Opinion
Index No. 514951/2018
03-28-2023
16 COURT STREET BROOKLYN, LLC, Petitioner, for a Judgment Pursuant to Article 78 of the Civil Practice Law and Rules v. NEW YORK CITY WATER BOARD and New York City Department of Environmental Protection, Respondents.
Recitation, as required by CPLR § 2219 (a), of the electronic papers considered in the review of the petition of 16 Court Street Brooklyn, LLC for a Judgment pursuant to CPLR article 78 against New York City Water Board and New York City Department of Environmental Protection:
Papers NYSCEF Doc. No.
Petition with Verification filed by Petitioner 1-2
Exhibits to the Petition 3
Notice of Petition 4
Answer filed by Respondent 11
Exhibits to the Answer 12-22
Respondents’ Memorandum of Law 3
Petitioner's Reply Memorandum of Law 26
Respondents’ Surreply 27
Respondents’ Memorandum of Law in Further Support 31
Petitioner's Supplemental Reply in Support 32
Petitioner's Supplemental Reply in Further Support 33
Respondents’ Second Supplemental Memorandum of Law in Further Support 34
New York City Water Board, Regulation No. 3 35
Respondents’ Supplemental Briefing in Opposition to CPLR Article 78 Petition 41
Petitioner's Letter Brief 42
Upon the foregoing cited papers and oral argument heard on February 8, 2023, Petitioner 16 Court Street Brooklyn, LLC ("Petitioner") seeks an Order, pursuant to CPLR § 7803 (3), annulling the determination of Respondent New York City Water Board ("Water Board") dated March 21, 2018, which upheld the determination of Co-Respondent New York City Department of Environmental Protection ("DEP" and, collectively with the Water Board, "Respondents") dated January 19, 2018, which assessed a $250 fee for denial of access and calculated Petitioner's water charges from October 26, 2015 to December 22, 2016 based on the attributed consumption charges. As explained below, the Petition is DENIED and the Proceeding is DISMISSED.
Factual History and Procedural Posture:
Petitioner owns a commercial building located at 16 Court Street in Brooklyn, New York (the "building"). The building is equipped with two water meters (collectively, the "subject meters"). In August 2015, Respondent DEP requested that Petitioner provide its contractor access to the subject meters. In that regard, DEP sent to Petitioner (by regular and certified mail) a total of three successive request-for-access notices which, for reasons unexplained in the record, were ignored by Petitioner until December 22, 2016 when its representative telephoned DEP and scheduled the inspection of the subject meters for January 19, 2017, wherein a DEP contractor successfully inspected the subject meters.
Following the meter inspection, DEP demanded that Petitioner compensate it for the inspection delay in accordance with Part V, Section III of the Water Board's rules, entitled "Denial of Access, Theft of Service and Attributed Consumption Charges" (NYSCEF Doc. No. 12). In Petitioner's case, such compensation consisted of two components. The first component was a $250 "Denial of Access Account Administration Fee" (the "DOA fee") for not timely responding to the inspection deadline set forth in the first request-for-access notice (see Water Board's Rules, Part V, Sections III.A.1-III.A.2). The second more significant component, which is the one contested in this proceeding, was the "Attributed Consumption Charges" (the "ACCs") for the period from October 26, 2015 to December 22, 2016 (the "access-delay period") for not timely responding to the inspection deadline set forth in the second request-for-access notice (see Water Board's Rules, Part V, Sections III.A.1, III.A3, and III.C.). The ACCs for the access-delay period in Petitioner's case were calculated under the formula set forth in the Water Board's rules, rather than in accordance with Petitioner's actual metered use as reflected by the subject meters for the same period.
Petitioner refused to pay the ACCs and the DOA fee. By letters dated August 25, 2017 and October 30, 2017, Petitioner's representative contested the ACCs and the DOA fee. By letters dated October 19, 2017 and January 29, 2018, DEP declined to annul or reduce the ACCs and the DOA fee. By letter dated February 7, 2018, Petitioner's representative appealed DEP's January 29, 2018 determination ("DEP's determination") to the Water Board. By letter dated March 21, 2018, the Water Board upheld DEP's determination (the "Water Board's determination"). In particular, the Water Board's determination explained:
"[Petitioner's representative's] letter suggests that the charges from October 26, 2015 to December 22, 2016 [i.e. , for the access-delay period] should be based on actual consumption. However, attributed consumption charges are not based on actual usage; rather, they are based on the representative usage of properties of similar type and size for which DEP has pursued the demand for access process. Additionally, the Water Board Rate Schedule, Part V, Section 3.A.3. provides that ‘DEP shall impose Attributed Consumption Charges for each applicable service where a Customer fails to provide and/or facilitate Access as required by DEP in a second written notice.’ Therefore, [Petitioner's] failure to provide access to the meter[s] in response to the September 4, 2015 notice [i.e. , the second written notice] mandated the attributed consumption billing, and there is no basis to adjust these charges.
In summary, both the DOA fee and the subsequent attributed consumption charges were properly imposed on this account due to [Petitioner's] failure to facilitate access to the water meter[s] in response to DEP's written demand for access notices.
Accordingly, [Petitioner's] appeal requesting a reduction in charges is denied, and DEP's billing determination[,] dated January 19, 2018[,] is affirmed. Pursuant to the Water Board Rate Schedule, this is the final review of this billing dispute."
(Water Board's Determination at 2, part of NYSCEF Doc. No. 3).
