In the Matter of FMC Corporation, Respondent,v.New York State Department of Environmental Conservation, Appellant.BriefN.Y.March 21, 2018APL-2017-00019 To be argued by Frederick A. Brodie Time requested: 15 minutes Appellate Division, Third Department No. 522187 ~tate of jiew !lork ) ................................................................................... . § 27-0917 ...................................................................................... 26n § 27-1301(2) ...................................................................................... 9 § 27-1305 ..................................................................................... 9, 16 § 27-1305(2)(b) ................................................................................ 15 IV TABLE OF AUTHORITIES (cont'd) PAGE STATE STATUTES (cont'd) Environmental Conservation Law (cont'd) § 27-1305(2)(b)(2) ........................................................................... .43 § 27-1305(3)(a) ................................................................................ 45 § 27-1305(3)(e) ................................................................................ 45 § 27-1305(3)(£) ................................................................................. 45 § 27-1309(3) .................................................................................... 45 § 27-1313 ................................................................................. passim § 27-1313(1)(a) .......................................................................... 9, 38n § 27-1313(1)(b) .......................................................................... 9, 38n § 27-1313(3) ........................................................................ 37, 41, 42 § 27-1313(3)(a) ............................................................................ 9, 37 § 27-1313(3)(b) .......................................................................... 10, 39 § 27-1313(4) .............. : ............................................................. passim § 27-1313(5)(a) .......................................................................... 10, 39 § 27-1313(5)(b) .......................................................................... 10, 39 § 27-1313(5)(c) ........................................................................... 10, 39 § 27-1313(5)(d) ........................................................................ passim § 27-1313(5)(d)(i)-(iv) ...................................................................... 11 § 27-1313(7) .................................................................................... 12 . § 27-1315 ........................................................................................... 9 § 71-2705 ...................................................................................... 31n § 71-2710 ...................................................................................... 31n § 71-2711 ...................................................................................... 31n § 71-2713 ...................................................................................... 31n § 71-2715 ...................................................................................... 3ln § 71-2727 ......................................................................................... 33 § 71-2727(3) .................................................................................... 17 State Finance Law § 97-b ................................................................................. 1, 5, 11, 12 § 97 -b(3)(a) ·······················:··················································12, 36, 40 § 97-b(3)(b) ................................................................................ 12, 32 v TABLE OF AUTHORITIES (cont'd) PAGE STATE STATUTES (cont'd) State Finance Law (cont'd) § 97 -b( 4) ...................................................................... 12, 36, 38n, 40 §97-b(6) ..................................................................................... 13, 47 1979 N.Y. Laws ch. 282 § 1 ....................................................................... 9 1982 N.Y. Laws ch. 857 ..................................................................... 43, 44 1982 N.Y. Laws ch. 857, § 17 ................................................................... 11 1982 N.Y. Legis. Annual. ......................................................................... 43 STATE RULES AND REGULATIONS 6 N.Y.C.R.R. § 370-373 ........................................................................................... 7 § 373 ........................................................................................... 6, 30 § 373-1.2(a) ....................................................................................... 6 § 373-1.3(a) ................................................................................. 6, 31 § 373-1.3(£)(2) .................................................................................. 31 § 373-2.6 ............................................................................................ 7 § 373-2.8(d) .................................................................................. 26n § 373-3.1 .......................................................................................... 31 § 373-3.31 ........................................................................................ 31 §375 ............................................................................................. 7,9 § 375-1.8(f) ...................................................................................... 40 § 375-2.11(c)(l)(i)(d) .................................................................. 12, 36 § 375-2.11(d) ................................................................................... 39 § 375-2.8 ....................................................................................... 12n § 375-2.8(a) ..................................................................................... 38 § 701.8 .......................................................................................... 16n § 703 ........................................................................................... 7, 15 Vl TABLE OF AUTHORITIES (cont'd) PAGE FEDERAL STATUTES 42 U.S.C. § 3008(h) ......................................................................................... 1 7 § 6901-6992k ..................................................................................... 5 § 6925(e) .......................................................................................... 33 § 6926(b) ............................................................................................ 5 § 6928(h) ................................................................................... 17, 33 § 9607 ........................................................................................ 13, 46 § 9607(a) ...................................................................................... 5, 13 § 9607(a)(4)(A) ................................................................................ 13 § 9607(b) .................................................................................... 14, 47 § 9607(c) .......................................................................................... 14 § 9613(b) .................................................................................... 14, 47 § 9613(£)(1) ...................................................................................... 14 FEDERAL RULES AND REGULATIONS 40 C.F.R. § 261.24 ........................................................................................... 14 § 265 ................................................................................................. 6 § 268 ................................................................................................. 6 § 270 ................................................................................................. 6 § 300 .......................................... · ..................................................... 13 § 300.130(f)(1)(ii)(D) ....................................................................... 38 MISCELLANEOUS McKinney's 1982 Session Laws of New York at 2629 ........................... .44 "Appellate Court Restricts NYSDEC Ability to Spend Superfund Money," http://www.environmental-law.net/2016illlappellate-court-restricts- dec-ability-spend-superfund-money/ ....................................................... 