When a party sues to stop construction in New York State, it is long settled law that at some point the litigation becomes moot because of how long the construction has continued. Essentially, a court is no longer able to render a decision that would “effectively determine an actual controversy.” When the construction progresses to a point that it becomes impossible to unwind the work without causing the party performing the construction undue hardship, through no fault of that party, a court has little choice but to permit the construction to continue to completion regardless of the merits of the lawsuit challenging the work. This principle was recently reaffirmed in a case brought by the Sierra Club to stop the reopening of a power plant in Dresden (Yates County), New York.
In Sierra Club, et.al v. New York State Department of Environmental Conservation, et.al., the New York Appellate Division, Fourth Department, found that the Petitioners properly commenced their CPLR Article 78 proceeding, but failed to timely seek injunctive relief throughout the litigation, as a result of which their appeal was moot. In determining whether an appeal is moot, courts consider various factors, including whether the parties challenging the construction had timely moved for injunctive relief and whether the work performed was undertaken either in bad faith or without authority.
The Court noted that Petitioners’ failure to request a temporary restraining order at the time of commencement, their failure to seek an injunction in the Appellate Court after filing the Notice of Appeal and the fact that they took the entire nine (9) month period available before perfecting the Appeal meant the Court had no choice but to deem the appeal moot given that the Respondents had completed the construction. Indeed, the Court found that as a result of Petitioners’ inaction, the plant was fully constructed and operational for nearly two (2) years. As such, Petitioners had failed to preserve their rights pending judicial review and the Court dismissed the Appeal without ever addressing the merits of the case.
The Court confirmed that the plant was being operated with authority, that the project was not undertaken in bad faith and that the environmental review pursuant to State Environmental Quality Review Act (“SEQRA”) was completed and all necessary permits and approvals were granted. Although the Petitioners couched their claims as a challenge to the SEQRA review process, the Court concluded that because of Petitioners’ failure to seek injunctive relief in a timely fashion, the construction was substantially completed and the Petitioners’ challenge of the SEQRA review process was now moot. It is likely that had Petitioners sought to restrain the project at various stages throughout the litigation (even unsuccessfully), the appeal would not have been dismissed and would likely have been determined on the merits of the proceeding.
The lesson learned from this decision is that if a party wants to challenge the commencement or continuation of construction on any grounds, it must be prepared to seek injunctive relief during each step of the process or risk dismissal of its appeal and lose the opportunity to have the merits of the case considered by the court.
If you are seeking to stop construction of a project or defending against such a claim, contact us to discuss your matter.