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AVOCA NATURAL GAS STORAGE v. CONCERNED CITIZENS OF

October 8, 1996

AVOCA NATURAL GAS STORAGE, Plaintiff,
v.
CONCERNED CITIZENS OF COHOCTON VALLEY, INC., Defendant.



The opinion of the court was delivered by: LARIMER

 Plaintiff, Avoca Natural Gas Storage ("Avoca"), commenced this action pursuant to 28 U.S.C. § 2201, seeking a declaratory judgment that federal law and regulations preempt certain New York State laws that defendant, Concerned Citizens of Cohocton Valley, Inc. ("CCCV"), is seeking to enforce against Avoca in state court. Avoca also seeks an order enjoining CCCV from attempting to enforce those state laws. CCCV has filed a motion to dismiss the complaint pursuant to Rule 12(b) of the Federal Rules of Civil Procedure, and Avoca has moved for summary judgment.

 BACKGROUND

 This case arises out of a dispute concerning a proposed natural-gas storage project ("the project") in the Town of Avoca, New York. CCCV was the plaintiff in another action before this court relating to that project, Concerned Citizens of Cohocton Valley, Inc. v. Town of Avoca Planning Board, 919 F. Supp. 643 ("the prior action"). The facts surrounding the dispute are set forth in my Decision and Order issued on March 21, 1996, which dismissed the complaint in that action. Familiarity with that decision is assumed, but a brief recitation of certain pertinent facts will be given here.

 CCCV, a non-profit corporation, filed the prior action against a number of parties involved in the project. One of the defendants in that case, J. Makowski Associates, Inc. ("JMAI"), was granted certain permits to develop the project, which have since been transferred to Avoca. CCCV sought an order from this court requiring the defendants to comply with certain New York State and local laws, including the State Environmental Quality Review Act ("SEQRA"), Envtl. Conserv. L. § 8-0101 et seq.

 Although all of CCCV's causes of action in the prior action were based upon state and local law, CCCV asserted the existence of federal question jurisdiction under 28 U.S.C. § 1331, based upon CCCV's expectation that the defendants would raise the defense that the state and local laws that plaintiff relied upon were preempted by the Natural Gas Act ("NGA"), 15 U.S.C. § 717 et seq., under the Supremacy and Commerce Clauses of the Constitution (Art. VI, cl. 2, and Art. I, § 8, cl. 3, respectively).

 After both sides had moved for summary judgment, I raised the issue of subject matter jurisdiction sua sponte pursuant to the court's duty to determine whether jurisdiction exists. See Manway Constr. Co. v. Housing Auth. of Hartford, 711 F.2d 501, 503 (2d Cir. 1983). In my March 21, 1996 Decision and Order, I found that because plaintiff's complaint alleged only violations of state law, it did not arise under federal law, and that federal jurisdiction was therefore lacking. I also held that the NGA did not completely occupy the field of natural-gas regulation so as to make the action cognizable in federal court under the complete-preemption doctrine enunciated by the Supreme Court in Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64, 95 L. Ed. 2d 55, 107 S. Ct. 1542 (1987). Decision and Order, March 21, 1996, at 9. *fn1"

 CCCV then commenced an action on April 9, 1996, in New York Supreme Court, Albany County, pursuant to N.Y. C.P.L.R. Art. 78. In that action, CCCV seeks essentially the same relief that it sought in the prior action in this court. That Article 78 proceeding has since been stayed pending resolution of the instant action.

 Avoca commenced the present action in federal court on May 1, 1996. Jurisdiction is premised on the Declaratory Judgment Act, 28 U.S.C. § 2201. Avoca seeks a declaration by this court that the NGA preempts SEQRA and any other state or local laws that CCCV is attempting to enforce against Avoca.

 DISCUSSION

 CCCV moves to dismiss the complaint on various grounds, including lack of subject matter jurisdiction. I find that jurisdiction is lacking, and will therefore grant the motion to dismiss.

 In support of its contention that the court has subject matter jurisdiction over this action, Avoca relies upon Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 77 L. Ed. 2d 490, 103 S. Ct. 2890 (1983), and Cable Television Ass'n of New York v. Finneran, 954 F.2d 91 (2d Cir. 1992). In Shaw, several employers sued certain New York State agencies and officials seeking a judgment declaring that New York's Human Rights Law and Disability Benefits Law were preempted by ERISA. In a footnote, the Supreme Court observed that its decision in Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 77 L. Ed. 2d 420, 103 S. Ct. 2841 (1983), which was issued on the same day as Shaw, did not call into question the lower courts' jurisdiction to hear Shaw. In Franchise Tax Board, the Court held that federal jurisdiction did not exist where the plaintiff sued for a declaration that state laws were not preempted by ERISA. The Shaw Court stated that Shaw was distinguishable because it involved plaintiffs seeking injunctions against enforcement of state laws they claimed were preempted by ERISA, as well as declarations that those laws were preempted. Shaw, 463 U.S. at 96 n. 14. The Court further noted that

 
it is beyond dispute that federal courts have jurisdiction over suits to enjoin state officials from interfering with federal rights. A plaintiff who seeks injunctive relief from state regulation, on the ground that such regulation is pre-empted by a federal statute which, by virtue of the Supremacy Clause of the Constitution, must prevail, ...

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