In Giambrone v Grannis (4th Department, October 2011), a New York appellate court ordered a reduction in environmental penalties, finding that the penalties imposed by the Department of Environmental (DEC) Conservation were “so disproportionate to the offense as to be shocking to one’s sense of fairness.” The Court reduced the penalty from $109,000 to $25,00.
The court provided some guidance in how to prove that a penalty is “disproportionte to the offense.” The decision was based in part on the penalty imposed on another party at the same site. Petitioners had retained a contractor who had been approved by the DEC to perform remedial work. The record showed that the contractor had mishandeld the waste and was partially responsible for the conditions, but nevertheless was subjected to a significantly lower penalty.
The Court cited two cases that also provide some guidance regarding reduction of penalties: Murray v Illion Water Commission, 9 AD3d 903, 780 NYS2d 262 (4th Dep’t 2004) and Vito v Jorling, 197 AD2d 882, 603 NYS2d 64 (3d Dep’t 1993). In Murray, the Court indicated that petitioner’s actions subsequent to the violation could provide grounds for reduction in penalty. The petitioner made an error regarding chemical solutions in a water treatment plant and intentionally withheld that information from his supervisor. Thus, some penalty was warranted. However, petitioner rectified the error before it could have an impact on the water supply and then voluntarily advised his supervisor. His subsequent actions made the penalty of dismissal “so disporportionate to the offense as to shock one’s sense of fairness.”
In Vito, petitioners were assisted by the fact that after the administrative hearing, the ALJ’s recommendation regarding penalty stated that a penalty significantly lower than the penalty imposed by the Commissioner “would not appear to be inappropriate.” The Court criticized the DEC for not providing the calculation methodology whereby it reached its remedy. Additionally, the Court noted that DEC had offered to settle the case for $500 and then imposed a penalty of $59,044.
Court decisions reducing environmental penalties remain rare. It is not enough to prove that the penalty is unfair, one needs to prove that the penalty is “so disporportionate to the offense as to shock one’s sense of fairness.” However, regulated parties should make use of the guidance in these cases during negotiations. That is, the cases indicate that knowing the penalty imposed on others similarly situated, understanding the DEC’s method of calculation and mitigation measures taken after the violation, can all play an important role in determining the penalty.