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KNAUST v. CITY OF KINGSTON

October 10, 1997

MARK KNAUST, BARBARA KNAUST and HERMAN KARL KNAUST, II, Plaintiffs,
v.
THE CITY OF KINGSTON; THE CITY OF KINGSTON PLANNING BOARD; THE CITY OF KINGSTON LOCAL DEVELOPMENT CORPORATION; and THE UNITED STATES DEPARTMENT OF COMMERCE, for and through the Economic Development Administration, Wilbur F. Hawkins, Deputy Assistant Secretary of Economic Development, Defendants.



The opinion of the court was delivered by: SCULLIN

 Introduction

 This environmental action arises out of the planning and construction of a business park on land adjacent to the Plaintiffs' property in the City of Kingston. In their complaint, Plaintiffs assert (1) claims against the City of Kingston, City of Kingston Planning Board, and the City of Kingston Local Development Corporation (collectively the "Kingston Defendants") for alleged violations of the Takings Clause of the Fifth Amendment pursuant to 42 U.S.C. § 1983; (2) claims against the City of Kingston and City of Kingston Planning Board for alleged violations of the New York State Environmental Quality Review Act ("SEQRA"), New York Environmental Conservation Law 8-0101 et seq. ; (3) claims against the Economic Development Administration ("EDA") for alleged violations of the National Environmental Policy Act ("NEPA"), 42 U.S.C. §§ 4321 and 4322, and the Coastal Zone Management Act ("CZMA"), 16 U.S.C. § 1456; and finally (4) common law nuisance claims against all of the Defendants.

 Factual Background

 Plaintiffs own a parcel of real property in Kingston, New York. The property contains a subterranean lake located within an abandoned limestone mine. From the 1930s to the 1960s, the Knaust family operated a large commercial mushroom farming operation in the mine using water from the lake. From the end of the 1960s to the present time, the Plaintiffs abandoned their farming operations. However, for the past several years, the family has been investigating the possibility of starting another commercial mushroom farming operation in the mine again using the water from the lake.

 During the spring of 1995, the City of Kingston and the Kingston Planning Board negotiated a series of contracts and agreements with a number of companies for the development and construction of a business park on a 107 acre parcel of property adjacent to the Knaust property. The business park will eventually be the site of a new manufacturing facility for Huck International, Inc. ("Huck"), a manufacturer of hand-held power tools and a major employer in the Kingston area.

 On September 20, 1995, the Defendant EDA awarded a grant of $ 1.86 million dollars to help fund this project pursuant to the Public Works and Economic Development Act of 1965. See 42 U.S.C. §§ 3121 et seq. ; 13 C.F.R. Part 308 (the Title IX Grant Program). *fn1" The EDA decided to award the grant after conducting two Environmental Assessments ("EAs") and finding that the project would have no significant impact on the environment as required by NEPA. *fn2"

 Plaintiffs assert that the Defendants have failed to investigate the environmental impact of the proposed business park adequately. Plaintiffs maintain that the business park's storm water management system will not prevent petroleum based pollutants from seeping into Plaintiffs' lake because the system does not take into account the "karstic" (or porous) nature of the earth underlying the business park. Plaintiffs claim that the pollutants will create a nuisance and diminish the usefulness and commercial value of their property.

 Presently before the Court are (1) Plaintiffs' motion for a preliminary injunction enjoining the Defendants from taking further steps to fund, develop, or construct the Kingston Business Park, (2) Plaintiffs' motion for summary judgment on their NEPA claim against the EDA, and (3) EDA's cross-motion to dismiss all of Plaintiffs' claims pursuant to Fed. R. Civ. Pro. 12(b), or in the alternative for summary judgment as to each of these claims.

 Discussion

 I. EDA's Cross Motion to Dismiss and/or for Summary Judgment on Plaintiffs' Claims Against It for Violation of NEPA and CZMA

 The Court will first address the EDA's cross-motion to dismiss and/or for summary judgment. In evaluating a motion to dismiss for failure to state a claim, the Court must "accept as true all the factual allegations in the complaint" and draw all reasonable inferences in favor of the plaintiff. Leatherman v. Tarrant County Narcotics Intelligence and Coordination Unit, 507 U.S. 163, 164, 122 L. Ed. 2d 517, 113 S. Ct. 1160 (1993). The court will not dismiss the complaint for failure to state a claim "'unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" Ricciuti v. New York City Transit Auth., 941 F.2d 119, 123 (2d Cir. 1991) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 101-02, 2 L. Ed. 2d 80 (1957)).

 With respect to the summary judgment standard, the Court will grant summary judgment only if, despite construing the facts in favor of the non-moving party, the moving party demonstrates that "no genuine issue as to any material fact" exists and that the undisputed facts entitle the moving party to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). In order to avoid summary judgment, the non-moving party must support each element of its claims with specific facts set forth by affidavit or other evidence. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 119 L. Ed. 2d 351, 112 S. Ct. 2130 (1992).

 As stated, the Plaintiffs have asserted claims against the EDA for violation of NEPA and the CMZA.

 A. NEPA

 The EDA first argues that Plaintiffs lack standing to assert a NEPA claim. Alternatively, the EDA argues that it is entitled to summary judgment on Plaintiffs' NEPA claim because the EDA's decision to issue a Finding of No Significant Impact ("FONSI") was not arbitrary or capricious. The Court will address these arguments seriatim.

 1. Standing

 The EDA contends that the Plaintiffs lack standing to assert their NEPA claim because of the speculative nature of the alleged harm, and the fact that the Plaintiffs are concerned primarily about their economic interests -- interests that do not fall within the "zone of interests" protected by NEPA. Plaintiffs, on the other hand, argue that their allegations of irreversible environmental injury are sufficient to establish standing under NEPA.

 At a minimum, standing under Article III of the Constitution requires that a plaintiff suffer a concrete and particularized injury that is actual or imminent, not conjectural or hypothetical; a causal connection between the injury and the conduct at issue; and that it be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. See Defenders of Wildlife, 504 U.S. at 560-561. In addition to meeting these requirements, Plaintiffs must also demonstrate that the interests they seek to protect fall within the "zone of interests" protected by the applicable statute. *fn3" Lujan v. National Wildlife Federation, 497 U.S. 871, 883, 111 L. Ed. 2d 695, 110 S. Ct. 3177 (1990).

 As stated, in this case Plaintiffs allege storm water runoff from the business park will contaminate the subterranean lake on Plaintiffs' property, and that this contamination will deny Plaintiffs of an economical use of their property. Plaintiffs argue that storm water runoff from the business park will contain pollutants that will not be filtered out by the business park's storm water management system. In addition, Plaintiffs allege that the ground underlying the park is "karstic" allowing the contaminated water to travel to the ...


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