GIAMBRONE, DOUGLAS J. v. GRANNIS, ALEXANDER B. ( 2011 )

SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
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TP 11-00377
PRESENT: SMITH, J.P., FAHEY, PERADOTTO, LINDLEY, AND SCONIERS, JJ.
IN THE MATTER OF DOUGLAS J. GIAMBRONE AND
MARCON ERECTORS, INC., PETITIONERS,
V MEMORANDUM AND ORDER
ALEXANDER B. GRANNIS, COMMISSIONER, NEW YORK
STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION,
AND NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL
CONSERVATION, RESPONDENTS.
JONATHAN D. ESTOFF, BUFFALO, MAGAVERN MAGAVERN GRIMM LLP, FOR
PETITIONERS.
ERIC T. SCHNEIDERMAN, ATTORNEY GENERAL, ALBANY (ADAM J. DOBSON OF
COUNSEL), FOR RESPONDENTS.
Proceeding pursuant to CPLR article 78 (transferred to the
Appellate Division of the Supreme Court in the Fourth Judicial
Department by order of the Supreme Court, Erie County [Kevin M.
Dillon, J.], entered February 7, 2011) to review a determination of
respondents. The determination imposed a civil penalty on
petitioners.
It is hereby ORDERED that the determination is unanimously
modified on the law and in the exercise of discretion and the petition
is granted in part by reducing the penalty to $25,000, and as modified
the determination is confirmed without costs.
Memorandum: Petitioners commenced this CPLR article 78
proceeding seeking to annul the determination of respondent New York
State Department of Environmental Conservation (DEC) dated March 17,
2010 that, inter alia, imposed a civil penalty of $109,500 for the
violation of 12 DEC regulations involving the generation and storage
of hazardous waste (see 6 NYCRR parts 372, 373), as well as two
statutes involving the discharge of petroleum (see Navigation Law §§
173, 175). In the mid-1980s, petitioner Douglas J. Giambrone, the
president and chief executive officer of petitioner Marcon Erectors,
Inc. (Marcon), directed that the top of a 25,000-gallon storage tank
be removed. The tank was located on property owned by Giambrone and
leased to Marcon, and the removal exposed the tank’s contents to the
environment. Those contents were subsequently determined to be sludge
laden with polychlorinated biphenyls (PCBs) and other hazardous
chemicals. In September 1995, the DEC received a complaint concerning
a spill on the property where the tank was located, and petitioners
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TP 11-00377
did not begin remediation efforts until 1997. Respondent DEC
Commissioner (Commissioner) determined in a subsequent administrative
enforcement proceeding that there was no issue of fact concerning
petitioners’ liability, and on the recommendation of the
Administrative Law Judge he granted the DEC’s motion in December 2000
for “order without hearing” pursuant to 6 NYCRR 622.12. In a
subsequent CPLR article 78 proceeding, the liability determination was
confirmed in a judgment entered March 25, 2002, but Supreme Court
vacated the penalty imposed based on the lack of a hearing with
respect to the amount. The penalty hearing was ultimately held on
November 7, 2007.
Despite the inordinate delays that occurred in the administrative
proceedings, we reject petitioners’ contention that the proceedings
should have been dismissed and the penalty vacated based on the
failure to hold a hearing either “immediately” as provided in 6 NYCRR
622.12 (f) or “within a reasonable time” as provided in State
Administrative Procedure Act § 301 (1). Moreover, we reject
petitioners’ further contention that dismissal of the proceedings is
required due to the failure of the Commissioner to issue the decision
and order within 60 days “after the close of the record” pursuant to 6
NYCRR 622.18 (b) (1). Time limitations imposed upon administrative
agencies by their own regulations are not mandatory (see Matter of
Dickinson v Daines, 15 NY3d 571, 575, affg 68 AD3d 1646), and
petitioners failed to establish that they suffered substantial
prejudice resulting from the delays (see id. at 577; Matter of
Cortlandt Nursing Home v Axelrod, 66 NY2d 169, 178-179, rearg denied
66 NY2d 1035, cert denied 476 US 1115; see also Matter of Corning
Glass Works v Ovsanik, 84 NY2d 619, 625-626). Additionally, we note
that, “[w]here . . . legislation providing for an administrative
determination explicitly prescribes the time frame for making a
determination and provides that the agency is required to act within
the specified time frame, there is ‘an unmistakable limitation on the
[agency’s] authority to act’ beyond that time frame” (Dickinson, 68
AD3d at 1647; see Matter of City of New York v Novello, 65 AD3d 112,
116, lv denied 14 NY3d 702; see generally Cortlandt Nursing Home, 66
NY2d at 177-182). Here, the Legislature provided no such time frame.
We agree with petitioners, however, that the civil penalty
imposed “ ‘is so disproportionate to the offense as to be shocking to
one’s sense of fairness’ ” (Matter of Waldren v Town of Islip, 6 NY3d
735, 736, quoting Matter of Pell v Board of Educ. of Union Free School
Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34
NY2d 222, 237). The record establishes that the remediation
contractor retained by petitioners to perform cleanup work at the site
was approved by the DEC, and the contractor mishandled materials and
was partially responsible for the site conditions but was subjected to
a substantially lower DEC penalty. We conclude that the maximum civil
penalty warranted against petitioners in this case is $25,000, and in
the exercise of our discretion we therefore modify the determination
by reducing the penalty accordingly (see generally Matter of Murray v
Ilion Water Commn., 9 AD3d 903; Matter of Vito v Jorling, 197 AD2d
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822, 824-825). We have considered petitioners’ remaining contentions
and conclude that they are without merit.
Entered: October 7, 2011 Patricia L. Morgan
Clerk of the Court