State of New York

Supreme Court, Appellate Division

Third Judicial Department

Decided and Entered: October 20, 2016 522187 

________________________________

In the Matter of FMC

CORPORATION,

Appellant,

v

MEMORANDUM AND ORDER

NEW YORK STATE DEPARTMENT OF

ENVIRONMENTAL CONSERVATION,

Respondent.

________________________________

Calendar Date: September 12, 2016

Before: Egan Jr., J.P., Lynch, Devine, Clark and Mulvey, JJ.

__________

Hodgson Russ, LLP, Buffalo (David G. Mandelbaum of

Greenberg Traurig, LLP, Philadelphia, Pennsylvania, admitted

pro hac vice), for appellant.

Eric T. Schneiderman, Attorney General, Albany (Maureen F.

Leary of counsel), for respondent.

__________

Lynch, J.

Appeal from a judgment of the Supreme Court (Elliot III,

J.), entered August 24, 2015 in Albany County, which, in a

proceeding pursuant to CPLR article 78, granted respondent's

motion to dismiss the petition.

Petitioner is the owner and operator of a 103-acre facility

that produced organic and inorganic pesticides, fungicides,

herbicides and insecticides for more than 60 years in the Village

of Middleport, Niagara County. Due to the manufacturing process

and because petitioner dumped and stored chemical waste on its

property, the soil, groundwater and surface water on and near the
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facility became contaminated with myriad chemicals, including

arsenic and lead. In 1980, petitioner submitted a hazardous

waste permit application to the Environmental Protection Agency

(hereinafter EPA) pursuant to the federal Resource Conservation

and Recovery Act (see 42 USC § 6901 et seq. [hereinafter RCRA]). 

That same year, petitioner's facility was added to New York's

registry of hazardous waste disposal sites (see ECL 27-1305 [1]). 

In 1985, the facility shifted from manufacturing to only

formulating pesticides (i.e., mixing and packaging) and continues

to operate in that capacity. After a revised permit application

was submitted to the EPA and respondent, respondent classified a

portion of the facility as having a "[s]ignificant threat to the

public health or environment" (ECL 27-1305 [2] [b] [2]; see 6

NYCRR former 375-1.4 [c]; 6 NYCRR 375-2.7 [a] [4]). In 1987 and

1990, petitioner and respondent executed separate administrative

orders on consent requiring certain remedial and investigative

action under the State Superfund program (see ECL art 27, tit

13).

In 1991, petitioner, respondent and the EPA executed an

administrative order on consent (hereinafter the consent order)

that required petitioner to complete an RCRA facility

investigation to determine the nature and extent of the

contamination. During the investigative process, respondent and

the EPA divided the affected on and off-site property into 11

separate operable units (hereinafter OUs) and directed petitioner

to complete certain interim corrective and remedial measures to

address contamination in areas requiring more immediate

attention. This proceeding involves OUs 2, 4 and 5 comprising

some 500 acres of off-site residential, commercial and school

properties. In 2009, respondent and the EPA approved

petitioner’s draft investigation report in accordance with the

consent order, and directed petitioner to perform a corrective

measure study (hereinafter CMS) to develop and recommend ways to

remediate the contamination. In June 2010, petitioner submitted

its draft CMS report, which proposed eight remedial plans, known

as corrective measure alternatives (hereinafter CMAs). 

In June 2012, respondent issued a draft statement of basis

designed "to inform the public and seek its participation in the

selection of a remedy" to address the contamination in OUs 2, 4
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and 5. Therein, respondent proposed CMA 9, a remedy that

incorporated elements of two of petitioner's CMAs, but exceeded

same by mandating that the arsenic level in the soil in each

affected property not exceed 20 parts per million. In August

2012, petitioner submitted its written response challenging the

selection of CMA 9. By letter dated October 19, 2012, respondent

and the EPA advised petitioner that its CMS report with regard to

OUs 2, 4 and 5 was accepted as final and that the consent order

was "deemed by the [a]gencies to be closed." By correspondence

dated October 25, 2012, petitioner responded that the consent

order could not be "closed" because a final CMA had not been

selected by the EPA. After a public comment period, respondent

issued the final statement of basis wherein it formally selected

CMA 9 on May 28, 2013. The parties entered into a series of

tolling agreements extending the time in which to challenge this

selection through April 30, 2014. On May 1, 2014, petitioner

submitted a "Notice of Dispute and Request for Resolution"

pursuant to the consent order.1 By correspondence dated May 7,

2014, respondent, through counsel, advised that, in light of

petitioner's "refusal" to implement CMA 9, respondent planned to

complete the work at petitioner's expense. 

