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BATH PETROLEUM STORAGE, INC. v. SOVAS

March 19, 2004.

BATH PETROLEUM STORAGE, INC., and E.I.L. PETROLEUM Plaintiffs, -v- GREGORY H. SOVAS, individually as Director of the Division of Mineral Resources, New York State Department of Environmental Conservation; BRADLEY J. FIELD, individually and as Acting Director fo the Bureau of Oil and Gas Regulation, Division of Mineral Resources, New York State Department of Environmental Conservation; THOMAS W. PEARSON, individually and as Regional Water Engineer, Region 8, Division of Water, New York State Department of Environmental Conservation; JOHN CAHILL, individually and as Commisioner of the New York State Department of Environmental Conservation; NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION; and THE STATE OF NEW YORK, Defendants


The opinion of the court was delivered by: LAWRENCE KAHN, District Judge

MEMORANDUM-DECISION AND ORDER

Presently before the Court are a motion to reconsider and two opposing summary judgment motions. The motion to reconsider is premised upon a discovery ruling that denied Plaintiffs, Bath Petroleum Storage, Inc., and its parent company E.I.L. Petroleum, Inc. (collectively "Plaintiffs" or "Bath") access to documents of Defendants, New York's Department of Environmental Conservation ("DEC"). At issue in the summary judgment motions is whether DEC is preempted Page 2 by several federal statutes from regulating the Bath facility.

MOTION FOR RECONSIDERATION

  The first motion before the Court is Plaintiffs' motion for reconsideration in part of the Magistrate Judge's Order of April 25, 2002. (Dkt. No. 92). Specifically, Plaintiffs seek reconsideration of their request that 10 documents at issue in that Order be released. For the reasons provided below, Plaintiffs' request for reconsideration is denied.

  I. Motion for Reconsideration Standard

  There are three possible grounds upon which a motion for reconsideration may be granted: (1) an intervening change in controlling law, (2) the availability of new evidence not previously available, or (3) the need to correct a clear error of law or prevent manifest injustice. In re C-TC 9th Ave. Partnership, 182 B.R. 1, 3 (N.D.N.Y. 1995). A district judge may reconsider any pretrial matter determined by a magistrate judge under a "clearly erroneous or contrary to law" standard of review. See 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a). A party seeking to overturn a ruling under the clearly erroneous standard generally bears a "heavy burden." See Corn-Tech Assoc., v. Computer Assoc., Int'l, Inc., 753 F. Supp. 1078, 1099 (E.D.N.Y.1990), aff'd, 938 F.2d 1574 (2d Cir. 1991). The Supreme Court has stated that "[a] finding is `clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." U.S. v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948) (quoted in Derthick v. Bassett-Walker Inc., Nos. 90 Civ. 5427, 1992 WL 249951 at * 8 (S.D.N.Y. Sept. 23, 1992)). Pursuant to this highly deferential standard of review, magistrate judges are afforded broad discretion and reversal is only appropriate if there is an abuse of discretion. See Derthick v. Bassett-Walker Inc., 1992 WL 249951 at * 8 Page 3 (S.D.N.Y. Sept. 23, 1992). See, e.g., Nikkal Industries. Ltd, v. Salton, Inc., 689 F. Supp. 187, 189 (S.D.N.Y. 1988) (magistrate judge's decision on discovery dispute should be afforded substantial deference and overturned only if found to be an abuse of discretion).

  As Bath makes no claim that there has been an intervening change in the controlling law, nor that there is new evidence that was not previously available, the Court reads its' motion as claiming that the Magistrate Judge's decision involved a clear error. Therefore, the motion for reconsideration will be granted only upon a finding that the Magistrate Judge abused his discretion.

  II. Magistrate Judge's Ruling

  In the instant case, the Magistrate's Judge's order of April 25, 2002 was issued in response to an on-going dispute concerning the discovery of 98 documents. Therein, Judge Treece ordered the release of 20 of the disputed documents. Judge Treece further ordered that the remaining documents were privileged and granted Defendant a protective order, precluding Plaintiffs' discovery of them. Bath now seeks reconsideration of this order with respect to 10 documents held to be privileged by Judge Treece.*fn1