46 .. Vll PRELIMINARY STATEMENT Petitioner-respondent FMC Corporation owns and operates a pesticide formulating facility that contaminated school, residential, and other properties in Middleport, New York, with arsenic, pesticides, and other toxic waste. The facility has been under regulatory scrutiny since the early 1980s for unlawful releases of hazardous substances. By 2014, FMC still had not fully remediated its contamination, including at a school and multiple residential properties. Respondent-appellant New York State Department of Environmental Conservation ("DEC") therefore commenced remediation in those areas using the Hazardous Waste Remedial Fund (also known as the State Superfund) established in State Finance Law § 97 -b. The question presented IS whether the Environmental Conservation Law-specifically title 9 or title 13 of article 27- authorized DEC to use money from the State Superfund for the remediation, notwithstanding FMC's objection to the remediation measure DEC adopted. In fact, both titles independently authorized the use of the State Superfund here. In ruling to the contrary, the Appellate Division, Third Department, seized on the fact that FMC's facility had "interim status" under title 9, and erroneously assumed that such status meant that the facility was "operating lawfully" when it repeatedly released hazardous waste to the environment and contaminated nearby properties. Because title 9 authorizes DEC to clean up hazardous wastes that were disposed, possessed or dealt in "unlawfully/' the Appellate Division's erroneous assumption about FMC's operations led it to conclude that DEC could not rely on title 9 for authority to clean up FMC's contamination using the State Superfund. "Interim status," however, does not mean a facility is "operating lawfully" when it releases hazardous waste to the environment. It means only that the facility may operate prior to completing the permitting process. And the record here shows that FMC unlawfully released contaminants into the environment on multiple occasions, contaminants that traveled beyond its facility's boundaries. The Appellate Division's decision has potentially grave consequences. More than 200 facilities statewide are currently in interim status. If the Appellate Division's decision is affirmed, DEC would be 2 unable, under title 9, to use the State Superfund to remediate contamination unlawfully disposed by facilities with interim status, to the detriment of public health and the environment. Interim status does not permit a facility to discharge hazardous waste into the environment. Nor should it affect DEC's authority under title 9 to use the State Superfund to clean up hazardous waste when the facility owner fails to do so. The Appellate Division also erred in directing DEC to provide FMC an administrative hearing before proceeding with a cleanup under title 13 using the State Superfund. FMC did not request any such relief in its article 78 petition. And an administrative hearing was not required under the circumstances of this case. Title 13 requires DEC to afford a hearing only when it issues an order identifying a responsible person and directing that party to clean up hazardous waste. DEC is not required to issue such an order when, as here, it undertakes a cleanup itself after making reasonable efforts to secure a voluntary agreement with the responsible person. Further, the administrative hearing contemplated by title 13 is intended to give a party an opportunity to contest its responsibility for cleanup when DEC elects to place the responsible 3 person under an order. There was no need to convene an administrative hearing in this case; FMC does not contest its responsibility, but rather seeks only to challenge DEC's determination to adopt a particular remediation measure. This Court should therefore reverse the Appellate Division's order. QUESTIONS PRESENTED 1. Whether Environmental Conversation Law article 27, title 9, authorized DEC to use the State Superfund to clean up properties contaminated by a hazardous waste facility in interim status. 2. Whether Environmental Conservation Law article 27, title 13, independently authorized DEC to use the State Superfund to clean up properties contaminated by a hazardous waste facility without first affording the responsible person an administrative hearing to challenge DEC's determination to adopt a particular remediation measure. STATEMENT OF THE CASE A. Statutory and Regulatory Framework Two separate titles in article 27 of the Environmental Conservation Law ("ECL")-title 9 and title 13-authorize DEC to clean up hazardous waste contamination using the State Superfund established in State 4 Finance Law ("SFL") § 97 -b. Mter expending Superfund money, DEC can utilize the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), 42 U.S. C. § 9607(a), and common law to recover its remediation costs from "responsible parties," which include the owners or operators of facilities that released hazardous substances to the environment. 1. Title 9 New York's statewide hazardous waste program is codified in ECL article 27, title 9 ("title 9"). The program is authorized by the federal Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901-6992k ("RCRA"), which establishes a comprehensive regulatory framework for the management of hazardous waste and allows each State to administer and enforce its own hazardous waste program upon approval by the United States Environmental Protection Agency ("EPA"). Such approval requires, among other things, a finding by EPA that the state program is equivalent to RCRA. See 42 U.S.C. § 6926(b). EPA approved New York's program in 1992. (Record on Appeal ["R"] 689-694, 2874.) 5 Under New York's program, a facility generally may treat, store, or dispose of hazardous waste only pursuant to a permit. ECL § 27- 0913(l)(a); N.Y. Comp. Codes R. & Regs., tit. 6 ("6 N.Y.C.R.R.") § 373- 1.2(a). Certain facilities are granted "interim status," however, which means that they may operate in conformance with DEC's regulations prior to completing the complex permitting process. ECL § 27-0913(l)(b); 6 N.Y.C.R.R. § 373-1.3(a). At present, some 200 facilities operating in New York have not yet completed the title 9 permitting process and remain in interim status. (R3119.) Facilities in interim status are still subject to the performance standards set forth in the federal regulations promulgated under RCRA (which include certain federal standards in 40 C.F.R. Parts 265, 268 and 270), as well as state regulations promulgated under title 9 at 6 N.Y.C.R.R. Part 373. Moreover, neither a permitted facility nor an interim-status facility would ever be authorized to release hazardous waste into the environment, because DEC does not issue hazardous waste permits that allow facilities to release waste into the environment. (R2861.) To the contrary, New York law requires the strict management 6 and proper disposal of hazardous waste at secure, permitted facilities. See ECL § 27-0913. A key requirement of title 9 is "corrective action," which is the cleanup of hazardous waste released to the environment, including contamination "beyond the facility boundary where necessary to protect human health and the environment." See ECL § 27-0911(2). When a release of hazardous waste has occurred at a facility, the owner/operator is required to investigate the nature and extent of contamination and evaluate corrective action alternatives. Before undertaking any such corrective action, the owner/operator must submit detailed technical reports to DEC setting forth data and other information on which DEC can base a formal corrective action decision identifying the necessary cleanup measures. See 6 N.Y.C.R.R. § 373-2.6; see also 6 N.Y.C.R.R. Parts 370-373, 375, 703. (For a description of the process, see R2861-2862.) DEC sets forth its corrective action decision in a Statement of Basis, which it issues in draft for public comment before formal adoption. A facilitv's owner or onerator mav obiect to DEC's draft Statement of Basis .., ..i. ..., .,; - -- - - - by submitting public comments of its own. (See, e.g., R2425-2426.) And while title 9 does not afford an owner/operator an administrative hearing 7 to challenge a final Statement of Basis, the owner/operator may bring a C.P.L.R. article 78 proceeding for that purpose. Absent a successful challenge, DEC will demand that the owner/operator clean up contamination in accordance with the final Statement of Basis. When hazardous waste has been disposed of unlawfully, DEC is also authorized to conduct the cleanup itself. Under ECL § 27-0916, DEC has "authority to clean up or return to its original state any area where hazardous wastes were disposed, possessed or dealt in unlawfully." ECL § 27-0916(1). "Unlawfully" means "without authorization." See ECL §§ 27-0914, 27-0916(1). "Disposal" includes "the abandonment, discharge, deposit, injection, dumping, spilling, leaking or placing of any substance so that such substance or any related constituent thereof may enter the environment." ECL § 27-0901(2). 