Petitioner commenced this CPLR article 78 proceeding on May

30, 2014, asserting four causes of action. In the first three

causes of action, petitioner alleges that respondent issued the

statement of basis and proceeded with remedial work in excess of

its authority under the Environmental Conservation Law,

respondent's regulations and the consent order, in contravention

of the EPA's authority under the RCRA and the consent order. By

the fourth cause of action, petitioner alleges that respondent's

selection of CMA 9 was affected by an error of law, was arbitrary

and capricious and an abuse of discretion because it was made in

violation of the consent order and the Environmental Conservation

Law. Respondent moved to dismiss the petition as time-barred and

1 By correspondence dated May 22, 2014, the EPA rejected

petitioner's attempt to challenge the statement of basis pursuant

to the dispute resolution procedures set forth in the consent

order, contending, at least in part, that the consent order had

been "closed" in October 2012.
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then answered. Supreme Court dismissed the petition as timebarred after finding that petitioner's claims accrued in October

2012. Petitioner now appeals. 

A proceeding pursuant to CPLR article 78 must be commenced

"within four months after the determination to be reviewed

becomes final and binding upon the petitioner" (CPLR 217 [1]; see

Matter of Best Payphones, Inc. v Department of Info. Tech. &

Telecom. of City of N.Y., 5 NY3d 30, 34 [2005]). A determination

is "final and binding" where, after a "pragmatic evaluation" of

the context (Matter of Essex County v Zagata, 91 NY2d 447, 453

[1998] [internal quotation marks and citation omitted]), it can

be said that the agency "reached a definitive position on the

issue that inflicts actual, concrete injury and . . . the injury

inflicted may not be prevented or significantly ameliorated by

further administrative action or by steps available to the

complaining party" (Matter of Best Payphones, Inc. v Department

of Info. Tech. & Telecom. of City of N.Y., 5 NY3d at 34; StopThe-Barge v Cahill, 1 NY3d 218, 223 [2003]; see Matter of Essex

County v Zagata, 91 NY2d at 453). "That a particular agency

action is merely a step in the agency's decision-making process

does not render that action nonfinal for purposes of review under

CPLR article 78" (Matter of Riverkeeper, Inc. v Crotty, 28 AD3d

957, 960 [2006]; see Matter of Demers v New York State Dept. of

Envtl. Conservation, 3 AD3d 744, 746 [2004]). 

This dispute centers on respondent's selection of CMA 9 as

the appropriate remedy to remediate the site and its

determination to implement that remedy at petitioner's expense. 

As a threshold matter, we conclude that Supreme Court erred in

dismissing the proceeding as untimely. In doing so, the court

erroneously focused on the October 19, 2012 correspondence from

the EPA and respondent advising petitioner that the consent order

was closed. The court treated this letter as a final

determination for purposes of triggering the statute of

limitations. The flaw in that analysis is that both the EPA and

respondent maintained that remedy selection and implementation
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were not included in the consent order.2 In other words,

respondent contends that the consent order delineated only

petitioner's obligation to complete both the facility

investigation and CMS – which the October 19 letter confirmed

that petitioner had completed to the satisfaction of both

agencies. That being the case, respondent maintains that the

dispute resolution procedures set forth in the consent order no

longer applied and, thus, petitioner was required to actually

commence a CPLR article 78 proceeding within four months, i.e.,

by February 19, 2013.

Respondent's argument overlooks the fact that an actual

remedy had yet to be selected by October 19, 2012. By its terms,

the October 19 letter makes no reference to the selection of a

remedy, notwithstanding the fact that the draft statement of

basis selecting CMA 9 had been issued in June 2012. The actual

selection of a remedy did not occur until respondent issued its

final statement of basis in May 2013. At that point, there is no

2 We are mindful that the consent order provides for the

performance of the CMS in accord with attachment II, incorporated

by reference into the consent order. By its terms, task X in

attachment II specifies that, after petitioner recommends a CMA,

the "EPA will select the [CMA] or [CMAs] to be implemented" and

defines the criteria to be utlized in making the selection. 

