On April 5, 2013, petitioner commenced a combined special proceeding pursuant to CPLR Article 78 and an action for declaratory judgment pursuant to CPLR § 3001 to, among other things, vacate and annul the order issued by respondent Joseph J. Martens, Commissioner of the New York State Department of Environmental Conservation (DEC) and for a declaration that petitioner, BCD Tire Chip Manufacturing Inc. (hereinafter BCD), and its operations qualify for registration under 6 NYCRR §§ 360-12.1(b)(2) and/or (b)(5). On April 8, 2013, this Court granted a temporary stay pending a hearing on the merits of the petition.

BCD began its' operation in Scotia, New York in 2001; however, since 2004, BCD has operated a scrap tire and recycling facility in Hagaman, New York. In 2004,BCD was issued a Solid Waste Management Facility Registration when it moved to its new facility in Hagaman. BCD's operation involves accepting waste tires and processing the waste tires through an indoor shredding machine into 4 inch by 4 inch chips, otherwise known as tire derived aggregate (TDA). BCD then transports the TDA to its private and public customers. In many instances the TDA is delivered to municipal entities for use in their landfills.

In 2010, DEC inspected BCD's facility and discovered that BCD was storing in excess of 1,000 tire equivalents in the form of TDA. Thereafter, BCD entered into a consent order with DEC. BCD admitted, in the consent order, that it was operating without a permit in violation of 6 NYCRR 360-13.1(b) and agreed to reduce the number of TDA to under 1,000. BCD was then investigated several times thereafter and was found to be noncompliant. Eventually, the consent order was withdrawn, but the reason for its withdrawal is contested by the parties. Throughout the proceedings, BCD never made an attempt to apply for a permit.

In 2011, respondent DEC commenced an administrative enforcement proceeding against BCD alleging, among other things, that BCD was operating a waste tire storage facility without a permit in violation of 6 NYCRR § 360-13.1 (b). While DEC's administrative enforcement action was pending, both the Department of Transportation and DEC contracted on multiple occasions with BCD to remove scrap waste tires from its facilities. It is troublesome to the Court that the DOT, on January 16, 2013, contracted with BCD to remove a total of 1,080 tires from its facility. The Court finds it even more alarming that during the pendency of the DEC administrative enforcement proceeding, DEC, on three separate occasions, contracted with BCD to remove waste tires from DEC facilities.^[FN1] It appears at first blush that, given the conduct of the DEC, the doctrine of unclean hands would apply in a situation such as this. Nevertheless, upon further review, the doctrine is not applicable here. In either event, it is worth noting that DEC's behavior undercuts and diminishes their argument that BCD's operation is unsafe and hazardous. However, as previously stated by the ALJ, this information is not relevant to the ultimate question of liability in this case, but can be taken into consideration when calculating the amount of a civil penalty.

On October 27, 2011, BCD and DEC agreed that there were no material issues of fact and [*2]that it was appropriate for DEC Staff to file a motion for order without hearing, the administrative equivalent of a motion for summary judgment. Furthermore, prior to the hearing, the parties stipulated to the following facts: (1) BCD's tire chip manufacturing process entailed accepting waste tires at the facility, and processing the waste tires through a shredding machine at the facility to make TDA; and (2) the amount of current TDA stockpiled at the facility was derived from more than 1,000 waste tires.

