IN RE: EAST END PROPERTY COMPANY # 1 (2007)

In a hybrid proceeding pursuant to CPLR article 78, inter alia, to review two determinations of the Long Island Power Authority, both dated December 15, 2005, which, after a hearing, adopted a findings statement pursuant to the State Environmental Quality Review Act, and authorized Richard M. Kessel, as Chairman of the Board of Trustees of the Long Island Power Authority, or his designee, to enter into a power purchase agreement and other related agreements with Caithness Long Island, LLC, regarding the construction and operation of a 350 megawatt dual-fuel, combined-cycle combustion turbine generator on a 15-acre parcel of land in the Town of Brookhaven, and taxpayer action pursuant to State Finance Law § 123-b, the petitioners-plaintiffs appeal, as limited by their brief, from stated portions of an order and judgment (one paper) of the Supreme Court, Nassau County (Cozzens, J.), entered August 25, 2006, which, among other things, in effect, denied the amended petition and dismissed the proceeding and granted those branches of the motions of the respondents-defendants which were pursuant to CPLR 3211 to dismiss the sixth and seventh causes of action.

ORDERED that the order and judgment is affirmed insofar as appealed from, with one bill of costs payable to the respondents appearing separately and filing separate briefs.

 Initially, contrary to the determination of the Supreme Court, the appellants Medford Taxpayers and Civic Association, Inc., Yaphank Taxpayers and Civic Association, Inc., and South Yaphank Civic Association (hereinafter the civic associations) have standing to maintain the first, second, third, fourth, fifth, and seventh causes of action of the amended petition and complaint (see Matter of Dental Socy. of N.Y. v. Carey, 61 N.Y.2d 330, 333-334, 474 N.Y.S.2d 262, 462 N.E.2d 362;  Matter of Douglaston Civic Assn. v. Galvin, 36 N.Y.2d 1, 7-8, 364 N.Y.S.2d 830, 324 N.E.2d 317;  cf. Rudder v. Pataki, 93 N.Y.2d 273, 278-281, 689 N.Y.S.2d 701, 711 N.E.2d 978;  Society of Plastics Indus. v. County of Suffolk, 77 N.Y.2d 761, 775-777, 570 N.Y.S.2d 778, 573 N.E.2d 1034).   However, none of the appellants have standing to assert the sixth cause of action alleging violations of Public Authorities Law § 1020-f.   The individual appellants failed to demonstrate sufficient potential injury in fact to sustain their burden of establishing standing to challenge the power of the Long Island Power Authority (hereinafter LIPA) to enter into a contract without approval from the Public Authorities Control Board (see Society of Plastics Indus. v. County of Suffolk, 77 N.Y.2d at 772-773, 570 N.Y.S.2d 778, 573 N.E.2d 1034;  cf. Matter of Town of Islip v. Long Is. Power Auth., 301 A.D.2d 1, 8-9, 752 N.Y.S.2d 320;  Matter of Long Is. Pine Barrens Socy. v. Town of Islip, 261 A.D.2d 474, 475, 690 N.Y.S.2d 95).  Public Authorities Law § 1020-f(aa) mandates that “[n]otwithstanding any other provision of law to the contrary,” LIPA “shall not undertake any project without the approval of the public authorities control board.”   In their affidavits, the individual appellants simply state that they are “New York State citizen taxpayers and Long Island Power Authority customers and ratepayers.”   In the absence of some injury in fact, the “zone of interest” test will not confer standing on the individual appellants merely because they are customers of the utility (see Matter of Lederle Labs. Div. of Am. Cyanamid Co. v. Public Serv. Commn. of State of N.Y., 84 A.D.2d 900, 444 N.Y.S.2d 779).   Similarly, the civic associations failed to allege a sufficient injury in fact concerning the alleged failure of LIPA to obtain approval from the Public Authorities Control Board.   Thus, the Supreme Court properly granted those branches of the respondents-defendants' motions which were to dismiss the sixth cause of action for lack of standing.

