State of New York v City of Yonkers
Annotate this CaseDecided on August 18, 2006
Supreme Court, Westchester County
State of New York, DENISE M. SHEEHAN, as Acting Commissioner of the New York State Department of Environmental Conservation, and NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, Plaintiffs,
against
City of Yonkers, Defendant.
02-21081
Francis A. Nicolai, J.
This action for injunction and other relief arises as a result of illegal discharges of raw sewage into the Bronx River in the City of Yonkers (hereinafter "Yonkers") since 2002.
After summary judgment was granted by this Court to plaintiff State of New York (hereinafter "State") on its claims for a permanent injunction requiring Yonkers to abate its ongoing discharges of raw sewage from its storm sewers into the Bronx River (Nicolai, J., October 26, 2004), an Order and Judgment was entered on February 22, 2005 (hereinafter "Judgment") which set forth a schedule for remediation and abatement. Although the schedule for abatement which was proposed by the State was disputed by Yonkers, which had submitted a counter-order providing for a substantially longer period of time for compliance (until 2008 and 2010), this Court determined that the plaintiff's proposed Order and Judgment would be accepted and was signed by this Court (Nicolai, J., Feb. 14, 2005).
The Judgment was appealed by Yonkers, which appeal is still pending. Yonkers asserted that an automatic stay applied, and upon the State's application to the Appellate Division, Second Department, that court vacated "any automatic stay which is in effect" by Order dated May 16, 2005. The Order was served upon Yonkers with notice of entry on May 20, 2005. [*2]
Enforcement provisions were included in the Judgment to "ensure [Yonkers'] prompt compliance with this Order." It provides for payment of penalties to the State in the amount of $100/day for Day 1 through Day 30, $500 per day for Day 31 through Day 60, and for $1,000 per day for Day 61 and thereafter "in the event Yonkers fails to perform any obligation required under this Order." Penalties accrue "for each day that elapses until Yonkers' failure to perform the obligation is cured" ( ¶ 10 and ¶ 11).
Such civil penalties are "punitive in nature, serving the purposes of both retribution and deterrence, in addition to restitution (cite omitted)" (State v. Wallkill, 170 AD2d 8, 11 [3d Dep't 1991]).
It can scarcely be doubted that, for a plaintiff who is injured or faces the threat of future injury due to illegal conduct ongoing at the time of suit, a sanction that effectively abates that conduct and prevents its recurrence provides a form of redress. Civil penalties can fit that description. ..[A] threat has no deterrent value unless it is credible that it will be carried
out. .. A would-be polluter may or may not be dissuaded by the existence of a remedy on the books, but a defendant once hit in its pocketbook will surely think twice before polluting again" (Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), 528 U.S. 167, 186-187[2000]).
Because Yonkers failed to comply with certain obligations under the Judgment, penalties were assessed by the State in two separate "Determinations" dated August 9, 2005 and February 28, 2006.
The Judgment provided that any application to annul or modify such Determinations could be made by petition served and filed within 30 days of service of the Determination, that the procedures and standards applicable to an Article 78 proceeding would apply to any such petition, and that Yonkers would have the burden of proof on any such petition. The Judgment further provided that such Determination shall not be set aside by the Court except upon a finding that such determination is arbitrary, capricious, contrary to law, or inconsistent with the Judgment (¶15 and ¶16).
In two separate petitions, Yonkers seeks (1) to annul the August 9, 2005 Determination, as to which the State has cross-moved for a judgment awarding stipulated penalties and for appointment of an environmental monitor; and (2) to annul the State's February 28, 2006 Determination. As to this Determination, the State has moved for a judgment awarding stipulated penalties. Both petitions, the cross-motion and the motion are consolidated for purposes of this decision.
An administrative penalty must be upheld unless it "is so disproportionate to the offense as to be shocking to one's sense of fairness thus constituting an abuse of discretion as a matter of law' (cite omitted)" (Waldren v. Town of Islip, 6 NY3d 735 [2005]).As more specifically set forth below, except as to the failure to timely submit to the State a check in the amount of $13,510 as required by the Judgment, the Court concludes that the remaining penalties are not so [*3]disproportionate "as to be shocking to one's sense of fairness."
