LLC 78 v. SUFFOLK COUNTY DEPARTMENT OF HEALTH SERVICES SUFFOLK COUNTY DEPARTMENT OF HEALTH SERVICES BOARD OF REVIEW (2026)

Upon the E-file document list numbered 1 to 87, read and considered on this CPLR Article 78 application, and after trial held before this Court on May 12, 2026; it is

ORDERED AND ADJUDGEDthat the petition is granted and the decision of the Suffolk County Department of Health Services Board of Review is annulled and set aside; and it is further

ORDERED AND ADJUDGEDthat respondents are directed to issue an Article 12 permit, and/or to confirm complete registration of the subject site under the strictures of Article 12, and to otherwise permit commencement of construction of this battery energy storage system, within ten (10) days of the entry date of this Order.

A trial in this CPLR Article 78 proceeding was conducted on May 12, 2026. While familiarity with the antecedents of the matter is presumed based upon the prior orders of this Court dated March 10, 2026, March 25, 2026, and May 7, 2026, it is underscored that the Court took the somewhat unusual step of setting the matter down for trial in order to determine the factual predicates for the agency determination to direct the petitioner to respondent Suffolk County Department of Health Services Board of Review ("County" or "the County") for a variance under Article 7 of the Suffolk County Sanitary Code. A review of the return of the record of proceedings revealed that no such factual predicates were recognizable.

Testifying on behalf of petitioner, Holtsville Energy Storage, LLC ("Holtsville") was Camille Rodriguez. Ms. Rodriguez was deemed credible by the Court. She evinced a calm, dispassionate demeanor, and gave uncomplicated, direct answers to questions. Ms. Rodriguez described an originally unremarkable registration process for the subject Battery Energy Storage System ("BESS") to be located in Holtsville, just south of the Long Island Expressway, under Article 12 of the Suffolk County Sanitary Code ("Code" or "The Code").

Ms. Rodriguez, as a project manager for Holtsville  ¹ , also recounted the application process under the Code respecting a BESS proposed at a site in Yaphank, which differed from the subject site because it was contained within a building, and upon application of the pertinent subsection, therefore, required a variance under Article 7 of the Code.

A brief digression on the substance of Articles 7, and 12 is instructive. Article 7 thereof, entitled "Water Pollution Control," includes as part of its declared policy, "...to maintain its water resources as near to their natural condition of purity as reasonably possible for the safeguarding of public health...." Suffolk County relies on a sole source aquifer for its potable water supply. By its own terms, and acknowledged by municipal officials at all levels of government in Suffolk, as well as attorneys, engineers and architects, Article 7 provides a regulatory framework for the orderly disposal of human waste in the same sub-surface universe where potable water is extracted for industry and human existence. The inherent conflict is obvious to anyone of ordinary sensibilities. The need for governmental regulation is palpable.

Similar to Article 7, Article 12 of the Code includes as part of its declared policy those very same objectives: "...to maintain its water resources as near to their natural condition of purity as reasonably possible for the safeguarding of public health...." What follows in Article 12, however, is a statutory scheme which includes, inter alia, detailed criteria for construction and operation of outdoor above ground storage facilities for the containment of toxic and hazardous materials as defined therein.

The Court of Appeals has repeatedly and forcefully guided the lower courts on the proper approach to statutory interpretation. An excellent recent exposition on the topic is found in Town of Southampton v New York State Department of Environmental Conservation, 39 NY3d 201, 184 NYS3d 706 (2023), where the Court held in relevant part: "Inasmuch as the clearest indicator of legislative intent is the statutory text, the starting point in any case of interpretation must always be the language itself, giving effect to the plain meaning thereof" (id. at 209, 184 NYS3d at 711, citing Kuzmich v 50 Murray St. Acquisition LLC, 34 NY3d 84, 91, 108 NYS3d 431 [2019] [internal quotation marks and citations omitted] cert denied 589 US 1136 [2020]. Furthermore, "[a] statute 'must be construed as a whole,' and 'its various sections must be considered together and with reference to each other' " (Matter of Peyton v New York City Bd. of Stds. & Appeals, 36 NY3d 271, 280, 140 NYS3d 447 [2020]).

While the rules of statutory construction require that Articles 7 and 12 be read in harmony, one with the other, and in accord with the reasonably understood objectives of the Legislature which adopted them, the clear import of language of limitation within Article 7 cannot be ignored. The relevant subsection, 760-706 (B)(1) reads as follows:

B. It shall be unlawful to use or store restricted toxic or hazardous materials on any premises except as follows:

1. a. the intended use of the product stored is solely for on-site heating, stand-by electricity generation for electrical outages or irrigation pump power; and

b. the facility for such storage is intended solely for the storage of kerosene, number 2 fuel oil, number 4 fuel oil, number 6 fuel oil, diesel oil or lubricating oil or used oil; and

c. the facility for such storage is piped directly to the on-site heating unit, stand-by electricity generator unit or irrigation pump;

d.the facility for such storage is constructed in accordance with the requirements of Article 12 of the Suffolk County Sanitary Code for new construction; and

e. the materials so stored are not industrial wastes from processes containing restricted toxic or hazardous materials; and

f. the materials stored are not intended for resale.

