Ni-Mo Court Cases - Updated December 2014

THE SACANDAGA PROTECTION COMMITTEE WINS LAWSUIT IN FEDERAL COURT - September 2015

After six years and many thousands of legal dollars, The Sacandaga Protection Committee (SPC) emerged victorious when Senior U.S. District Judge Norman A. Mordue granted the Committee's motion for Summary Judgment against Niagara Mohawk Power Corp. (d.b.a. National Grid).  This is a major victory for the SPC and the entire lake community.

In 2009 Niagara Mohawk (NM) filed a lawsuit in Federal Court against the Hudson River Black River Regulating District (HRBRRD) challenging the authority of the District to charge NM for the benefits NM derives from the Conklinville Dam for property NM owns on the Hudson River.  In the lawsuit NM claimed that privately-owned properties and permit holders surrounding the Great Sacandaga Lake (GSL) “are beneficiaries and should be assessed” the same as all downstream beneficiaries. NM also made a number of additional causes of actions, including “preemption”, “equal protection”, and ‘taking claims”. 

The Sacandaga Protection Committee (SPC) and its legal representatives Hodgson Russ took major exception that permit holders should be subject to the same beneficiary assessments as the downstream beneficiaries.  The SPC legal team filed for and was granted intervenor status to gain protect the rights of the property owners on and around the Great Sacandaga Lake. 

On September 8, 2015, the Federal Judge Mordue issued a verdict granting SPC’s motion for summary judgement.  Summary judgement is issued when the facts of the case are indisputable and can have only one verdict – that the permit areas are NOT the same as downstream beneficiaries and do not have to be considered beneficiaries for the purpose of downstream assessments.

The Judge clearly distinguished that the benefits of flood protection are not the same as recreational benefits enjoyed by the users of the lake.  The Court found that the HRBRRD can reasonably distinguish between entities having flood protection and Lake permit areas.  The fact that the Reservoir confers on the permit holders’ properties benefits – primarily recreation, view, and resultant increased property value – are categorically distinct from the flood protection benefits conferred on the properties downstream of the Conklingville Dam.  The fact that the State owns the land immediately surrounding the Reservoir and the adjacent properties have permits to access that land, was an important factor in the decision.

Unfortunately, the summary judgement in favor of the SPC does not end the entire lawsuit.  In the very complicated lawsuit, Judge Mordue ruled that NM’s equal protection claim against the HRBRRD cannot be decided on a summary judgement and the case will proceed to trial.  The Court did rule in favor of the District and dismissed a portion of the $5 million claim because the claim was limited by a three year statute of limitations.  There was no ruling on the claim for the three year period, and the case will proceed to resolve that issue.


 

Niagara Mohawk Permit System Challenge Drags On - December 2014

The SPC has been engaged in Niagara Mohawks legal battle with the HRBRRD for several years now.  In one of their many lawsuits against the HRBRRD, Niagara Mohawk claims that the permit system is illegal and should be abolished.  In July 2014 the HRBRRD and SPC filed a motion for summary judgement that would effectively close this issue.  Niagara Mohawk responded with a motion of their own and the issue now waits for the Judge's decision.  If summary judgement is granted our involvement in this issue could be over.

 


 

 

Niagara Mohawk Continues to Challenge Permit System - June 2013

Whether you know it or not, one major issue facing Permit Holders right now is a lawsuit filed by Niagara Mohawk Power Corporation, doing business as National Grid, (NiMo) against the Regulating District.  NiMo has filed many such lawsuits but the current one says the current Permit System is illegal and should be abolished.

Why would they do that???  Because the SPC believes that NiMo is trying to stop paying the Regulating District their yearly assessment, and is trying to shift the burden of that assessment to the current Permit Holders.

NiMo was one of the early designated beneficiaries and they still own considerable lands along the Hudson River.  They are still a designated beneficiary and the Regulating District has been assessing them annually.  Since NiMo no longer is a power producer, they do not qualify for the recent changes in the beneficiaries’ status – the one that resulted in shifting the financial assessments from the power companies to the “five Counties”.

NiMo has been filing many such lawsuits and this is just one of their latest strategies.  The case was initially tried in the US District Court in 2009 and NiMo lost the case.  They appealed to the US Court of Appeals in 2011 and lost on some of their issues, but the remainder of the suit has been sent back to the District Court for further proceedings.

To protect the current permit System and to prevent NiMo from shifting their assessments to the Permit Holders, the SPC, through their attorneys, entered the case as an intervenor.  We believe we need to aggressively fight this outrageous action by NiMo.

 


Court Says Permit System is Legal - March 7, 2012

Accepting legal arguments raised by attorneys for the Sacandaga Protection Committee and the Hudson River-Black River Regulating District, the U.S. Court of Appeals for the Second Circuit issued a decision affirming a federal district court’s dismissal of Niagara Mohawk Power Corporation’s challenge to the Great Sacandaga Lake Permit System.  The Second Circuit’s detailed 43-page decision in the matter of Niagara Mohawk Power Corporation v. Hudson River-Black River Regulating District was issued on March 7, 2012 following oral argument in New York City on December 2, 2011.