August 9, 2005 Determination
In its Determination dated August 9, 2005 penalties were assessed for Yonkers' failure to file quarterly progress reports commencing 90 days after service of the Order and Judgment with notice of entry, i.e., commencing on June 6, 2005, and for Yonkers' failure to deliver a check to the State in the amount of $13,510 within 30 days of service of the Order and Judgment, i.e., by April 5, 2005.
It is undisputed that Yonkers failed to submit the first progress report which was due on June 6, 2005. A penalty of $18,000 through August 5, 2005 was assessed together with additional penalties until Yonkers cured its continuing violation by submitting the report (Determination, ¶11 ). Although some materials were thereafter provided to the State in November 2005 relating to Yonkers' remedial activities from February 23, 2005 through October 2005, it was not accompanied by completed progress reports; and it is undisputed that the first complete progress report was not filed until March 1, 2006. According to counsel for the State, this results in a total penalty for this violation of $453,000.
It is also undisputed that Yonkers failed to deliver the check for $13,510, which was due on April 5, 2005, until September 9, 2005. The State assessed a penalty of $80,000 from the due date of April 5, 2005 through August 5, 2005 and additional penalties until the City cured its continuing violation for failure to deliver the check (Determination, ¶11). According to plaintiff's counsel, the total penalty for this failure through September 9, 2005 is $115,000 .
As to the penalties imposed in the August 9, 2005 Determination, Yonkers contends that the State incorrectly included in its computation the 48-day period of the automatic stay, which was in effect from March 29, 2005, the date it filed its notice of appeal, until the stay was vacated on May 16, 2005. Yonkers contends that any penalty for failure to file a progress report on June 6, 2005, should not commence until 48 days after June 6, 2005, and that the penalty for failure to deliver the $13,510 check by April 5, 2005, should not commence until 48 days after April 5, 2005. (This argument is not raised as to the February 22, 2006 Determination).
CPLR 5519 (a), by its express terms, only provides a stay of proceedings toenforce the judgment or order appealed from [emphasis added]. Thus, when a stay is obtained pursuant to this subdivision it has the effect of temporarily depriving the prevailing party of the ability to use the methods specified by law (see, e.g., CPLR art 51, entitled "Enforcement of Judgments and Orders Generally") to enforce the executory provisions of the judgment or order appealed from ( cite omitted) (Pokoik v. Department of Health Servs., 220 AD2d 13, 14-15 ([2d Dep't 1996]).
The Court agrees that Yonkers was entitled to the benefit of the stay as to the delivery of the check by April 5, 2005, which fell within the period in which Yonkers claims it was entitled to an automatic stay. Although the Appellate Division did not specifically rule that there was an [*4]automatic stay in effect upon filing the notice of appeal on March 29, 2005, under the circumstances herein, the Court would agree with Yonkers' contention that it could rely on such a stay from March 29, 2005, the date of filing of the notice of appeal, until it was vacated on May 16, 2005.
While the Court does not condone the lateness of the payment (which is not even explained by Yonkers), the Court finds that the penalty for this violation of $80,000 as set forth in the August 5, 2006 Determination and $115,000 through September 9, 2005, the date of payment, is disproportionate to the offense, particularly as the purpose of the penalty provisions in the Judgment was to compel continued remediation and abatement of the raw sewage discharge. Reimbursement to the State for testing done prior to the entry of the Judgment would not further that purpose. However, the State shall be entitled to statutory interest from May 16, 2005, the date the stay was vacated, until September 9, 2005, the date of payment.
As to the penalties assessed for failure to file the first quarterly report which was due on June 6, 2005, there was no stay in effect on June 6, 2005, and the penalties were therefore correctly computed from June 6, 2005.
Despite counsel's assertions that relevant work was being performed in 2005 after the judgment was entered (see affirmation of Mark W. Blanchard, Esq., dated October 21, 2005, together with exhibits B and C, and J and K) , the failure to file the first quarterly report until March 1, 2006 is totally unexplained. Counsel asserts only that Yonkers was "merely late with a quarterly report" and that "the late quarterly report is based on the City's good faith analysis of the time line while the parties were awaiting the Appellate Divisions decision on the State's Motion to Vacate any Stay" (see affirmation cited above). Even accepting counsel's contention as to the "time line," there is no explanation for the delay of approximately 8 months subsequent to the expiration of the 48-day period claimed by Yonkers.
