East Fifties Neighborhood Coalition v Lloyd

[*1] East Fifties Neighborhood Coalition v Lloyd 2006 NY Slip Op 52301(U) [13 Misc 3d 1243(A)] Decided on November 28, 2006 Supreme Court, New York County Stone, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 November 28, 2006
Supreme Court, New York County

EAST FIFTIES NEIGHBORHOOD COALITION, by LINDA SAPUTELLI as Chair; LINDA SAPUTELLI; SISTER ELIZABETH GRAHAM, as Principal of CATHEDRAL HIGH SCHOOL; FENIX INC. d/b/a ROSA MEXICANO RESTAURANT; DAN HICKEY, as owner of ROSA MEXICANO RESTAURANT; NINA ROOT; PATRICIA MCHUGH, JEANNETTE PALADINO; and EILEEN BIZAR, Petitioners,

against

EMILY LLOYD, as COMMISSIONER OF THE NEW YORK CITY DEPARTMENT OF ENVIRONMENT PROTECTION; and the NEW YORK CITY DEPARTMENT OF ENVIRONMENTAL PROTECTION, Respondents,



107282/06

Lewis Bart Stone, J.

This proceeding was commenced by Notice of Motion by Petitioners, a coalition of neighborhood residents and large and small businesses of the area from East 53rd to East 59th Streets and between Sutton Place and Third Avenue, in Manhattan (the "Area"), certain individual residents of the Area, an individual business located in the Area, the owner thereof, and the principal of a girls' high school located in the Area (collectively "East Fifties"), against Respondent, Emily Lloyd, Commissioner of the New York City Department of Environmental Protection and such Department itself (collectively "DEP"), pursuant to Article 78 of the Civil Practice Law and Rules ("CPLR") to challenge a determination by DEP to place a vertical access shaft and facilities ancillary thereto from the surface on the northwest corner of 59th Street and First Avenue to the underground "third water tunnel" now in the process of completion below the streets of Manhattan.

East Fifties' claim is based upon alleged procedural improprieties in DEP's [*2]decision making process in complying with legal requirements allegedly imposed by the State Environmental Quality Review Act ("SEQRA") (NY Environ Cons. L. Art. 8) and the City Environmental Quality Review process ("CEQR"). As a remedy, East Fifties seeks to annul DEP's determination to construct the shaft and to enjoin the construction unless and until the requirements of law under SEQRA and CEQR have been fully complied with. East Fifties also seeks its costs and reasonable attorney's fees.

DEP has answered the petition and in such answer has interposed three defenses, viz: (1) that DEP's decision complied with law and was neither arbitrary nor capricious, (2) that the complaint failed to state a cause of action and (3) that East Fifties claims are barred by the equitable doctrine of laches.

THE THIRD WATER TUNNEL

The principal source of domestic water for the residents, business and government of the City of New York (the "City") lies north and west of the City. This water is presently delivered into the City through two large water tunnels, known as City Water Tunnels Nos. 1 and 2, completed respectively, in 1917 and 1936. Recognizing the continued use and age of these tunnels, the need to inspect them and maintain them from time to time, and to provide for a supply redundancy in the case of a rupture of a tunnel, the City determined that a third water tunnel was essential to assure the City's water supply over the long term and the City commenced, in 1970, to construct such tunnel ("Tunnel No. 3").

Tunnel No. 3, when completed, will be approximately sixty miles long, running through five counties, viz: New York, Bronx, Queens, Kings and Westchester. In Manhattan, the horizontal portions of Tunnel No. 3 will be about 600 feet below the surface. A number of vertical riser shafts are to be constructed from these deep tunnels to the surface from which additional mains will be constructed to connect with the existing water distribution grid. These vertical shafts will be valved to permit a shut off of water to local areas to isolate possible future problems for repair. Accordingly, a number of shafts are required to complete the project. According to the City, such shafts should be located within the existing configured local areas for this purpose. In this controversy, the relevant local area ("Relevant Local Area") is approximately between 46th and 62nd Streets east of Third Avenue. The City has recently determined to construct a shaft within this area, specifically at First Avenue and 59th Street, to be known as Shaft 32B (the "Shaft"). The City expects that at some time after the completion of the Shaft, additional mains will be constructed from the Shaft to tie into trunk mains of the existing City's water distribution system at Third [*3]Avenue in the East Fifties.