 Moreover, the Supreme Court properly, in effect, denied the amended petition and dismissed the proceeding seeking relief pursuant to CPLR article 78.   The State Environmental Quality Review Act ( [ECL art. 8] hereinafter SEQRA) was designed to “insure[ ] that agency decision-makers enlightened by public comment where appropriate will identify and focus attention on any environmental impact of proposed action, that they will balance those consequences against other relevant social and economic considerations, minimize adverse environmental effects to the maximum extent practicable, and then articulate the bases for their choices” (Matter of Jackson v. New York State Urban Dev. Corp., 67 N.Y.2d 400, 414-415, 503 N.Y.S.2d 298, 494 N.E.2d 429;  Matter of Halperin v. City of New Rochelle, 24 A.D.3d 768, 775, 809 N.Y.S.2d 98;  Matter of Coalition for Future of Stony Brook Vil. v. Reilly, 299 A.D.2d 481, 483, 750 N.Y.S.2d 126).   It is axiomatic that “judicial review of a SEQRA determination is limited to determining whether the challenged determination was affected by an error of law, or was arbitrary and capricious, an abuse of discretion, or was the product of a violation of lawful procedure” (Matter of Village of Tarrytown v. Planning Bd. of Sleepy Hollow, 292 A.D.2d 617, 619, 741 N.Y.S.2d 44;  see Akpan v. Koch, 75 N.Y.2d 561, 570, 555 N.Y.S.2d 16, 554 N.E.2d 53;  Matter of UPROSE v. Power Auth. of State of N.Y., 285 A.D.2d 603, 607, 729 N.Y.S.2d 42).   Courts “may review the record to determine 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” (Matter of Jackson v. New York State Urban Dev. Corp., 67 N.Y.2d at 417, 503 N.Y.S.2d 298, 494 N.E.2d 429, quoting Aldrich v. Pattison, 107 A.D.2d 258, 265, 486 N.Y.S.2d 23;  see Matter of New York City Coalition to End Lead Poisoning v. Vallone, 100 N.Y.2d 337, 348, 763 N.Y.S.2d 530, 794 N.E.2d 672).   In this regard, “it is not the role of the courts to weigh the desirability of any action or choose among alternatives, but to assure that the agency itself has satisfied SEQRA, procedurally and substantively” (Matter of Jackson v. New York State Urban Dev. Corp., 67 N.Y.2d at 416, 503 N.Y.S.2d 298, 494 N.E.2d 429;  see Matter of Chemical Specialties Mfrs. Assn. v. Jorling, 85 N.Y.2d 382, 397, 626 N.Y.S.2d 1, 649 N.E.2d 1145;  Chinese Staff & Workers Assn. v. City of New York, 68 N.Y.2d 359, 363, 509 N.Y.S.2d 499, 502 N.E.2d 176).

 Furthermore, SEQRA mandates literal compliance with its procedural requirements and substantial compliance is insufficient to discharge the responsibility of the agency under the act (see Matter of Group for S. Fork v. Wines, 190 A.D.2d 794, 795, 593 N.Y.S.2d 557;  Matter of Rye Town/King Civic Assn. v. Town of Rye, 82 A.D.2d 474, 481, 442 N.Y.S.2d 67).  “Literal compliance is required because the Legislature has directed that the policies of the State and its political subdivisions shall be administered to the fullest extent possible in accordance with SEQRA” (Matter of Consolidated Edison Co. of N.Y. v. New York State Dept. of Envtl. Conservation, 112 A.D.2d 989, 991, 492 N.Y.S.2d 800 [internal quotation marks omitted] ).