Petitioner relies upon this language to sustain its position that

remedy selection was embraced in the consent order and that it

was entitled to follow the dispute resolution procedures in the

consent order to challenge respondent's selection of CMA 9. In

contrast, the EPA and respondent maintain that the quoted phrase

was "merely descriptive of the remedial process" beyond the

consent order, such that the consent order's dispute resolution

procedures do not apply to the remedy selection. If that were

the case, then it is incongruent for respondent to maintain that

the October 19, 2012 letter closing the consent order triggered

the statute of limitations to challenge the selection of CMA 9. 

We need not resolve this impasse between the parties, for even

accepting respondent's premise that remedy selection was not part

of the consent order, the selection did not occur until the final

statement of basis was issued in May 2013.
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dispute that the parties entered into the tolling agreements in

an effort to negotiate a resolution. As petitioner initiated

this proceeding on May 30, 2014, the proceeding is timely. 

Because issue has been joined and the record is fully developed,

we exercise our discretion to consider the substantive claims in

the petition in the interest of judicial economy (see Matter of

Williams v Travis, 20 AD3d 622, 623 [2005]). 

This proceeding involves federal and state statutes and

regulations governing hazardous waste treatment, storage and

disposal. The RCRA, administered by the EPA, primarily governs

the treatment, storage and disposal of hazardous waste "so as to

minimize the present and future threat to human health and the

environment" (42 USC § 6902 [b]; see Meghrig v KFC Western, Inc.,

516 US 479, 483 [1996]); Matter of Thompson Corners, LLC v New

York State Dept. of Envtl. Conservation, 119 AD3d 81, 84 [2014],

lv denied 24 NY3d 910 [2014]). In 1986, the EPA authorized New

York to implement its own hazardous waste program pursuant to the

RCRA (see 42 USC § 6926 [b]; ECL 27-0900 et seq.), thus allowing

the state to "operate in lieu of the Federal [hazardous waste]

program" (51 Fed Reg 17739 [1986]; see Matter of Thompson

Corners, LLC v New York State Dept. of Envtl. Conservation, 119

AD3d at 85). New York's waste management program is set forth in

ECL article 27, title 9 and is "consistent with [RCRA] standards"

(ECL 27-0911 [1]; see Matter of Thompson Corners, LLC v New York

State Dept. of Envtl. Conservation, 119 AD3d at 85). ECL article

27, title 13, which governs cleanup of inactive hazardous waste

disposal sites (see ECL 27-1301 et seq.), obligates respondent to

"implement[ ] a remedial program in the event the responsible

party was unknown, unable or unwilling to ameliorate the

situation" (Matter of New York State Superfund Coalition, Inc. v

New York State Dept. of Envtl. Conservation, 18 NY3d 289, 292-293

[2011]). The consent order was negotiated and issued after the

EPA issued a unilateral "Initial Administrative Order" pursuant

to the RCRA and the New York statute authorizing respondent to

enforce ECL article 27 (see ECL 71-2727 [3]; Matter of New York

Pub. Interest Research Group v Town of Islip, 71 NY2d 292, 306

[1988]). 

Petitioner now alleges that respondent was without

authority to issue the final statement of basis in May 2013 and
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further challenges respondent's May 7, 2014 determination to

implement CMA 9 at petitioner's expense, while rescinding its

"interim decisions" with regard to corrective work performed on

school district property. The gravamen of petitioner's claims is

that respondent's unilateral selection of CMA 9 as the remedial

plan and decision to use the hazardous waste remedial fund to pay

for the remediation was arbitrary and capricious. 

Initially, we find that petitioner was properly subjected

to the provisions of ECL article 27, titles 9 and 13. Title 13

became applicable when petitioner's property was added to the

registry of inactive hazardous waste disposal sites in 1980 due

to its storage of certain hazardous byproducts from the

manufacturing process on the premises (see ECL 27-1303). In

1986, the property was reclassified as a "[s]ignificant threat to

the public health or environment – action required" (ECL 27-1305

[2] [b] [2]). At the same time, due to its status as an operator

and generator of hazardous waste (see 6 NYCRR 370.2; 40 CFR

260.10), petitioner submitted a hazardous waste permit in

accordance with the state's equivalent of the RCRA statute (see

ECL 27-0913). Consequently, we find that respondent was

authorized to assert its authority pursuant to titles 9 and 13

and to issue the statement of basis as part of the permitting

process (see Matter of Occidental Chem. Corp. v New York State

Dept. of Envtl. Conservation, 114 AD2d 233, 238 [1986]). By its

terms, the statement of basis document (see 6 NYCRR 373-1.4 [e])

was the "the final corrective measure for [OUs 2, 4 and 5]"

pursuant to the state's equivalent of the RCRA permitting

statutes and regulations and also the "Record of Decision" for

purposes of selecting a remedial plan for these OUs under title

13 (see ECL 27-0913 [1] [a]; 6 NYCRR 373-1.4 [e]; 375-2.8 [e]). 