2. Title 13 The remediation of hazardous waste contamination is also subject to a separate and complementary statutory scheme codified at ECL article 27, title 13 ("title 13"). Title 13 applies to "inactive hazardous waste disposal sites," defined as any site used to dispose of hazardous waste that had no permit for the disposal of hazardous waste when the 8 statute took effect. ECL § 27-1301(2). DEC maintains a registry of such sites (the "Registry"). See ECL § 27-1305. The Legislature adopted title 13 in 1979 to address hundreds of hazardous waste sites around the State, which posed a "threat to public health and the environment." 1979 N.Y. Laws ch. 282, § 1. The Legislature authorized DEC's Commissioner to promulgate "regulations necessary and appropriate to carry out the purposes" of title 13. See ECL § 27-1315. Those regulations are found in 6 N.Y.C.R.R. Part 375. Remedial programs to clean up such sites are authorized by ECL § 27-1313. Section 27-1313(1)(a) makes DEC generally responsible for inactive hazardous waste disposal site remedial programs, while 27- 1313(1)(b) vests DEC with authority to require the development and implementation of remedial plans. Whenever DEC finds that hazardous waste at an inactive hazardous waste disposal site constitutes a significant threat to the environment, DEC "may order" the site's owner or any person responsible for the disposal of hazardous wastes at the site to develop a remedial program, subject to DEC's approval, and to implement that program within a reasonable time. ECL § 27-1313(3)(a). Such orders are issued 9 after providing notice and an opportunity for a hearing at which DEC "shall determine which persons are responsible" for the hazardous waste necessitating remediation. ECL § 27-1313(4). ECL § 27-1313 also authorizes DEC to develop and implement remedial programs on its own in various circumstances. For example, DEC may do so whenever a person ordered to eliminate a threat to the environment fails to act within the time limits specified in the order, ECL § 27-1313(5)(a), or when, despite reasonable efforts, DEC has been unable to locate a responsible person, ECL § 27-1313(5)(b). DEC may also proceed on its own to address an imminent danger of irreversible or irreparable damage to the environment. ECL §§ 27-1313(3)(b), 27- 1313(5)(c). Additionally, section 27-1313(5)(d) separately authorizes DEC to "develop and implement an inactive hazardous waste disposal site remedial program" by itself "if, in the discretion of the department, it is cost-effective for the department to develop and implement such a remedial program." ECL § 27-1313(5)(d). The goal of any such program is "a complete cleanup of the site through the elimination of the significant threat to the environment posed by the disposal of hazardous 10 wastes at the site and of the imminent danger of irreversible or irreparable damage to the environment caused by such disposal." ECF § 27-1313(5)(d). In exercising its discretion under subdivision (5)(d), DEC is directed to weigh four factors "among others": (1) its ability to determine whether the elimination of any imminent danger of irreversible or irreparable damage to the environment can be achieved through limited actions; (2) its ability to identify the owner of the site or any person responsible for the disposal of hazardous waste at the site with sufficient resources to develop and implement a remedial program; (3) the nature of the danger to human health and the environment which DEC's actions are designed to address; and (4) the extent to which DEC's actions would reduce that danger or would otherwise benefit human health or the environment. ECF § 27 -1313(5)(d)(i)-(iv). 3. The State Finance Law and the State Superfund The Legislature created the State Superfund in 1982. 1982 N.Y. Laws ch. 857, § 17 (codified at SFL § 97-b). The fund makes money available, among other things, for DEC's title 9 and title 13 remedial 11 programs. DEC can thus use monies from the fund when it proceeds under title 9 to clean up hazardous waste that was unlawfully disposed. See SFL § 97-b(3)(b); ECL § 27-0916(5). DEC may also use monies from the fund when it undertakes remediation under title 13. See SFL § 97- b(3)(a); ECL § 27-1313(7).1 When DEC uses the State Superfund to pay for remediation under title 13, however, SFL § 97 -b imposes two additional requirements. First, DEC must make "all reasonable efforts to secure voluntary agreement to pay the costs of necessary remedial actions" from responsible persons. SFL § 97-b(4); 6 N.Y.C.R.R. § 375-2.11(c)(1)(i)(d).2 The responsibility for 1 The steps to achieve cleanup under title 13 are similar to those under title 9. The owner/operator-or DEC-investigates the nature and extent of contamination and evaluates cleanup alternatives, which are set forth in technical documents that are often complex and voluminous. Mter considering the relevant information and regulatory criteria (6 N.Y.C.R.R. § 375-2.8), DEC issues a draft cleanup decision for public comment. The owner/operator has the opportunity to comment on the draft decision. DEC then issues a final Record of Decision, which is title 13's analogue to a title 9 Statement of Basis and contains the agency's determination of the appropriate cleanup measures. (For a description of the process, see R2865-2866.) 2 No such efforts are required when DEC acts to remediate contamination under title 9. 12 making such efforts, and for finding that all reasonable efforts have been made, has been delegated to DEC's General Counsel. DEC Organization & Delegation Mem. #95-24 at § 5.2 (Sept. 12, 1995). (See R3138-3139 [describing process].) Second, DEC must "make all reasonable efforts to recover the full amount of any funds expended" from the responsible persons through litigation or cooperative agreements. SFL § 97 -b(6). 4. CERCLA DEC's primary mechanism for recovering State Superfund money is found in section 107 of CERCLA, 42 U.S.C. § 9607.3 CERCLA makes owners and operators of a hazardous waste facility strictly liable for the release of hazardous substances to the environment. 42 U.S. C. § 9607(a); see State v. Shore Realty Corp., 759 F.2d 1032, 1042 (2d Cir. 1985) (describing strict liability under CERCLA). CERCLA also imposes responsibility for any costs incurred by DEC that are "not inconsistent with" the National Contingency Plan, 40 C.F.R. Part 300. 42 U.S.C. § 9607(a)(4)(A). In a CERCLA cost recovery action, the owner/operator 3 Polluters may also be sued under the common law. See, e.g., In re Duplan Corp., 212 F.3d 144, 157 (2d Cir. 2000). 13 has the opportunity to dispute its liability, the amount of DEC's costs, and the consistency of those costs with the National Contingency Plan. See 42 U.S.C. §§ 9607(b), (c). The owner/operator may also seek contribution from other potentially responsible parties. 42 U.S.C. § 9613(£)(1). Exclusive jurisdiction over actions to recover remedial costs under CERCLA rests in the federal district courts. 