Matter of Town of Woodbury v County of Orange

[*1] Matter of Town of Woodbury v County of Orange 2012 NY Slip Op 50898(U) Decided on May 2, 2012 Supreme Court, Orange County Nicolai, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on May 2, 2012
Supreme Court, Orange County

In the Matter of the Application of Town of Woodbury, VILLAGE OF WOODBURY, and VILLAGE OF HARRIMAN, Petitioners, For a Judgment Pursuant to Article 78 of the CPLR and a Declaratory Judgment Pursuant to Section 3001 of the CPLR

against

County of Orange, ORANGE COUNTY LEGISLATURE, ORANGE COUNTY SEWER DISTRICT NUMBER 1, VILLAGE OF KIRYAS JOEL, VILLAGE OF SOUTH BLOOMING GROVE, TOWN OF BLOOMING GROVE, VILLAGE OF MONROE, TOWN OF MONROE, TOWN OF CHESTER, and VILLAGE OF CHESTER, Respondents.



6034/10



DAVID K. GORDON, ESQ.

Law Office of David K. Gordon

Attorney for petitioners

126 Main Street, Suite 1

New Paltz, New York 12561

JAMES BACON, ESQ.

Attorney for petitioners

P.O. Box 575

New Paltz, New York 12561 DAVID L. DARWIN

County Attorney for Orange County

Attorney for respondents, County of Orange,

Orange County Legislature, and Orange

County Sewer District Number 1

255 Main Street

Goshen, New York 10924

WHITEMAN OSTERMAN & HANNA, LLP

Attorneys for respondent, Village of Kiryas Joel

One Commerce Plaza

Albany, New York 12260

FEERICK LYNCH MacCARTNEY, PLLC

Attorneys for respondent, Village of South Blooming Grove

96 South Broadway

South Nyack, New York 10960

BONACIC, KRAHULIK, CUDDERBACK, McMAHON & BRADY, LLC

Attorneys for respondents, Village of Monroe, Town of Monroe,

and Town of Chester

90 Crystal Run Road, Suite 104

Middletown, New York 10941

NORTON & CHRISTENSEN

Attorneys for respondent, Village of Chester

60 Erie Street

P.O. Box 308

Goshen, New York 10924

Francis A. Nicolai, J.

The following documents numbered 1 to 82 were read on this petition for judgments pursuant to article 78 and section 3001 of the Civil Practice Law and Rules:

Notice of Petition - Petition and Complaint -

Affidavits - Exhibits1 - 18

Amended Notice of Petition - Amended Petition

and Complaint - Affirmation - Exhibits -

Memorandum of Law19 - 34 [*2]

Answer to Amended Petition and Complaint

(Village of Monroe, Town of Monroe,

Town of Chester)35

Answer to Amended Petition and Complaint -

Affirmation - Exhibits - Memorandum of Law

(Village of Kiryas Joel)36 - 59

Answer with Cross Claim - Affirmation -

Exhibits - Memorandum of Law

(Village of Chester)60 - 66

Answer - Affidavits - Exhibits -

Memorandum of Law

(County of Orange, Orange County

Legislature, Orange County Sewer District

Number 1)67 - 91

Certified Record92 - 120

Reply Affidavits - Exhibits -

Reply Memorandum of Law121 - 126

Upon consideration of all of the foregoing, and for the following reasons, the petition is disposed of as follows.

Procedural and Factual Background

In 1970 respondent, Orange County Legislature (hereafter, the "Legislature") created respondent, Orange County Sewer District Number 1 (hereafter, "OCSD"), the geographical boundaries of which include petitioner, Village of Harriman (hereafter, "VOH"), respondent, Village of Kiryas Joel (hereafter, "VOKJ"), respondent, Village of Monroe (hereafter, "VOM"), and part of respondent, Town of Monroe (hereafter, "TOM"). In 1974 the Harriman Wastewater Treatment Plant (hereafter, "HWTP") was constructed to serve OCSD. HWTP is located within the geographical boundaries of VOH. VOH and petitioner, Village of Woodbury (hereafter, "VOW"), are both located within the geographical boundaries of petitioner, Town of Woodbury (hereafter, "TOW").

In 1978 respondent, County of Orange (hereafter, the "County")[FN1], entered into an Intermunicipal Agreement (hereafter, "1978 IMA," a copy of which is annexed to the Affidavit Of John P. Burke [hereafter, "Burke Aff"], submitted in support of Amended Petition, as Exhibit A) with five municipalities located outside OCSD whereby those municipalities agreed to construct and finance an expansion of HWTP and lease such expanded facility to OCSD for a nominal sum, in consideration of which the municipalities would be entitled to a specified share of the treatment capacity of HWTP. The five municipalities were TOW, respondent, Town of Blooming Grove (hereafter, "TOBG"), respondent, Town of Chester (hereafter, "TOC"), respondent, Village of Chester (hereafter, "VOC"), and that part of TOM lying outside OCSD (hereafter collectively, the [*3]"Signatory Municipalities"). In 1995 the parties to the 1978 IMA entered into another Intermunicipal Agreement (hereafter, "1995 IMA," a copy of which is annexed to the Burke Aff as Exhibit B), which was actually the third and last in a series of such agreements.[FN2] Petitioners allege that pursuant to the 1995 IMA, "the County committed to consult with [municipalities within OCSD and the Signatory Municipalities outside OCSD] before taking virtually any significant action to alter the structure and use of [HWTP]." (Amended Petition and Complaint [hereafter, "Amended Petition"] at 6).