At issue in this dispute is whether the Petitioners may challenge the location of the Shaft and its construction, which the parties acknowledge will take about four years. When construction of the Shaft is complete, the Shaft and the machinery needed to direct and shut off water and the tie in mains will be located underground. The head of the Shaft and the associated machinery will be accessed through a surface door or manhole and the construction will thereafter present little or no visible, audible or olfactory impact on the environment or create any material danger. Although the mains to bring water from the Shaft head to the existing grid will be constructed below city streets, their construction will be from the surface.

During the four-year construction period of the Shaft, however, there will be a construction site on the surface, excavation will occur, spoil will be removed, the Shaft will be constructed, and the hole filled. As the tie-in mains will be constructed from the surface, there will be further construction impacts along the path of such mains. As is the inevitable result of virtually any project in midtown Manhattan involving excavation and construction, there will be, at least during a portion of the construction period, noise and vibration, dirt and dust, added traffic from construction and spoil removal vehicles, and obstruction of city streets, thus adversely affecting traffic and traffic patterns. Further, the need for on site storage of construction material and access points for construction vehicles may result in sidewalk blockages. Although any environmental impact of the Shaft will be transient, lasting no longer than the construction period of about four years,[FN1] the City acting through its Department of Environmental Protection, on April 6, 2006, determined that the construction of the Shaft itself could result in potential significant adverse impacts on the environment (within the meaning of such concept under SEQRA) and two days later, on April 8, 2006, issued a "Positive Declaration" and a Draft Scope of Work for a Draft Environmental Impact Statement, and proceeded to prepare an Environmental Impact Statement ("EIS") as if the Shaft was subject to SEQRA. The EIS discusses the tie-in mains in a general manner and the decision considers issues such as road closures which might arise in connection with the routing of these mains in selecting the site for the Shaft. However, the EIS and the decision do not address the actual routes the tine-in mains would actually take, either for the Shaft or for any of the [*4]alternates to the Shaft considered in the EIS. These routes would be determined in the future.

SEQRA, enacted by Chapter 512 of the Laws of 1975 ("Chapter 612") makes governmental actions which may result in a potential significant adverse impact in the environment, subject to an environmental review process. In the City, this process is conducted pursuant to the Rules of Procedure for City Environmental Quality Review ("CEQR"), a local law which the City enacted to provide a procedure by which City projects, subject to SEQRA, are to be reviewed to assure compliance with SEQRA. The issuance of the Positive Declaration and the Draft Scope of Work for Draft Environmental Impact Statement, and the preparation of an EIS were actions required by SEQRA and CEQR for projects subject to them.

Where a siting decision is to be made under SEQRA, the government is required, inter alia, to consider reasonable alternatives and to analyze the impact of the proposed site and the alternative in the EIS. In the EIS for the Shaft, the City initially identified nineteen sites. Applying three criteria, the City screened out fifteen of these sites and included a full environmental analysis in the EIS of the remaining four sites. East Fifties has challenged two of the three criteria used in the decision sieve which ruled out the fifteen sites, as arbitrary and capricious. These two criteria for exclusions were:

"The site would require condemnation of active private property, other than parking lots or vacant lots... The site configuration would not accommodate the required space need for the construction of the Shaft (assuming the minimum width of 39 feet and corresponding length of approximately 175 to 200 feet)." Statement of Finding, January 31, 2006, p.5.