42 U.S.C. § 9613(b). B. FMC's Facility Since 1943, FMC has owned and operated an approximately-103- acre pesticide manufacturing and formulating facility in the Village of Middleport, Niagara County. (R271, 2554, 2888.) Properties bordering the facility include schools, businesses, and many residential properties. (R271, 1551, 2888.) Within the facility are numerous surface impoundments, landfills, and tanks containing hazardous waste. (R1026- 1028, 1038-1090, 1141-1143, 1146, 1565, 1688-1690, 1720, 2859, 2889.) By 1985, FMC's facility was generating millions of gallons of hazardous arsenic waste annually. (H7 43, 1145, 2890.) See 40 C.F.R. § 261.24 (identifying arsenic-contaminated waste by designation D004). For decades, FMC disposed and released significant quantities of 14 hazardous waste to areas within and adjacent to the facility's boundaries. (R1669-1677, 2889.) The facility's soil and groundwater contain pesticides and other toxic contaminants well above the maximum level permitted by the State's health-based regulations, e.g., 6 N.Y.C.R.R. Part 703, including arsenic, lead, chloroform, DDT, DDE, carbofuran, chlorbenzene, trichlorethane, acetone, and cyanide. (R1151-1166, 2888- 2889, 2910-2911.) These hazardous contaminants migrated to adjacent areas through storm-water and surface-water runoff, groundwater migration, and a1r deposition. (R1166-1168, 2889, 2892, 2910.) As a result, the facility itself and these adjacent areas are significantly contaminated. In December 1986, DEC classified a portion of FMC's facility on New York's Registry of inactive hazardous waste disposal sites as posing a "[s]ignificant threat to the public health or environment-action required," under ECL § 27-1305(2)(b),. (R2867, 1025, 1107, 2555.) The rest of the site was added subsequently. C. FMC's Interim Status and Continued Contamination Meanwhile, in 1980, FMC had initiated the process of applying to DEC and EPA for a hazardous waste permit for its facility under RCRA. 15 (R430, 1140-1141, 2890). Pending determination of that application process, FMC's facility has been in "interim status" under both RCRA and title 9. (R270, 430, 1144, 2557.) Because the facility is also listed on the Registry, it is regulated under title 13 as well as title 9. See ECL §§ 27-0913, 27-1305. (R1025, 3053.) While in interim status, FMC's facility made numerous unlawful discharges of hazardous wastes to the environment. FMC's unlawful spills and releases between 1980 and 2008 are documented in the record. (R1670-1677.) These discharges reached off-site areas beyond the facility's boundaries. Contaminated adjacent areas include the nearby school complex, hundreds of residential, commercial and agricultural properties, and a stream that discharges into Jeddo and Johnson Creeks, which are protected Class C water bodies. 4 (R2859, 2889.) As a result of this well-documented, widespread contamination, FMC entered into consent orders with DEC in 1987 and 1990. In addition to mandating certain limited, interim remediation, these orders required 4 Class C waters are suitable for fish, shellfish and wildlife propagation and survival, and for contact recreation. See 6 N.Y. C.R.R. § 701.8. 16 FMC to sample soil and groundwater and to submit recommended cleanup measures. (R941-953, 1105-1125.) D. The 1991 Order The size, scope, and complexity of FMC's facility, and the nature and extent of its contamination, led to a joint DEC/EPA enforcement action to address the environmental hazard comprehensively. In 1991, DEC, EPA and FMC executed an administrative order on consent (the "1991 Order") (R1131-1219), with the goal of protecting human health and the environment from releases of hazardous waste (R1138, 1170). EPA and DEC issued the 1991 Order under the authority of RCRA § 3008(h), 42 U.S.C. § 6928(h), and ECL article 27, see ECL § 71-2727(3). (R1128, 2870.) The 1991 Order required FMC to investigate the nature and extent of contamination at its facility and in adjacent off-site areas, and to submit the results in a facility investigation report. (R1138, 1171-1173, 2893.) Depending on the levels of contamination and the results of the facility investigation, the 1991 Order gave DEC and EPA the option to require FMC to conduct a Corrective Measures Study, in which FMC would evaluate necessary corrective action and cleanup. (R1173-75, 17 2893.) The 1991 Order also directed FMC to undertake limited, interim measures to abate the spread of methylene chloride from the facility (R1180-1182) and to take other interim corrective actions that EPA might deem necessary (R1183-1184). Those measures ultimately included, · among others, the cleanup of arsenic-contaminated soil at the school's bleacher and athletic field areas. (R2559-2560.) Because of the site's large and varied scope, the facility and affected adjacent areas were divided into eleven areas known as Operable Units (OUs) to prioritize the required investigative and corrective action work based upon the potential for human exposure. (R42, 2555-2556, 2894). The 1991 Order contemplated that the agencies would select the corrective action in a final cleanup decision, and that FMC would then implement the cleanup under a separate, subsequent order. (R2879; see R1138.) Nothing in the 1991 Order limited the agencies' corrective action decision to alternatives proposed by FMC in its Corrective Measures Study; to the contrary, while FMC would "recommend" those alternatives, EPA would make the final selection. (R1138, 1264, 2872.) Subsequently, however, EPA delegated RCRA responsibilities to DEC, and the two agencies agreed that DEC would make that final selection in 18 EPA's stead. (R2483.) The agencies both reserved "all of their statutory and regulatory powers, authorities, rights, remedies and defenses, both legal and equitable." (R1201.) And the 1991 Order expressly reserved the agencies' right "to perform any portion of the work required by this Order" and to "undertake removal or remedial actions at any time" subject to applicable law. (R1202-1203.) E. FMC's RCRA Facility Investigation Report In September 2009, more than 18 years after the 1991 Order's execution, FMC submitted a RCRA facility investigation report addressing OUs 2, 4, and 5. (R1522-1879.) Those areas together include part of the school complex, 315 residential, commercial, and other contaminated properties, and the drainage area flowing into Jeddo Creek. (R2894-2895.)5 FMC's facility investigation report found that arsenic concentrations detected in many samples in these areas were well over 5 OU2 is a residential area known as Air Deposition Area 1; OU4 is the school property; and OU5 is a storm water drainage way known as Culvert 105, which runs through residential areas and discharges to a tributary of Jeddo Creek. (R2423, 2894-2895; see R1 710.) 19 20 parts per million ("ppm"), the "upper limit" (R2412, 2916-2917) of the naturally-occurring range for arsenic in soil in this area. (See Return Document #30, Appendix C, pp. 1-13 [pp. 339-351 of pdf on CD supplied at R672].) Fifty residential properties and six non-residential properties had arsenic levels in the soil exceeding 60 ppm. (R2558.) Some samples revealed arsenic concentrations as high as 5,330 ppm, 6, 710 ppm, and even 26,900 ppm. (Return Document #30, Appendix C, pp. 2-3 [pp. 340- 341 of pdf on CD supplied at R672].) Arsenic is a human carcinogen and a well-known poison (R1395, 2418, 2911), which FMC used in manufacturing and formulating pesticides at its facility (R2558, 2888) and managed as a hazardous waste there (R1141). The facility investigation report also showed that soil in OUs 2, 4, and 5 contained elevated levels of other contaminants, including lead and the pesticides DDT, DDE, and dieldrin. (R2558, 2895.) Mter reviewing the facility investigation report, DEC and EPA determined that corrective action was required and directed FMC to prepare a Corrective J\;leasures Study to compare cleanup alternatives. (R1521.) 20 F. FMC's Corrective Measures Study FMC submitted a Corrective Measures Study for OUs 2, 4, and 5 in May 2011. (R2221-2343.) The report discussed eight alternatives, most of which involved soil removal to achieve an average level of residual arsenic. (R2897-2898; see also R2239-2241, 2243.) FMC's preferred remedy would have left the soil with maximum arsenic levels of 40-80 ppm, and would have required no further cleanup at the school. (R2897- 2899, 2290-2292.) DEC and EPA found FMC's report to be deficient and FMC's proposed remedy to be insufficiently protective of public health and the environment. (R2914-2917; see R1928-1929, 2167-2168, 2206-2207, 2897, 2903-2904.) Nevertheless, to move the two-decade-long process forward to actual cleanup of OUs 2, 4, and 5, DEC and EPA deemed the report sufficient to release for public comment and for DEC to make a corrective action determination. (R2897 .) G. DEC's Corrective Action Determination In consultation with EPA and the New York State Departrnent of Health ("DOH") (R2423), and after considering FMC's reports and applicable corrective action objectives, cleanup criteria, and statutory 21 and regulatory provisions, in June 2012 DEC issued for public comment a Draft Statement of Basis for OUs 2, 4, and 5, which set forth its corrective action determination. (R2421-24 75.) In a study of comparable, uncontaminated property in the region, DEC found that 20 ppm was the "upper limit" of the naturally occurring amount of arsenic. (R2412, 2916-2917.) That number was not an average-average levels of naturally occurring arsenic on the uncontaminated properties were less than 10 ppm. (R2917.) DEC therefore sought in its Draft Statement of Basis remediation that would reduce arsenic levels to 20 ppm. FMC, in contrast, wanted to achieve an average arsenic concentration of 40 ppm in the soil of certain properties. (R2898.) In DEC's judgment, FMC's approach was not sufficiently protective of public health and the environment. (R2898-2899, 2916- 2918.) FMC's averaging approach was inconsistent with any standard method of remediation (R2904), and would have allowed some arsenic soil concentrations at least four times higher than the maximum level that DEC and DOH could accept as adequately protective of human health (R2917). 