In 1999, pursuant to the provisions of and rules promulgated under article 8 of the Environmental Conservation Law (also known as the State Environmental Quality Review Act [hereafter, "SEQRA"]), the Legislature declared itself lead agency for the environmental review of a plan to expand further the treatment capacity of HWTP (hereafter, the "1999 HWTP Expansion"); in 2001 the Legislature adopted a Final Environmental Impact Statement (FEIS) (hereafter, the "2001 FEIS," a copy of which is Exhibit B in the Record Of Proceedings [hereafter, "Record"]) and findings statement. The Legislature authorized the project in 2002, and the expanded treatment capacity came on line in 2006.

Meanwhile, VOKJ declared itself lead agency for the environmental review of its plan to construct a public water supply facility and a pipeline connecting the facility with the Catskill Aqueduct, and in 2004 completed a FEIS and adopted a findings statement. The County commenced a special proceeding under CPLR art. 78 challenging the adequacy of that environmental review. See Matter of County of Orange v Village of Kiryas Joel, Supreme Court, Orange County, Index No. 7547/04 (hereafter, "Pipeline I" litigation). By decision and order dated October 20, 2005, inter alia, this court (Rosenwasser, J.), annulled said determinations and directed VOKJ to prepare a Supplemental Environmental Impact Statement (hereafter, "SEIS"). (A copy of the Decision And Order is annexed to the Amended Petition as Exhibit E.) On appeal by VOKJ, the Appellate Division affirmed in part and modified in part, directing VOKJ to prepare an Amended FEIS (hereafter, "AFEIS") rather than a SEIS. See Matter of County of Orange v Village of Kiryas Joel, 44 AD3d 765 (2nd Dep't 2007).

By letter dated January 8, 2007 — i.e., approximately five years after the 1999 HWTP Expansion project considered in the 2001 FEIS was authorized and one year after the expanded capacity came online — the County inquired of each of the Signatory Municipalities whether they had an interest in purchasing additional capacity from and consolidating their sewer districts with OCSD (hereafter, the "2007 Offer," a copy of which letter is annexed to the Affirmation Of David L. Darwin [hereafter, "Darwin Aff"], submitted in support of the Verified Answer of County Respondents, as Exhibit 1G). In March 2007 VOKJ commenced a combined action for declaratory judgment and a special proceeding seeking to enjoin the County from selling treatment capacity to entities outside OCSD without first conducting an environmental review of said proposed action. See Matter of Village of Kiryas Joel v County of Orange, Supreme Court, County of Orange, Index Nos. 1892/07 and 3958/07 (hereafter, "Wastewater" litigation). By decision and order dated August 7, 2008, inter alia, this Court said, "[a]t a bare minimum, the County should have undertaken to [*4]prepare a [SEIS] to evaluate relevant environmental concerns to the OCSD members and their proposed increased needs," and enjoined the County "from selling any wastewater treatment capacity to any entity outside OCSD without first complying with the provisions of SEQRA." (Decision And Order [hereafter, the "8/7/08 Decision"], a copy of which is annexed to the Amended Petition as Exhibit D, at 9-10, 11 [internal citation omitted]). The entities named as respondents in the Wastewater litigation included respondents herein, the County, OCSD, TOC, TOM, TOBG, VOC and Village of South Blooming Grove (hereafter, "VOSBG"), and petitioners herein, TOW and VOW. Petitioner herein, VOH, was not a party to the Wastewater litigation. In November 2008, VOW and the County filed notices of appeal of the 8/7/08 Decision.

In 2009 VOKJ completed its AFEIS (hereafter, the "Pipeline I AFEIS") as it had been directed to do following its appeal in the Pipeline I litigation and adopted an amended findings statement for the proposed construction of the public water supply facility and connection to the Catskill Aqueduct. The County then commenced a second special proceeding challenging the Pipeline I AFEIS. See Matter of County of Orange v Village of Kiryas Joel, Supreme Court, Orange County, Index No. 8513/09 (hereafter, "Pipeline II" litigation).

While the appeals of the 8/7/08 Decision in the Wastewater litigation were pending the County and VOKJ began negotiations, culminating in a settlement resolving the issues between them in the Wastewater and Pipeline II litigations. According to the County Respondents, "[t]here were two key components of the settlement. First, [VOKJ] and the County each had to draft an Amended FEIS in satisfaction of the SEQRA issues." (Darwin Aff, Exhibit 1 at ¶24). Thus, VOKJ agreed to prepare a AFEIS — presumably, in addition to the Pipeline I AFEIS, which it had prepared following the appeal in the Pipeline I litigation and which the County had challenged in the Pipeline II litigation — the County agreed to prepare a AFEIS amending the 2001 FEIS which the Legislature had adopted concerning the 1999 HWTP Expansion, and each agreed that the two AFEIS's "would be exchanged and finalized if acceptable to the other party" (id.) The AFEIS which the County prepared pursuant to the terms of its settlement with VOKJ, and an Amended Findings Statement, (hereafter, "County AFEIS" and "County AFS," respectively, copies of which are Exhibits I and J, respectively, in the Record) were the subject of a resolution approved by the Legislature on February 4, 2010 (see Resolution No. 18 of 2010 [hereafter, the "Resolution"], a copy of which is Exhibit K in the Record).

The County Respondents and VOKJ allege that a representative of VOW was involved in the negotiations from the outset and aware of the terms of the settlement. Petitioners allege that none of them had been advised of or consulted as to the terms of the settlement between the County and VOKJ or the process by which the County AFEIS was prepared, or given an opportunity to comment upon the County's decision to proceed by amending the 2001 FEIS or the County AFEIS itself, and they were not aware of the content of the County AFEIS before the Resolution was approved by the Legislature.