The City argued that the avoidance of condemnation was an appropriate criterion and that the size of the site determined by design criteria for the Shaft developed by its engineers was also appropriate. East Fifties argued that the City's failure to consider other sites available through condemnation was improper and that by use of different designs and engineering criteria smaller sites would be feasible. East Fifties suggested a specific site which met its design criteria and which would only involve the condemnation of a portion of an underground parking garage located under a plaza presently a part of a major office building, and requested that this Court require the City to reopen the EIS so that such site could be considered as an alternate. [*5]

STANDING

The Court of Appeals, in Society of the Plastics Industry, Inc. v. County of Suffolk, 77 NY2d 761 (1991) held that persons and businesses located near construction sites involving government action may complain of in fact injuries which fall "within the zone of interests" or concerns sought to be provided under SEQRA. Accordingly, petitioners have standing to challenge whether the decision to select the site of the Shaft has been made in compliance with SEQRA requirements. DEP does not challenge the standing of East Fifties or any component of East Fifties as a party petitioner here to make such a claim and the Court concurs.

The Parties' initial submissions assumed that the Shaft is subject to SEQRA and CEQR requirements. Because the Shaft is a portion of the Water Tunnel No. 3 project which began in 1970 prior to the adoption Chapter 612, this Court, on October 13, 2006, suggested that the parties address whether the Shaft was subject to SEQRA.[FN2] The parties agreed that Water Tunnel No. 3 itself is not subject to SEQRA, being grandfathered. East Fifties, however, asserts that the Shaft is a different question. The Court authorized the parties additional time to submit on this issue.

While the City did not in its original response expressly object to the applicability of SEQRA, the City did raise as its Second Affirmative Defense that East Fifties failed to state a claim, thus preserving all legal objections, including the applicability of SEQRA. Parties cannot by consent, compel a court to take jurisdiction or to apply a law which does not apply,[FN3] especially where the issue involves a matter of public policy. While the legislature may, by a constitutionally acceptable amendment, confer such power on a court, parties may not. Thus, the Court has addressed whether SEQRA applies to the Shaft.

Chapter 512 became effective on June 1, 1976, except that ECL §8-0113, enacted by such Chapter, became effective earlier, on September 1, 1975. Section 8-0113 authorized and directed the Commissioner of the State Department of Environmental Conservation (the "Commissioner") to "adopt rules and regulations [*6]implementing the provision of ECL §8-0013(1). Such rules and regulations which, pursuant to the powers delegated to the Commissioner by the Legislature, have the force of law, have been adopted and presently constitute 6 NYCRR Part 617 (hereinafter the "Part 617 Regulations").

ECL §8-0111(5)(a) generally excludes or "grandfathers," inter alia, actions undertaken or approved prior to the effective date of Article 8. (i.e. June 1. 1976). As the construction of the Tunnel No. 3 commenced in 1970, it clearly falls under this grandfather provision.

ECL §8-0111(5)(a), however, sets forth two exceptions from the grandfathering of already commenced or already approved projects. They are:

(i) In the case of an action where it is still practicable either to modify the action in such a way as to mitigate potentially adverse environmental effects or to choose a feasible and less environmentally damaging alternative, in which case the commissioner may, at the request of any person or on his own motion, in a particular case, or generally in one or more classes of cases specified in rules and regulations, require the preparation of an environmental impact statements pursuant to this article; or

(ii) In the case of an action where the responsible agency proposes a modification of the action and the modification may result in a significant adverse effect on the environment, in which case an environmental impact statement shall be prepared with respect to such modification.

The first exception only applies where the Commissioner, upon a finding of "practicability," has taken a positive action to include the project under SEQRA. This exception seems designed to address actions which were in the early stages of implementation at the time of the enactment of SEQRA. In any event, such exception does not apply here as the Commissioner has not acted to require SEQRA to apply to the Tunnel No. 3 or any part thereof, although as East Fifties note, the Commissioner has taken such steps with respect to other, unrelated projects which had been commenced at least in part before the effective date of SEQRA to bringing them within its ambit.

