In the Matter of Sierra Club, et al., Appellants,v.Village of Painted Post, et al., Respondents.BriefN.Y.October 13, 2015TO BE SUBMITTED APL 2014-00266 Steuben County Index No.: 2012-0810 Appellate Division, Fourth Department Docket No. CA-13-01558 Court of Appeals State of New York In The Matter of the Application of the Sierra Club; People for a Healthy Environment, Inc.; Coalition to Protect New York; John Marvin; Theresa Finneran; Michael Finneran; Virginia Hauff; and Jean Wosinski; Petitioners, - Against- The Village of Painted Post, Painted Post Development, LLC; SWEPI, LP; and Wellsboro and Corning Railroad, LLC. Respondents. Docket # CA 13-01558 BRIEF OF THE NEW YORK STATE CONFERENCE OF MAYORS AND MUNICIPAL OFFICIALS AS AMICI CURIAE NEW YORK STATE CONFERENCE OF MAYORS & MUNICIPAL OFFICIALS 119 Washington Avenue, 2nd Floor Albany, New York 12210 Telephone: (518) 463-1185 Wade Beltramo, General Counsel wade@nycom.org TABLE OF CONTENTS TABLE OF CONTENTS 3 TABLE OF AUTHORITIES 5 PRELIMINARY STATEMENT 7 INTEREST OF AMICI. 8 STATEMENT OF FACTS 10 ARGUMENT 10 POINT I 10 THE NATURE OF LOCAL GOVERNMENT ACTIONS AND DETERMINATIONS IN GENERAL, AND LAND USE MATTERS IN PARTICULAR, DEMAND THAT THE PRINCIPLE OF STANDING BE CLEARLY ARTICULATED AND NARROWLY DEFINED TO AVOID OVERBURDENING LOCAL GOVERNMENTS AND THE COURTS, WHILE AT THE SAME PROTECTING AGGREVIED PARTIES 10 POINT II 14 BECAUSE DUPLICATIVE SEQRA REVIEWS MUST BE AVOIDED, THE TRIAL COURT'S DECISION TO IMPOSE AN ADDITIONAL, REDUNDANT SEQRA REVIEW MUST NOT BE REINSTATED 14 CONCLUSION 19 3 TABLE OF AUTHORITIES Cases City Council of City of Watervliet v Town Board ofTown of Colonie, 3 NY3d 508 [2004] IS Cross Westchester Dev. Corp v Town Board ofTown of Greenburgh, 141 AD2d 796 [2d Dept 1988] IS Jackson v New York State Urban Development Corp., 67 N.Y.2d 400, [1986] 16 Sierra Club v Village ofPainted Post, No. 2012/00810 [Sup Court, Steuben County Apr. 8, 2013] IS Statutes Environmental Conservation Law § 8-0105 12 Other Authorities Rick Karlin, "Lawsuits extract $1B from localities a year," Times Union Online, July 26, 201213 Rockefeller College of Public Affairs & Policy, "Assessing the Fiscal Impact of Lawsuits on New York State Municipalities," February 2011 13 Rockefeller College of Public Affairs & Policy, "Assessing the Fiscal Impact of Lawsuits on New York State Municipalities," Report Draft Two, February 2012 14 Regulations 6 NYCRR § 617.2[b] 12 6 NYCRR § 617.4[b][4]; IS 6 NYCRR § 617.5[c][25] IS 5 I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I PRELIMINARY STATEMENT The New York State Conference of Mayors and Municipal Officials respectfully submits this memorandum of law amicus curiae in support of the Respondent, the Village of Painted Post. Sound public policy dictates that the decision of the Appellate Division, Fourth Department, must be upheld. Specifically, the Court's ruling that Petitioners lack standing to maintain the instant action must be upheld to avoid creating confusion and subjecting local governments across New York to an endless parade of meritless legal actions by disgruntled activists, interest groups, and individuals who are unsatisfied with municipal actions which are in compliance with State laws and regulations. Moreover, the trial court's classification of the sale of 1,000,000 gallons per day (gpd) of water as an Unlisted action necessitating environmental review under the State Environmental Quality Review Act (SEQRA) is incorrect because the Village had already completed the requisite SEQRA reviews for both the generation and sale of the surplus water and the construction of the transloading facility to transport the surplus water. If the Appellate Division's decision is reversed and the trial court's decision reinstated, the day-to-day operations of municipally-owned water systems will be subject to unnecessary, heighted scrutiny beyond what is required by the SEQRA laws adopted by the State legislature and the SEQRA regulations promulgated by the Department of Environmental Conservation. If reinstated, the trial court's holding would allow practically any opponent of a municipal water sale to require municipalities to perform unnecessary, redundant SEQRA reviews of surplus water agreements where a court arbitrarily decides that the amount of water being sold should be considered an Unlisted Action. Furthermore, if the Court of Appeals allows individuals such as Petitioners, who have articulated only generalized grievances not distinct 7 from the public at large, to commence and maintain lawsuits, the local governments could be paralyzed by a flood of litigation. INTEREST OF AMICI NYCOM is a not-for-profit, voluntary membership association consisting of 581 of the State's 609 cities and villages, thereby representing the vast majority of such municipalities. This case involves a matter of statewide concern to all cities and villages. The Appellate Division's decision should be upheld, as it protects local governments and the courts from litigation that is merely obstructionist, generally meritless, and in which the petitioners are not alleging to be suffering from any harm that is distinct from public-at-large. If the Appellate Division decision is overturned, NYCOM's city and village members would be substantially impacted. Additionally, the