These reports were required in order to document Yonkers' progress in abating the discharges of raw sewage, and the failure to provide the first quarterly progress report until March 1, 2006, deprived the State of meaningful review of the progress of the remediation in the nine months subsequent to entry of the Judgment.Therefore the State would be entitled to assess penalties for Yonkers' continuing failure to file a completed first quarterly report until March 1, 2006.
February 28, 2006 Determination
In its Determination dated February 28, 2006, penalties were assessed for Yonkers' failure to comply with those provisions in the Judgment that required Yonkers to eliminate by November 1, 2005 (240 days after service of the Order and Judgment) its dry weather sewage discharges into the Bronx River from three of its most polluting storm sewer outfalls ("priority outfalls") and submit certification to the State that it has done so.
[*5]
Testing performed by the State on January 27, 2006 showed that the dry weather discharges from the McLean Avenue, Glen Road, and Raybrook Avenue storm sewer outfalls were contaminated with fecal coliform bacteria which greatly exceeded the applicable water quality standards. Based on those results and Yonkers' failure to certify its abatement of sewage discharges from these outfalls, the State issued a Determination on February 28, 2006 finding that Yonkers was in violation of the Judgment and assessing penalties from November 5, 2005 through February 22, 2006 in the amount of $71,000 for the McLean Avenue outfall, $71,000 for the Glen Road outfall, and $71,000 for the Raybrook Avenue outfall, plus additional penalties until the City remedies the discharge. According to counsel for the State, the penalty for these failures totals $564,000 through May 31, 2006.
After this Determination was issued, the State moved for judgment awarding penalties. Thereafter, Yonkers served and filed a petition on June 16, 2006, in which it seeks to vacate and annul the February 28, 2006 Determination as arbitrary and capricious.
The State contends that this petition was filed beyond the 30-day period set forth in the Judgment which provides as follows: "To be timely, a petition must be served and filed within 30 days of service of the Determination being challenged. If Yonkers fails to timely serve and file such petition following a State Determination, such Determination shall be final and binding upon the City" (¶15).
The Court agrees that this petition is untimely. The thirty day period commenced on March 2, 2006, upon service of the February 28, 2006 Determination on Yonkers. Thereafter, by stipulation dated March 30, 2006, the parties stipulated "[T]hat in computing the time period by which Yonkers may serve and file a timely petition challenging the State's February 28, 2006 Determination, the time between March 15, 2006 and April 30, 2006 (the "Tolling Period") shall not be included." Therefore, Yonkers was required to file its petition on or before May 23, 2006, which it failed to do.
Yonkers' contention that it had until June 16, 2006 to file its petition is not supported by the language of the stipulation which defined the "tolling period" and which set a "return date" (not a filing date) of June 16, 2006 for all pending petitions and motions including "any petition by the City" concerning the February 28, 2006 Determination (Stipulation dated March 30, 2006, paragraphs 2 and 3). Therefore the petition is dismissed for failure to timely serve and file it.
Even if the Court were to consider the merits of Yonkers' petition, it would have to be denied.
Yonkers asserts that it has spent in excess of $4 Million for remediation. It accepted two bids on March 21, 2005 for work in the amount of over Two Million Dollars. These bids are for "Rehabilitation of Sanitary and Storm Water Sewers ...at Various City Locations" (Exhibits B and C annexed to affirmation of Mark W. Blanchard, Esq., dated October 21, 2005). Yonkers provides payment vouchers dated August 22, 2005 for Two Million Dollars each ( [*6]Exhibits J and K annexed to the same affirmation) for "cleaning and lining of sanitary and storm sewers" (Exhibit J) and for "rehabilitation of storm and sanitary sewer" (Exhibit K) which work was completed in June, July and August 2005. While it is not disputed that this work was performed, counsel's conclusory assertion that these payments demonstrate Yonkers' remediation efforts is insufficient as there is no explanation as to whether or to what extent these expenditures were in fact for work related to storm sewers in the subject three priority outfalls.