Subsequently, on March 26, 2013, the Commissioner of the DEC adopted the summary report submitted by Administrative Law Judge P. Nicholas Garlick, subject to the Commissioner's comments, and issued an order finding that BCD violated 6 NYCRR § 360-13.1 (b), by storing more than 1,000 waste tire equivalents without a permit. The Commissioner ordered BCD, among other things, to immediately cease accepting any additional waste tires at its facility. Furthermore, the Commissioner gave BCD three alternatives to select from and ordered BCD to notify DEC, within ten (10) days of service of the Decision and Order, its decision as to whether it was going to: (1) apply for a waste tire storage facility permit; (2) bring its facility into compliance with its current registration; or (3) permanently close the facility."[I]t is settled that in a proceeding seeking judicial review of administrative action, [this] court may not substitute its judgment for that of the agency responsible for making the determination, but must ascertain only whether there is a rational basis for the decision or whether it is arbitrary and capricious" (Flacke v Onondaga Landfill Sys., 69 NY2d 355, 363, [1987]; Matter of Warder v Board of Regents of Univ. of State of NY, 53 NY2d 186, 194 [1981]; see Port of Oswego Auth. v Grannis, 70 AD3d 1101, 1103 [2010]). Furthermore, where "the judgment of the agency involves factual evaluations in the area of the agency's expertise and is supported by the record, such judgment must be accorded great weight and judicial deference" (Flacke v Onondaga Landfill Sys., Inc., 69 NY2d at 363). In particular, it is well established that "where the question presented is not one of pure legal interpretation, the practical construction of the statute by the agency charged with implementing it, if not unreasonable, is entitled to deference by the courts'" (Matter of Citizens' Envtl. Coalition, Inc. v New York State Dept of Envtl. Conservation, 57 AD3d 1279, 1279-1280 [2008], quoting Matter of Village of Scarsdale v Jorling, 91 NY2d 507, 516 [1998]; see Island Waste Services, Ltd. v Tax Appeals Tribunal of State, 77 AD3d 1080, 1082 [2010]). Moreover, an agency's interpretation of its regulations must be upheld unless the determination is "irrational and unreasonable" (Matter of Marzec v DeBuono, 95 NY2d 262, 266 [2000] [citations omitted]; see Matter of Gracie Point Cmty. Council v New York State Dept. of Envtl. Conservation, 92 AD3d 123, 128 [2011], lv denied 19 NY3d 807 [2012]). An offer of an alterative plausible construction of a term at issue, submitted by a petitioner, does not render irrational respondent's construction of that term (see Campion v New York State Adirondack Park Agency, 188 AD2d 877, 879 [3d Dept 1992]). Lastly, "[a] fundamental rule of construction provides that the Legislature, when enacting an amendment or new legislation, is presumed to know and be aware of the law existing at that time and does not act in a vacuum" (Matter of Thomas v Bethlehem Steel Corp., 95 AD2d 118, 120 [3d Dept 1983], aff'd, 63 NY2d 150 [1984]).

Both the ALJ's report and the Commissioner's decision recognize that the central issue in this matter is whether BCD's TDA constitutes waste tires under Environmental Conservation Law article 27 and the DEC's regulations. The Commissioner went on to find that the TDA at [*3]BCD's facility constituted waste tires and that, because the TDA stockpiled at BCD's facility was derived from more than 1,000 waste tires, BCD was required to obtain a permit for its facility.

DEC regulations state that "[n]o person shall engage in storing 1,000 or more waste tires at a time without first having obtained a permit to do so" (6 NYCRR § 360-13.1). Pursuant to DEC regulations enacted in 1993, a waste tire is defined as "any solid waste which consists of whole tires or portions of tires" 6 NYCRR § 360-1.2 (b) (183). Similarly, as a result of the enactment of the "Waste Tire Management and Recycling Act of 2003," ECL § 27-1901 (13) defines "waste tire" as "any solid waste which consists of whole tires or portions of tires." Furthermore, a "noncompliant waste tire stockpile" is defined as a facility where one thousand or more waste tires or mechanically processed waste tires have been accumulated, stored or buried, without a permit (see ECL § 27-1901 [6]). Lastly, under ECL § 27-0703, "the owner or operator of a solid waste management facility engaged in the storage of one thousand or more waste tires . . . shall submit . . . a completed application for a permit to continue to operate such facility, or cease operations and begin removal of the waste tires from the facility and dispose of or treat them in a lawful manner pursuant to a removal plan."

First, the ALJ relied upon, among other things, proof in the record which demonstrated that DEC has consistently regulated tire processing facilities, which store more than 1,000 waste tires or portions thereof, including TDA, by requiring a permit pursuant to 6 NYCRR § 360-13.1(b) and that this has been the regulatory practice of DEC for over twenty years.^[FN2] The ALJ also found that the DEC regulations and the legislatures 2003 Act have nearly identical definitions and that the Act did not alter DEC's regulatory scheme for the permitting of waste tire facilities. Furthermore, the ALJ dismissed all the arguments put forth by BCD, which asserted that BCD did not need to obtain a permit, rather it could operate under different provisions of 6 NYCRR § 360. Lastly, as mentioned earlier, the Commissioner adopted the ALJ's report, subject to the Commissioner's comments, and issued an order finding that BCD violated 6 NYCRR § 360-13.1 (b), by storing more than 1,000 waste tire equivalents without a permit.