trial court's decision requiring the Village of Painted Post to complete an additional SEQRA review, above and beyond already statutorily completed SEQRA review, amounts to a drastic departure from well-settled interpretations of SEQRA and will have a profoundly damaging impact on municipalities across this state. By holding in favor of the Petitioners and overturning the Village's approval of the Agreement, the trial court incorrectly held that the mere use of 1,000,000 gpd from a water supply that had been constructed over 100 years ago, fully permitted under applicable law for a daily capacity well in excess ofthe combined village customer demand and amount needed for the proposed sale, is an Unlisted action necessitating further SEQRA review. If reinstated, the trial court's decision would, in essence, require NYCOM's member municipalities to perform SEQRA review for any action involving the sale of surplus water where they otherwise would not be required to undertake a SEQRA review. In granting the relief requested by the Petitioners, the trial court stepped into 8 the shoes of the New York State Legislature, creating a new standard not found in any State law or regulation. While local governments value SEQRA as a powerful tool to ensure that a proposed action's potential environmental and community impacts are considered prior to undertaking that action, municipalities are frequently sued based on alleged SEQRA violations. As such, municipalities have a vested interest in ensuring that New York's courts give proper deference to their determinations under SEQRA when local government officials faithfully adhere to the intricate regulatory scheme crafted by the State Legislature and DEC. All of the municipalities represented by NYCOM have the authority to enter into agreements to sell surplus water to public and private entities, the profits of which may be used for any municipal purpose. These water agreements are a significant source of revenue for local governments that are struggling financially during the current economic crisis faced by municipalities across this state. By requiring municipalities to perform a SEQRA review of the sale of surplus water from already constructed and permitted water supplies with approved capacities, the trial court has imposed an unfunded mandate on local governments struggling to do more with less on a daily basis. A holding in favor of the Petitioners would have a chilling effect on such agreements across the State. Moreover, there is no indication that, if it were reinstated, the trial co~rt's expansion of the standing standard and the creation of a court-made SEQRA review would not be applicable to other types of local government actions. By its very definition, SEQRA applies to every action of a local government. And while the list of Type II Actions (those actions which do not require any SEQRA review) is extensive, it is not exhaustive. Consequently, there is a substantial universe of Type I and Unlisted Actions that do require some level of SEQRA review on the part of local government officials. The trial court's decision is a novel interpretation of 9 SEQRA, which would create the unintended and untenable situation of mandating municipal officials to complete SEQRA reviews within SEQRA reviews. There is no evidence that the State Legislature or DEC ever intended for such a scenario, nor is such a process tenable as it would create an essentially redundant process whereby local officials make the same determination on the same facts or local officials reach opposite conclusions and determinations based on the same facts, which would be by its very nature arbitrary and capricious. Such a process must be avoided. STATEMENT OF FACTS The Conference of Mayors adopts the statement of facts presented by Respondents. ARGUMENT POINT I THE NATURE OF LOCAL GOVERNMENT ACTIONS AND DETERMINATIONS IN GENERAL, AND LAND USE MATTERS IN PARTICULAR, DEMAND THAT THE PRINCIPLE OF STANDING BE CLEARLY ARTICULATED AND NARROWLY DEFINED TO AVOID OVERBURDENING LOCAL GOVERNMENTS AND THE COURTS, WHILE AT THE SAME PROTECTING AGGREVIED PARTIES Standing is a fundamental principle of jurisprudence that serves myriad purposes including, but by no means limited to, being a litmus test for ripeness of a dispute, narrowing the issues and focusing the arguments that the courts must address, limiting litigation to those instances where there is an actual injury, and preventing the use of litigation as a delaying tactic or a method of litigating an opponent into submission. These goals are even more important for litigation affecting local government actions and determinations because the very nature of local government operations and regulations is fraught with confrontation. Rare is the case where a decision by municipal officials is fully supported by 10 everyone in the community. To the contrary, confrontation surrounding and opposition to private projects which require municipal approval or to municipal projects or actions undertaken directly by a municipality (such as the case before this court) is the norm. The vast majority of these disputes revolve around land use, either in the form of traditional zoning regulations, other municipal land use regulations, or the municipality undertaking a project itself that