The underlying proceeding in the Pipeline II litigation was discontinued with prejudice by stipulation between the County and VOKJ, the only parties thereto; which stipulation was So Ordered by this Court on February 16, 2010. (A copy of the Stipulation Of Discontinuance With Prejudice [hereafter, "Pipeline II Stip"] is annexed to the Amended Petition as Exhibit H.) Also, pursuant to a stipulation So Ordered by this Court on February 22, 2010, "the injunction imposed [in the 8/7/08 Decision] is hereby vacated and the [Wastewater] proceeding is hereby discontinued [*5]with prejudice." (Stipulation And Order To Vacate Injunction And Dismiss Action With Prejudice [hereafter, "Wastewater Stip"], a copy of which is annexed to the Affirmation [of Michael G. Sterthousee] [hereafter, "Sterthouse Aff"] as Exhibit 18, at 5). Applications by the County and VOW to withdraw their appeals of the 8/7/08 Decision were granted by decision and order of the Appellate Division, Second Department, dated March 23, 2010. (A copy of the Decision & Order is annexed to the Sterthouse Aff as Exhibit 15.)

According to the County Respondents, "[a] second key component of the global settlement [of the Wastewater and Pipeline II litigations] was a reaffirmation of the 1978 contractual obligation to expand the capacity of OCSD facilities when the capacity at [HWTP] reaches 85%." (Darwin Aff, Exhibit 1 at ¶30). Thus, on February 19, 2010, the County and OCSD executed an agreement (hereafter, "2010 Expansion Agreement," a copy of which is Exhibit R in the Record) committing them to expand the treatment capacity of HWTP "and any other wastewater treatment facilities . . . owned and/or operated by the County and [OCSD] that provides wastewater treatment to [OCSD]" if and when eighty-five percent of OCSD's existing treatment capacity was being utilized (2010 Expansion Agreement at 3, ¶3). Petitioners allege that the 2010 Expansion Agreement was executed without their knowledge and without consulting VOW or the Signatory Municipalities, one of whom is TOW; the County Respondents deny these allegations and contend that, in any event, neither VOW nor the Signatory Municipalities had any right to be consulted.

Petitioners commenced the instant proceeding on June 4, 2010. The Amended Petition was filed on July 14, 2010; none of the respondents had filed an answer to or moved to dismiss the original petition in the interim. In seven separately stated and numbered causes of action, inter alia, petitioners seek the following: to annul the County AFEIS and the County AFS on the grounds that the decision of the County Respondents to proceed by an AFEIS rather than prepare a SEIS violated the 8/7/08 Decision in Wastewater, and the County AFEIS was improper and inadequate under SEQRA; to annul the 2010 Expansion Agreement on the ground that the execution thereof constituted an action requiring environmental review under SEQRA, and; to annul the Legislature's adoption of the County AFEIS, the County AFS, and the 2010 Expansion Agreement on the grounds that the decisions to prepare the County AFEIS and execute the 2010 Expansion Agreement breached the consultation provisions of the 1995 IMA.

In lieu of serving a pleading responsive to the Amended Petition, the County Respondents moved pursuant to sections 3211 and 7804(f) of the Civil Practice Law and Rules to dismiss on the grounds that petitioners lacked standing to assert any claim under SEQRA (see CPLR 3211[a][3]), that the SEQRA claim which petitioners assert as a fourth cause of action is barred by the applicable statute of limitations (see CPLR 3211[a][5]), and that both the claims under SEQRA and for declaratory judgment must be dismissed because the Amended Petition fails to state a cause of action (see CPLR 3211[a][7]). Petitioners, and respondents, VOC and VOSBG, opposed the motion.

Respondent, VOKJ, filed an answer to the Amended Petition in which it alleged eleven affirmative defenses including, but not limited to, that petitioners lacked standing and that petitioners' claims were barred by the applicable statute of limitations; VOKJ made no submissions in response to the motion to dismiss. Respondents, VOM, TOM and TOC, filed an answer to the Amended Petition in which they did not allege any affirmative defense or objection in point of law; these respondents made submissions in response, but neither in support of nor opposition, to the motion to dismiss. Respondent, TOBG, did not make any submissions in response to the motion to [*6]dismiss. The motion was deemed fully submitted on January 13, 2011.

Meanwhile, the petitioners in the instant proceeding moved this Court for orders granting them leave to intervene in the Pipeline II proceeding and reinstating the petition by which that proceeding had been commenced. Those motions, which were opposed by the County and VOKJ and deemed fully submitted in August 2010, were denied by decision dated October 29, 2010. (A copy of the Decision [hereafter, the "10/29/10 Decision"] is Exhibit BB in the Record).

By decision and order dated April 27, 2011 [hereafter, the "4/27/11 Decision"], this Court denied the motion of the County Respondents to dismiss the instant proceeding and directed that the respondents who had not previously done so were permitted to serve and file their answers to the Amended Petition. Respondent, VOC filed an answer to the Amended Petition, in which it did not allege any affirmative defenses or objections in point of law, but did interpose a cross-claim against the County and OCSD. On July 7, 2011, the County Respondents filed an answer to the Amended Petition in which they allege ten affirmative defenses to the Amended Petition — including, but not limited to, that petitioners lack standing and that petitioners' claims are barred by the statute of limitations — and a request for an order dismissing VOC's cross-claim. Petitioners filed submissions in reply on August 15, 2011. Neither TOBG nor VOSBG have filed an answer to the Amended Petition.

