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BROOKLYN BRIDGE PARK COALITION v. PORT AUTH. OF NE

January 14, 1997

BROOKLYN BRIDGE PARK COALITION, Plaintiff, against PORT AUTHORITY OF NEW YORK AND NEW JERSEY and THE STROBER ORGANIZATION, Defendants.


The opinion of the court was delivered by: RAGGI

 RAGGI, District Judge:

 Plaintiff Brooklyn Bridge Park Coalition ("the Coalition"), a not-for-profit corporation comprised of approximately sixty civic associations, brings this action to challenge the decision of the Port Authority of New York and New Jersey ("the Port Authority") to lease Pier 3, a pier and warehouse located on the Brooklyn waterfront, to the Strober Organization ("Strober") for use as a building supply facility and corporate headquarters. The Coalition seeks declaratory and injunctive relief, specifically: (1) a declaration that the Port Authority is a "federal agency," which must comply with provisions of the National Environmental Protection Act ("NEPA"), 42 U.S.C. §§ 4321-70 (1994), and the Coastal Zone Management Act ("CZMA"), 16 U.S.C. §§ 1451-64 (1994), before leasing Pier 3 to Strober; (2) a declaration that the Port Authority is a "state agency," which must comply with provisions of New York's State Environmental Quality Review Act, N.Y. Envtl. Conserv. Law §§ 8-0101 - 8-0117 (McKinney 1984 & Supp. 1996), and Waterfront Revitalization Act, N.Y. Exec. Law §§ 910-923 (McKinney 1996), before leasing Pier 3 to Strober; (3) a declaration that the Port Authority acted ultra vires its founding compact in leasing Pier 3 to Strober; (4) an injunction barring the Port Authority from honoring the Strober lease; and (5) an injunction barring Strober from constructing a building supply facility on Pier 3 that will create a public nuisance.

 Factual Background

 1. The Parties and the Strober Lease

 Plaintiff Coalition was organized in 1989 and has as its members sixty civic organizations and community groups from the downtown waterfront area of Brooklyn. Its stated mission is the creation of a multi-use recreational facility on the Brooklyn Heights waterfront. Defendant Strober is a construction supply company whose headquarters and main warehouse had been located on Hamilton Avenue in Brooklyn. Defendant Port Authority owns and operates a series of piers on the Brooklyn waterfront as part of the Brooklyn Port Authority Marine Terminal ("Brooklyn Marine Terminal"). Several of these piers are currently used as active shipping terminals; others stand vacant.

 The Brooklyn Marine Terminal apparently operates at a deficit. To raise revenue, the Port Authority, on March 29, 1996, preliminarily decided to lease one of its vacant Brooklyn piers, known as Pier 3, to Strober for use as its headquarters and warehouse. The lease was formally approved by the Port Authority's Board of Directors on June 6, 1996. Strober's lease at its Hamilton Avenue facility expired on December 31, 1996. It plans to occupy the Pier 3 site as soon as practicable.

 2. The Port Authority

 Since many of the legal issues in this case hinge on the structure and power of the Port Authority, the court briefly discusses the creation of this entity.

 New York and New Jersey have a long history of cooperation regarding their shared port. For example, in 1834, the two states entered into "an agreement fixing and determining the rights and obligations of the two States" with respect to the "bay of New York and the Hudson River." See 42 Stat. 174 (1921). As commerce in the port expanded, the states' legislatures, in 1917, authorized their respective governors to appoint members to a "New York, New Jersey Port and Harbor Development Commission," for the purpose of studying and making recommendations concerning the operation of the common port. See Bush Terminal Co. v. City of New York, 152 Misc. 144, 147, 273 N.Y.S. 331, 335 (N.Y. Co. 1934) (detailing history of the Port Authority), aff'd, 256 A.D. 978, 11 N.Y.S.2d 554 (1st Dep't 1939), aff'd, 282 N.Y. 306, 16 N.Y.S.2d , 26 N.E.2d 269 (1940). The end result was an interstate compact signed on April 20, 1921 and ratified by Congress on August 23, 1921, creating the Port Authority. Id. at 149, 273 N.Y.S. at 337.

 In giving its consent to this compact, Congress acknowledged that the waterways common to the two states had "become commercially one center or district." 42 Stat. 174. It recognized that "better coordination of the terminal, transportation, and other facilities of commerce in, about, and through the port of New York will result in great economies, benefiting the Nation as well as the States of New York and New Jersey." Id. It concluded that these ends could best be attained "through the cooperation of the two States by and through a joint or common agency." Id.

 By the terms of the compact, the Port Authority is defined as "a body corporate and politic, having the powers and jurisdiction hereinafter enumerated, and such other and additional powers as shall be conferred upon it by the legislature of either State concurred in by the legislature of the other, or by Act or Acts of Congress . . . ." Id. at Art. 3. The enumerated powers are broad. They include

 
full power and authority to purchase, construct, lease, and/or operate any kind of terminal or transportation facility [in the port] district; and to make charges for the use thereof; and for any of such purposes to own, hold, lease, and/or operate real or personal property, to borrow money and secure the same by bonds or by mortgages upon any property held or to be held by it.

 Id. at Art. 6. The compact further provides for the Port Authority to "have such additional powers and duties as may hereafter be delegated to or imposed upon it from time to time by the action of the legislature of either State concurred in by the legislature of the other." Id. at Art. 7.

 With respect to fiscal matters, "'the Port Authority was conceived as a financially independent entity, with funds primarily derived from private investors.'" Hess v. Port Authority Trans-Hudson Corp., 513 U.S. 30, , 115 S. Ct. 394, 398, 130 L. Ed. 2d 245 (1994) (quoting United States Trust Co. of N.Y. v. New Jersey, 431 U.S. 1, 4, 52 L. Ed. 2d 92, 97 S. Ct. 1505 (1977)). Any debts or obligations incurred by the Port Authority "are not liabilities of the two founding States, and the States do not appropriate funds to the Authority." Id. at 399. Neither does Congress appropriate funds to the Port Authority. "Tolls, fees, and investment income account for the Authority's secure financial position." Id.

 Discussion

 I. Motion to Dismiss

 In considering a motion to dismiss, a court must assume that all factual allegations in a plaintiff's complaint are true. It must also draw all reasonable inferences in plaintiff's favor. See Leatherman v. Tarrant Co. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164, 122 L. Ed. 2d 517, 113 S. Ct. 1160 (1993). Dismissal is warranted only if it appears beyond question that plaintiff can prove no set of facts to support its claim. E.g., Bernham v. Litt, 79 F.3d 318, 321 (2d Cir. 1996) (and cases cited therein). Applying these principles to this case, the court is persuaded that plaintiff's federal claims must be dismissed for failure to state a claim upon which relief can be granted.

 II. The Ultra Vires Claim Against the Port Authority

 The Coalition asserts that the Port Authority's decision to lease Pier 3 to Strober for use as its corporate headquarters and supply facility is not authorized by the governing federal compact and should, therefore, be enjoined. Defendants move for dismissal of this claim on both procedural and substantive grounds. The court rejects defendants' ...


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