The second exception deals with a "modification of the action," where "the modification may result in a significant adverse effect on the environment." The Court of Appeals has addressed the meaning of this clause in Salmon v. Flacke, 61 NY2d 798 (1984) where, in a memorandum decision, it upheld two decisions of the [*7]Fourth Department (reported respectively at 91 AD2d 867 (4th Dept. 1982) and 91 AD2d 868 (4th Dept. 1982)). While the Court's memorandum noted that a change in operations could be "sufficiently substantial" so as to remove the activity from the exclusion clause, it did not find that circumstances in the two cases before it merited such a finding.

Thus, it is clear that SEQRA did not initially apply to the Tunnel No. 3, but that a "sufficiently substantial" modification might have brought such project into the regulatory purview of SEQRA.

It is therefore necessary to ascertain whether or not the Shaft is a part of Tunnel No. 3 project and also to determine whether the decision to site the Shaft represents a "substantial modification" under Salmon, supra.

The principal problem in resolving both questions is that since the enactment of SEQRA, governmental decisions to construct major projects are made differently than they were before. Because SEQRA requires that a proposed project be analyzed as against alternatives as well as a "no action" alternative, and that extensive environmental studies of the alternatives be prepared, it is a rare post-SEQRA project which may effect the environment which proceeds without a fairly comprehensive plan for the project having being drawn up in advance, delineating where each portion of the project is to be located and how it is to be constructed. Tunnel No. 3 was begun before SEQRA was enacted, and thus the City was not effectively required to spell out the entire project plan before proceeding. In fact the City did proceed pursuant to a more generic idea, leaving to a later date decisions such as the location of the Shaft and other shafts and tie-ins to the existing water grid system.[FN4] If there is to be a "Tunnel No. 4," it would be subject to SEQRA and most likely could not proceed without a more detailed and comprehensive plan at the outset. While a change of the Tunnel No. 3 project, for example, to run passenger trains through the tunnel or to extend it to counties not originally contemplated could constitute "substantial modifications," the completion of the project by constructing shafts and tie-in mains to the water grid is clearly part of the original project. Such shafts and tie-in mains were clearly contemplated when Tunnel No. 3 was begun, as it is absurd [*8]to believe anyone would have expended billions of dollars over almost two generations solely to dig a water tunnel which could not connect to the surface distribution water grid and therefore be of any use. Accordingly, under the test of Solomon, supra, this Court finds that the shafts and tie-ins do not constitute a substantial modification so as to subject either Tunnel No. 3 or the Shaft to SEQRA.

In determining whether the Shaft is a part of the grandfathered Tunnel No. 3 project or whether it is not, the concept of "segmentation" is helpful in making the analysis. East Fifties itself has invoked this doctrine in the context of their claim that the environmental review process did not appropriately address the full environmental impact of the Shaft. Their argument is that wherever the Shaft is constructed, there will still be a necessity to connect the upper portion of the shaft to the existing water main system and that such construction will have important and different environmental consequences, depending on where the Shaft is located. Thus, East Fifties asserts, by not including studies of the alternate routes and the impact of the tie-ins and their construction in the EIS, the Shaft EIS was improper as it attempted to "segment" environmental concerns.

Under SEQRA, a project cannot be divided into segments to avoid the appropriate SEQRA review by asserting that no individual segment of a proposed project would by itself require environment review, where the entire project, including the sum of the segments would. East Fifties cites DeFreestville Area Neighborhoods Ass'n v. Town of North Greenbush, 299 AD2d 631 (3d Dept. 2002) and Long Island Pine Barrens Society, Inc. v. Town of Riverhead, 290 AD2d 448 (2d Dept. 2002) in support of this principle. This rule is logical and proper as the impact of an action must be considered as an organic whole. Although these cases clearly assert that segmentation to avoid environmental review is improper, and was improper in the instances before them, the cases do not set forth a clear test defining what is and what is not a segmentation and how the principle is to be applied.