Discussion

Standing and Statute of Limitations

To the extent that any of the answering respondents have pled affirmative defenses seeking dismissal of the Amended Petition on the ground that petitioners lack standing and dismissal of the fourth cause of action on the ground that it is barred by the statute of limitations, said affirmative defenses are denied. Those defenses were determined on the merits when this Court denied the motion of the County Respondents for the same relief in the 4/27/11 Decision, which determination constitutes the law of the case as to the grounds raised in said motion. See Spindell v Brooklyn Jewish Hosp., 35 AD2d 962, 963 (2nd Dep't 1970) affd 29 NY2d 888 (1972) and compare with Light v Light, 64 AD3d 633, 634 (2nd Dep't 2009) (holding that law of the case doctrine did not apply because prior determination was not on the merits). Moreover, to the extent that any of the answering respondents have pled affirmative defenses seeking dismissal of the remainder of the causes of action alleged in the Amended Petition on the ground that they are barred by the statute of limitations, said affirmative defenses are denied for the same reasons stated in the 4/27/11 Decision — in sum, since all of the determinations at issue in the remaining causes of action became final and binding no earlier than February 4, 2010, and the instant special proceeding was commenced within four months thereafter, and none of petitioners' claims would have a shorter limitations period, none of petitioners' claims are barred by the statute of limitations. (See 4/27/11 Decision at 11).

Claim/Issue Preclusion [*7]

In their answers both the County Respondents and VOKJ allege as a fourth affirmative defense that "[p]etitioners' claims are barred, in whole or in part, by the doctrines of res judicata, collateral estoppel and/or law of the case." "The doctrine of res judicata operates to preclude the reconsideration of claims actually litigated and resolved in a prior proceeding, as well as claims for different relief against the same party which arise out of the same factual grouping or transaction, and which should have or could have been resolved in the prior proceeding." Matter of James M. v City of New York Police Dept., 69 AD3d 634, 635 (1st Dep't 2010). Collateral estoppel precludes a party from relitigating an issue which was raised and determined, and which that party had a full and fair opportunity to litigate, in a prior action. See Maybaum v Maybaum, 89 AD3d 692, 695 (2nd Dep't 2011). The law of the case doctrine "provides that once a point has been decided in a case, it cannot be relitigated within [that case]." (Siegel, NY Prac § 443, at 774 [5th ed]).

The affirmative defenses are denied. VOKJ does not identify any specific order, decision or holding in a prior action pursuant to which determination petitioners are purportedly precluded from raising any claims or issues. Neither the County Respondents nor VOKJ identify any point previously decided in the instant proceeding which petitioners purportedly seek to relitigate. And the contentions of the County Respondents, that the 10/29/10 Decision denying petitioners' motions to intervene in and reinstate the Pipeline II proceeding constituted a determination on the merits of several of the factual and legal issues which petitioners raise in the instant proceeding (see [County] Respondents Memorandum Of Law In Support Of Answer To Petition [hereafter, "County MOL"] at 16-19), are unavailing.

In the 10/29/10 Decision this Court determined only that "[t]he matters herein[ — i.e., the Pipeline II and Wastewater proceedings —]were globally settled and the present [motion] to intervene is denied." (10/29/10 Decision at 2). The language which preceded the determination constituted a recitation, not determination, of the procedural background and the facts alleged in the papers submitted in support of and opposition to the motions; and the latter part of the determination itself was based upon the fact that the Pipeline II proceeding had been discontinued months before and none of the proposed intervenors had sought such relief while it was pending. (See id.)[FN3] However, petitioners do not allege or raise a claim in the Amended Petition that the County and VOKJ did not between themselves arrive at a settlement of and, between themselves, discontinue the Pipeline II and Wastewater proceedings, or allege that they sought leave to intervene in Pipeline II before it was discontinued. Nor do petitioners raise any claims in the Amended Petition challenging the Pipeline I AFEIS — i.e., the subject of Pipeline II — or the Pipeline II settlement.[FN4] Since none of the claims raised or issues of fact or law alleged in the Amended Petition were determined in the 10/29/10 Decision, petitioners are not precluded by said decision from asserting any of those claims in the instant proceeding. Therefore, the fourth affirmative defenses of VOKJ and the County Respondents are denied.

[*8]Violation of CPLR 5015

In their answers both the County Respondents and VOKJ allege as a sixth affirmative defense that "[p]etitioners' claims are barred, in whole or in part, by their failure to comply with CPLR 5015." Rule 5015 provides the procedural mechanism by which a party may be relieved from a judgment or order, and the grounds upon which such relief may be granted. See CPLR 5015(a). In support of their affirmative defense VOKJ contends — which contentions the County Respondents "adopt[] and incorporate[] by reference" (County MOL at 19) — that the Wastewater Stip constituted a "judgment" within the meaning of the rule and that the annulment of said judgment is the actual purpose behind the instant proceeding, which constitutes a collateral attack not permitted by and in violation of CPLR 5015(a). (See Memorandum Of Law Of Respondent Village Of Kiryas Joel In Opposition To The Verified Petition And Complaint [hereafter, "VOKJ MOL"] at 26 ["In reality, this proceeding is simply an improper collateral attack on this Court's disposition of the proceeding brought by Kiryas Joel against the County."])

Respondents do not elaborate what aspect of the Wastewater Stip petitioners are allegedly attacking collaterally or how a determination in the instant proceeding would effect such an attack. However, a copy of the County AFEIS was annexed to the Watsewater Stip, the instant proceeding seeks annulment of determinations made in reliance upon that document, and the bases for annulment include alleged violations of SEQRA and the 8/7/08 Decision. Thus, the Court infers that the aspect of the Wastewater Stip upon which respondents base their sixth affirmative defenses is the language therein reciting that the County AFEIS satisfied the terms of the 8/7/08 Decision and complied with SEQRA (see Wastewater Stip at 3, 4-5) and that the crux of said defenses is that the Wastewater Stip constituted a judgment holding that the County AFEIS did so, which judgment can not be attacked collaterally in the instant proceeding.