involves the development of land within the municipality. Abutting and nearby property owners and tenants are invariably affected by these land developments and uses. Consequently, regardless of the determination made or the action taken, there is unfailingly an aggrieved party with an interest in resorting to the courts for redress that they could not get via the political, legislative, or administrative process. Standing serves as a necessary bulwark against frivolous litigation or litigation that is used as a last ditch means of achieving results that were more appropriately addressed via the local legislative or administrative process. In the context of municipal water and waste water systems, the expansion of standing could be widespread and significant. New York is home to 1,515 municipal water systems and 682 municipal waste water facilities. The sale of excess capacity in these systems has long been a common practice, and current fiscal pressure on local officials to find revenue sources besides the real property tax have spurred local governments across the State to maximize the revenue from selling surplus water and from processing waste water from sources outside of the municipality. Any loosening of the standing requirement would open these sales of surplus capacity to any disgruntled resident, business, or property owner who is opposed to these transaction. Normally, the New York State Court system would not be an appropriate venue for individuals who are not a party to the sale of surplus municipal water or waste water treatment capacity to challenge such a transaction. However, should this Court expand the definition of 11 standing, any resident disturbed by the noise of trucks picking water up from municipal water plant or any business owner impacted by the exhaust from trucks delivering waste water to a municipal treatment facility will be able to claim standing to challenge the sale of such product or servIce. This Court must also recognize that any expansion of standing in general and how it applies to any SEQRA review in particular will have wide-reaching implications, far beyond the sale of surplus water and waste water system capacity. The SEQRA process must be completed for every action undertaken by a State and local government entity. "Action" is defined by Environmental Conservation Law § 8-0105 to include: (i) projects or activities directly undertaken by any agency; or projects or activities supported in whole or part through contracts, grants, subsidies, loans, or other forms of funding assistance from one or more agencies; or projects or activities involving the issuance to a person of a lease, permit, license, certificate or other entitlement for use or permission to act by one or more agencies; (ii) policy, regulations, and procedure-making. The Department of Environmental Conservation expounded upon what constitutes an action subject to SEQR, defining "actions" to include: (1) projects or physical activities, such as construction or other activities that may affect the environment by changing the use, appearance or condition of any natural resource or structure, that: (i) are directly undertaken by an agency; or (ii) involve funding by an agency; or (iii) require one or more new or modified approvals from an agency or agencies; (2) agency planning and policy making activities that may affect the environment and commit the agency to a definite course of future decisions; (3) adoption of agency rules, regulations and procedures, including local laws, codes, ordinances, executive orders and resolutions that may affect the environment; and (4) any combinations of the above. 6 NYCRR § 617.2[b] 12 Consequently, any broadening of the standing doctrine in this particular case will have broad ramifications not only for New York's cities, villages, towns, and counties, but the State as well. Opponents to area and use zoning variances, special use permits, site plan and subdivision approvals, historic and architectural review approvals, adult use permits, and any other land use or development which requires municipal approval will look to take advantage an expanded standing standard to block the use or development. Moreover, any State or local government "project or physical activity" opposed to by a member of the community could be subject to unnecessary litigation if the definition of standing is expanded. Any public infrastructure project, whether it be the construction or redevelopment of a public park, a community center, a road, a bridge, a senior or youth center, a salt shed, water and sewer lines, a fire house, or a DPW garage could be litigated by residents or property or business owners who are not suffering any injury distinguishable from the rest of the public at large. The trial court's relaxed interpretation of standing is particularly troublesome for municipalities, who are viewed as having "deep pockets" and are already preferred targets in litigation. According to data from the Rockefeller College of Public Affairs and Policy, local governments spend $1 billion on judgments and other costs from lawsuits (Rick Karlin, "Lawsuits extract $1B from localities a year," Times Union Online, July 26,2012). In a recent study, the Rockefeller College found that these judgment costs frequently absorb a