  (a) Deliberative Process Privilege

  The deliberative process privilege "rests on the obvious assertion that officials will not communicate candidly among themselves if each remark is a potential item of discovery and front page news, and its object is to enhance the quality of agency decisions by protecting open and frank discussion among those who make them within the Government." Dep't of Interior v. Klamath Page 4 Water Users Protective Ass'n, 532 U.S. 1, 8-9 (2001) (internal citations and quotations omitted). To qualify for this privilege, the documents must be (1) predecisional, and (2) deliberative. Grand Cent. P'ship, Inc. v. Cuomo, 166 F.3d 473, 482 (2d. Cir. 1999). "A document is predecisional when it is prepared in order to assist an agency decisionmaker in arriving at his decision. . . . The privilege protects recommendations, draft documents, and other subjective documents which reflect the personal opinions of the writer rather than the policy of the agency." Id. (internal citations and quotations omitted). "A document is deliberative when it is actually related to the process by which policies are formulated." Id. Furthermore, the privilege does not generally extend to material which is purely factual, and factual material once severed from the privileged material in a document is discoverable. Id. (collecting cases).

  (b) The Field affidavit

  In assessing DEC's claims of privilege to the documents at issue, Judge Treece relied on the April 5, 2002 affidavit of Bradley J. Field, Director of Mineral Resources of DEC.*fn2 Mr. Field's affidavit was filed and continues to be under seal. Plaintiffs acknowledge that the affidavit's contents have not been revealed to them. (Dkt. No. 93 at 2). Because they have not reviewed the document that provide the basis for Judge Treece's decision, Plaintiffs recognize that they "cannot substantively challenge Field's assertions in support of the claim of privileges as to these particular documents at issue." (Dkt. No. 93 at 2). Rather, Plaintiffs go on to say that "they are confined to putting forth, as best they can, reasons why the documents would appear, from the descriptions Page 5 made, to fall outside of the asserted privileges." (Dkt. No. 93 at 2). While Bath puts forth specific arguments for each document, Bath has not seen the documents nor Mr. Field's detailed affidavit and its arguments amount to conjecture. Such conjecture on the part of Plaintiffs can hardly be sufficient to carry the "heavy burden" placed on them to demonstrate that the Magistrate Judge abused his discretion. Plaintiffs recognize that they "cannot knowledgeably evaluate whether [Mr. Field's affidavit's] contents comply with the legal requirements necessary to sustain the privileges asserted" and they "ask this Court to make that independent analysis." (Dkt. No. 93 at 3). Such requests indicate that rather than meeting their burden, Plaintiffs have redistributed it to the Court.

  Mr. Field's April 5, 2002 affidavit satisfies the requirement that the affidavit specifically designate and describe the information that is purportedly privileged for eight of the ten disputed documents.*fn3 Mobil Oil v. Dep't. of Energy, 520 F. Supp. 414, 416 (N.D.N.Y. 1981). Mr. Field's affidavit provides for each of these documents: (1) a description, (2) the type of deliberation(s), and (3) the agency position or decision to which it led. The descriptions of the documents in Mr. Field's April 5, 2002 affidavit are often extensive and leave little mystery as to the contents of the disputed material. Those descriptions that are brief describe documents which themselves are short, or otherwise, additional information describing the documents appear in the column specifying the type of deliberation.

  1. Documents must be deliberative

  The government bears the burden of proving that the document is "deliberative". Mary Page 6 Imogene Bassett Hosp. v. Sullivan, 136 F.R.D. 42, 44 (N.D.N.Y. 1991). Mr. Field's affidavit satisfies this requirement by explaining for each document the "type of deliberation(s)". Mr. Field provides an extensive explanation of such matters, noting whether the document contains the writer's own analysis, viewpoint, or recommendations. The deliberative process privilege is intended to protect documents with such personal opinions from dissemination. The sworn explanations of Mr. Field, in addition to a review of the documents, provide sufficient evidence that the Magistrate did not abuse his discretion in finding that the documents at issue were deliberative.

  2. Documents must be pre-decisional

  The government also bears the burden of proving the documents were pre-decisional. Mary Imogene Bassett Hosp., 136 F.R.D. at 44. The Magistrate did not abuse his discretion in holding that this requirement was satisfied as to the contested documents. The DEC's policy positions, or decision, that the documents fueled are explained by Mr. Field in his affidavit. It is clear from such descriptions that the documents were created prior to the DEC's final decision on the matters contained in each. Hence, the Magistrate Judge did not abuse his discretion in finding that these documents were pre-decisional, and the documents therefore satisfied the requirements for the deliberative process privilege.