The affirmative defenses are denied. A stipulation of discontinuance with prejudice constitutes a judgment. See Fifty CPW Tenants Corp. v Epstein, 16 AD3d 292 (1st Dep't 2005). However, "a representation in a stipulation — even a so-ordered stipulation — is not to be equated with a judicial finding' (Urban Assoc. v Hettinger, 177 AD2d 439, 439 [1991])." Jazilck v Abart Holdings, LLC, 72 AD3d 529, 532 (1st Dep't 2010). The language upon which respondents rely represented no more than their opinion, and the Court made no determination concerning the merit or accuracy of that opinion. Thus, the Wastewater Stip did not constitute a judicial finding that the County AFEIS satisfied the 8/7/08 Decision or complied with SEQRA. Therefore, the instant proceeding neither includes nor constitutes an impermissible collateral attack on the judgment evidenced by the Wastewater Stip, and the sixth affirmative defenses of VOKJ and the County Respondents are denied.

The Merits of the Proceeding

"It is settled that a special proceeding is subject to the same standards and rules of decision as apply on a motion for summary judgment, requiring the court to decide the matter upon the pleadings, papers and admissions to the extent that no triable issues of fact are raised' (CPLR 409[b] [other internal citations omitted])." Matter of Karr v Black, 55 AD3d 82, 86 (1st Dep't 2008); see also Matter of Bahar v Schwartzreich, 204 AD2d 441, 443 (2nd Dep't 1994) (applying summary judgment standard in article 78 proceeding).

[*9]Challenges to the County AFEIS and County AFS

Petitioners contend that the County AFEIS and County AFS should be annulled because the process pursuant to which the County AFEIS was prepared and adopted failed in several respects to comply with SEQRA. In the second cause of action petitioners allege that the decision to amend the 2001 FEIS rather than use a SEIS violated both the requirements of SEQRA and this Court's prior ruling "that the County should have at a bare minimum,' completed a [SEIS] to review the impacts surrounding the allocation [of HWTP] capacity." (Amended Petition at ¶¶52-53). In the first cause of action petitioners allege that the Legislature "as lead agency failed to formally adopt the [County] AFEIS, or to take steps required to make it publicly accessible prior to taking action on it." (Id. at ¶48). In the third cause of action petitioners allege that the Legislature "failed to take the required hard look' under SEQRA at the project's significant environmental impacts . . . [, and that the County] AFEIS and [County AFS] contain analyses which are not reasonable, in the face of readily available evidence surrounding the growth of Kiryas Joel." (Id. at ¶¶56-57). And in the fourth cause of action petitioners allege that the Legislature "should have identified [petitioners] as involved agencies and given them an opportunity to comment on the [County] AFEIS, including . . . demanding a full SEIS as ordered by the court." (Id. at ¶61).

As to the second cause of action, the fact that the County failed to comply with this Court's statement in the 8/7/08 Decision that it should have prepared a SEIS is not a ground for nullification of the County AFEIS. The 8/7/08 Decision held that the County's offer to sell treatment capacity to entities outside OCSD — i.e., the 2007 Offer — was an "action" under SEQRA, which action the County had undertaken without conducting any environmental review whatsoever; therefore, the County was enjoined from following through on said action without first complying with SEQRA. The statement concerning what the County should have done did not constitute a holding directing the County to prepare a SEIS or a finding that such was the only course that would be SEQRA-compliant. And even assuming, arguendo, that to have been the case, this Court would not nullify the determinations at issue merely because the County — or more properly, the Legislature[FN5] — followed a different course. Ultimately, the issue is whether the course chosen and the end result complied with SEQRA. See Matter of Riverkeeper, Inc. v Planning Bd. of Town of Southeast (Riverkeeper), 9 NY3d 219 (2007).

Under SEQRA, the Legislature had the authority but was not required to use a SEIS. Pursuant to section 617.9(a)(7) of the rules promulgated under SEQRA, a "lead agency may require a supplemental EIS, limited to the specific significant adverse environmental impacts not addressed or inadequately addressed in the EIS," and then only where such impacts "arise from: (i)(a) changes proposed for the project; or (b) newly discovered information; or (c) a change in circumstances related to the project." 6 NYCRR 617.9(a)(7). In other words, a SEIS can not be used where the environmental impacts not addressed or inadequately addressed in the original environmental impact statement (hereafter, "EIS") arose from the project under consideration as it was then contemplated, but may be used where the impacts arise from events or circumstances that occurred after the original [*10]EIS was adopted. See Matter of County of Orange v Vil. of Kiryas Joel, 44 AD3d at 769.

In the instant proceeding, the "project" at issue in the determination of the appropriateness of a SEIS was the 1999 HWTP Expansion, the environmental review of which the Legislature declared itself lead agency to undertake and the EIS concerning which — i.e., the 2001 FEIS — was adopted in 2001. The alleged environmental impacts at issue in the instant proceeding "arise" from the 2007 Offer, and there is no allegation or indication in the Record that the 2007 Offer or its equivalent was contemplated in the 1999 HWTP Expansion. Consequently, those impacts arose not from the expansion plan as it was contemplated during the environmental review which culminated in the 2001 FEIS, but from a subsequent change in circumstances related to the expansion plan — i.e., the 2007 Offer. Therefore, in the sense that it had authority to do so, the Legislature could have used a SEIS. See 6 NYCRR 617.9(a)(7)(i)(c).

