                          State of New York
                   Supreme Court, Appellate Division
                      Third Judicial Department
Decided and Entered: December 11, 2014                   518510
________________________________

In the Matter of ENTERGY
   NUCLEAR OPERATION, INC.,
   et al.,
                    Appellants,
      v                                     OPINION AND ORDER

NEW YORK STATE DEPARTMENT
   OF STATE et al.,
                    Respondents.
________________________________


Calendar Date:   October 6, 2014

Before:   Lahtinen, J.P., McCarthy, Egan Jr., Devine and
          Clark, JJ.

                             __________


      Quinn Emanuel Urquhart & Sullivan, LLP, New York City
(Kathleen M. Sullivan of counsel), Nixon Peabody, LLP, Albany
(Andrew C. Rose of counsel), Marcus V. Brown, Entergy Services,
Inc., New Orleans, Louisiana and William B. Glew Jr., Entergy
Services, Inc., White Plains, for appellants.

      Eric T. Schneiderman, Attorney General, Albany (Denise A.
Hartman of counsel), for respondents.

                             __________


Clark, J.

      Appeal from a judgment of the Supreme Court (Lynch, J.),
entered December 19, 2013 in Albany County, which dismissed
petitioners' application, in a combined proceeding pursuant to
CPLR article 78 and an action for declaratory judgment, to review
a determination of respondent Department of State denying
petitioners' request for a declaration that their power plants
are exempt from New York's Coastal Management Program.
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      Petitioners are the owners and operators of nuclear power
plants in Westchester County that are known as Indian Point
Nuclear Generating Plant Unit No. 2 (hereinafter Indian Point 2)
and Indian Point Nuclear Generating Plant Unit No. 3 (hereinafter
Indian Point 3).

           "The Atomic Energy Act of 1954
           'establishes a comprehensive regulatory
           framework for the ongoing review of
           nuclear power plants located in the United
           States' and vests the Atomic Energy
           Commission, and its successor agency, the
           [Nuclear Regulatory Commission
           (hereinafter NRC)], with broad regulatory
           power to ensure 'that the generation and
           transmission of nuclear power does not
           unreasonably threaten the public welfare'"
           (Brodsky v United States Nuclear
           Regulatory Commn., 704 F3d 113, 116 [2d
           Cir 2013], quoting County of Rockland v
           United States Nuclear Regulatory Commn.,
           709 F2d 766, 769 [2d Cir 1983], cert
           denied 464 US 993 [1983]).

The NRC is accordingly entrusted with exclusive authority "to
license and regulate the construction and regulation of nuclear
power plants" (Duke Power Co. v United States Nuclear Regulatory
Commn., 770 F2d 386, 388 [4th Cir 1985]; see Entergy Nuclear
Vermont Yankee, LLC v Shumlin, 733 F3d 393, 409 [2d Cir 2013]).
The Atomic Energy Commission issued a 40-year operating license
for Indian Point 2 in 1973, and the NRC issued a similar license
for Indian Point 3 in 1975 (see 42 USC § 2133 [a], [c]).

      Petitioners applied to the NRC for 20-year renewals of both
operating licenses in 2007. A complicating factor arose,
however, in that respondent Department of State (hereinafter
Department) created the New York State Coastal Management Program
(hereinafter CMP) after the original operating permits had been
issued. The Coastal Zone Management Act of 1972 (see 16 USC
§ 1451 et seq.) invited states in coastal areas to develop such
plans and submit them to the United States Secretary of Commerce
                              -3-                518510

for approval (see 16 USC §§ 1452 [2]; 1453 [12]; 1454, 1455).
The Department was authorized to prepare the CMP in 1981
(see Executive Law § 913, as added by L 1981, ch 840) and, in
1982, the Secretary of Commerce approved the terms of the
completed CMP (see 47 Fed Reg 47056-02 [1982]). As a result of
that approval,

           "any applicant for a required Federal
           license or permit to conduct an activity
           . . . affecting any land or water use or
           natural resource of the coastal zone [in
           New York] shall provide in the application
           to the licensing or permitting agency a
           certification that the proposed activity
           complies with the enforceable policies of
           the [CMP] and that such activity will be
           conducted in a manner consistent with" the
           CMP (16 USC § 1456 [C] [3] [A]).