significant portion of the local government's budget (Rockefeller College of Public Affairs & Policy, "Assessing the Fiscal Impact of Lawsuits on New York State Municipalities," February 2011). For instance, the Village of Broadalbin in Fulton County incurred judgment costs of approximately $175,000, which amounts to an astronomical 17% of their total annual budget (id). The Rockefeller College also found that that "a substantial percentage of local governments 13 have to work annually to resolve (42%) and pay claims (25%)" (Rockefeller College of Public Affairs & Policy, "Assessing the Fiscal Impact of Lawsuits on New York State Municipalities," Report Draft Two, February 2012). The impact of municipal liability on taxpayers is demonstrable: the per capita cost of the median payment by a municipality incurring liability ranges from $1.34 to $58.78 per person (id.). The trial court's decision to confer standing to John Marvin defies well-established principals governing standing and defies sound public policy. If the trial court's relaxed interpretation of what constitutes particularized harm is reinstated, it will inevitably open the floodgates of litigation against municipalities that are frequently sued based on alleged SEQRA violations. Therefore, the Appellate Division's decision must be upheld to protect local governments and their taxpayers from the astronomical costs of excessive and unwarranted litigation. POINT II BECAUSE DUPLICATIVE SEQRA REVIEWS MUST BE AVOIDED, THE TRIAL COURT'S DECISION TO IMPOSE AN ADDITIONAL, REDUNDANT SEQRA REVIEW MUST NOT BE REINSTATED The decision of the Supreme Court, Steuben County to impose an additional SEQRA review is contrary to sound public policy and, if reinstated, will have a deleterious impact on municipal water agreements across New York. In this case, the Petitioners challenged the sale of surplus water from the Village to SWEPI. Specifically, the Village had agreed to sell 1,000,000 gallons of surplus water per day to SWEPI for use in hydraulic fracturing in Pennsylvania. Respondent classified the agreement, which merely fixed the economic terms of the sale of surplus water, as a Type II Action, for which no further review or analysis was required. The trial court erroneously ruled that (a) the Village's determination was arbitrary and capricious and (b) that the DEC has "implicitly designated a water use of 1,000,000 gallons per day as an 14 Unlisted action" (Sierra Club v Village ofPainted Post, No. 2012/00810 [Sup Court, Steuben County Apr. 8, 2013]). However, neither state law, regulations, or the cases cited by the court stand for such a proposition. The two cases cited by the trial court, and which Petitioners now cite in support of their argument, City Council of City of Watervliet v Town Board ofTown of Colonie, 3 NY3d 508 [2004] and Cross Westchester Dev. Corp v Town Board ofTown of Greenburgh, 141 AD2d 796 [2d Dept 1988], did not concern water usage, but involved the annexation of real property, which pursuant to DEC regulations, is considered a Type I Action under certain circumstances (see 6 NYCRR § 617.4[b][4]; 6 NYCRR § 617.5[c][25]). The Village was simply not required to conduct a SEQRA review for the water agreement at issue because I) it conducted the requisite SEQRA review when it reviewed the Lease ofthe Facility used to convey the surplus water onto railcars for shipment to Pennsylvania, 2) the Village's wells were permitted over five decades ago with a capacity of 4,000,000 gpd before SEQRA was the law of the land, and 3) the water agreement set only the economic terms of the sale of water and did not authorize the withdrawal or conveyance of water by the Village, nor use of it, as those were previously authorized under applicable law. The trial court's holding is detrimental to municipalities for a number of reasons. First, the trial court's determination that the water agreement was an Unlisted Action because the DEC "impliedly" classified it as Unlisted compromises the integrity of SEQRA review, effectively dismantling the "hard look standard" for SEQRA review relied upon by the judiciary in assessing a lead agency's determination. The process and standard articulated by the trial court creates a scenario where municipalities must complete additional, unnecessary SEQRA reviews for surplus water agreements or other high volume uses within the municipality involving existing, permitted water systems with demonstrated sufficient capacity. 15 Second, imposing SEQRA reviews on the mere use of surplus water where there is no new construction or physical modification associated with the proposed use will have a chilling effect on the creation of municipal water agreements, a significant source of revenue for municipalities struggling to survive amidst a statewide financial crisis. Would the trial court apply the same standard for a sale of 100,000 gpd of surplus water? 