The document described CMA 9 to include the excavation and

removal of soil within the affected area to achieve the "arsenic

remedial goal of 20 parts per million with some flexibility to be

employed by [respondent] on a case-specific basis," in part, "to

accommodate property owner concerns." 

Petitioner also contends that respondent did not have any

authority to choose CMA 9 under either the state's equivalent to

the RCRA provisions or the provisions applicable to inactive

hazardous waste sites. As explained within the document, the
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statement of basis was "a hybrid administrative decision under

two complementary [s]tate statutory programs." Under both of the

statutory programs, respondent has the authority to undertake

remedial work. For example, respondent may "clean up or return

to its original state any area where hazardous wastes were

disposed, possessed or dealt in unlawfully" (ECL 27-0916) and

such remedial work is paid from the hazardous waste remedial fund

(see ECL 27-0916 [5]; State Finance Law § 97-b). Respondent may

also direct certain corrective action as a condition of a permit

(see ECL 27-0911; Matter of Thompson Corners, LLC v New York

State Dept. of Envtl. Conservation, 119 AD3d at 87-88). Further,

respondent may require remediation of an inactive hazardous waste

site, where, as here, the site is deemed to be a "significant

threat to the environment" (ECL 27-1313 [3] [a]).

While conceding that petitioner's facility is regulated

under both title 9 and title 13 of ECL article 27, respondent

maintains that it was authorized to select CMA 9 and proceed with

the remedial work pursuant to ECL 27-0916 (1) on the premise that

petitioner "unlawfully" dealt with hazardous waste. Under that

provision, respondent's authority to act exists where the

hazardous waste is managed "unlawfully in violation of [ECL] 27-

0914," i.e., without authorization (ECL 27-0916 [1]; see ECL

27-0914). But here, respondent explained in the statement of

basis that petitioner "does not presently have an operating

permit but is subject to what are called 'iterim status'

requirements." Thus, it appears that, at all relevant times,

petitioner was operating lawfully pursuant to its "interim

status" (6 NYCRR 373-1.3). 

Given the hybrid nature of the statement of basis, and the

fact that petitioner was operating on an "interim status" basis,

we conclude that the procedural framework set forth in ECL 27-

1313 applies (see Matter of New York State Superfund Coalition,

Inc. v New York State Dept. of Envtl. Conservation, 18 NY3d at

296-297). Where, as here, respondent has determined that a site

poses a "significant threat to the environment," the agency may

order an owner "(i) to develop an inactive hazardous waste

disposal site remedial program, subject to the approval of

[respondent], at such site, and (ii) to implement such program

within reasonable time limits specified in the order" (ECL 27-
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1313 [3] [a]). Prior to issuing such an order, the owner is

entitled to "notice and the opportunity for a hearing" (ECL 27-

1313 [4]). Where a responsible party "has failed" to comply with

a remedial order, either because it is unable or unwilling to do

so, respondent may implement the remedial program itself (ECL 27-

1313 [5] [a], [b], [c]).

Here, under the consent order, petitioner developed the CMA

report. The focus in this proceeding turns to remedy selection

and implementation. Under this statutory framework, petitioner

was entitled to both notice (which was provided through the

statement of basis process) and an opportunity for a hearing

prior to the issuance of an order directing petitioner to

implement CMA 9. As it turns out, petitioner was not accorded an

opportunity for a hearing to assert its challenge to CMA 9 and no

implementation order was issued. Absent such an order, we must

agree with petitioner that respondent's determination that it was

authorized to proceed with the remedial work based on

petitioner's "refusal" to perform the work was arbitrary and

capricious. In light of our determination, it is not necessary

to consider petitioner's remaining contentions. 

Egan Jr., J.P., Devine, Clark and Mulvey, JJ., concur.

ORDERED that the judgment is reversed, on the law, without

costs, motion denied, petition granted and matter remitted to

respondent for further proceedings not inconsistent with this

Court's decision. 

ENTER:

Robert D. Mayberger

Clerk of the Court