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Lillian J. Badgley Emil Lake and Helen Lake v. City of New York

decided: September 27, 1979.


City of New York appeals from judgments entered below, Southern District of New York, Brieant, J., opinion reported at 450 F. Supp. 846 (1978), holding appellant liable to these appellees in these cases, consolidated upon appeal. Appellees are Pennsylvania owners of Pennsylvanian riparian lands along the Delaware River, and they obtained judgments against the City for its alleged tortious manipulation of the waters of the River. Judgments reversed.

Before Waterman, Mansfield and Timbers, Circuit Judges.

Author: Waterman

These actions consolidated for trial, were brought by or in the name of, owners of riparian land situated in Pennsylvania, who claim that the value of their lands along the Delaware River and its West Branch was diminished by the City of New York's impoundment, diversion and manipulation of the headwaters of the Delaware River for the City's public water supply purposes. The City's answer admitted that it impounds and diverts the Delaware waters and that it manipulates the flow of the river. The City contended, however, that these acts were authorized by the U.S. Supreme Court's equitable apportionment of the Delaware River waters, decreed in New Jersey v. New York, 347 U.S. 995, 74 S. Ct. 860, 98 L. Ed. 1127 (1954) (New Jersey v. New York IV )*fn1, litigation to which the Commonwealth of Pennsylvania was a party. Accordingly, the City asserted that the rights of these individual riparian landowners in Pennsylvania were adjudicated with those of Pennsylvania itself and are thus barred.

In June 1975, a non-jury trial on the issues of liability and damages was held in the United States District Court for the Southern District of New York (Brieant, District Judge). On September 4, 1976, the trial record was reopened to allow submissions by the parties with reference to legislation enacted in July 1976, 1976 N.Y.Laws ch. 888, codified at N.Y.Envir.Conserv.Law §§ 15-0801 to -0807 (McKinney Supp.1979). On March 31, 1978, the trial court issued its decision, 450 F. Supp. 846 (SDNY 1978), setting forth its findings of fact and conclusions of law, awarding damages plus interest to the plaintiffs appellees and against the City. From that judgment the City appeals, raising three allegations of error: (1) that the district court erred in holding that common law riparian rights are not destroyed or altered in streams, the waters of which have been apportioned by a United States Supreme Court decree invoking the common law doctrine of equitable apportionment; (2) that the district court was incorrect in determining that the amount of damages to be awarded to appellees should not be affected by a post-trial two-year experimental program to ascertain if and to what extent certain of the damaging conditions underlying the judgment herein can be ameliorated; and (3) that the district court's method of computing damages was erroneous.

Inasmuch as we reverse the judgment below and order the entry of judgment for the appellant City, and as we base our holding upon the first issue, we need not and do not reach the latter two issues.

The Delaware River begins its flow within the bounds of New York State. The East Branch, which is entirely within New York State, and the West Branch, which is also entirely within New York State, except for approximately 8 miles above Hancock, N. Y., join at Hancock to form the main stream of the Delaware River. Thereafter the river flows in a generally southeasterly direction. Commencing about 4 miles south of Deposit, New York, the West Branch forms the boundary line between New York and Pennsylvania for approximately 8 miles, and thereafter the main stream forms the boundary line for some 68 miles to Port Jervis, N. Y. At Tri-State Rock, near Port Jervis, New York, the boundaries of New Jersey, New York and Pennsylvania converge. Below Tri-State Rock the river constitutes the boundary between New Jersey and Pennsylvania, and at the head of Delaware Bay near Wilmington, Delaware it discharges into the Atlantic Ocean.

In order to meet its increasing need for supplies of public water New York City in 1929 began to plan the diversion of the waters of the Delaware River and its tributaries. Shortly thereafter, the State of New Jersey commenced an original suit in the U.S. Supreme Court against the State of New York and the City of New York to enjoin and restrain any diversion of the waters of the Delaware River and its tributaries. In its bill of complaint New Jersey alleged that the proposed diversion would deprive New Jersey "and its citizens as riparian owners along the Delaware River of the natural, unobstructed and undiminished flow of its waters in violation of their rights under the common-law," and would thereby "take the property of the plaintiff and its citizens without due process of law," in violation of the fourteenth amendment of the U.S. Constitution. New Jersey further alleged that the proposed diversion would substantially harm navigation, water power, sanitation, industrial use, oysters, fish, water supply, agriculture and recreation in the Delaware Valley basin.

The Commonwealth of Pennsylvania was permitted to intervene, New Jersey v. New York I, 280 U.S. 528, 50 S. Ct. 151, 74 L. Ed. 595 (1930), upon filing a Statement of Interest and Relief desired. In its statement Pennsylvania set forth its opposition to the application of the common law doctrine of riparian rights advocated by New Jersey inasmuch as that doctrine would prevent the development and use of the Delaware River and its tributaries as a present and future source of water supply for Philadelphia and eastern Pennsylvania. Instead, Pennsylvania proposed a fair and equitable division of the waters of the Delaware River and its tributaries between the three states in accordance with the doctrine of equitable apportionment.

