The opinion of the court was delivered by: William M. Skretny Chief Judge United States District Court
In this action, Plaintiff asserts claims under the Fifth and Fourteenth Amendments of the United States Constitution pursuant to 42 U.C.S. § 1983. Plaintiff's claims arise out of Defendant's decision to deny Plaintiff's site modification application and classify the operation of a power generation facility a non-conforming use under local zoning laws. Plaintiff seeks a declaratory judgment that Plaintiff did not abandon or vacate its power generation facility, an order declaring the denial of its application unconstitutional, an order directing Defendant to approve the application, and money damages in the amount of $10,000,000, in addition to attorneys' fees and litigation costs. Presently before this Court is Defendant's Motion to Dismiss Plaintiff's complaint in its entirety. For the reasons discussed below, Defendant's motion to dismiss is granted.*fn1
In adjudicating Defendant's motion to dismiss, this Court assumes the truth of the following factual allegations contained in the complaint. See Hosp. Bldg. Co. v. Trs. of Rex Hosp., 425 U.S. 738, 740, 96 S. Ct. 1848, 1850, 48 L. Ed. 2d 338 (1976); see also Hamilton Chapter of Alpha Delta Phi, Inc. v. Hamilton Coll., 128 F.3d 59, 63 (2d Cir. 1997).
Plaintiff, Laidlaw Energy and Environmental, Inc. ("Laidlaw"), is a corporation organized and maintained under the laws of New York, with its principal offices in New York County, New York. (Complaint ("Comp."), Docket No. 1, ¶ 5.) Defendant, the Town of Ellicottville ("Town" or "Ellicottville"), is a duly constituted political subdivision of New York, with its principal offices in the Town of Ellicottville, Cattaraugus County, New York. (Id. ¶ 6.) The parties' dispute centers around a facility (the "Co-Generation Plant") located inside Ellicottville, along Route 219 North. (Id. ¶ 9.) The facility is, and was at all relevant times, composed of two principal components: First, lumber kilns that prepare hardwood lumber for use in furniture production; and, second, co-cycle combustion turbine and steam turbine generators working in conjunction to produce heat and electricity. (Id. ¶ 15.) The generated electricity powered the lumber kilns, while the excess electricity was sold to New York's electric power grid. (Id. ¶ 5.)
Throughout its existence, the Co-Generation Facility has been owned and controlled by various parties and used a variety of fuels to produce the heat and electricity necessary to keep the lumber kilns active. From 1990 to 1999, the Co-Generation Facility was owned and operated by Ellicottville Energy, Inc. ("EEI"), a company owned by the Northrup family. (Id. ¶ 14.) Laidlaw alleges that throughout its ownership, EEI made various changes to the Co-Generation Facility, some authorized, others not. (Id. ¶ 18.) For example, from 1994-1997, EEI added, without express authorization, a biomass gasification system, fueled by the combustion of wood chips delivered to the facility. (Id. ¶ 20.) This addition also featured a 60-foot-tall smoke stack. (Id.) Later, in 1998, EEI applied for, and was granted, a zone change to allow biomass combustion by wood pellets. (Id. ¶ 21.) Within a year, however, EEI dismantled that system. (Id.)
Laidlaw purchased the facility in 1999. (Id. ¶ 25.) Following the purchase, Laidlaw applied for, and was granted, a permit to expand the Co-Generation Facility's kiln equipment. (Id. ¶ 26.) However, in August 2002, rising natural gas prices made continued operation of the Co-Generation Facility cost-prohibitive. (Id. ¶ 27.) On August 29, 2002 Laidlaw's facility was placed in receivership, until new investors helped Laidlaw purchase a new round of bonds in May 2004. (Declaration of Ivan E. Lee. In Support of the Town of Ellicottville's Motion to Dismiss ("Lee Decl."), Docket No. 5, Ex. A; Ex. A to Declaration of James P. Evans, Esq., Docket No. 14.) Both during and after the receivership period, Laidlaw "temporarily curtailed its operation of the Co-Generation Facility," by reducing the facility's staff to a single individual responsible for equipment maintenance. (Comp. ¶¶ 28-29.)