Where a lead agency is authorized to use a SEIS, the determination of whether to do so is a matter of discretion (see 6 NYCRR 617.9[a][7]), and the standard of judicial review of a determination not to use a SEIS is the same as the standard of review of determinations under SEQRA generally, taking into consideration the process which the lead agency undertook in the alternative. See Riverkeeper, 9 NY3d at 232; Matter of Town of Pleasant Val. v Town of Poughkeepsie Planning Bd., 289 AD2d 583 (2nd Dep't 2001) lv denied 98 NY2d 602 (2001). Thus, the decision not to use a SEIS can be nullified only if it "was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion" (CPLR 7803[3]), and the determinations made as a result of the process undertaken in the alternative can be nullified only if there was a failure to identify the relevant areas of environmental concern, take a hard look at them and make a reasoned elaboration of the bases for said determinations (see Matter of Jackson v New York State Urban Dev. Corp., 67 NY2d 400, 416-417 [1986]).

In the instant proceeding, the decision not to use a SEIS was not unlawful. Within SEQRA there is no prescribed procedure to which a lead agency must adhere in deciding whether to exercise its authority to use a SEIS. Further, there was a rational basis for the decision not to exercise such authority. Considering the facts at hand — and despite this Court's statement implying the contrary — the County and the Legislature reasonably inferred that there were no aspects of the 2001 FEIS or the 2007 Offer that could not be adequately addressed except by a SEIS (see, e.g., Matter of Halperin v City of New Rochelle, 24 AD3d 768, 777 [2nd Dep't 2005] lv dismissed 6 NY3d 890 and7 NY3d 708 [2006] and compare with Matter of Doremus v Town of Oyster Bay, 274 AD2d 390, 394 [2nd Dep't 2000]), and that amending the 2001 FEIS presented a more effective alternative involving "minimum procedural and administrative delay" (6 NYCRR 617.3[h]). And from the County's perspective, that alternative would also enable it to simultaneously seek a satisfactory resolution of its concerns over VOKJ's pipeline project. Therefore, the second cause of action is denied because the decision not to use a SEIS did not violate lawful procedure and was neither arbitrary, capricious nor an abuse of discretion.

The determinations concerning the County AFEIS and County AFS were not unlawful. Petitioners' allegations to the contrary notwithstanding, the Record establishes that in adopting the County AFS on February 4, 2010, the Legislature also "accepted and reviewed" the County AFEIS, which "presents the facts and conclusions relied upon to support the Findings Statement." (See Resolution). There remain issues of fact as to whether and to what extent petitioners and the general public were afforded access to the process leading to those determinations. However, there are no [*11]requirements that a lead agency provide involved agencies with an opportunity to comment upon an amended EIS before deciding whether to use it instead of a SEIS (see Riverkeeper, 9 NY3d at 235) or that an amended EIS be made available for public review and comment prior to adoption (compare 6 NYCRR 617.9[a][7][iii] [providing that "(i)f a supplement is required, it will be subject to the full procedures of this Part"]). Thus, even assuming as fact petitioners' allegations in support of the first and fourth causes of action, they would not prevail.

The County AFEIS and County AFS comply with SEQRA. The County AFEIS was prepared by the Orange County Department of Environmental Facilities & Services. It begins with confirmation that the analysis contained therein was necessitated by the 2007 Offer and undertaken in "direct response to" the 8/7/08 Decision, pursuant to which the Legislature/County was required to make "a determination of excess capacity . . . [and to] take all necessary steps to insure that the in-OCSD municipalities are adequately allocated with respect to their wastewater treatment needs'" (County AFEIS, Amended FEIS Preface [quoting the 8/7/08 Decision]), thereby identifying the relevant areas of environmental concern at which they were required to take a hard look under SEQRA.

Starting with the total existing capacity available to OCSD from the HWTP and "the Village of Kiryas Joel Wastewater Treatment Plant (which the County leases to serve the capacity requirements of OCSD)," the County AFEIS contains a "population growth study and buildout analysis" using three alternative models for projected development within the geographical area served by OCSD over the next thirty years. (Id., Section 3 at 1). The alternative models include scenarios in which (1) "population growth will be limited by the amount of vacant developable land available in the OCSD" (id. at 6); (2) population growth will be limited, "but the strict limits of available land in Kiryas Joel are supplemented by increased development potential (via rezoning, lot redevelopment, annexation, etc.)" (id. at 7), and; (3) population growth "will continue regardless of the availability of vacant, developable land in the OCSD" (id. at 8) — i.e., without limits imposed by land use restrictions. The third scenario would involve the greatest population growth and, therefore, the greatest drain on the wastewater treatment capacity available to in-OCSD municipalities. The County AFEIS concludes that even under the third scenario, and after subtracting the maximum amount of capacity that would be sold if the 2007 Offer was accepted by all of the entities to whom it was made, the remaining capacity would be more than sufficient to serve the needs of the in-OCSD municipalities at least through 2014 or 2015. (See id. at 9).[FN6]

Petitioners do not dispute the component parts of the analysis — e.g., sewage units of output per day, sewage unit volume per acre — the quantities comprising each component, or the arithmetic employed to arrive at the sums upon which the conclusions are founded. Rather, petitioners allege that the County AFEIS underestimates the potential population growth of VOKJ, and that such growth will overburden the OCSD. (See Amended Petition at ¶57). However, each of the scenarios considered in the County AFEIS presume a population density per acre in VOKJ more than seven [*12]times that in other municipalities, the second scenario anticipates exacerbated population growth due to VOKJ's more liberal land use restrictions, and the third anticipates the consequences of unrestricted development throughout the OCSD. Moreover, the County AFEIS and the conclusions reached therein are the product of sound, well-reasoned, expert analysis based upon empirical evidence. In contrast, petitioners offer only speculative allegations by lay municipal officials of explosive, unchecked and predatory expansion by VOKJ which appear to be based on little more than anecdotal media accounts. (See, e.g., Burke Aff at 3-5).