22 Combining two of FMC's eight corrective measure alternatives, DEC's plan, known as "CMA-9," proposed to achieve a maximum residual arsenic level of 20 ppm through soil removal. (R2450-2451, 2899, 2914- · 2917.) CMA-9 also gave DEC flexibility to depart from the 20-ppm standard on a case-by-case basis, depending on human exposure scenariOs, and thus allow greater concentrations in soil In some instances. (R2899, 2902, 2915.) Applying multiple criteria, DEC found that when the various corrective action proposals were compared, CMA- 9 best achieved the primary statutory objective of protecting human health and the environment. (R2441-2450, 2899.) FMC submitted comments and objections to DEC's Draft Statement of Basis, arguing that greater arsenic concentrations should be allowed, including at the school and residential properties. (R2485-2540.) In an August 10, 2012 letter to DEC, EPA confirmed the agencies' agreement to give DEC authority to select the corrective action for FMC's facility and to issue a final Statement of Basis. (R2483.) In a joint letter dated October 19, 2012, DEC and EPA advised FMC that FMC had fulfilled its obligations under the 1991 Order with respect to OUs 2, 4, and 5 by 23 submitting the Corrective Measures Study. (R2543.) The next step was for DEC to select the corrective action to be implemented. In consultation with EPA and DOH, DEC issued a Final Statement of Basis for OUs 2, 4, and 5 in May 2013, selecting CMA-9 as the corrective action to be implemented. (R2549-2603.) Before issuing the Final Statement of Basis, DEC considered the Corrective Measures Study and other reports; applied corrective action objectives developed under the 1991 Order, cleanup criteria, and regulatory provisions; considered community concerns; and responded to comments from FMC and the public. (R2549-2550, 2568-2577, 2584-2588, 2605-2668, 2901, 2915.) Consistent with CMA-9, the Final Statement of Basis established a 20 ppm residual arsenic objective to be reached through the removal of contaminated soil. (R2550, 2567, 2578-2583, 2901-2902, 2915.) CMA-9 also required remediation at areas of the school not addressed previously by FMC's interim work. (R2579.) The Final Statement of Basis contained DEC's finding that the remedy was protective of human health and the environment, complied with state and federal requirements, and was cost-effective. (R2551.) 24 For more than a year after issuing the Final Statement of Basis, DEC attempted to negotiate a voluntary agreement with FMC to implement CMA-9 for OUs 2, 4, and 5. (R2879.) No agreement was reached, however, because FMC fundamentally disagreed with the 20 ppm level of arsenic cleanup necessary under the Statement of Basis. (R2880; see R2711.) FMC maintained that a less protective cleanup level was sufficient, and that fewer properties needed to be remediated. (R2880.) In light of FMC's refusal to implement CMA-9 to clean up OUs 2, 4, and 5, DEC notified. FMC on May 7, 2014 that DEC would begin remediation itself, using the State Superfund, as authorized by titles 9 and 13. (R2758.) H. Proceedings Below FMC filed the instant petition under CPLR article 78 on May 30, 2014.6 (R24-39.) It asserted four causes of action: (1) that the Statement 6 This case was the first of three proceedings brought by FMC to block DEC's remediation of OUs 2, 4 and 5. A month after filing the petition at issue here, ~1\IIC sued ~_pAin federal court, asserting similar claims. (R2773-2797.) That action was dismissed on the pleadings in February 2017. See FMC Corp. v. EPA, No. 14-CV-487, 2017 WL 431809 (W.D.N.Y. Feb. 1, 201 7). 25 of Basis was unenforceable (R28-29); (2) that DEC's actions were inconsistent with the 1991 Order (R30-31); (3) that DEC lacked authority to use State Superfund money for its own remedial work (R31-35); and (4) that, among other things, DEC l(;lcked authority to implement CMA- 9 (R35-37). FMC sought declaratory and injunctive relief, including an injunction to stop DEC from cleaning up OUs 2, 4 and 5. (R37 -38.) FMC did not, however, request an order directing DEC to provide an administrative hearing under title 13.7 In October 2014, FMC commenced a second article 78 proceeding against DEC in Supreme Court, Albany County (Index No. 5545-14), challenging DEC's ability to request financial assurance that corrective action would be funded, pursuant to ECL § 27-0917 and 6 N.Y.C.R.R. § 373-2.8(d). (R2882.) That proceeding was withdrawn by stipulation. (R2882.) In December 2015, FMC commenced a third article 78 proceeding against DEC in Supreme Court, Albany County (Index No. 5705-15). Its petition sought to challenge a DEC letter requesting reimbursement for remedial costs associated with OUs 2, 4, and 5 and warning that DEC would refer the matter to the Attorney General for further action if reimbursement was not made. The proceeding was dismissed because it challenged a non-final agency action and FMC was not aggrieved by the letter. FMC appealed the dismissal to the Appellate Division (No. 523354). FlVIC's appeal was argued, but remains pending as of this writing. 7 While FMC argued in briefing that a hearing was required, it did not seek a hearing as a form of relief in its petition. 26 Supreme Court, Albany County (Elliott, J.), dismissed the petition as time-barred. (R10-20.) On appeal, the Appellate Division, Third Department, reversed. (R304 7 -3055.) The Appellate Division held that FMC's petition was timely because, taking into account a series of tolling agreements, FMC commenced the proceeding within four months of DEC's issuance of the May 2013 Final Statement of Basis. (R3050-3052.) Rather than remand for Supreme Court to address the merits in the first instance, the Appellate Division exercised its discretion to reach certain of the petition's substantive claims-specifically, those portions of the third and fourth causes of action that challenged DEC's decision to select CMA-9 and to proceed with the cleanup using the State Superfund. (R3052-3053.) The court found that FMC's facility was subject to both titles 9 and 13, and that DEC was authorized to issue the Statement of Basis under both titles. (R3053.) But the court further held that neither title authorized DEC to clean up the school and residential properties in OUs 2, 4, and 5 itself, using the State Superfund. As to title 9, the court looked to ECL § 27-0916(1), which authorizes DEC to undertake remedial work itself using the State Superfund "where hazardous wastes were disposed, possessed or dealt in unlawfully" in 27 violation of ECL § 27-0914. (R3054.) The court noted that FMC lacked a permit. (R3054.) But the court seized on the fact that FMC was operating in "interim status" and assumed-based on an argument in FMC's reply brief-that the facility's interim status made its releases of hazardous waste lawful. (R3054.) The Appellate Division wrote that "it appears" FMC "was operating lawfully pursuant to its 'interim status,"' and therefore concluded that title 9 did not authorize DEC to clean up FMC's contamination. (R3054.) As to title 13, the Appellate Division recognized that "[w]here, as here, [DEC] has determined that a site poses a 'significant threat to the environment,"' DEC may order an owner to develop and implement an inactive hazardous waste disposal