In the case, Niagara Mohawk also sought a refund of more than $5 million in assessments paid to the regulating district plus interest.  Niagara Mohawk had also argued that the Federal Power Act preempts virtually all of the regulating district’s activities, including operation of the Great Sacandaga Lake Permit System, maintenance of the watershed, and even flood control.  In the underlying district court case, the U.S. District Court for the Northern District of New York (Hon. Norman A. Mordue) dismissed Niagara Mohawk’s claims.

On appeal, the Second Circuit again rejected Niagara Mohawk’s preemption claims which would have affected the permit system.  Adopting arguments from the Sacandaga Protection Committee’s legal briefs and oral argument, the Second Circuit described Niagara Mohawk’s interpretation of the Federal Power Act as “misguided” and strongly criticized Niagara Mohawk for “misapplying the preemption test” and “again and again . . . mischaracterizing the holdings” of case law interpreting the Federal Power Act.  As the power company no longer produces power in the area and merely owns vacant land, the Federal Power Act does not apply by its express terms.  Therefore, the Second Circuit affirmed dismissal of the federal preemption claims.  Without expressing an opinion on the merits, the court remanded claims concerning the amount of the assessment back to the district court for further consideration.


 

SPC Attorneys Represent Interests of Permit Holders at Federal Appeals Court - December 2, 2011

On December 2, 2011 attorneys for the Sacandaga Protection Committee (SPC) argued to preserve the Great Sacandaga Lake Permit System at oral argument before a three judge panel of the United States Court of Appeals for the Second Circuit in New York City.

In the case, titled Niagara Mohawk Power Corporation v. Hudson River – Black River Regulating District, the plaintiff power company sought a refund of more than $5 million in assessments paid to the regulating district plus interest. Niagara mohawk also argued that the Federal Power Act preempts virtually all of the regulating district's activities, including operation of the Great Sacandaga Lake Permit System, maintenance of the watershed, and even flood control.

Niagara Mohawk also asserted that SPC constituents should pay greater costs to the Regulating District as a beneficiary. SPC was represented at oral argument by its attorneys from Hodgson Russ LLP, with Benjamin K. Ahlstrom joining attorneys for the Regulating District in arguing against Niagara Mohawk's claim. SPC, with the Regulating District, had earlier prevailed before the Federal District Court in a decision by US District Court Judge Norman A. Mordue.  It is this decision that Niagara Mohawk is appealing.  

SPC has also sought permission from the New York State Supreme Court to intervene in twenty related lawsuits challenging the Regulating District's assessments of Niagara Mohawk and threatening the permit system and the region's tax base.


 

SPC Requests Intervener Status in State Court - July 26, 2011

The Sacandaga Protection Committee (SPC) filed a motion asking State Supreme Court Justice Richard T. Aulisi to allow the citizens group to intervene in litigation challenging the Hudson River-Black River Regulating District’s multi-million dollar assessment of Niagara Mohawk Power Corporation.  The motion states that SPC represents a wide range of property owners (both “front lot” and “back lot”), businesses, and recreational users of Great Sacandaga Lake who have a substantial interest in protecting the lake community from the financial consequences threatened by Niagara Mohawk’s request for annulment of its approximately $6 million assessment.  In addition, Niagara Mohawk challenges the Regulating District’s GSL Permit System, which SPC was formed to protect.  The motion to intervene and supporting affidavits can be downloaded here.

The motion to intervene was filed in the case of Niagara Mohawk Power Corporation v. State of New York and Board of Hudson River-Black River Regulating District et al., pending in Hamilton County under Index No. 6555-08.  This is one of approximately 20 pending assessment challenges initiated by Niagara Mohawk against the Regulating District dating back to 2000.  A motion to consolidate Niagara Mohawk’s state court assessment challenges is pending decision by Justice Aulisi.  If consolidation occurs, SPC has asked for permission to intervene in the entire case.

The SPC’s latest litigation move follows its successful intervention and victory in the United States District Court for the Northern District of New York in a related suit in which National Grid, formerly known as Niagara Mohawk Power Corporation, claimed the Regulating District violated the United States Constitution and the Federal Power Act and requested a $5 million refund.  In that case, Chief Judge Mordue recognized SPC’s ability to contribute to the lawsuit as well as its track record of representing the entire lake community:  “SPC was well organized . . . to launch a legal and political fight to ensure the current permit access system remained unchanged.”  

The SPC successfully argued in federal court and in other efforts that the current GSL Permit System results in high property values of lakefront properties, which directly benefits the entire local economy through a stable tax base.  Conversely, elimination of the permit system would lower taxes on property immediately around the lake and cause a corresponding increase in property taxes for all properties in Fulton, Hamilton and Saratoga counties where the lake is located.  SPC actively seeks to avoid that inequity and the resulting financial consequences to the Regulating District posed by Niagara Mohawk/National Grid’s repeated assessment challenges.