In sum, the Record establishes that the Legislature/County identified the areas of environmental concern relevant to changes to the 1999 HWTP Expansion that would result from the 2007 Offer, took a hard look at such concerns and made a reasoned elaboration of the bases for its determinations. And petitioners have failed to raise any triable issues of fact concerning the adequacy under SEQRA of the County AFEIS and County AFS, or the propriety under SEQRA of the determinations relative to said documents. Therefore, the third cause of action is denied.

Challenges to the 2010 Expansion Agreement

Petitioners contend that the 2010 Expansion Agreement should be annulled for several reasons. In the fifth cause of action petitioners allege that the County's execution of the 2010 Expansion Agreement was an "action" requiring environmental review under SEQRA, and that said action was undertaken without any prior environmental review. (See Amended Petition at ¶¶64-65). In the sixth cause of action petitioners allege that the County's execution of the 2010 Expansion Agreement without first giving them an "opportunity to respond" constituted a breach of the 1995 IMA (id. at ¶67); VOC's cross-claim against the County and OCSD alleges essentially the same cause of action (see Amended Verified Answer To Amended Petition And Complaint And Cross-Claim at ¶¶71-87). And in the seventh cause of action petitioners allege that "[t]he County failed to gain legislative authorization for entering into the [2010 Expansion Agreement] or any other authorization for the expansion of the [HWTP] beyond 6 mgd." (Amended Petition at ¶70).

The fifth cause of action is granted. Pursuant to the rules promulgated under SEQRA, "[n]o agency involved in an action[FN7] may undertake, fund or approve the action until it has complied with the provisions of SEQR." 6 NYCRR 617.3(a). There are three categories of actions: "Type I" (see id. at 617.2[ai]), "Type II" (see id. at 617.2[aj]), and "Unlisted" (see id. at 617.2[ak]). With respect to a Type I or Unlisted action, in order to comply with SEQRA an agency must first determine the environmental significance or non-significance of the action; the scope of the environmental review required thereafter depends upon that determination (see id. at 617.3[c]). No such determination or further review is required for a Type II action. See id. at 617.3(f).

Execution of the 2010 Expansion Agreement was an action requiring at least a prior [*13]determination of environmental significance. "A principal goal of SEQRA is to incorporate environmental considerations into the decisionmaking process at the earliest opportunity' (Matter of Neville v Koch, 79 NY2d 416, 426 [other citations omitted])[, and] SEQRA's broad definition of actions' . . . should be liberally construed to facilitate SEQRA's salutary purposes." Matter of City Council of the City of Watervliet v Tn. Bd. of the Tn. of Colonie (City Council), 3 NY3d 508, 518 (2004). Thus, where an agency contemplates granting approval for, or entering into a contract to do, that which would itself constitute an action, SEQRA requires that before approval is granted or the contract is executed the agency make a determination of environmental significance and conduct whatever environmental review, if any, is appropriate. See Devitt v Heimbach, 58 NY2d 925, 928 (1983) (holding that resolution authorizing sale of real property "was not properly passed because the county legislature did not have prior to passing that resolution either an EIS or a determination of nonsignificance"); Matter of Kuzma v City of Buffalo, 45 AD3d 1308, 1310-1311 (4th Dep't 2007) (holding that determination to enter into contract to sell State property without prior environmental review violated SEQRA). The scope of review which is appropriate upon a determination of environmental significance depends upon the action for the accomplishment of which the contract or approval is contemplated (see, e.g., Matter of City of Middletown v Tn. Bd. of the Tn. of Walkill, 54 AD3d 333, 336-337 [2nd Dep't 2008]), but at a minimum SEQRA mandates a pre-execution or pre-approval determination of non-significance.See Devitt v Heimbach,58 NY2d at 928.

It is beyond dispute that any expansion by OCSD would constitute an action under 6 NYCRR 617.2(b) because it would necessarily entail projects or physical activities that may affect the environment through changes to the use, appearance or condition of OCSD's facilities. Indeed, the necessity for an environmental review was anticipated within the 2010 Expansion Agreement. (See, e.g., 2010 Expansion Agreement at ¶¶5[b] and [d], and 7[iii]). Thus, the County and OCSD were required to make determinations of environmental significance and conduct any necessary environmental review before entering into any contract to expand OCSD.

Respondents argue that the 2010 Expansion Agreement is not a contract, that it merely memorializes an understanding between the parties thereto to undertake certain tasks upon the possible occurrence of a future event, so that the written execution of that understanding was either not an action under section 617.2(b) or it was among the list of actions defined as Type II in section 617.5(c). The County Respondents contend, for example, that the 2010 Expansion Agreement "is nothing more than a reaffirmation of an existing obligation under the 1978 IMA to expand capacity when the [OCSD] facilities reach 85%[, . . . that] does not commit the County to a definite course of future activities.'" (County Respondents' Memorandum Of Law In Support Of Motion To Dismiss, a copy of which is incorporated by reference as Appendix A to the County MOL, at 19). And VOKJ contends that "the 2010 (Expansion) Agreement provides a commitment to merely undertake the planning and approval process" (VOKJ MOL at 21-22), and that it constitutes at most a Type II action "because it reflects the County's and [OCSD's] preliminary formulation of a timely and predictable procedure to follow for the expansion of the [OCSD's] facilities and explicitly does not commit any agency to approve such an expansion" (id. at 23). These contentions are unavailing for several reasons.