site remedial program. (R3054.) The court further stated that "[p]rior to issuing such an order, the owner is entitled to 'notice and the opportunity for a hearing"' under ECL § 27- 1313(4), and that in such cases DEC may "implement the remedial program itself' only when the responsible person has failed to comply with such an order. (R3055.) The court did not consider the other provisions in ECL § 27-1313 that authorize DEC to implement a remedial program itself. Instead, it reasoned that, because FMC "was not accorded 28 an opportunity for a hearing to assert its challenge to CMA 9 and no implementation order was issued," DEC was not authorized under title 13 to proceed with remedial work using the State Superfund. (R3055.) The court therefore remitted the matter to DEC to provide an administrative hearing (R3055), even though FMC's article 78 petition requested no such relief (see R37 -38). DEC timely moved for reargument or leave to appeal. (R3057-3150.) The Appellate Division unanimously denied reargument but granted leave to appeal on February 2, 2017. (R3044.) ARGUMENT POINT I TITLE 9 AUTHORIZED DEC TO USE THE STATE SUPERFUND TO CLEAN UP POLLUTION CAUSED BY FMC's FACILITY The Appellate Division mistakenly concluded that FMC's "interim status" meant the company was operating "lawfully" when it released hazardous waste to the environment, and thus that title 9 did not authorize DEC to clean up FMC's pollution using the State Superfund. In fact, FMC's releases of hazardous waste to the environment constituted unlawful disposal in violation of title 9, specifically 29 ECL § 27-0914(2). And because FMC's releases of hazardous waste to the environment were unlawful, title 9 authorized DEC to clean up the contamination using the State Superfund, notwithstanding FMC's interim status. A. The "Interim Status" of FMC's Facility Did Not Authorize Releases of Hazardous Waste to the Environment. The Appellate Division erroneously assumed that, because FMC's facility had "interim status," it appeared to have been "operating lawfully" at all relevant times, notwithstanding any releases of hazardous waste to the environment. (R3054.) A facility's authority to operate in interim status does not render lawful its releases of hazardous waste into the environment, including releases that reach offsite areas such as the school complex and residential properties here. Even a permitted facility could not lawfully release hazardous waste to the environment, because DEC does not issue permits that allow such releases. (R2861.) Under New York law, a permitted facility must strictly manage and properly dispose of hazardous waste in a way that prevents its release to the environment. See ECL § 27-0913; 6 N.Y.C.R.R. Part 373. Releases of 30 hazardous waste into the environment are "unlawful[]" under ECL § 27- 0916(1) because ECL § 27-0914(2) provides that "[n]o person shall dispose of hazardous wastes without authorization" and DEC has not authorized FMC, or anyone else, to contaminate adjacent lands with hazardous waste. (R2861.)8 The rule is no different for a facility with interim status. Interim status is neither a license nor a permit. ECL § 27-0913(1)(b). It simply means that a hazardous waste facility may continue to operate pending completion of the extensive permitting process. 6 N.Y.C.R.R. § 373-1.3(a). Having interim status does not immunize the facility's owner from responsibility to prevent unlawful disposal or releases of hazardous waste to the environment. The owner or operator of an interim-status facility can still violate the law by releasing waste into the surrounding community. See ECL § 27 -0914(2); see also 6 N.Y.C.R.R. §§ 373-1.3(£)(2), and 373-3.1 through 373-3.31. 8 Indeed, the release of hazardous waste to the environment may also result in criminal penalties depending on the amount of waste, the consequence of the release, and the releasing party's culpable mental state. See, e.g., ECL §§ 71-2705, 71-2710, 71-2711, 71-2713, 71-2715. 31 Nor could FMC's interim status bar DEC's cleanup efforts under title 9 using the State Superfund. Under ECL § 27-0916(1), DEC has "authority to clean up or return to its original state any area where hazardous wastes were disposed, possessed or dealt in unlawfully in violation of section 27-0914." And the State Finance Law expressly provides that the State Superfund "shall be available" to DEC for purposes of "cleaning up or restoring to its original state any area where hazardous wastes were disposed of or possessed unlawfully" in violation of ECL article 27. SFL § 97-b(3)(b). The Appellate Division's key assumption-that, because FMC's facility had interim status, FMC's releases of hazardous waste to the environment must have been "lawful"-would undermine one of the Legislature's expressed purposes in adopting article 27, which was "to prevent a discharge of wastes into the environment." ECL § 27-0301. In sum, the facility's interim status did not render "lawful" its releases of hazardous waste into the surrounding area. 32 B. FMC Released Hazardous Waste Unlawfully While in Interim Status. The record demonstrates that FMC in fact unlawfully discharged hazardous waste to the environment on multiple occasions while in interim status. Mter FMC's facility attained interim status, federal and state environmental agencies commenced an enforcement process based on FMC's unlawful releases of hazardous waste or constituents. That enforcement process led to the 1991 Order, which was issued under section 3008(h) of RCRA, 42 U.S. C. § 6928(h), as well as ECL § 71-2727. (R1131, 1134-35.) Section 3008(h) is entitled "Interim status corrective action orders," and applies when EPA "determines that there is or has been a release of hazardous waste into the environment from a facility authorized to operate under section 6925(e) of this title," which provides for interim status. 42 U.S. C. § 6928(h); see 42 U.S. C. § 6925(e). The 1991 Order found that such releases had occurred. (R1170; accord Rl031; see also Rl670-1672 [listing pre-1991 releases].) If FMC's releases had been lawful, there would have been no occasion for the 1991 Order. Even after entry of the 1991 Order, FMC's facility continued to dispose of and release toxic waste into the environment unlawfully while 33 in interim status. The record documents that FMC unlawfully released millions of gallons of contaminated waste from the facility. (See R1560, 1673-1677.) And if this matter is ultimately remanded to Supreme Court, DEC stands ready to prove that unlawful releases continued to occur after 2008. (See R3129-3134.) If, however, this Court permits the Appellate Division's contrary view to stand, DEC's cleanup efforts at numerous other facilities could be jeopardized. Some 200 hazardous waste sites in New York have interim status. (R3119.) The owners and operators of these interim-status facilities could view the Appellate Division's ruling as effectively granting them a license to pollute because the owners' and operators' unauthorized hazardous waste releases would be deemed "lawful." If courts adopted that view, not only would the owners/operators fail to clean up contamination themselves, but DEC would also be prevented from relying on title 9 in using the State Superfund to do so. 34 POINT II TITLE 13 INDEPENDENTLY AUTHORIZED DEC TO UNDERTAKE THE SUBJECT CLEANUP USING THE STATE SUPERFUND, WITHOUT FIRST AFFORDING FMC AN ADMINISTRATIVE HEARING Title 13 independently authorized DEC to proceed with remediation using the State Superfund, without first affording FMC an administrative hearing to challenge DEC's decision to implement CMA- 9. In ruling to the contrary, the Appellate Division not only gave FMC relief that its article 78 petition did not request, but also misconstrued title 13 in two ways. First, title 13's hearing requirement is triggered only when DEC issues an order directing a responsible person to develop and implement a remedial program. DEC is not, however, required to issue such an order before accessing the State Superfund to conduct a cleanup itself. Title 13 alternatively permits DEC to develop and implement a remedial program on its own when, as here, contamination poses a significant threat to the environment; DEC has made a discretionary determination that the remedial progran1 is cost-effective; and DEC has undertaken all reasonable efforts to secure the voluntary agreement of a responsible 