The search for affordable fuel sources led Laidlaw to obtain a $1 million grant from New York State to convert the facility from the use of natural gas over to biomass fuel. (Id. ¶ 31.) This grant was contingent on Laidlaw's continuing operation of the Co-Generation Facility. (Id.)
In October 2004, Laidlaw applied to the Ellicottville Planning Board for a Modified Site Plan Approval ("MSPA") to modify the facility to accommodate biomass fuel. (Id. ¶ 33.) Laidlaw also initiated an environmental impact review pursuant to the New York State Environmental Quality Review Act ("SEQRA"). (Id. ¶ 34.) Ellicottville assumed "lead agency status" in the SEQRA review, and thus became responsible for issuing a Findings Statement for Laidlaw's project. (Id. ¶ 37.)
In considering Laidlaw's MSPA, Ellicottville retained special counsel to review Laidlaw's application and use of the Co-Generation Facility's site. (Id. ¶ 41.) On the basis of that review, the Town determined that conversion of the facility to biomass fuel would constitute an unauthorized expansion of a prior non-conforming use. (Id. ¶ 43.) To reach this decision, the Town found that Laidlaw's prior operation of the facility using natural gas was a permitted "prior non-conforming use." This meant that, although Ellicottville's zoning codes did not permit Laidlaw's power production, because the facility began operating before those codes came into effect, Laidlaw could continue generating electrical power. (See id. ¶ 42.) However, in the Town's view, even this prior use was no longer permitted because Laidlaw had "abandoned" or "vacated" the facility and could not now return and resume an activity in contravention of the Town's zoning codes. (Id. ¶ 44.) The Town effectively denied Laidlaw's MSPA and required Laidlaw to apply for various variances and special use permits to restart the Co-Generation Facility as a natural gas fueled plant. (See id. ¶¶ 45-46.) Laidlaw appealed the Planning Board's decision to the Town Zoning Board of Appeals ("ZBA"), which upheld the Planning Board's decision on June 11, 2007. (Id. ¶ 49.)
Thereafter, the Planning Board completed its SEQRA review and issued a SEQRA Findings Statement on October 18, 2007. (Id. ¶ 37.) In that statement, the Planning Board determined that Laidlaw's project would pose significant, adverse, and unmitigable environmental risks and denied Laidlaw's requested biomass fuel conversion. (Id. ¶¶ 66, 72.)
In both its MSPA and SEQRA decisions, the Planning Board found that Laidlaw could continue operation of the kilns, notwithstanding the fact that these kilns require the energy and heat produced by the facility's combustion and steam turbine generators. (Id. ¶¶ 50, 68.)
Plaintiff now seeks a declaratory judgment finding that Laidlaw did not abandon the Co-Generation Facility, as well as an order declaring that the Town's denial of Laidlaw's MSPA was unconstitutional, and directing the Town to approve that application. Plaintiff also seeks money damages to recoup losses it incurred as a result of the Town's denial.
On June 11, 2007, Laidlaw filed an Article 78 proceeding in New York State Court seeking review of the ZBA's June 2007 decision affirming the Planning Board's determinations. (Lee Decl., Ex. I.) That matter is ongoing. (Defendant's Memorandum of Law Supporting Defendant's Motion to Dismiss, Docket No. 6, 5.)
On November 16, 2007, Laidlaw commenced a second Article 78 proceeding in New York State Supreme Court to challenge the Planning Board's SEQRA Findings Statements. The court dismissed that action on March 10, 2008 on the basis that the Planning Board's decision was neither arbitrary nor an abuse of discretion. (Lee Decl., Ex. L.)
Plaintiff commenced the present action on January 14, 2008, by filing a complaint in the United States District Court for the Western District of New York. Defendant originally filed a motion to dismiss ...