To begin with, the document is by its own terms "a legally binding contract enforceable by any aggrieved Party[, . . . including] each municipality located within the HWWTP Service Area[, each of which is] hereby deemed to be a third party beneficiary of this Agreement, and has an [*14]independent right to enforce the terms of this Agreement." (2010 Expansion Agreement at ¶10). Throughout the document expansion is consistently referred to as a foregone conclusion rather than a possibility to be explored (see, e.g., id. at ¶¶4-6, 8), such a commitment to expansion was fundamental to the post-2015 analysis contained in the County AFEIS (see n. 6, supra), and the representation that the document itself constituted an "enforceable agreement to expand" was clearly a lynchpin of the global settlement of the Pipeline II and Wastewater litigations (see Pipeline II Stip at 2; Wastewater Stip at 3). And respondents' contentions to the contrary notwithstanding, the necessity for prior environmental review is not dependent upon whether the contract or proposal being considered includes a definite project plan; rather, the determinative factor is whether there is a "specific request for governmental action." See City Council, 3 NY3d at 519 (distinguishing Matter of Programming & Sys. v New York State Urban Dev. Corp., 61 NY2d 738 [1984]).

The 2010 Expansion Agreement is a contract binding the County and OCSD to undertake a specific governmental action — expansion of OCSD — which action required prior environmental review under SEQRA. Absent such prior review, entailing at least a prior determination of non-significance, execution of the contract violated SEQRA. Consequently, the contract was void and must be annulled. See Devitt v Heimbach, supra; Matter of Tri-County Taxpayers Assn., Inc. v Tn. Bd. of the Tn. of Queensbury, 55 NY2d 41 (1982); Tauber v Vill. of Spring Val., 56 AD3d 660, 661 (2nd Dep't 2008) (holding that plaintiff not entitled to specific performance of contract because municipality failed to comply with SEQRA prior to execution). Therefore, the fifth cause of action is granted.

Since the 2010 Expansion Agreement was void and is hereby annulled, petitioners' sixth and seventh causes of action and VOC's cross-claim are dismissed as moot because the determination thereof would "have no immediate effect and may never resolve any actual dispute or controversy." Hirschfeld v Hogan, 60 AD3d 728 (2nd Dep't 2009) lv denied 14 NY3d 706 (2010); see also Matter of United Water New Rochelle, Inc. v City of New York, 275 AD2d 464, 466-467 (2nd Dep't 2000).

Accordingly, for the foregoing reasons, the first through fourth causes of action in the Amended Petition are denied, the sixth and seventh causes of action in the Amended Petition and the cross-claim of the Village of Chester are dismissed, and the fifth cause of action in the Amended Petition is granted to the extent that the agreement executed on February 19, 2010, between the County of Orange and Orange County Sewer District Number 1 (referred to herein as the 2010 Expansion Agreement) is hereby annulled..

The foregoing constitutes the decision and order of the Court.

Dated: White Plains, New York

May 2, 2012E N T E R:

HON. FRANCIS A. NICOLAI

Justice of the Supreme Court Footnotes

Footnote 1:Hereafter, the County, the Legislature and OCSD will be referred to collectively as the "County Respondents."

Footnote 2:Petitioners allege that "[t]he Village of Woodbury is beneficiary and successor party to the various intermunicipal agreements governing the operation and expansion of areas served by the [HWTP]" (Amended Petition at 2).

Footnote 3:Of course, there would have been no need for VOW or TOW to seek leave to intervene in the Wastewater proceeding as they were named respondents therein.

Footnote 4:Although, the County Respondents' contention to the contrary notwithstanding, the 10/29/10 Decision did not constitute or include a "rul[ing] that the global settlement may not be reopened." (County MOL at 19).

Footnote 5:Throughout the Amended Petition, the County and the Legislature are referred to as if they are the same entity. However, while the County was the author of the 2007 Offer — and therefore the entity to which this Court referred in the 8/7/08 Decision — the Legislature was the lead agency in the preparation of the 2001 FEIS, and therefore the entity whose decision to amend rather than supplement the 2001 FEIS is at issue.

Footnote 6:In support of its conclusion that there will be sufficient capacity beyond 2015, the County AFEIS invokes "the obligation to increase capacity" pursuant to the 2010 Expansion Agreement (see County AFEIS, Section 3, at 9), which is the subject of the fifth cause of action (see discussion, infra). Petitioners allege that "the [County] AFEIS relies in part upon [that] illegal agreement" (see Amended Petition at ¶58), but neither allege nor contend how such partial reliance meant that the Legislature "failed to take the required hard look' under SEQRA" (id. at ¶56).

Footnote 7:" Actions'" include: (1) projects or physical activities, such as construction or other activities that may affect the environment by changing the use, appearance or condition of any natural resource or structure, that: (i) are directly undertaken by an agency; or (ii) involve funding by an agency; or (iii) require one or more new or modified approvals from an agency or agencies; (2) agency planning and policy making activities that may affect the environment and commit the agency to a definite course of future decisions; (3) adoption of agency rules, regulations and procedures, including local laws, codes, ordinances, executive orders and resolutions that may affect the environment; and (4) any combinations of the above." 6 NYCRR 617.2(b).