35 person. See ECL § 27-1313(5)(d); SFL §§ 97-b(3)(a), 97-b(4); 6 N.Y.C.R.R. § 375-2.11(c)(1)(i)(d). Second, the purpose of the hearing contemplated by title 13 is to examine DEC's determination of a party's responsibility for the contamination, a question that is not at issue here. Nothing in title 13 entitles a responsible person to an administrative hearing to challenge DEC's remedial determination. A party seeking to challenge that determination should proceed under C.P.L.R. article 78. A. Title 13 Authorizes DEC to Clean Up Hazardous Waste Contamination Itself Without Issuing an Order and Thereby Triggering Any Need for a Hearing. Contrary to the conclusion reached by the Appellate Division (R3055), title 13 does not require DEC to provide an administrative hearing before cleaning up contamination itself using the State Superfund. The Legislature nowhere required a hearing before DEC can access the State Superfund under title 13 for its own cleanup efforts. A hearing under ECL § 27-1313 is required only if DEC opts to issue an administrative order requiring a responsible person to undertake a 36 remedial program "pursuant to subdivision three of this section." ECL § 27-1313(4) (referencing ECL § 27-1313(3)). But subdivision three does not require DEC to issue an order. Rather, it provides that DEC "may order" the owner of an inactive hazardous waste disposal site to develop and implement a cleanup plan. ECL § 27-1313(3)(a) (emphasis added). The statutory term "may" is not a mandate, and affords DEC discretion to proceed without issuing an order. If the Legislature had intended to mandate an administrative hearing and implementation order before DEC uses the State Superfund, it would have used the mandatory phrase "shall order." See General Elec. Capital Corp. v. N. Y.S. Diu. of Tax Appeals, 2 N.Y.3d 249, 255 n.1 (2004) ("We will not presume that the Legislature meant 'shall' when it said ' "') may .. Title 13 provides separate authority for DEC to clean up hazardous waste sites without offering an administrative hearing and issuing an order. See supra at 10-11. Among the provisions giving DEC such authority is ECL § 27-1313(5)(d), which authorizes DEC "to develop and implement an inactive waste disposal site remedial program" at a site if, "in the discretion of the department, it is cost-effective" to do so. As 37 explained above, the goal of any such program is a complete cleanup of the site through the elimination of the significant threat to the environment posed by the release of hazardous waste and any imminent danger of irreversible or irreparable damage to the environment caused by such release. Consequently, DEC may "develop and implement" a remedial program using the State Superfund to address either the significant threat to the environment or the imminent danger, if either of these conditions is caused by contamination at or from the site. The remedial plan must be tailored to address the nature of the threat or danger. In tailoring the remedial plan, DEC is required to consider four non-exclusive factors when deciding whether to exercise its discretion under this provision.9 The action must not be inconsistent with the National Contingency Plan, see 6 N.Y.C.R.R. § 375-2.8(a), and must be cost-effective, see 40 C.F.R. § 300.430(f)(l)(ii)(D). 9 DEC's specific authority under ECL § 27-1313(5)(d) is consistent with the broad general grants of authority in ECL § 27-1313(1)(a) and (b). Because DEC was authorized to undertake this cleanup on its own under ECL § 27-1313(5)(d), as well as title 9, it is not necessary for the Court to consider whether ECL §§ 27-1313(1)(a) and (b), together with SFL § 97-b(4), independently provided that authority. 38 The grant of separate authority to undertake remediation in ECL § 27-1313(5)(d) makes sense. As this Court has observed, the responsible person is often "unknown, unable or unwilling to ameliorate the situation," in which case the statute "task[s] DEC with implementing a remedial program." Superfund Coalition, Inc. v. N. Y.S. Dep't of Envt'l Conserv., 18 N.Y.3d 289, 292-93 (2011). To be sure, separate provisions authorize DEC to act on its own when a person ordered to eliminate a threat to the environment fails to act within the time limits specified in the order, ECL § 27-1313(5)(a); when, despite reasonable efforts, DEC has been unable to locate a responsible person, ECL § 27-1313(5)(b); or when there is a risk of imminent danger of irreversible or irreparable damage to the environment, ECL §§ 27-1313(3)(b), 27-1313(5)(c). Here, DEC knows the identity of the responsible person, but the responsible person-FMC-has delayed undertaking the necessary remediation and will not agree to do so voluntarily despite reasonable efforts on DEC's part to reach an agreement. See 6 N.Y.C.R.R. § 375-2.11(d). DEC should be able to proceed on its own in these circumstances. Under the State Finance Law, the State Superfund "shall be available" to DEC for "inactive hazardous waste disposal site remedial 39 programs pursuant to [ECL] section 27-1313." SFL § 97-b(3)(a). There are only two conditions to DEC's use of the State Superfund under title 13: (1) title 13's requirement that DEC make a discretionary determination that the remedial program is cost-effective, ECL § 27- 1313(5)(d); and (2) the State Finance Law's requirement that DEC find it has made "all reasonable efforts to secure voluntary agreement to pay the costs of necessary remedial actions from owners or operators," see SFL § 97-b(4). Here, the Statement of Basis contains DEC's finding that CMA-9 would be cost-effective. (R2551.) In reaching that conclusion, DEC evaluated multiple criteria, including technical, environmental, human health, and institutional factors, "green remediation practices," cost, and community acceptance. (R2568-2577.) Those analyses encompassed the statutory considerations identified in ECL § 27-1313(5)(d), which are not mandatory prerequisites but rather non-exclusive "factors to be considered." ECL § 27-1313(5)(d); see also 6 N.Y.C.R.R. § 375-1.8(£) (regulatory criteria for selection of remedy). The record further shows that DEC made all reasonable efforts to secure a voluntary agreement with FMC through diligent but ultimately 40 unsuccessful negotiations (see R2707 -2708, 2711, 2758-2759, 2770-2771, 2825-2828, 2845-2846, 2848-2849, 2879-2880), and that DEC found such efforts had been made (R3139). B. The Hearing Provided by Title 13 Does Not Encompass Review of DEC's Remedial Decisions. On its face, title 13's hearing provision does not support the Appellate Division's holding that FMC was entitled to an adn1inistrative hearing on its challenge to DEC's decision to adopt CMA-9. In the administrative hearing contemplated by title 13, DEC "determine[s] which persons are responsible pursuant to said subdivision [i.e., ECL § 27-1313(3)] according to applicable principles of statutory or common law liability." ECL § 27-1313(4). Nothing in this language suggests that a party identified by DEC as a responsible person can also use the administrative hearing to challenge DEC's remedial decision. Rather, the hearing is intended to determine responsibility in the first place. Here, FMC does not dispute that it is responsible for cleanup. (See R25.) . - Disputes over DEC's remedial decision, including whether DEC exceeded its jurisdiction, abused its discretion, or made its remedial decision in an arbitrary and capricious manner, may be decided in a 41 proceeding under article 78 of the CPLR. Accordingly, the courts have reviewed DEC's cleanup decisions under article 78.10 See, e.g., National Fuel Gas Distribution Co. v. N. Y.S. Dep't of Envt'l Conserv., 18 Misc. 3d 1129(A) (Sup. Ct. Albany Cty. 2008); Town of Moreau v. N. Y.S. Dep't of Envt'l Conserv., 178 Misc. 2d 56 (Sup. Ct. Albany Cty. 1998). Indeed, FMC brought the instant case under article 78 and did not demand an administrative hearing under ECL § 27-1313(3) and (4). (See R24, 37 -38.) When the merits of FMC's article 78 challenge to DEC's remedial decision are resolved, FMC will have received any due process to which it was entitled. Io Unlike FMC, a responsible person that generated waste elsewhere and shipped it to the site may not as a practical matter be able to challenge a remedial decision under article 78 if it has not yet been identified. But even a generator who is not identified until after a remedy has been implemented would have the right to defend itself under CERCLA before costs are imposed on it. (See Point II(D).) 