The SPC and the Regulating District won the federal case, and the SPC has subsequently been awarded intervenor status by the New York City-based United States Court of Appeals for the Second Circuit.  SPC’s submitted an appeal brief requesting the Court of Appeals to affirm dismissal of Niagara Mohawk’s assessment challenge, and the case awaits oral argument.

The Sacandaga Protection Committee was formed in 2009 to allow its constituents, residents, businesses and recreational users of Fulton, Hamilton and Saratoga counties, with a means to launch a legal and political fight to ensure the current permit access system remains unchanged. More information can be found on SPC’s website (www.lovethesacandaga.com).  SPC has been represented throughout the litigation by its attorneys, Hodgson Russ LLP (Daniel A. Spitzer and Benjamin K. Ahlstrom). 



Sacandaga Protection Committee Prevails Over National Grid In Federal Court - September 30, 2010

On September 30, 2010, United States District Judge Norman A. Mordue issued a decision dismissing National Grid’s latest attempt to avoid shouldering its share of the costs for maintaining Great Sacandaga Lake and the Conklingville Dam.  In the suit, National Grid claimed that many of the Hudson River-Black River Regulating District’s operations, including the GSL Permit System, were preempted by federal law and contrary to the United States Constitution. 

Following several months of briefing by the Sacandaga Protection Committee’s attorneys, Hodgson Russ LLP, and the Hudson River-Black River Regulating District, the Court dismissed National Grid’s lawsuit in its entirety.  In rejecting National Grid’s arguments, Judge Mordue specifically noted the contribution of the Sacandaga Protection Committee, which intervened in the litigation to represent the interests of “both front lot and back lot property owners as well as business and recreational users of Great Sacandaga Lake.” 

According to Sacandaga Protection Committee Co-Chair Joseph Sullivan, of particular importance of the victory is the dismissal with prejudice of the attack on the permit system.  “This is very important for our entire community.  The suit, if successful, would have eliminated the GSL Permit System, leaving the Great Sacandaga Lake shore area without management and eliminating 70 plus years of permitted access to the band of land surrounding the lake.”  The Court decision protects the investment generations of Sacandaga Protection Committee members have made in improving the lakefront.

Co-Chair Richard Smith explained that, “We are extremely pleased that Judge Mordue seemed to recognize the rights of lake users and property owners over big businesses.”  Smith continued, “In many ways, this decision validates the mission of the Sacandaga Protection Committee, and Judge Mordue placed a lot of weight on the arguments our attorneys made while, at the same time, flatly rejecting National Grid’s arguments as ‘largely irrelevant.”  Smith added that the decision was especially important in light of the District’s ongoing financial difficulties.

The Sacandaga Protection Committee was represented by Hodgson Russ LLP attorneys Daniel A. Spitzer and Benjamin K. Ahlstrom.

Please visit our website (www.lovethesacandaga.com) for additional information and updates on this issue.


 

SPC Granted Intervenor Status - May 2010

The Northern District of New York approved the SPC’s request to intervene in the lawsuit that Niagara Mohawk Power Corporation, doing business as National Grid, brought against the Hudson River-Black River Regulating District (HRBRRD). 

As part of its case against the HRBRRD, Niagara Mohawk claims that the District’s current permit system is illegal and/or preempted by the Federal Power Act.  The SPC is concerned that the rights of its constituents will be affected by the outcome of the pending litigation and possible abolishment of the existing permit system.  Niagara Mohawk opposed the inclusion of the citizens’ group (SPC) in the proceedings, while the Regulating District took no position on the motion by SPC. 

Recognizing that the HRBRRD had previously filed a motion for summary judgment which would end the proceedings, Chief Judge Norman A. Mordue approved the SPC’s participation in order to give the citizen’s group an opportunity to fully present its interests to the Court.  In his opinion, Chief Judge Mordue expressly recognized SPC’s ability to contribute to the lawsuit as well as its track record of representing the entire lake community.  “SPC was well organized . . . to launch a legal and political fight to ensure the current permit access system remained unchanged.” 

In the Court’s discussion of the facts of the case, Chief Judge Mordue recognized that rights granted under the permit system are reflected in the high property values of lakefront properties.  The SPC has argued in this litigation and in other efforts that these property values directly benefit the local economy through a stable tax base.  Conversely, elimination of the permit system would lower the taxes on property immediately around the lake and cause a corresponding increase in property taxes for all properties in Fulton, Hamilton and Saratoga counties where the lake is located. 

In its motion, the SPC expressed concern that the HRBRRD has various and serious fundamental financial problems which could affect its ability to effectively defend the present litigation.  Although the Court did not directly rule on this issue, Chief Judge Mordue recognized that the interests of the SPC and the HRBRRD diverge such that the SPC had a legally recognizable interest that has not been represented in the litigation:  “[I]t is apparent that SPC and the District have sufficiently different interests insofar as the present litigation is concerned. . . . While both parties may have an interest in preserving the District’s permit system, the District may not be interested in preserving the permit system as it exists presently. . . .”

 

Read the May 5, 2010 Gazette Article Regarding Intervenor Status Here