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Empire Gen Holdings, Inc. v. The Governor of State

Supreme Court of New York, Albany County

June 25, 2013

EMPIRE GEN HOLDINGS, INC. and Empire Generating Co., LLC, Plaintiffs,
v.
The GOVERNOR OF the STATE of New York, in his official capacity, and the State of New York, Defendants.

Page 985

[967 N.Y.S.2d 921] Hiscock & Barclay, LLP, David Burch, Jr., Esq., Syracuse, attorneys for plaintiffs.

Eric T. Schneiderman, Esq., Attorney General of the State of New York, Aaron Baldwin, Esq. AAG, Albany, attorneys for the defendants.

JOSEPH C. TERESI, J.

Page 986

Plaintiffs [1] commenced this declaratory judgement/ injunction action seeking a declaration that Tax Law ยงยง 33 and 34[2] are [967 N.Y.S.2d 922] UNCONSTITUTIONAL, AN INJUNCTION prohibiting their enforcement and attorney's fees. Prior to answering, Defendants claim that the complaint fails to state a cause of action and move to dismiss pursuant to CPLR 3211(a)(7). Plaintiffs opposed the motion. Because Defendants demonstrated their entitlement to dismissal, their motion is granted and the complaint is dismissed.

It is well established that this Court, when considering a motion to dismiss pursuant to CPLR 3211(a)(7), " must afford the complaint a liberal construction, accept the facts as alleged in the pleading as true, confer on the plaintiff[s] the benefit of every possible inference and determine whether the facts as alleged fit within any cognizable legal theory." ( Torok v. Moore's Flatwork & Foundations, LLC, 106 A.D.3d 1421, 966 N.Y.S.2d 572 [3d Dept. 2013], quoting Scheffield v. Vestal Parkway Plaza, LLC, 102 A.D.3d 992, 958 N.Y.S.2d 232 [3d Dept. 2013]; Simkin v. Blank, 19 N.Y.3d 46, 945 N.Y.S.2d 222, 968 N.E.2d 459 [2012] ). " [T]he dispositive inquiry is whether [Plaintiffs have] a cause of action and not whether one has been stated." ( Alaimo v. Town of Ft. Ann, 63 A.D.3d 1481, 1482, 883 N.Y.S.2d 321 [3d Dept. 2009], quoting IMS Engineers-Architects, P.C. v. State, 51 A.D.3d 1355, 858 N.Y.S.2d 486 [3d Dept. 2008] ).

Page 987

Here, accepting Plaintiffs' allegations outlined below as true, they have no cause of action that fits within a cognizable legal theory.

Prior to June 2004, BASF Corporation (hereinafter " BASF" ) owned a parcel of real property located in the City of Rensselaer, New York (hereinafter " South 40" ). The South 40, however, was polluted. Plaintiffs entered an agreement with BASF, whereby the South 40 would be remediated and redeveloped.

In June 2004, Plaintiffs, BASF and the New York State Department of Environmental Conservation (hereinafter " DEC" ) entered into a Brownfield Site Cleanup Agreement (hereinafter " BSCA" ). Such agreement obligated Plaintiffs and BASF to remediate the South 40, subject to DEC oversight and approval. In March 2008, DEC approved Plaintiffs' final engineering report of remediation. Upon such completion and approval, DEC issued a " Certificate of Completion" and Plaintiffs claimed a " site preparation [tax] credit." Such tax credit was received by Plaintiffs in tax year 2008, and is not at issue herein.

Plaintiffs then turned to redevelopment and its related tax credit. They built a 65 megawatt natural gas fired electric generating plant (hereinafter " the facility" ) on the South 40. The facility was placed into service in September 2010, at which time it began generating electricity. For such redevelopment project Plaintiffs claim they were due, for tax year 2010, a tax credit of $86,951,916 (hereinafter " full redevelopment tax credit" [3]). Defendants do not dispute the projects' completion, the amount of the full redevelopment tax credit or Plaintiffs' eventual entitlement to it.

[967 N.Y.S.2d 923] The Tax Credit Deferral Provisions, however, prohibited Plaintiffs from claiming the entire $86,951,916 in tax year 2010. Instead, the Tax Credit Deferral Provisions significantly reduced Plaintiffs' 2010 tax credit to $1,663,633 and deferred Plaintiffs' receipt of the balance of the full redevelopment tax credit to future years. Due to such delay, Plaintiffs' complaint seeks redress under multiple constitutional theories, each of which will be addressed separately.

Plaintiffs first and sixth causes of action set forth " Takings Clause" challenges, both of ...


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