42 C. Requiring an Administrative Hearing Before DEC Performs a Cleanup Using the State Superfund Would Undermine the Goal of Swift Remediation. If upheld, the Appellate Division's decision would run contrary to the Legislature's purpose in creating the State Superfund and would unduly delay the cleanup process. The State Superfund was intended to enable DEC "to immediately cleanup certain identified 'priority' sites" listed in the Registry. See Memorandum of Sen. John R. Dunne in Support ofthe Hazardous Waste Disposal Act, 8.10620 (emphasis added), reprinted in 1982 N.Y. Legis. Annual at 273 (also contained in bill jacket for 1982 N.Y. Laws ch. 857). Priority sites include class 2 sites such as Middleport. For a site to fall within class 2, DEC must identify it as posing a "[s]ignificant threat to the public health or environment." See ECL § 27-1305(2)(b)(2). The law's objective was to "permit more timely remedial action to occur at these environmentally hazardous locations, thus better protecting the public welfare." Budget Report on S.l0620 at 2 (July 13, 1982) (contained in bill jacket for 1982 N.Y. Laws ch. 857). The statute therefore provided "appropriate extensions of State authority ... to address hazardous waste threats in a more timely manner." Id. at 4. The 43 1982 memorandum of the bill's sponsor made this clear in language that further undercuts the Appellate Division's view of the statute: Broad powers are given to the DEC Commissioner to respond to situations which significantly threaten public health or environmental degradation. Thus, the Commissioner can act to implement a site-specific hazardous waste remedial program without notice to the site owner or operator. Memorandum of Sen. John R. Dunne in Support of the Hazardous Waste Disposal Act, S.10620, reprinted in 1982 N.Y. Legis. Annual at 273 (also contained in bill jacket for 1982 N.Y. Laws ch. 857). Consistent with that understanding, the Governor's statement upon approving the 1982 creation of the State Superfund and concomitant amendments to title 13 noted that the bill clarified DEC's power "to fully clean up inactive hazardous waste sites, and to seek redress from persons responsible for such hazardous conditions." Memorandum of Gov. Hugh L. Carey on approving L. 1982, chs. 857 and 858 (July 27, 1982), reprinted in McKinney's 1982 Session Laws of New York at 2629 (also contained in bill jacket for 1982 N.Y. Laws ch. 857). The statutory scheme of title 13 also does not support the Appellate Division's interpretation. For example, DEC is required to investigate sites on the Registry, prepare a remedial plan, detail the recommended 44 strategy, methods and time frame for remedial actions, and estimate the remedial action costs. See ECL §§ 27-1305(3)(a), (e), (f). DEC is also given broad authority, using the State Superfund, to access hazardous waste sites for investigation and sampling. See ECL § 27-1309(3). The Legislature would not have given DEC those powers and duties while barring it from cleaning up such sites until a hearing is held and an order issued to the polluter. Requiring an administrative hearing before DEC can access the State Superfund would significantly delay the agency's remediation efforts, thus conflicting with the Legislature's clear intent to assure prompt cleanups. A full adjudicatory hearing in a complex environmental case can take years to complete. (R314 7.) For instance, an environmental site for which an adjudicatory hearing was commenced in 1986 still has not been fully cleaned up. (R3147-3148.) The potential repercussions are serious: DEC currently is using State Superfund monies to undertake remedial programs at 224 sites which, like the FMC facility, have been found to present a significant threat to public health or the environment. (See R3140.) 45 In the words of a recent article criticizing the Appellate Division's decision, written by the then-Chair of the New York State Bar Association's Environmental and Energy Law Section, "[t]he idea that the NYSDEC would first have to hold a hearing and have the responsible party refuse to implement a remedy before spending money to protect human health is simply contrary to the purpose of the statute."ll D. Allowing DEC to Access the State Superfund Without an Administrative Hearing Would Not Deprive FMC of Any Process Due. In addition to its right to judicial review under CPLR article 78, FMC will have the opportunity to contest any effort by DEC to recover its costs from FMC under CERCLA or the common law. See 42 U.S.C. § 9607.12 11 See Schnapf LLC, "Appellate Court Restricts NYSDEC Ability to Spend Superfund l\1oney," available at http:l/wvvw.environmental- law.net/2016/11/appellate-court-restricts-dec-ability-spend-superfund- money/ (last visited May 31, 2017). 12 DEC does not normally convene an administrative hearing under title 13 because of the potential for delay in implementing cleanups at sites that pose a significant threat. 46 When DEC uses the State Superfund to conduct a cleanup itself, DEC routinely seeks to recover its costs from the responsible person in federal court through CERCLA. See 42 U.S. C. § 9607(a); see, e.g., State v. General Elec. Co., No. 1:14-cv-00747, 2017 WL 1239638 (N.D.N.Y. Mar. 31, 2017); State v. Moulds Holding Corp., 196 F. Supp. 2d 210 (N.D.N.Y. 2002); State v. Almy Bros., 866 F. Supp. 668 (N.D.N.Y. 1994); State v. N. Storonske Cooperage Co., 174 B.R. 366 (N.D.N.Y. 1994).13 In a cost-recovery action under CERCLA, FMC would be able to assert defenses, including the defense that DEC's chosen remedial action was arbitrary and capricious, and thus inconsistent with the National Contingency Plan. See 42 U.S.C. § 9607(b); see, e.g., Washington State Dep't of Transp. v. Washington Natural Gas Co., 59 F.3d 793, 802-05 (9th Cir. 1995) (state agency's response to pollution was arbitrary and capricious, and thus inconsistent with National Contingency Plan); Matter of Bell Petroleum Servs., Inc. (EPA v. Sequa Corp.), 3 F.3d 889, 907-08 (4th Cir. 1993) (where EPA's choice of environmental response 13 Such efforts are required under SFL § 97 -b(6) if the polluters do not enter into a "cooperative agreement[]" to pay DEC's expenses. 47 was arbitrary and capncwus, it was inconsistent with the National Contingency Plan). Because FMC had the opportunity to advance its arguments under article 78 and also will be able to defend itself against a CERCLA action, the additional administrative hearing required by the decision below, is procedurally and substantively unnecessary. 48 CONCLUSION The order of the Appellate Division should be reversed. This Court should hold that DEC was entitled to clean up contamination from Fl\IIC's facility using money from the State Superfund under both title 9 and title 13 of article 27 of the Environmental Conservation Law. Dated: Albany, New York June 2, 2017 ANDREA0SER Deputy Solicitor General l\1AUREEN F. LEARY Assistant Attorney General FREDERICK A. B RODIE Assistant Solicitor General of Counsel By: Respectfully submitted, ERIC T. SCHNEIDERMAN Attorney General of the State of New York Attorney for Respondent-Appellant FREDERICK A. BRODIE Assistant Solicitor General The Capitol Albany, NY 12224 (518) 776-2317 Reproduced on Recycled Paper 49 State of New York Court of Appeals FMC CORPORATION, -against- THE NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, Petit ioner-Respondent, R espondent-Appellant. AD #522187- COURT #APL-2017-00019- OAG #14-173572 STATE OF NEW YORK COUNTY OF ALBANY ss: CITY OF ALBANY WILLIAM SPORTMAN being duly sworn says: I am over eighteen years of age and an employee in the office of the Attorney General of the State of New York, attorney for the Respondent-Appellant, herein. On 2nd day of June, 2017, I served, by UPS Ground Service, the annexed Record and Brief For Respondent-Appellant upon the attorneys named below, by depositing Q. true copies of each thereof, properly enclosed in a sealed, United Parcel Service wrapper, in the Mailroom of the Office of the Attorney General, in the City of Albany, New York, directed to the said attorneys at the addresses within the State respectively theretofore designated by them for that purpose as follows: RICK W. KENNEDY, ESQ. JULIA M. HILLIKER, ESQ. HODGSON RUSS LLP THE GUARANTY BUILDING 140 PEARL STREET, SUITE 100 BUFFALO, NY 14202 I