 “Actions,” as that term is contemplated by SEQRA (ECL 8-0105[4] ), are to be reviewed “[a]s early as possible” in the decisional process for purposes of determining whether an Environmental Impact Statement (hereinafter EIS) will be necessary (ECL 8-0109[4];  see Matter of Tri-County Taxpayers Assn. v. Town Bd. of Town of Queensbury, 55 N.Y.2d 41, 47, 447 N.Y.S.2d 699, 432 N.E.2d 592).   Here, LIPA, as lead agency, properly commenced SEQRA review before “any significant authorization [was] granted for a specific proposal” to require the filing of an EIS (Matter of Tri-County Taxpayers Assn. v. Town Bd. of Town of Queensbury, 55 N.Y.2d at 47, 447 N.Y.S.2d 699, 432 N.E.2d 592;  see Hudson Riv. Sloop Clearwater v. Cuomo, 222 A.D.2d 386, 387, 635 N.Y.S.2d 637).   Neither the issuance of the request for proposals nor the Memorandum of Understanding entered into between LIPA and Iroquois Gas Transmission System LP (hereinafter Iroquois), pursuant to which Iroquois would conduct a feasibility study exploring the possible construction of a 21.5-mile natural gas pipeline between the terminus of its existing point in South Commack, New York, and the project site for the purpose of supplying natural gas (hereinafter the Iroquois Pipeline Extension), committed LIPA to a “specific project plan” (Matter of Programming & Sys. v. New York State Urban Dev. Corp., 61 N.Y.2d 738, 739, 472 N.Y.S.2d 912, 460 N.E.2d 1347), or a “definite course of future decisions” (Hudson Riv. Sloop Clearwater v. Cuomo, 222 A.D.2d at 386-387, 635 N.Y.S.2d 637;  see Matter of City of Ithaca v. Tompkins County Bd. of Representatives, 164 A.D.2d 726, 728, 565 N.Y.S.2d 309;  Matter of Nassau/Suffolk Neighborhood Network v. Town of Oyster Bay, 134 Misc.2d 979, 982, 513 N.Y.S.2d 921).

 In addition, while it is true that Type I actions, such as the project at issue, require the preparation of a full Environmental Assessment Form (hereinafter the EAF), and the lead agency is responsible for preparing Part 2 and, as needed, Part 3 (see 6 NYCRR 617.6[a][2] ), under these circumstances, the failure of LIPA to complete Parts 2 and 3 of the EAF did not require nullification of the entire environmental review procedure, which was otherwise taken in accordance with SEQRA (see Save Audubon Coalition v. City of New York, 180 A.D.2d 348, 365, 586 N.Y.S.2d 569;  Business & Community Coalition to Save Brownsville v. New York City Dept. of Envtl. Protection, 173 A.D.2d 586, 587, 570 N.Y.S.2d 169).   Pursuant to 6 NYCRR 617.6(a)(4), “[a]n agency may waive the requirement for an EAF if a draft EIS is prepared or submitted.   The draft EIS may be treated as an EAF for the purpose of determining significance.”   Here, to require LIPA to comply with SEQRA procedure by completing Parts 2 and 3 of the EAF, after it had already compiled both a draft EIS and a final EIS, which it could properly use in lieu of an EAF (see 6 NYCRR 617.6[a][4] ), would be pointless (see Matter of Rusciano & Son Corp. v. Kiernan, 300 A.D.2d 590, 591, 752 N.Y.S.2d 377).

Further, LIPA satisfied its obligations under SEQRA by taking a “hard look” at the potential environmental impacts of the project in a final EIS (hereinafter the FEIS), which thoroughly analyzed, among other things, land use and zoning impacts, impacts on historic, archaeological, and cultural resources, traffic, transportation, and noise impacts, impacts on visual resources and neighborhood character, air quality impacts, socioeconomic impacts, groundwater usage and water quality impacts, stormwater runoff impacts, terrestrial ecology impacts, cumulative impacts, and alternatives to the project.  “Not every conceivable environmental impact, mitigating measure or alternative must be identified and addressed before a FEIS will satisfy the substantive requirements of SEQRA” (Horn v. International Bus. Machs. Corp., 110 A.D.2d 87, 94, 493 N.Y.S.2d 184, quoting Aldrich v. Pattison, 107 A.D.2d 258, 486 N.Y.S.2d 23;  see Coalition Against Lincoln W. v. City of New York, 94 A.D.2d 483, 491, 465 N.Y.S.2d 170, affd. 60 N.Y.2d 805, 469 N.Y.S.2d 689, 457 N.E.2d 795).   Although the appellants disagree with data and/or methodologies utilized by LIPA, in its lengthy analyses of potential environmental impacts, the conclusion of LIPA is supported by accepted governmental guidelines and scientific authorities.   The findings in an environmental impact statement “need not achieve scientific unanimity” (Matter of Residents for More Beautiful Port Washington v. Town of Hempstead, 149 A.D.2d 266, 274, 545 N.Y.S.2d 297, quoting Matter of Schiff v. Board of Estimate of City of N.Y., 122 A.D.2d 57, 60, 504 N.Y.S.2d 215).

