Title: In the Matter of Chasm Hydro, Inc. v. New York State Department of Environmental Conservation

State: new-york

Issuer: New York Appellate Court

Document:

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This opinion is uncorrected and subject to revision before
publication in the New York Reports.
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No. 10  
In the Matter of Chasm Hydro, 
Inc., et al.,
            Appellants,
        v.
New York State Department of 
Environmental Conservation,
            Respondent.
Gary C. Hobbs, for appellants.
Owen Demuth, for respondent.
CIPARICK, J.:
On this appeal, we must determine whether a CPLR
article 78 petition in the nature of prohibition lies to prevent
the New York State Department of Environmental Conservation (DEC)
from bringing an administrative enforcement proceeding against
Chasm Hydro, Inc. and the other petitioners for the violation of
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a variety of state water quality laws.  Because petitioners have
an adequate remedy at law and have not demonstrated that the
agency has exceeded its jurisdiction, prohibition does not lie.  
Petitioners own and operate the Chasm Hydroelectric Dam
on the Chateaugay River in the Town of Chateaugay, Franklin
County.  Under the Federal Power Act (FPA), the Federal Energy
Regulatory Commission (FERC) has licensing authority over the dam
and authority to exempt projects from the Act's licensing
procedures (16 USC § 791a et seq.).  Although regulation of
hydroelectric dams is generally vested in FERC, states exercise
some control over a dam's impact on water quality.  Section 401
of the Federal Water Pollution Control Act, commonly referred to
as the Clean Water Act (CWA), requires that any application for a
federal license or permit that may result in discharge into
navigable waters must first receive state certification that the
activities being licensed will not violate the state's water
quality standards (33 USC § 1341 [a]). 
In 1980, before Chasm Dam began operating, petitioners
received a water quality certificate from DEC.  It certified that
the dam's operation would comply with New York's water quality
standards provided that the dam receive DEC approval for any
future construction, abide by applicable state law, and conduct
any draining and refilling for repairs or maintenance gradually
to avoid damage downstream.  FERC issued Chasm an exemption from
certain FPA requirements in 1981, noting that the exemption
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* FERC grants case-specific exemptions from licensing to
small hydroelectric projects of 5 megawatts or less (18 CFR
4.30).
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"requires compliance with any conditions that . . . State fish
and wildlife agencies have determined appropriate to prevent loss
of, or damage to, fish and wildlife resources."* 
In 2005, petitioners informed FERC and DEC that they
wanted to drain the pond in order to repair the dam and penstock,
and in June 2006 petitioners submitted an application to DEC for
any necessary permits.  DEC issued a combined Environmental
Conservation Law article 15 Stream Disturbance Permit and revised
CWA § 401 Water Quality Certificate that authorized draining of
the pond behind the dam.  The Water Quality Certificate stated
that the proposed sediment removal would not violate water
standards under the CWA, "provided that all of the conditions
listed herein are met."  These conditions included limits on the
amount of sediment petitioners could move (200 cubic yards) and
the methods used to remove it, as well as a general requirement
that petitioners minimize downstream turbidity and sediment
accumulation.  The permit explicitly noted that it did not
authorize dam repairs.  In July 2006, FERC authorized repair of
the dam, with "the understanding that all work will be done to
meet the environmental requirements as stipulated on the DEC
permit."  In September 2006, petitioners opened the dam's bottom
drain gate and allegedly discharged approximately 4,000 cubic
yards of sediment into the river.  
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DEC commenced an enforcement proceeding by notice of
hearing and administrative complaint on November 10, 2006,
alleging several violations of the ECL.  The first two causes of
action allege that Chasm violated ECL § 17-0501 and 6 NYCRR §
703.2 by discharging sediment, sand, and paint into the river. 
The third cause of action alleges that Chasm violated ECL § 15-
0501.1 and its stream disturbance permit by disturbing and
removing material from the riverbed.  The fourth cause of action
alleges that Chasm further violated § 15-0501.1 by depositing
sediment in the river without a Stream Disturbance Permit.  The
fifth cause of action alleges that Chasm engaged in dam repair
without a permit, in violation of ECL § 15-0503.01.  Finally, the
sixth cause of action alleges that Chasm discharged substances
injurious to fish, in violation of ECL § 11-0503.1.   
Petitioners commenced this CPLR article 78 proceeding
seeking to enjoin DEC's action as extra-jurisdictional, and DEC
cross-moved for dismissal of the petition.  Supreme Court
dismissed the petition, finding the issue "not ripe for review,"
and noted that petitioners' preemption arguments would be fully
addressed in the administrative proceeding and any resulting
appeals.  The Appellate Division unanimously affirmed,
determining that DEC has authority to regulate petitioners'
activity in order to protect water quality.  We granted leave to
appeal and now affirm on different grounds.
Petitioners contend that DEC's authority over a
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federally regulated dam is preempted by federal law and that DEC
is therefore proceeding in excess of its jurisdiction (see Matter
of Niagara Mohawk Power Corp. v New York State Dept. of Envtl.
Conservation, 82 NY2d 191, 193-194 [1993]).  In response, DEC
argues that, because CWA § 401 (d) authorizes it to enforce
violations of New York's water quality standards (33 USC § 1341
[a]), it is acting within its authority by bringing this
administrative enforcement proceeding against Chasm.  We conclude
that petitioners have failed to meet their heavy burden, as they
have not established a clear legal right to relief or that
prohibition would provide a "more complete and efficacious
remedy" than the administrative proceeding and resulting judicial
review (Matter of Town of Huntington v New York State Div. of
Human Rights, 82 NY2d 783, 786 [1993]; accord Matter of City of
Newburgh v Public Empl. Relations Bd. of State of N.Y., 63 NY2d
793, 795 [1984] ["prohibition does not lie against an
administrative agency if another avenue of judicial review is
available, absent a demonstration of irreparable injury to the
applicant"]).
 Petitioners have not clearly established that DEC's
enforcement action is in excess of its jurisdiction.  Whether
these causes of action fall within the state's power to
"determine[] that construction and operation of the project as
planned would be inconsistent with one of the designated uses" of
the water (PUD No. 1 of Jefferson Cty. v Washington Dept. of
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Ecology, 511 US 700, 714 [1994]) should be determined, in the
first instance, through the administrative process.  In addition
to the issues raised before this Court, the administrative
proceeding should address whether the dam, as an exempt project,
should be treated the same as a licensed project for the purpose
of preemption analysis.
The courts below properly dismissed the article 78
petition.  Accordingly, the order of the Appellate Division
should be affirmed with costs.
*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *
Order affirmed, with costs.  Opinion by Judge Ciparick.  Chief
Judge Lippman and Judges Graffeo, Read, Smith, Pigott and Jones
concur.
Decided February 16, 2010