The clear and unmistakable import of that subsection is simple and easily understood; with particular advertence to subsections d, e, and f following the semicolon at subsection c: so long as a facility for storage of toxic or hazardous materials is constructed in accordance with the requirements of Article 12, and the materials are not industrial wastes from processes containing restricted toxic or hazardous materials and such materials are not intended for resale, the strictures of the Code are satisfied. This is the construction of the statutory language adopted by the Court.

One of two witnesses who testified on behalf of the County was Kenneth Zegel, the Chief Public Health Engineer for the Division of Environmental Quality. Mr. Zegel was offered an opportunity at trial to disclose an alternative construction or otherwise explain a disagreement with the plain and obvious import of language found in Section 760-706(B)(1). The Court found his testimony in this regard to be uninformed and his conclusions to be patently wrong.

Also testifying for the County was Oksana Dzhavala, Public Health Engineer. Like Mr. Zegel, Ms. Dzhavala was asked about the statutory language which under Article 7 clearly permits the subject BESS to be constructed without additional municipal application, provided the Article 12 registration process has been completed.

The Court determined that by her demeanor, Ms. Dzhavala was guarded and evasive. Her answers to direct questions bear this out. For instance, when asked by the Court to explain the facts which caused the County to refer the project to the Board of Review for an Article 7 variance (by way of her own e-mail dated August 30, 2024) she "could not remember exactly" why that decision was made. The subsequent question concerning new information netted a response about identification of the owner in fee title of the subject property and consideration of an alternative oil to be used and stored on the site. Such responses were deemed not credible or worthy of belief. Later testimony from this witness (see below) about differing standards to be applied to toxic or hazardous material storage as a function of the size of a building was likewise deemed not credible or relevant to the matter framed for decision by the Court.

An additional municipal justification for declaring this project subject to an Article 7 variance included the construction applied to the word "building." As alleged by Mr. Zegel in his amended affirmation dated March 2026, "building" means anything installed or constructed in "the protected Article 7 groundwater zones."

A variant on the statutory construction offered by Mr. Zegel was delivered by Ms. Dzhavala at trial. She posited that no building on a particular site is equivalent to a small building (as opposed to a larger building). The pertinent testimony follows:

THE WITNESS: Your Honor, these citations from the Article 7, they were not cumulative. I view them as separate. And that citation about the building 20,000 square footage or less, that is under which this facility falls into. So since they didn't have any building, this would be under that clause that 20,000 square footage or less, which is zero, which is less.

THE COURT: So you are saying no building is like a smaller building, is that what you are saying?

THE WITNESS: It means that it's a 20,000 square footage of building or less, which means zero in this case.

Ignoring entirely the inconsistency in the interpretations asserted by the County officials, both such interpretations are unreasonable and irrational.

Trials are rare in the context of Article 78 proceedings challenging the propriety of governmental action. In this matter the Court provided a platform and a unique opportunity for the respondent County to direct the Court's attention to facts which would sustain governmental decision-making that preceded commencement of this matter. The County was unable to marshall and present any intelligible facts to sustain the actions taken. Much to the same effect, the County was permitted to offer a statutory construction which would have buttressed the decision to require the petitioner to make application for a variance under Article 7 of the Code. No credible construction was presented. New York Law is clear that agency deference is not to be accorded when the matter to be decided is one of pure statutory construction (see Matter of DeVera v Elia, 32 NY3d 423, 93 NYS3d 198 [2018]). One need not be schooled in the law to recognize the ordinary meaning of the word "building." The material proposed to be stored on the subject site will not be stored in a building but is proposed to be stored in part of a series of outdoor components, which include a containment system designed to impound one hundred percent (100%) of the regulated toxic material, in addition to a "a 100 year rainfall event" in the event of a failure in the primary means of containment. The material, mineral oil, will not be stored inside a building. In this instance, the only reasoned and rational construction to be applied to this statutory scheme was divined by the Court, leading to the granting of the petition. In addition, no predicate facts to explain the determination of the County to suddenly alter the review process and compel Holtsville to request variance relief under Article 7 were adduced at trial.

There is a tipping point at which municipal officials elevate themselves from upholding and enforcing the law and instead presume that they, by their policy objectives and decision-making, become the law. These County officials have reached that point, with the decision to subject Holtsville to an appellate process that does not apply to the project they wish to undertake.

In accord with all of the foregoing, the Court grants the petition.

The foregoing constitutes the decision, Order, and Judgment of the Court.

Dated: July 30, 2026

HON. CHRISTOPHER MODELEWSKI, J.S.C.

FOOTNOTES

1.   At the time of trial, Ms. Rodriguez was in the employ of a different company.

Christopher Modelewski, J.