If the state objects to the applicant's certification of
consistency,

           "[no] license or permit shall be granted
           . . . unless the Secretary [of Commerce],
           on his [or her] own initiative or upon
           appeal by the applicant, finds, after
           providing a reasonable opportunity for
           detailed comments from the Federal agency
           involved and from the state, that the
           activity is consistent with the objectives
           of this chapter or is otherwise necessary
           in the interest of national security" (16
           USC § 1456 [3] [A]; see 15 CFR 930.63,
           930.64).

      There is no dispute that Indian Point 2 and Indian Point 3,
which lie on the banks of the Hudson River, have an impact upon a
coastal area that is subject to the CMP (see 16 USC § 1453 [1];
Executive Law § 911; 19 NYCRR 600.2 [h]). Therefore, petitioners
would ordinarily be required to certify in their renewal
application to the NRC that the renewal of the operating permits
                               -4-                518510

would be consistent with the terms of the CMP. Petitioners
noted, however, that the CMP exempts from consistency review

           "(1) those projects identified as
           grandfathered pursuant to [the] State
           Environmental [Q]uality Review Act at the
           time of its enactment in 1976; and (2)
           those projects for which a final
           [e]nvironmental [i]mpact [s]tatement has
           been prepared prior to the effective date
           of the Department of State [p]art 600
           regulations [see Appendix A, DOS
           Consistency Regulations, NYCRR Title 19,
           Part 600, (600.3 [d])]."1

The CMP further encouraged individuals to request clarification
if they were unsure as to whether a project fell within one of
the exemptions and, as such, petitioners requested a declaratory
ruling from the Department to assess if the renewal application
was exempt from consistency review (see State Administrative
Procedure Act § 204; 19 NYCRR 264.2). The Department declined to
issue a declaratory ruling because the CMP is not a formal
regulation, but did issue an advisory opinion finding that the
renewal application was not exempt.

      Petitioner then commenced this combined CPLR article 78
proceeding and declaratory judgment action seeking review of the
advisory opinion and a declaration that Indian Point 2 and Indian
Point 3 are not subject to the CMP. Supreme Court found that the
Department's advisory opinion was reviewable, upheld it as
rational and dismissed the proceeding.2 Petitioners now appeal.


     1
        The bracketed provision contains a typographical error in
the original text, but the parties concur that it is intended to
refer to 19 NYCRR 600.3 (4), which is now codified at 19 NYCRR
600.3 (d).
     2
        For purposes of this appeal, respondents do not dispute
that Supreme Court was empowered to review what the Department
deemed to be an advisory opinion.
                              -5-                518510

      We reverse. As respondents correctly note, "[a]n agency's
interpretation of its regulations must be upheld unless the
determination is irrational and unreasonable" (Matter of Marzec v
DeBuono, 95 NY2d 262, 266 [2000] [internal quotation marks and
citation omitted]; see CPLR 7803 [3]). An example of such
irrationality exists where "a regulatory construction . . .
conflicts with the plain meaning of the promulgated language"
(Matter of Visiting Nurse Serv. of N.Y. Home Care v New York
State Dept. of Health, 5 NY3d 499, 506 [2005]; see Matter of
County of St. Lawrence v Daines, 81 AD3d 212, 218 [2011], lv
denied 17 NY3d 703 [2011]). Petitioners argue that the
Department's reading of the exemptions set forth in the CMP
conflicts with the plain meaning of those terms, and we agree.

