURT

Smith, J.

The issue presented on this appeal is whether a declaratory judgment action was properly dismissed on the ground that plaintiff failed to exhaust administrative remedies. We conclude that the dismissal was improper because, in this case, the pursuit of administrative remedies would have been futile. Accordingly, we modify the order of the Appellate Division and remit this declaratory judgment action to the trial court for a determination on the merits of plaintiffs complaint.

Between August and November 1992, plaintiff submitted petitions to the Department of Environmental Conservation (DEC) pursuant to DEC’s Beneficial Use Determination (BUD) program. The petitions sought permission to use waste materials as substitutes for raw materials in plaintiff’s cement manufacturing processes. Upon the fulfillment of certain conditions, the BUD program permits the storage and use of solid waste materials, without a solid waste management facility permit, if those waste materials are incorporated into a marketable product, i.e., "beneficially used” (see, 6 NYCRR 360-1.15, formerly 6 NYCRR 360-1.2). Otherwise, the management, disposal and storage of nonhazardous solid waste may be handled only by solid waste management facilities. These facilities are subject to extensive regulation (see, 6 NYCRR part 360).

In March and July of 1993, plaintiff sent two demand letters to DEC stating that six of its pending BUD petitions would be deemed approved pursuant to the Uniform Procedures Act (UPA) unless DEC issued determinations on the petitions within five working days. The UPA provides specific time frames in which the DEC must notify permit applicants that [139]*139their applications are incomplete, hold hearings (where required), and issue decisions on applications (see, ECL 70-0109). "Permit” is defined by statute as "any permit, certificate, license or other form of department approval” (ECL 70-0105 [4]). The NYCRR applies UPA time frames to permit applications relating to the collection, treatment and disposal of refuse and other solid waste (see, ECL 70-0107, 70-0109).

DEC responded to plaintiffs demand letters by stating, in letters dated March 29, 1993 and July 15, 1993, that the UPA does not apply to BUD petitions. DEC’s replies declared:

"A determination of beneficial use, as provided for in 6 NYCRR Part 360-1.2 (a) (5) [recodified and amended as 6 NYCRR 360-1.15], is a decision regarding the Department’s jurisdiction to regulate an activity as a solid waste management facility. A request for a beneficial use determination is not an application for a permit. Such a request is not subject to the timeframes [sic] or any other provision of the Uniform Procedures Act. Consequently, your request for a decision under 6 NYCRR Part 621.9 (b) is not appropriate in this instance.”

Both DEC responses were signed by DEC’s Chief Permit Administrator.

After receiving DEC’s reply letters, plaintiff commenced this declaratory judgment action in Supreme Court seeking a declaration that UPA time frames apply to BUD petitions, and deeming eight of plaintiff’s petitions approved. Plaintiff then moved for summary judgment. DEC cross-moved to convert the action into a CPLR article 78 proceeding and to dismiss. DEC argued that its determination, that UPA time frames do not apply to BUD petitions, was rational. Alternatively, DEC sought a declaration that the UPA does not apply to the BUD program. In support of its cross motion, DEC submitted an affidavit from its Chief Permit Administrator stating:

"The Department has, since the promulgation of Part 360 on December 31, 1988, taken the position that the type of decisions which plaintiff sought was a determination in the first instance or a confirmation that the proposed uses of certain 'solid waste’ materials in a beneficial manner were exempt from the definition of 'solid waste’ and, therefore, exempt from the Department’s extensive Part 360 regulations. Therefore, it is our view that [140]*140petitions for beneficial use determinations are similar to petitions for declaratory rulings. * * * In reviewing plaintiff’s letter demands, my staff consulted its counterpart staff in the Department’s Region 4 office and also the Department’s Division of Legal Affairs. As a result of these consultations, I affirmed the Department’s longstanding position that petitions for beneficial use determinations are not subject to the requirements of the UPA.”

While the declaratory judgment action was pending, the DEC completed processing, and issued decisions on, the eight BUD petitions specified in plaintiff’s complaint. The DEC granted one petition, requested additional information on another, and denied six petitions. Plaintiff commenced a separate article 78 proceeding seeking annulment of the six denials.

While the article 78 proceeding was pending, the Supreme Court in the declaratory judgment action, sua sponte, dismissed plaintiff’s complaint on the ground that plaintiff failed to exhaust administrative remedies. The Supreme Court held that plaintiff should have sought a declaratory ruling from the DEC on whether the UPA applied to BUD petitions before commencing this present action (see, State Administrative Procedure Act § 204; 6 NYCRR part 619). Plaintiff appealed the dismissal of its action to the Appellate Division. During the appeal, the article 78 proceeding was dismissed on the ground that DEC had not acted arbitrarily, capriciously or irrationally in denying the six BUD petitions (see, Lehigh Portland Cement Co. v New York State Dept. of Envtl. Conservation, 161 Misc 2d 652). Plaintiff did not appeal the dismissal of its article 78 petition. Subsequently, the Appellate Division affirmed Supreme Court’s dismissal of the declaratory judgment action.

Plaintiff argues that the State Administrative Procedure Act does not require the pursuit of administrative remedies before relief may be sought in Supreme Court, and that in this case, pursuing a declaratory ruling from the DEC would have been futile. Generally, "one who objects to the act of an administrative agency must exhaust available administrative remedies before being permitted to litigate in a court of law” (Watergate II Apts. v Buffalo Sewer Auth., 46 NY2d 52, 57). However, exhaustion of administrative remedies is not required where an agency’s action is challenged as beyond its grant of power or when resort to an administrative remedy would be futile (Watergate, supra, at 57). Although a court may dismiss a declaratory judgment action in a proper exercise of discretion, [141]*141the mere existence of other adequate remedies does not mandate dismissal (CPLR 3001; Matter of Morgenthau v Erlbaum, 59 NY2d 143, 148).

Here, the DEC clearly and unequivocally stated its long-established position that UPA time frames do not apply to BUD petitions, both in correspondence with plaintiff and through the affidavit of the Chief Permit Administrator. The Chief Permit Administrator, who consulted with counterparts in DEC’s Region 4 office and with DEC’s Division of Legal Affairs, "affirmed” DEC’s "longstanding position” that the UPA does not apply to BUD petitions. DEC has taken this position since the promulgation of part 360 of the NYCRR, which became effective as of December 31, 1988.1 Consequently, ever since the inception of the BUD program, the DEC, as a matter of policy on at least a regional basis,2

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Bluebook (online)
661 N.E.2d 961, 87 N.Y.2d 136, 638 N.Y.S.2d 388, 1995 N.Y. LEXIS 4444, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lehigh-portland-cement-co-v-new-york-state-department-of-environmental-ny-1995.