In addition, LIPA adequately analyzed a reasonable range of alternatives to the project (see Matter of Rusciano & Son Corp. v. Kiernan, 300 A.D.2d at 591-592, 752 N.Y.S.2d 377;  Matter of Schiff v. Board of Estimate of City of N.Y., 122 A.D.2d at 57, 60, 504 N.Y.S.2d 215).

 The appellants further contend that LIPA engaged in improper segmentation by failing to consider the Iroquois Pipeline Extension during the SEQRA review of the project.   Segmentation occurs when “the environmental review of a single action is broken down into smaller stages or activities, addressed as though they are independent and unrelated, needing individual determinations of significance” (Matter of Teich v. Buchheit, 221 A.D.2d 452, 453, 633 N.Y.S.2d 805 [internal quotation marks omitted];  see 6 NYCRR 617.2[gg];  Matter of Farrington Close Condominium Bd. of Mgrs. v. Incorporated Vil. of Southampton, 205 A.D.2d 623, 626, 613 N.Y.S.2d 257).   The regulations which prohibit segmentation are “ ‘designed to guard against a distortion of the approval process by preventing a project with potentially significant environmental effects from being split into two or more smaller projects, each falling below the threshold requiring full-blown review’ ” (Matter of Maidman v. Incorporated Vil. of Sands Point, 291 A.D.2d 499, 501, 738 N.Y.S.2d 362, quoting Matter of Teich v. Buchheit, 221 A.D.2d at 453, 633 N.Y.S.2d 805).  “In addition, certain activities may not be excluded from the definition of a project for the purpose of making it appear that adverse environmental impacts have been minimized to circumvent the detailed review called for under SEQRA” (Matter of Maidman v. Incorporated Vil. of Sands Point, 291 A.D.2d at 501, 738 N.Y.S.2d 362;  see Matter of Long Is. Pine Barrens Socy. v. Planning Bd. of Town of Brookhaven, 204 A.D.2d 548, 550-551, 611 N.Y.S.2d 917;  Matter of Schultz v. Jorling, 164 A.D.2d 252, 255, 563 N.Y.S.2d 876).   Although the project at issue and the natural gas pipeline to supply fuel to the project were part of an integrated and cumulative development plan (see Matter of Village of Westbury v. Department of Transp. of State of N.Y., 75 N.Y.2d 62, 69, 550 N.Y.S.2d 604, 549 N.E.2d 1175;  Matter of Defreestville Area Neighborhoods Assn. v. Town Bd. of Town of N. Greenbush, 299 A.D.2d 631, 750 N.Y.S.2d 164;  Matter of Citizens Concerned for Harlem Val. Envt. v. Town Bd. of Town of Amenia, 264 A.D.2d 394, 694 N.Y.S.2d 108;  Matter of Teich v. Buchheit, 221 A.D.2d at 453, 633 N.Y.S.2d 805), environmental review of the pipeline under SEQRA was preempted by the regulatory authority of the Federal Energy Regulatory Commission (hereinafter the FERC).   We note that Iroquois is a “natural gas company” engaged in the interstate transmission of natural gas via interstate gas pipelines.   In that regard, “the regulation of interstate gas pipelines is a matter within the exclusive jurisdiction of the FERC” (Matter of Skyview Acres Coop., Inc. v. Pub. Serv. Comm'n, 163 A.D.2d 600, 602, 558 N.Y.S.2d 972).   The federal preemption of state regulations of such pipelines, however, also extends to state assessment of environmental matters (see National Fuel Gas Supply Corp. v. Public Service Commn., 894 F.2d 571, cert. denied 497 U.S. 1004, 110 S.Ct. 3240, 111 L.Ed.2d 750).   Pursuant to the requirements of the National Environmental Policy Act, the FERC is required to undertake its own environmental analysis (see 42 USC § 4321 et seq.;  Matter of Niagara Mohawk Power Corp. v. New York State Dept. of Envtl. Conservation., 82 N.Y.2d 191, 196, 604 N.Y.S.2d 18, 624 N.E.2d 146, cert. denied 511 U.S. 1141, 114 S.Ct. 2162, 128 L.Ed.2d 885).   In the instant matter, since the FERC has authority to consider environmental issues, LIPA was prohibited from engaging in “concurrent site-specific environmental review” (see National Fuel Gas Supply Corp. v. Public Service Commn., 894 F.2d at 579).   Accordingly, its segmentation of the natural gas pipeline from the environmental review of the project was not improper.