On July 23, 2018, Petitioner timely commenced the instant CPLR article 78 proceeding seeking to annul the Water Board's determination as (1) "arbitrary and capricious insofar as it lacks sound reasoning," (2) "not supported by or based on substantial evidence," and (3) "grounded on errors of law" (Petition, ¶ 17). On May 31, 2019, Respondents interposed their joint answer. After attempts at settlement negotiations before Justice Katherine A. Levine failed, the matter ultimately came for resolution before the undersigned. The Court heard oral argument on February 8, 2023 and shortly thereafter received supplemental briefing.
Standard of Review:
As is the case with any other administrative agency, "[a] court has the power to review an administrative determination made by the Water Board and may overturn such a determination if it is arbitrary and capricious or lacks a rational basis" ( Matter of Jaman Realty, LLC v New York City Water Bd. , 206 AD3d 656, 658 [2d Dept 2022] ). As a general matter, however, the Water Board (like any other administrative agency) enjoys broad discretionary power when making determinations on matters it is empowered to decide. CPLR § 7803(3) provides for only a very limited judicial review; namely, whether a determination was made in violation of lawful procedure, was affected by an error of law, was arbitrary and capricious, or an abuse of discretion. When reviewing an administrative determination, "the court's scope of review is limited to an assessment of whether there is a rational basis for the administrative determination without disturbing underlying factual determinations" (Matter of Heintz v Brown , 80 NY2d 998, 1001 [1992] ). "In a review of administrative determinations ... courts do not review the facts de novo and arrive at an independent determination" (Matter of Marsh v Hanley , 50 AD2d 687, 687 [3d Dept 1975] [italics in the original]). "A reviewing court in passing upon this question of law may not substitute its own judgment of the evidence for that of the administrative agency, but should review the whole record to determine whether there exists a rational basis to support the findings upon which the agency's determination is predicated" (Matter of Purdy v Kreisberg , 47 NY2d 354, 358 [1979] ). Thus, "if the acts of the administrative agency find support in the record, its determination is conclusive[,] and the test of judicial review is to determine whether the agency acted arbitrarily or capriciously" (Matter of Sullivan County Harness Racing Assn. v Glasser , 30 NY2d 269, 278 [1972] ). What's more, "in reviewing administrative determinations, a court may not overturn an agency's decision merely because it would have reached a contrary conclusion" (id. ). Finally, "[i]n demonstrating that administrative actions were taken arbitrarily or in bad faith, the petitioner bears a heavy burden of proof, for which conclusory allegations and speculative assertions will not suffice" (Matter of Harpur v Cassano , 129 AD3d 964, 965 [2d Dept 2015], lv denied 26 NY3d 916 [2016] ).
Discussion:
Here, Petitioner has failed to meet its heavy burden of proving that it was irrational for DEP to assess petitioner with the ACCs for the access-denial period, as well as to impose the DOA fee. "[T]he Water Board is the entity which promulgates the rate schedule of sewer rents and wastewater allowances (see Public Authorities Law § 1045-g[4] ) in the discharge of its duties to fix and collect water and sewer charges in order for the City to maintain the water system" ( Matter of A&F Scaccia Realty Corp. v New York City Dept. of Envtl. Protection , 200 AD3d 875, 877 [2d Dept 2021] ). In that regard, Public Authorities Law § 1045-g ("General powers of the water board") provides, in relevant part (in ¶ 4 thereof), that the Water Board shall have the power "[t]o establish, fix, revise, charge and collect and enforce the payment of all fees, rates, rents and other service charges for the use of, or services furnished by the sewerage system, water system, or both."
Appendix A of Title 15 of the Rules and Codes of New York City ("RCNY"), entitled "New York City Water Board, Water and Wastewater Rate Schedule" (the "Rate Schedule"), provides the rates to be charged by DEP and sets forth certain other rules and regulations concerning water charges. As relevant herein, Part V, § 3.A.3 of the Rate Schedule provides that "DEP shall impose Attributed Consumption Charges for each applicable service where a Customer fails to provide and/or facilitate Access as required by DEP in a second written notice" (emphasis added). As further relevant herein, Part V, § 3.A.2 of the Rate Schedule provides that "DEP shall impose a Denial of Access Account Administration Fee of $250 on each account when a Customer fails to facilitate Access as required by DEP in a first written notice" (emphasis added). "Judicial deference to an agency's interpretation of its own regulations is warranted here because, having authored the [aforecited] promulgated text and exercised its legislatively delegated authority in interpreting it, the agency is best positioned to accurately describe the intent and construction of its chosen language" (Matter of 38 Fountain Ave. Corp. v New York City Water Bd. , 2021 WL 4290693, *2 [Sup Ct, Kings County 2021, Sweeney, J.] ).
Inasmuch as it is undisputed that Petitioner failed to provide access to the subject meters during the approximately year-long access-denial period, DEP acted within its regulatory right to assess the ACCs for that period, as well as to impose the DOA fee, in accordance with Part V, § A.3 and Part V, § A.2 of the Rate Schedule, respectively. Further, the mandatory language of the Rate Schedule, in each instance, leaves no discretion to DEP to waive or reduce either the ACCs and/or the DOA fee. Accordingly, the Water Board's denial of Petitioner's appeal of DEP's assessment of the ACCs and its imposition of the DOA fee was not arbitrary and capricious and was not erroneous as a matter of law. Contrary to Petitioner's contention, the Water Board's determination was supported by, and was based on, substantial evidence, including Petitioner's undisputed failure to provide a DEP contractor access to the subject meters during the access-denial period.
Conclusion:
Upon the filing and reading of the Verified Petition, the Verified Answer, and the parties’ respective submissions in support and opposition thereto, and upon the oral argument held on February 8, 2023, the Court denies the petition and dismisses the proceeding.
The foregoing constitutes the Decision and Judgment of this Court