Stewart Park & Reserve Coalition v. Slater, 352 F3d 545 (2d Cir. 2003), a subsequent Federal case, has however, set forth such test and discussed it at length. While the decision involved a challenge to the action of a New York State agency whose decision required compliance with both the National Environmental Policy Act ("NEPA"), 42USC §4332(2)(c) and SEQRA, the Second Circuit implicitly found no difference between these Federal and State statutes on this issue and cited both Federal and New York precedents (including the two above Appellate Division cases) for its conclusion that segmentation is improper. In doing so, it found that "A project has been improperly segmented if the segmented project has no independent utility, no life of its own or is simply illogical when viewed in isolation." Id. at 599. [*9]Applying such standard, the Second Circuit upheld the Federal District Court's finding that a study for a road interchange project near Stewart Airport in Newberg, New York, had not been "segmented," although the study excluded a second interchange which had been an earlier part of a larger project. This definition of improper segmentation presents a useful guide both to prevent improper avoidance of SEQRA, on the one hand, and on the other hand, to avoid meritless litigation to unreasonably delay proper governmental action.

In applying this standard to the Shaft, it is clear that the Shaft has no utility as a stand alone project, and no one would build it, absent connections to both Tunnel No. 3 at the bottom and to the existing water main grid at the top. Thus, to the extent the decision to locate the Shaft at First Avenue and 59th Street is subject to SEQRA, the failure of the City's EIS to include the impact of the surface (or close to surface) tie-ins to the water grid and consider alternate routes of such tie-in mains when considering alternate sites for the Shaft might have constituted an improper segmentation, as East Fifties has asserted. However, the concept of segmentation makes it absolutely clear that the Shaft is an integral part of Tunnel No. 3.[FN5] The Tunnel has no independent utility without shafts and the shafts have no independent utility without Tunnel No. 3.

Further support for the conclusion that the Shaft is a grandfathered portion of the Tunnel No. 3 project may be found in the Regulations adopted by the Commissioner in 1976 in the Part 617 Regulations.

The Part 617 Regulations make it clear that every EIS considered under SEQRA must include a "no action" option, that is each EIS must consider not taking the action proposed NYCRR 617 9(b)(5)(v). As the Part 617 Regulations have the force of law, they must be read pari passu with other provisions of law to determine the applicable rules to be applied to this controversy. When read together with SEQRA's grandfathering provisions it is clear that NYCRR 617 9(b)(5)(v) does not contemplate subjecting a Shaft location decision to SEQRA. The Regulations contemplate situations where a possible rational alternative would be to do nothing, i.e. not build the project. While such alternative may have been rational to consider before the Tunnel No. 3 project was begun, when the decision to build some other tunnel could be balanced against a "no build" option, it is not rational to consider "no build" now that the lateral portion of Tunnel No. 3 is virtually complete. Clearly, the [*10]Commissioner in adopting the Part 617 Regulations never contemplated their applicability to projects materially underway.

Cases cited by East Fifties do not change this conclusion. While both Rye Town/King Civic Ass'n v. Town of Rye, 82 AD2d 474 (2d Dept. 1981) and H.O.M.E.S. v. New York State Urban Dev. Corp., 69 AD2d 222 (4th Dep't 1979) were cases which analyzed the effective date of SEQRA and found the projects considered to be subject to SEQRA review, in both cases the final permit was issued after SEQRA became effective, and construction was not to start until the issuance of the permits. The legislature, subsequent to the adoption of SEQRA in 1975, had adopted more consolidated language in Laws 1977, C 252, §14 to establish that the date of such final permit controlled for the purpose of determining which projects were to be grandfathered under SEQRA.

Petitioners finally generically argue that grandfathering would frustrate the Legislature's intention and fly in the face of established precedent judicial decisions. This Court thinks not. The Legislature in enacting SEQRA effected a sea change in governmental decision making and rationally and appropriately provided for an orderly phase-in of its provisions, including requiring a period of rule making before SEQRA became effective, and providing for grandfathering of projects underway, with provisions for administrative adjustment for special cases by rule of the Commissioner.[FN6] While Tunnel No. 3 is probably the last SEQRA grandfathered project still underway, Tunnel No. 3 was none-the-less grandfathered and has not been removed from such status by the Commissioner or by a substantial revision to the project under the meaning of the Salmon, supra decision.