Following considerable testimony before Special Master Charles N. Burch, Esq., the Special Master prepared a report and recommended decree to the Supreme Court which was adopted and incorporated in the decision and decree entered on May 25, 1931. New Jersey v. New York II, 283 U.S. 805, 51 S. Ct. 562, 75 L. Ed. 1425 (1931). The Decree, adopting the doctrine of equitable apportionment, limited New York's diversion to 440 million gallons daily (m.g.d.), and, as proposed by the Commonwealth of Pennsylvania, imposed a compensatory release plan. Under this plan, releases were required from New York reservoirs to maintain flows at Port Jervis, New York, at or above 1535 cubic feet per second (c.f.s.), and at Trenton, New Jersey, at or above 3400 c.f.s., provided that the maximum release required would be 30 per cent of the average diversion area's yield, or 402.6 c.f.s. The purpose of these releases was to protect downstream states from potential injuries to municipal, recreational and fishery uses, particularly during low-flow periods. The Decree also required the construction of a sewage treatment plant at Port Jervis. Paragraph 6 of the 1931 Decree provided that the Court's jurisdiction should be a continuing one and any party was authorized to apply subsequently for further action or relief, or for any modification of the Decree.

In April 1952 the City petitioned the Court to amend the 1931 Decree so as to allow an increase in the diversion of Delaware River waters of as much as 800 m.g.d. The States of New York, New Jersey, Pennsylvania and Delaware appeared as parties or as interveners, and the matter was referred to Special Master Kurt F. Pantzer, Esq. Following hearings before the Special Master and a lengthy series of negotiating sessions, the parties agreed to the terms of a consent decree to replace the 1931 Decree. This consent decree was reported by the Special Master and entered by the Court on June 7, 1954. New Jersey v. New York IV, 347 U.S. 995, 74 S. Ct. 860, 98 L. Ed. 1127 (1954).

The 1954 Consent Decree authorizes the City of New York, following the completion of the Cannonsville Reservoir on the West Branch, to divert up to 800 m.g.d. subject to a new and somewhat different scheme for compensatory releases known as the "Montague Formula." This Formula requires the City to maintain certain minimum flows of water at Montague, New Jersey, approximately 75 miles downstream from the confluence of the East and West Branches of the River. The 1954 Decree further provides for certain excess releases depending upon the City's expected consumption of water, for the appointment of a River Master, and continues to require sewage treatment at Port Jervis. As in the 1931 Decree, the Court retained jurisdiction of the dispute, permitting the parties to apply for modification of the Decree, or for any pertinent supplemental orders. In 1961 the four basin states entered into a Compact creating the Delaware River Basin Commission (hereinafter DRBC), Del.Code tit. 7, §§ 6501-6511 (1974); N.J.Stat.Ann. §§ 32:11 D-1 to D-110 (West 1963); N.Y.Envir.Conserv.Law §§ 21-0701 to -0723 (McKinney 1973); Pa.Stat.Ann. tit. 32, §§ 815.101 .106 (Purdon 1967), which Compact subsequently was approved by Congress, Delaware River Basin Compact, Pub.L.No.87-328, 75 Stat. 688 (1961).

The general purposes of the Compact are "to promote interstate comity; to remove causes of present and future controversy; to make secure and protect present developments within the states; to encourage and provide for the planning, conservation, utilization, development, management and control of the water resources of the basin; (and) to provide for cooperative planning and action by the signatory parties with respect to such water resources." (Delaware River Basin Compact, Art. I, par. 1.3(e)).

Throughout Article 3 of the Compact, the Article setting forth the powers and duties of the Commission, there is constant reference to limitations upon the Commission, limitations deriving from the Decree of the United States Supreme Court in New Jersey v. New York IV, 347 U.S. 995, 74 S. Ct. 860, 98 L. Ed. 1127. Though in extraordinary circumstances, such as drought, the Commission may direct increases or decreases in any allocation or diversion or release of water required by the above mentioned decree, it is clear that, except for such an emergency, the Commission may not act, and nothing in the Compact shall be construed in any way so as to impair, diminish, or otherwise adversely affect the rights, powers, privileges, conditions, and obligations contained in that decree. For instance, Article 3, Section 3.3 reads as follows:

3.3 Allocations, Diversions and Releases. The Commission shall have the power from time to time as need appears, in accordance with the doctrine of equitable apportionment, to allocate the waters of the basin to and among the states signatory to this compact and to and among their respective political subdivisions, and to impose conditions, obligations and release requirements related thereto, subject to the following limitations:

(a) The commission, without the unanimous consent of the parties to the United States Supreme Court decree in New Jersey v. New York, 347 U.S. 995, 74 S. Ct. 860, 98 L. Ed. 1127 (1954), shall not impair, diminish or otherwise adversely affect the diversions, compensating releases, rights, conditions, obligations, and provisions for the administration thereof as provided in said decree; . . . .

subject, however, to the emergency provision previously mentioned.

Moreover, in Article 3, Section 3.4, each of the signatory states waived or relinquished for the duration of the Compact, any right, privilege or power a state may have to apply for any modification of the terms of the Decree in New Jersey v. New York IV, which would increase or decrease the releases required, except through a proceeding in ...

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