  3. No need for discovery outweighs the privilege

  Plaintiff makes no convincing argument that the need for discovery of these documents outweighs the privilege. See, e.g., Mary Imogene Bassett Hosp., 136 F.R.D. at 44 (instructing that the deliberative process privilege is a qualified one, and the court must conduct a balancing test, considering (i) the relevance of the evidence sought to be protected; (ii) the availability of other evidence; (iii) the seriousness of the litigation and the issues involved; (iv) the role of the Page 7 government in the litigation; and (v) the possibility of future timidity by government employees who will be forced to recognize that their secrets are voidable). While Plaintiffs argue that an in camera inspection of the documents cannot substitute for a comprehensive affidavit, (Dkt. No. 93 at 4), in the present case, the inspection of the documents, coupled with the Field affidavit that Plaintiffs have not seen, supply the Court with sufficient knowledge of the documents' contents. See Grand Cent. P'ship, 166 F.3d at 483. The Magistrate did not abuse his discretion and there was no clear error in finding that privilege attaches these eight documents.

  4. Privilege question is moot with respect to the remaining document

  The Court now takes up consideration of the remaining document, namely Document Bates No. 800101-800103.*fn4 As ordered by a subpoena served upon the Governor's Office of Regulatory Reform on December 31, 2001, Plaintiffs obtained an un-redacted copy of the 800101-800103 document. (Dkt. No. 95 at 7). As this document is in Plaintiffs' possession, the question of discovery is moot. The Court declines to decide whether the Magistrate Judge abused his discretion in holding that the deliberative process privilege was properly invoked as to this document.

  SUMMARY JUDGMENT MOTIONS

  Plaintiffs argue that New York is preempted from regulating its facility by Congress' grant of authority to the Environmental Protection Agency ("EPA") in the Safe Water Drinking Act ("SDWA"), 42 U.S.C. § 300f (2001), et seq. Specifically, Bath asks the Court to hold that the state is preempted based on two permits that were issued to Bath by the EPA under the SDWA's Underground Injection Control ("UIC") program, 42 U.S.C. § 300h to 300h-8. Bath further argues Page 8 that the DEC is preempted because of the assertion of jurisdiction by the Federal Energy Regulatory Commission ("FERC") under the Natural Gas Act ("NGA"), 15 U.S.C. § 717, et seq., and Natural Gas Pipeline Safety Act ("NGPSA"), 49 U.S.C. § 60101, et seq.

  Bath further seeks to preclude DEC action by claiming that the agency has failed to enact regulations that would allow it to require sonar surveys. Finally, Bath objects to the enforcement action that DEC is pursuing against it.

  I. Background

  (a) The Bath facility

  Bath operates a facility in Steuben County, New York that stores liquified petroleum gas ("LPG") in salt storage caverns which lie approximately ½ mile below the surface of the earth. (Dkt. No. 116, ¶ 7).

  Bath created these caverns by "solution-mining." In this process, a well is first drilled from the surface of the earth until it reaches the permeable salt layer. Fresh water is then pumped into the salt layer. The water becomes saturated with salt, and the resulting mixture, brine, is contained in the newly created cavern. When Bath receives LPG product, it transfers brine from the underground caverns into holding ponds on the surface to create storage space in the caverns. In response to delivery requests, Bath pumps brine from the holding ponds into the caverns to displace LPG that is stored there.

  On March 8, 1996, Bath filed an application with the EPA for a Class IID UIC Permit ("Class IID permit"). On May 21, 1996 Bath filed for a Class III UIC Permit ("Class III permit"). Page 9 (Dkt. No. 112, ¶ 15). Around August 1998, the EPA issued both permits.*fn5 The scope of these permits is a source of contention between the parties.

  (b) Class IID UIC Permit

  Bath and DEC agree that the Class IID permit allows Bath to dispose of solution mined brine through a Class IID underground injection well, Bath's Well No. 8. Bath argues that this permit gives it the authority to operate that well as a brine disposal well, and the DEC is preempted from further regulating Well No. 8 in any way that interferes with the rights granted in that permit. DEC contends that to operate the well, a State Pollutant Discharge Elimination System ("SPDES") permit, pursuant to New York's Environmental Conservation Law ("ECL") Article 17, is also required. DEC argues that in contrast to the UIC permit ...


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