The opinion of the court was delivered by: Barrington D. Parker, Jr., District Judge.
MEMORANDUM DECISION AND ORDER
Plaintiff David Kittay, as Trustee of the bankruptcy estate of
Duke & Benedict, Inc. ("D & B"), commenced this action against
defendants seeking declaratory judgment, injunctive relief and
damages for violations of plaintiff's rights under the United
States Constitution, 42 U.S.C. § 1983 ("§ 1983"), the New York
State Constitution, the New York Public Health Law ("NYPHL"), and
New York common law.
Defendants Rudolph W. Giuliani, the City of New York, the New
York City Department of Environmental Protection and Joel A.
Miele, Sr., its Commissioner (collectively, the "City
Defendants"), and George Pataki, the State of New York, John P.
Cahill, the New York State Department of Environmental
Conservation, Antonia C. Novello, the New York State Department
of Health and James Tierney (collectively, the "State
Defendants") move, separately, to dismiss the Amended Complaint
pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6). The defendants
also include Putnam County, the Towns of Carmel, Southeast and
Kent, as well as a number of local officials servicing those
entities. All of these defendants have joined the Motions to
Dismiss which, for the reasons set forth below, are granted.
D & B is a Delaware corporation engaged in real estate
development located in White Plains, New York. D & B filed for
Chapter 11 bankruptcy protection on January 24, 1997, and Kittay
was appointed as Trustee in January 1999. D & B's assets almost
entirely consist of approximately 650 acres of undeveloped real
property located within the Watershed area in Putnam County, New
York. D & B claims that the regulations, challenged in this
litigation, inhibiting development in the Watershed area,
unlawfully render its property unuseable.
The factual underpinnings in this matter span many years and
involve numerous state and local officials and governmental
entities. For purposes of deciding this motion, however, the
Court must construe the pleadings in favor of the plaintiff, and
accept as true all factual allegations in the Amended Complaint.
See Cooper v. Parsky, 140 F.3d 433, 440 (2d Cir. 1998);
Serrano v. 900 5th Avenue Corp., 4 F. Supp.2d 315, 316 (S.D.N Y
1998). The following facts are construed accordingly.
I. Regulation of New York City Water
New York City provides drinking water to nearly nine million
citizens of the State of New York, including seven and a half
million city residents and over one million residents in four
upstate counties. The Watershed area from which the City obtains
its drinking water stretches over a two thousand square mile
area, touching parts of eight upstate counties, sixty towns and
Due to opposition and extensive litigation by local communities
and private landowners challenging the proposed regulations,
plaintiff contends that the City, with the help of New York
State, entered into secret negotiations with local government
officials from the various municipalities making up the
Watershed. Throughout the year-long negotiations, private
landowners were allegedly excluded and were subjected to a
State-imposed gag order on information concerning the progress of
In January 1997, New York City entered into a comprehensive
agreement with the EPA, the State of New York, over eighty
Watershed municipalities, and several environmental groups. This
agreement, known as the New York City Watershed Memorandum of
Agreement (the "MOA"), established a cooperative framework
through which the various government agencies and other parties
would resolve uses affecting water purity in the Watershed.*fn2
Three parts of the MOA are relevant to this action.
First, the MOA provides the terms of the City's land
acquisition program under which the City may offer to purchase
certain sensitive properties from a willing landowner at "fair
market value" (as defined in the MOA)*fn3, which the landowner
is free to reject. MOA at ¶¶ 54-86.
Second, the MOA calls for numerous payments by the City to
local Watershed governments to "enhance water quality in the
Watershed and the economic and social character of the Watershed
communities." MOA at ¶ 119. In particular, the City agreed to pay
millions of dollars in "Good Neighbor Payments" to each municipal
signatory according to the percentage of land area that each
municipality has within the Watershed, to be used "solely to pay
for the capital costs of designing, constructing and installing
public works or public improvements, or purchasing public
equipment . . . that will benefit the public at large." MOA at ¶
147(b)(iii). Moreover, the City agreed to reimburse Watershed
officials for the expenses incurred in negotiating the terms of
the MOA, including legal fees.
According to plaintiff, these payments were made as improper
inducements to secure local acceptance and implementation of the
MOA, and local elected officials were made to understand that
they would receive promotions or appointments to positions in
certain administrations if they accepted the Watershed agreement.
Third, the MOA calls for the adoption by each Watershed
municipality of proposed administrative regulations designed to
protect the sources of public water from contamination. MOA at ¶¶
According to plaintiff, the final version of the MOA was
presented to the legislative bodies of the Watershed
municipalities and their constituent landowners for consideration
with virtually no time for review or debate. Although some local
legislators protested that they had not been given time to read
the MOA and proposed regulations, the agreement was ultimately
approved and implemented by virtually all the government entities
Consistent with the MOA, the proposed regulations were approved
by the NYS Department of Health and New York City under the NYPHL
(the "Regulations"), taking effect in the City on May 1, 1997 and
as State regulations in July, 1998. Because the Regulations were
promulgated by both the City and the NYS Department of Health,
they were subject to the public notice and comment procedures set
forth in the City Administrative Procedure Act ("CAPA") and the
State Administrative Procedure Act ("SAPA"). Under both CAPA ...