Furthermore, the “new information” that the appellants brought to the attention of LIPA after the issuance of the FEIS was not of the type that would require further environmental review of the project (Matter of Croton Watershed Clean Water Coalition, Inc. v. New York City Dept. of Envtl. Protection, 20 A.D.3d 476, 477, 797 N.Y.S.2d 908).   Contrary to the appellants' contention, there were no environmentally-significant modifications made after LIPA issued the FEIS, nor was there evidence of changes to the proposal, newly-discovered information, or adverse impacts which were inadequately addressed in the FEIS that would require the preparation of a supplemental EIS (see Matter of Halperin v. City of New Rochelle, 24 A.D.3d at 777, 809 N.Y.S.2d 98;  Matter of Village of Pelham v. City of Mount Vernon Indus. Dev. Agency, 302 A.D.2d 399, 400-401, 755 N.Y.S.2d 91).   Thus, the determination of LIPA not to prepare a supplemental EIS (see 6 NYCRR 617.9[a][7][i] ), was neither arbitrary and capricious, nor an abuse of discretion (see Matter of Haberman v. City of Long Beach, 307 A.D.2d 313, 314, 762 N.Y.S.2d 425;  Matter of Town of Pleasant Val. v. Town of Poughkeepsie Planning Bd., 289 A.D.2d 583, 736 N.Y.S.2d 70).

 Finally, under State Finance Law § 123-b, a “citizen taxpayer, whether or not such person is or may be affected or specially aggrieved ․ may maintain an action for equitable or declaratory relief, or both, against an officer or employee of the state, who in the course of his or her duties, has caused, is now causing, or is about to cause, a wrongful expenditure, misappropriation, misapplication, or any other illegal or unconstitutional disbursement of state funds or state property.”   This statute is narrowly construed as a grant of “standing to correct clear illegality of official action,” but does not allow the interposition of “litigating plaintiffs and the courts into the management and operation of public enterprises” (Matter of Abrams v. New York City Tr. Auth., 39 N.Y.2d 990, 992, 387 N.Y.S.2d 235, 355 N.E.2d 289;  see Saratoga County Chamber of Commerce v. Pataki, 100 N.Y.2d 801, 813, 766 N.Y.S.2d 654, 798 N.E.2d 1047, cert. denied 540 U.S. 1017, 124 S.Ct. 570, 157 L.Ed.2d 430;  Matter of Transactive Corp. v. New York State Dept. of Social Servs., 92 N.Y.2d 579, 588-589, 684 N.Y.S.2d 156, 706 N.E.2d 1180;  Garber v. Board of Trustees of State Univ. of N.Y., 38 A.D.3d 833, 834 N.Y.S.2d 203).   In the case at bar, the conclusory allegations set forth in the amended petition and complaint were patently insufficient to establish that the challenged expenditures were an “illegal” use of state funds (Garber v. Board of Trustees of State Univ. of N.Y., 38 A.D.3d 833, 834 N.Y.S.2d 203;  see Kennedy v. Novello, 299 A.D.2d 605, 607, 750 N.Y.S.2d 175) and the appellants also failed to demonstrate that the “challenged expenditures can be clearly traced to identifiable State funds” (Matter of Schulz v. State of New York, 217 A.D.2d 393, 395, 634 N.Y.S.2d 780;  see Public Util. Law Project of N.Y. v. New York State Pub. Serv. Commn., 252 A.D.2d 55, 58, 681 N.Y.S.2d 396;  Matter of Schulz v. Cobleskill-Richmondville Cent. School Dist. Bd. of Educ., 197 A.D.2d 247, 251, 610 N.Y.S.2d 694).   Accordingly, the Supreme Court properly granted those branches of the respondents-defendants' motions which were to dismiss the seventh cause of action.

The appellants' remaining contentions are without merit.