      Petitioners particularly focus upon the second exemption in
the CMP, which exempts from consistency review "those projects
for which a final [e]nvironmental [i]mpact [s]tatement has been
prepared prior to the effective date of the Department of State
[p]art 600 regulations [see Appendix A, DOS Consistency
Regulations, NYCRR Title 19, part 600, (600.3 [d])]." 19 NYCRR
part 600 took effect in 1982. Indian Point 2 and Indian Point 3
went into operation prior to the State Environmental Quality
Review Act (see ECL art 8 [hereinafter SEQRA]) taking effect in
1976 and, as such, environmental impact statements were not
prepared under SEQRA. Final environmental impact statements were
prepared pursuant to the National Environmental Policy Act of
1969 (42 USC § 4321 et seq. [hereinafter NEPA]), however, and
statements were completed for Indian Point 2 and Indian Point 3
in 1972 and 1975, respectively. Accordingly, applying the plain
meaning of the language in the CMP, Indian Point 2 and Indian
Point 3 are exempt from consistency review.

      The Department nevertheless held that the exemption did not
apply to Indian Point 2 and Indian Point 3 because their final
environmental impact statements had not been prepared pursuant to
SEQRA. There is simply no basis in law for injecting such a
requirement. The Department noted that 19 NYCRR 600.3 (d) is
cited in the exemption and refers to final environmental impact
statements prepared under the SEQRA regulatory regime, but that
regime permits the use of final environmental impact statements
prepared under NEPA (see 6 NYCRR 617.2 [n]; 617.15 [a]; Philip
                              -6-                518510

Weinberg, Practice Commentaries, McKinney's Cons Laws of NY, Book
17½, ECL 8-0111). Indeed, SEQRA is modeled upon NEPA, and there
is no indication that the final environmental impact statements
prepared for Indian Point 2 and Indian Point 3 would not have
complied with SEQRA (see Matter of Jackson v New York State Urban
Dev. Corp., 67 NY2d 400, 414 [1986]).

      The Department further asserted that limiting the exemption
to statements prepared under SEQRA was required because SEQRA and
the CMP were "intertwined" with regard to coastal review. That
intertwining only came about, however, because the Legislature
directed the Commissioner of Environmental Conservation to amend
the SEQRA regulatory regime at the same time it authorized the
Department to create the CMP (see Executive Law § 919 [3], as
added by L 1981, ch 840). To put it differently, neither SEQRA
nor NEPA would have required a coordinated review of projects
affecting coastal areas completed prior to 1982. We thus agree
with petitioners that the Department's reading of the second
exemption offends the plain meaning of its language, is
irrational and cannot be sustained.3
      As a final matter, ECL 8-0111 (5) is not pertinent to the
applicability of the CMP. ECL 8-0111 (5) (a) (ii) provides that
the requirements of SEQRA do not apply to "[a]ctions undertaken
or approved prior to [1976], except . . . [i]n the case of an
action where the responsible agency proposes a modification of
the action and the modification may result in a significant
adverse effect on the environment, in which case an environmental
impact statement shall be prepared with respect to such
modification." Actions, however, are "projects or activities
involving the issuance to a person of a lease, permit, license,
certificate or other entitlement for use or permission to act by
one or more [state or local] agencies" (ECL 8-0105 [4] [i];
see ECL 8-0105 [3]; 6 NYCRR 617.2 [b], [c]). As discussed above,
the projects at issue here are exempt from review under the CMP
because final environmental impact statements were filed for both


    3
        Nothing in our decision should be read as precluding the
Department from amending the CMP to require consistency review in
cases such as the one presently before us (see 16 USC § 1455 [e];
15 CFR 930.51 [b]).
                              -7-                  518510

prior to 1982. There is accordingly nothing further for the
Department to review, with the only relevant activity being the
application for renewal of the operating permits before the NRC,
a federal agency. Thus, there is no action to which the
grandfathering provisions of SEQRA could apply.

      In light of the foregoing, we need not reach petitioners'
remaining claims.

     Lahtinen, J.P., McCarthy, Egan Jr. and Devine, JJ., concur.



      ORDERED that the judgment is reversed, on the law, without
costs, petition granted and it is declared that Indian Point
Nuclear Generating Plant Unit No. 2 and Indian Point Nuclear
Generating Plant Unit No. 3 are exempt from New York's Coastal
Management Program.




                             ENTER:




                             Robert D. Mayberger
                             Clerk of the Court
