RNC Indus. v State of New York Pub. Serv. Commn.
Annotate this CaseDecided on November 13, 2017
Supreme Court, Albany County
RNC Industries, Petitioner, For a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules
against
State of New York Public Service Commission, Respondent.
902778-17
Trivella & Forte, LLP
Attorneys for the Petitioner
Arthur J. Muller, III, Esq., of counsel
1311 Mamaroneck Avenue
White Plains, New York 10605
Hon. Eric T. Schneiderman, Esq.
Attorney General
Attorneys For Respondent
John Graham, Esq., of counsel
The Capitol
Albany, New York 12224-0341
Henry F. Zwack, J.
In this Article 78 proceeding the petitioner RNC Industries ("RNC") seeks review and vacatur of a December 15, 2015 determination of the respondent New York State Public Service Commission ("PSC") — which found that RNC was in violation of 16 NYCRR 753.3.1(a)(1) and imposed a fine of $2,500. The basis of the fine was that RNC, having reported that it would be excavating at 50 Bowery Street (the "one-call notification"), damaged a natural gas line owned by Consolidated Edison of New York, Inc. ("Con-Ed") some 20 feet from the excavation site, at 52-56 Bowery Street. Having not reported that it planned to do any work at 52-56 Bowery Street, the PSC found that RNC was in violation of 16 NYCRR 753.3.1(a)(1). RNC argues that the PSC's determination was made in violation of lawful procedure by denying it a hearing and due process, was arbitrary and capricious, and should have been based upon substantial evidence. RNC also argues that the penalty itself was excessive. The PSC has answered and opposed the petition, arguing that RNC received all that process that it was due, that the finding was rationally based upon the documentary evidence, and that the penalty was not excessive in light of the threat to public safety.
For the reasons that follow the Court denies the petition in its entirety.
Procedural due process in the context of an agency determination means the agency must only provide an opportunity to be heard in a meaningful manner at a meaningful time (Kaur v New York State Urban Development Corp., 15 NY3d 235 [2010]).Here, RNC was entitled to notice procedures "tailored, in light of the decision to be made, to 'the capabilities and circumstances of those who are to be heard' to insure they are given a meaningful opportunity to present their case" (Mathews v Eldridge, 424 US 319 [1976]). An opportunity to be heard is not always equated to a full blown hearing on the merits (Matter of Vector East Reality Co v Abrams, 89 AD2d 453 [1st Dept 1982]). Rather, the courts apply a balancing of the private interest affected; the risk of erroneous deprivation of a protected property interest through the procedures used and the probable value, if any, of substitute or additional procedures; and the government interest (Morgenthau v Citisource, Inc., 68 NY2d 211 [1986].
The New York State Legislature directed the PSC to adopt rules and regulations to carry out the requirements of General Business Law (GBL) Article 36 which were established to protect underground facilities (Public Service Law [PSL] 119-b[2]). Among the regulations established is 16 NYCRR 753.3.1(a)(1). Because RNC is challenging the procedures established by Part 753, its challenge is time barred, as the procedures were in fact enacted on February 9, 2001. An Article 78 challenge to an agency regulation must be commenced within four months.
Nor is the Commission's determination reviewable under the "substantial evidence doctrine." This doctrine applies to review of a proceeding for which a hearing is required to be held and which is held on the record. Nothing in the General Business Law 36 or PSL 119-b requires that an on-the- record hearing be held prior to a finding of a violation and assessing a penalty. The proper standard of review is "arbitrary and capricious." So unless it is clear that the determination is arbitrary and capricious, it is well established that a court cannot substitute its judgment for that of an administrative agency (Dasyure Corporation v New York Department of Health, 90 NY2d 89 [1990]), and therefore a severe limitation is imposed on judicial review in a [*2]proceeding like the present application (see Johnson v Iambic, 74 AD2d 986 [3d Dept 1980]).
There is no dispute that RNC was duly notified of the subject violation. It first received notification in August 8, 2014 with a letter that invited it to call the Damage Prevention Coordinator for further information. On December 24, 2014 RNC received, via certified mail, a letter from the PSC regarding the violation — which gave RNC the choice of three ways to proceed: [1] respond in writing with a complete statement of all relevant facts, including any back up documentation indicating compliance with the regulations; [2] to request an informal conference with PSC Staff, at which RNC would have an opportunity to present evidence to dispute the alleged violation, and to schedule the conference RNC was provided a contact phone number; [3] RNC could pay the assessed fine of $2,500. Here, RNC chose the first option, and responded with a letter "requesting to dispute this violation" including the call ticket number and submitting a 2012 letter that reflected a request that service be turned off to some parts of the area in question. The letter concluded with a request that the violation be removed. The letter did not request a conference, nor does the petition state that RNC call the phone number to schedule a conference with the staff.
Simply stated, in this uncomplicated situation the PSC's August 8, 2018 letter afforded petitioner with all the necessary due process that is required. The letter unambiguous, and it afforded RNC an adequate and appropriate opportunity to present its objections to the violation either in letter form or at a conference. The RNC sent a letter (perhaps inartfully drafted) and opted not to have an informal conference. The RNC's letter did not explain fully why it believed it was not in violation. Regardless, it had then the opportunity — as it now attempts to articulate in this petition — to more fully outline its objections, but failed to do so. Now, for the first time the RNC states the basis for its belief that it had complied with the requirements of one call by providing a map which included 52-56 Bowery as part of its notification. The map is said to highlight the area of excavation. This same argument could have been set out in the RNC's January 21, 2015 letter, which it failed to do. Accordingly, the Court may not consider it raised for the first time in this application.
On this record the Court finds the PSC's determination to be rationally based. The precise location of the dig is required in order that Con Ed could mark it's facilities in the area. The one call system requires identification of the areas of the dig so that all the facilities would be marked. Here the facilities at 52 Bowery were not marked because it was not specifically identified by RNC, and the damage occurred 20 feet from the proposed location. Also rationally based and not excessive is the penalty which the PSC assessed. Considering that the damage was in a heavily populated and traversed section of downtown Manhattan, the potential for damage and injury was significant — thus amply supporting the imposition of a significant fine and towards encouraging others to comply with the requirements of the one call system.
Accordingy, it is
ORDERED, that the Article 78 petition is denied.
This constitutes the Decision and Order of the Court. This original Decision and Order is returned to the attorneys for the Respondents. All other papers are delivered to the Supreme Court Clerk for transmission to the County Clerk. The signing of this Decision and Order shall not constitute entry or filing under CPLR 2220. Counsel is not relieved from the applicable [*3]provisions of this rule with regard to filing, entry and Notice of Entry.
Dated: November 13, 2017
Troy, New York
Henry F. Zwack
Acting Supreme Court Justice
Papers Considered:
Notice of Petition dated March 28, 2017, Verified Petition dated March 26, 2017, together with Exhibits "1" through "7", Memorandum of Law; Supplemental Affirmation of Arthur Miller III, Esq., dated April 28, 2017, together with Exhibit "A";
Verified Answer, sworn to June 7, 2017, together with record in Commission Case 15-G-0659l Memorandum of Law;
Reply Affirmation of Arthur J. Muller, III, Esq., dated June 28, 2017.
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