Based on the abovementioned, as well as the voluminous record before the Commissioner below, this Court, when affording the appropriate deference, finds that there is a rational basis for the Commissioner's determination and that it was neither arbitrary nor capricious.

Petitioner's seventh cause of action seeks a declaratory judgment. In response, respondents' claim that BCD's seventh cause of action must be converted into an Article 78 cause of action. Generally, "a declaratory judgment action is not the proper vehicle to challenge an administrative procedure[ ] where judicial review by way of [an] article 78 proceeding is available" (Fulton County Economic Dev. Corp. v New York State Auths. Budget Off., 100 AD3d 1335, 1336 [2012]; Greystone Mgt. Corp. v Conciliation & Appeals Bd. of City of NY, 62 NY2d 763, 765 [1984]). Here, petitioner's arguments raised in the seventh cause of action were already raised in the petition's other causes of action. Therefore, in light of the above and [*4]pursuant to CPLR § 103 (c), the seventh cause of action is converted to a CPLR Article 78 proceeding.

Next, petitioner has made a motion to amend its Verified Petition to add two new causes of action. This issue arose when BCD's attorney sent correspondence to DEC. In response, the Attorney General stated that they considered the letter to be a settlement offer.

"While leave to amend a pleading should be freely granted so long as no prejudice befalls the nonmoving party and the amendment is not plainly lacking in merit, such a decision rests squarely in the discretion of the trial court and will not be disturbed absent a clear abuse of discretion" (Davis v Wyeth Pharmaceuticals, Inc., 86 AD3d 907, 908 [3d Dept 2011] [internal quotation marks and citations omitted]; see Matter of Wechsler v New York State Adirondack Park Agency, 85 AD3d 1378, 1380 [3d Dept 2011]; Duquette v Oliva, 75 AD3d 727, 727—728 [3d Dept 2010]). "Although mere lateness in seeking such relief is not in itself sufficient to bar amendment, denial of a motion to amend is appropriate when there is prejudice to the opposing party and no showing of a satisfactory excuse for the delay" (Ciarelli v Lynch, 46 AD3d 1039, 1040 [3d Dept 2007][internal quotation marks and citations omitted]). Additionally, only final determinations are reviewable under CPLR article 78 (see CPLR 7801[1]; Sour Mountain Realty Inc. v New York State Dep't of Envtl. Conservation, 260 AD2d 920, 922 [1999]). To ascertain whether "an agency determination is final, consideration must be given to the completeness of the administrative action . . . [and] [t]here must be also consideration as to whether the injury inflicted can be ameliorated by further administrative action or by steps available to the complaining party" (Adams v Carrion, 85 AD3d 1517, 1518 [3d Dept 2011], lv denied, 17 NY3d 717 [2011] [internal quotation marks and citations omitted]).

The language used by petitioner throughout the abovementioned letter provides evidence that the letter was submitted in the spirit of settlement. Furthermore, petitioner used his own settlement offer as grounds to amend the petition, said motion was made the day before the Court held oral argument in the matter, petitioner never submitted formal applications and respondent simply rejected BCD's settlement offer without rendering an administrative determination. Therefore, petitioner's motion to amend the complaint is denied.

This Court has considered petitioner's remaining arguments and finds them to be without merit. In light of the foregoing, the Court will grant respondents' application and uphold the Commissioner's Order, vacate the stay of enforcement of the Commissioner's order, convert petitioner's seventh cause of action into an Article 78 proceeding and deny the petition and dismiss the proceeding.

Respondents shall submit a proposed judgment for the Court's review. However, the judgment shall provide that petitioner has 60 days from entry of said judgment to notify DEC whether it will apply for a waste tire storage facility permit, bring the facility into compliance with its current registration, or permanently close the facility. During this 60 day period, BCD is bound by the Court's prior ruling limiting BCD's intake of scrap waste tires. Therefore, BCD can continue to operate its business on the basis of accepting 100 scrap waste tires for every ton of TDA manufactured by BCD that is removed/shipped from its facility within 24 to 48 hours.

Although this Court will not substitute its judgment for that of the legislature, this Court believes that between the legislature and DEC something needs to be done to allow similar tire shredding businesses, who are providing valuable jobs and a cleaner New York, an easier, more [*5]affordable and expedited process to obtain a permit or variance, thus ensuring that this state is truly "open for business."

Signed this day of 2013, at Johnstown, New York.

____________________________________

HON. RICHARD C. GIARDINO

Acting Supreme Court Justice

ENTER.