200,000 gpd? Five separate sales of 100,000 gpd? Ten separate sales of 100,000 gpd? The "hard look" doctrine requires that a court limit its substantive review of a lead agency's determination of environmental significance under SEQRA to consideration of whether "the agency identified the relevant areas of environmental concern, took a 'hard look' at them, and made a 'reasoned elaboration' of the basis for its determination" (Jackson v New York State Urbaii Development Corp., 67 N.Y.2d 400 [1986] (citation omitted)). The trial court's holding runs afoul of this standard because it imposed a SEQRA review for the Village's water agreement, which merely fixed the terms and conditions of the sale of surplus water, even though the Village had already completed SEQRA review for the lease and the facility used to load surplus water onto railcars for transport to Pennsylvania. The Village's SEQRA review considered environmental impacts concerning the construction and operation of the Facility (to the extent not preempted by other laws) and the impact of the Facility on water pressure (id.). Furthermore, the wells in question had been constructed and permitted with a capacity of 4,000,000 gpd decades prior to the State's adoption of SEQRA. It is unclear how the trial court's holding regarding the sale of up to 1,000,000 gpd to one user can be differentiated from the sale of 1,000,000 gpd to thousands of different users. The water agreement was simply not an action necessitating SEQRA review and the trial court's decision must not be reinstated. This holding has important public policy implications for all local governments in New York State, as they frequently serve as the lead agencies for the purpose of SEQRA review. The 16 court's holding would require unnecessary, duplicative SEQRA reviews for the mere use of surplus water, even when the municipality is utilizing previously constructed and permitted wells having sufficient capacities for such use and any sale was fully authorized under applicable law. Such a result will either (a) be entirely duplicative and redundant, reaching the same conclusions of previous SEQRA determinations, or (b) be arbitrary and capricious, reaching a different conclusion based upon the same facts. Allowing duplicative SEQRA reviews could result in the incongruous result of the Village of Painted Post obtaining the requisite authority to withdraw 4,000,000 gpd from the Susquehanna River Basin but then being prevented from selling that water. It could result in the untenable outcome of the Village being authorized to construct and operate a water treatment facility with a capacity of 4,000,000 gpd, but then not being able to sell that capacity. It could result in the Orwellian outcome of the Village being authorized to construct a transloading facility to provide a specific capacity of rail transport but then being prevented from using the facilities capacity. Such outcomes would be inherently arbitrary and capricious. Moreover, if the trial court's holding is reinstated, it could apply in full force and effect to any sell of surplus municipal water from an existing permitted well or system, a routine transaction for local governments. To require a separate SEQRA review for the day-to-day operations of municipal water systems imposes undue administrative and financial burdens on local governments with no actual benefit to the community. This brief does not seek to undermine the value of SEQRA, nor does NYCOM suggest that localities view SEQRA only as an administrative burden. To the contrary, municipalities value SEQRA as a tool by which they can protect the environmental integrity of their communities. However, the SEQRA review process imposes a significant financial burden on municipalities. Most municipalities do not have the resources to conduct SEQRA reviews on 17 their own. Rather, they must rely on consultants, engineers, and other professionals to conduct the review, at a hefty cost to the local governments and their taxpayers. With this in mind, it is crucial that judicial review of a lead agency's actions under SEQRA are limited to the procedural and substantive requirements set forth in law and regulations, as opposed a new standard for SEQRA created by the courts. Thus, in order to preserve the integrity of SEQRA and prevent municipalities from having to undergo unnecessary and duplicative SEQRA reviews, the trial court's decision must be reversed as contrary to the law and sound public policy. 18 CONCLUSION For the foregoing reasons, the Amicus respectfully requests that this Court uphold the Appellate Division's decision and dismiss the complaint in its entirety. The record in this case establishes that none of the Petitioners had standing to sue the Village of Painted Post and the mere sale of 1,000,000 gpd of surplus water from existing, permitted wells with sufficient capacity to supply such sale, is not an Unlisted Action under SEQRA. To hold otherwise would run afoul of public policy and have deleterious effects on municipalities across this state. If the trial court's unprecedented and overly expansive interpretation of SEQRA is upheld and the long-held principles of standing are not clearly applied, this case will serve as an invitation to advocates, activists, and interest groups to use the SEQRA process in a way not intended, allowing them to wield SEQRA as a sword rather than the shield that it is intended to be. Dated: Albany, New York September 3, 2015 Respecu~ ~ NEW YORK STATE CONFERENCE OF MAYORS & MUNICIPAL OFFICIALS 119 Washington Avenue, 2nd Floor Albany, New York 12210 Telephone: (518) 463-1185 Wade Beltrarno, General Counsel wade@nycom.org 19 I I I I I I I I I I I I I I I I I I