Accordingly, the completion of Tunnel No. 3 may continue under prior law - the express implication of grandfathering. While by reason of the passage of time it may appear strange that the Shaft is not subject to SEQRA and thus to challenge by a community lawsuit, as is usually the case with city projects, repairing a perceived anomaly is no basis for this Court to apply SEQRA to Tunnel No. 3 or its segments. Nothing, however, need stop the City from making and publishing its own studies, including studies in the form of an EIS or otherwise considering alternatives or seeking public input on other shafts or remaining pieces of the Tunnel No. 3 project, even though, to the extent that such segments are still part of the project, such aspects [*11]of the City decision making process will not be subject to review under SEQRA.

As the petition is an Article 78 petition based on alleged violations of SEQRA, it must therefore be dismissed. By this decision, this Court does not decide that the City's decision to site the Shaft or any other shaft is or would be immune to a timely Article 78 challenge by a person directly affected by such decision on the grounds that such decision was arbitrary or capricious or in violation of any law or procedure other than SEQRA. However, in such a proceeding, not being under SEQRA, the standing to challenge would be the usual narrow rules of standing and timing under CPLR Article 78, and not the expanded rules as discussed in Society of the Plastics Indus. Inc., supra. Whether any of the East Fifties petitioners would have standing to raise such a challenge must be left to a court before which any such challenge is brought.

As this Court has found that this petition must be dismissed on the grounds set forth above, this opinion does not address whether,[FN7] had the decision to site the Shaft been subject to SEQRA, the City's "decision sieve" in excluding certain sites which were not considered was arbitrary or capricious, whether the City had to consider sites available only by condemnation and to what extent and what basis the City's engineering decisions and standards used in this sieve should be reviewed by the Court. While those issues are indeed interesting, and have been well briefed by competent counsel, their determination is unnecessary for this Decision.

The petition is denied.

This is the Decision and Order of the Court.

DATED:NOVEMBER 28, 2006

NEW YORK, NEW YORK

Hon. Lewis Bart Stone

Justice of the Supreme Court Footnotes

Footnote 1: East Fifties asserts that a four year long period of construction creates the Shaft project more than a transient one for which an EIS under SEQRA must be prepared. While four years may have been long had the Shaft been constructed by a private entity, the Shaft is a city Project and four years for a city project does not constitute an inordinate or unusual occurrence.

Footnote 2: If the Shaft is not subject to SEQRA, the fact that the city took steps to review its decision to locate the Shaft as if such decision were subject to SEQRA would not by such action make the Shaft so subject as there is no "opt in" provision in SEQRA. As East Fifties petition is grounded on its assertion that the City's action violated SEQRA, the non-applicability of SEQRA would render East Fifties petition moot.

Footnote 3: To the extent the parties had agreed by contract to resolve a dispute with reference to a statute which might not otherwise apply they may do so under a contract theory. As this is an Article 78 proceeding, they may not do so here.

Footnote 4: As the shafts are being constructed in 2006, some 36 years after the commencement of the Tunnel No. 3 project, the decision not to identify the final shaft location probably made substantial sense at the time, at least with respect to Manhattan shaft sites, as it would have been impossible to predict how Manhattan would develop over such a long period and it would have been inordinately disruptive and expensive to designate shaft sites which would have to lie allow in Manhattan for over 36 years.

Footnote 5: As the issue as to whether the surface tie-ins would be, under this analysis, also a portion of the Tunnel No. 3 project or separate for the purpose of SEQRA grandfathering is not before this Court, this opinion does to address such issue.

Footnote 6: Further, support of legislative awareness of the grandfathering issue is provided by NY Laws 1977, Chap. 252, which was adopted two years after SEQRA was adopted to clarify which ongoing projects were or were not grandfathered. Chapter 242, did not affect the Tunnel No. 3 project.

Footnote 7: Other than the issue of segmentation which is addressed.