Narrative Reports (Exhibits L through Exhibit AA annexed to affirmation of Mark W. Blanchard, Esq., dated June 16, 2006) reference work performed from 2003 through 2006 to detect and repair improper third-party private connections resulting in discharge of raw sewage to storm sewers, including Reports for the three subject outfalls (Exhibits M, N and
AA) . Again, other than counsel's conclusory assertions, there is no explanation, except as to a few private owners who were uncooperative or were in the process of obtaining repairs, for the failure to abate the conditions in the three subject outfalls prior to November 1, 2005.
The Narrative Reports for the subject three outfalls indicate that most of the work referred to was completed prior to the January 27, 2006 testing. As the results of the January 2006 testing are not disputed, and there is no explanation from Yonkers as to the effect of any repairs completed (or to be completed by private homeowners) after the January 2006 testing, it appears, therefore, that these violations are continuing.
Conclusion
Except as to the penalty imposed for failure to timely deliver the check, this Court does not find the penalties imposed to be so disproportionate to the offense as to be shocking to one's sense of fairness.
The schedule of proposed penalties in the Judgment was not opposed or disputed by the City of Yonkers, but in fact was also adopted and set forth in the City's proposed Order and Judgment (see Plaintiff's Exhibit 14). The penalties are significantly less than the penalties that are allowed pursuant to statute (Environmental Conservation Law §71-1929[1]) which permits a penalty of up to $37,500 per day for each violation. There was no notification by Yonkers of a "Force Majeur Event" which would have prevented its performance (Judgment ¶17 and ¶18). Any contention that Yonkers did not have enough time to complete the work under the schedule set forth in the Judgment is unavailing as these same contentions were raised and rejected upon the granting of summary judgment to the State in October 2004, and upon submission of Yonkers' proposed Judgment in February 2005.
As stated above, Yonkers' failure to abate the conditions in the three subject outfalls by November 1, 2005 and thereafter is not adequately explained. Yonkers has also failed to explain the delay in filing the first quarterly report until March 1, 2006.
Under these circumstances, it cannot be said that the penalties for these failures as set [*7]forth in the August 9, 2005 Determination or in the February 28, 2006 Determination are "so disproportionate to the offense as to be shocking to one's sense of fairness"(Waldren v. Town of Islip, 6 NY3d 735 [2005]); see also Deutsch Relays, Inc. v. New York State Dep't of Environmental Conservation, 179 AD2d 756 [ 2d Dep't 1992]).
Accordingly, the petition as to the August 9, 2005 Determination is granted in part and denied in part; and the cross-motion for judgment awarding penalties is granted to the extent that the State is entitled to judgment for penalties until March 1, 2006 for failure to file the first quarterly report, and is entitled to statutory interest as to the late payment from May 16, 2005 through September 9, 2005.The petition as to the February 28, 2006 Determination is dismissed for failure to timely file and serve it. The State's motion for judgment awarding penalties as to the February 28, 2006 Determination is granted, and the penalties due for this violation shall be calculated as of June 23, 2006, the return date of these petitions and motions.
Calculation of the amount of penalties shall be annexed to the proposed Judgment to be submitted by the State. Yonkers shall pay the total amount of such penalties within 120 days of the date of service upon it of the Order and Judgment to be entered herein.
Although in its initial cross-motion with regard to the August 9, 2005 Determination, the State sought an order permitting the use of the penalties for an environmental monitor, the State now indicates it would support the use of the funds, to be held in an escrow account controlled by the State, to fund stormwater retrofit projects within the Bronx River Basin which would supplement Yonkers' obligations under the Judgment to eliminate its dry weather discharges of pollutants but would not apply to satisfy any of the City's environmental legal obligations under the Judgment (see Reply Affirmation of Philip Bein, Esq., dated June 21, 2006). The Court agrees that this is an appropriate use of these funds, and the State shall hold the penalties in escrow for this purpose.
Settle Order and Judgment (22 NYCRR 202.48).
Dated: White Plains, New York
August, 2006
____________________________________FRANCIS A. NICOLAIA.J.S.C.
TO:
ELIOT SPITZER
Attorney General of the State of New York
Attorney for the Plaintiffs
The Capitol
[*8]
Albany, New York 12224
FRANK J. RUBINO
Corporations Counsel
Attorney for Defendant
City Hall, Room 300
Yonkers, New York 10701
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