Sloane v. Power Auth. of N.Y.

214 A.D.3d 1150

185 N.Y.S.3d 395

Lawrence SLOANE et al., Appellants,

v.POWER AUTHORITY of the State of New York, Respondent, et al., Defendants.

534164

Supreme Court, Appellate Division, Third Department, New York.

Calendar Date: January 9, 2023

Decided and Entered: March 16, 2023

Aaron Mark Zimmerman, Esq., PC, Syracuse (Aaron Mark Zimmerman of counsel), and Bousquet Holstein, PLLC, Syracuse (Gary J. Lavine of counsel), for appellants.

Holland & Knight LLP, New York City (Katherine A. Skeele of counsel), for respondent.

Before: Egan Jr., J.P., Clark, Pritzker, Ceresia and Fisher, JJ.

MEMORANDUM AND ORDER

Ceresia, J. Appeal from an order of the Supreme Court (James H. Ferreira, J.), entered September 22, 2021 in Albany County, which, among other things, granted a motion by defendant Power Authority of the State of New York to dismiss the complaint against it.

Defendant Power Authority of the State of New York (hereinafter NYPA) generates hydropower using the Niagara and St. Lawrence Rivers. NYPA is legally mandated to sell a portion of the hydropower, known as "preference hydropower," at cost to certain wholesale customers, who then resell it to retail customers (see Public Authorities Law § 1005[5] ; 16 USC § 836 [b][1]). Among NYPA's wholesale customers are defendants Villages of Solvay and Skaneateles in Onondaga County. Plaintiff William H. Steele, a resident of Solvay, and plaintiff Eric Stohrer, a resident of Skaneateles, are retail consumers who purchase preference hydropower through their respective municipal utilities.

In the early 1980s, plaintiff Lawrence Sloane and other individuals brought a series of court challenges that resulted in rulings interpreting NYPA's statutory obligation to ensure that preference hydropower was available for retail consumers at the "lowest possible price" ( Public Authorities Law § 1005[5] ). After these rulings were issued, the cases were resolved by means of a global settlement agreement (hereinafter the 1986 Settlement Agreement), entered into by Sloane, defendants and other parties, which further clarified NYPA's obligations regarding the setting of preference hydropower rates. Following the 1986 Settlement Agreement, NYPA proceeded to engage in public rate-making processes with respect to preference hydropower on five separate occasions, with the most recent rate becoming effective on December 1, 2011.

On December 2, 2020, plaintiffs commenced this action seeking a declaratory judgment and monetary damages stemming from defendants’ purported failure to supply preference hydropower at cost. According to the complaint, under the 2011 rate plan, preference hydropower customers are receiving 45% of the total hydropower generated but are being charged 55% of the total costs of production, in violation of the aforementioned federal and state statutes, case law and the 1986 Settlement Agreement. Following commencement, NYPA filed a pre-answer motion to dismiss the complaint, arguing, among other things, that it was time-barred. Plaintiffs opposed the motion and cross-moved for an award of costs and sanctions. Supreme Court issued a decision and order in which, as relevant here, it granted NYPA's motion, denied plaintiffs’ cross-motion and dismissed the complaint as untimely. Plaintiffs appeal.

We affirm. A motion to dismiss a complaint on statute of limitations grounds pursuant to CPLR 3211(a)(5) requires the defendant "to establish, prima facie, that the action was time-barred" ( Northeastern Indus. Park, Inc. v. Hoosick Val. Contrs., Inc., 106 A.D.3d 1182, 1183, 964 N.Y.S.2d 733 [3d Dept. 2013] ; accord DiCenzo v. Mone, 200 A.D.3d 1162, 1164, 159 N.Y.S.3d 529 [3d Dept. 2021] ). This entails a showing as to when the plaintiff's claim accrued (see Witecki v. Saratoga Lakeside Acres Assn., Inc., 201 A.D.3d 1175, 1177–1178, 162 N.Y.S.3d 180 [3d Dept. 2022] ; DiCenzo v. Mone, 200 A.D.3d at 1164, 159 N.Y.S.3d 529 ). The burden then shifts to the plaintiff "to raise a question of fact as to whether the statute of limitations has been tolled or was otherwise inapplicable, or whether the action was actually commenced within the period propounded by [the] defendant[ ]" ( Colucci v. Rzepka, 209 A.D.3d 1205, 1207, 176 N.Y.S.3d 372 [3d Dept. 2022] [internal quotation marks, ellipsis and citations omitted]).

Against that backdrop, we preliminarily note that "[w]here the challenge brought is to a quasi-legislative act or decision made by an administrative agency, ... the proper vehicle for such review is a CPLR article 78 proceeding" ( Smith v. State of New York, 201 A.D.3d 1225, 1227, 162 N.Y.S.3d 499 [3d Dept. 2022] [internal quotation marks, ellipsis and citation omitted]; see generally Solnick v. Whalen, 49 N.Y.2d 224, 229–230, 425 N.Y.S.2d 68, 401 N.E.2d 190 [1980] ). Thus, inasmuch as the substance of plaintiffs’ challenge is to NYPA's administrative act of setting rates for preference hydropower, the four-month statute of limitations pertaining to CPLR article 78 proceedings applies (see CPLR 217[1] ; 7803[3]; see e.g. Matter of Incorporated Vil. of Freeport v. Public Serv. Commn. of the State of N.Y., 206 A.D.3d 1205, 1207, 171 N.Y.S.3d 193 [3d Dept. 2022] ; Matter of National Fuel Gas Distrib. Corp. v. Public Serv. Commn. of the State of N.Y., 169 A.D.3d 1334, 1335, 95 N.Y.S.3d 382 [3d Dept. 2019], appeal dismissed & lv. denied 33 N.Y.3d 1053, 103 N.Y.S.3d 25, 126 N.E.3d 1065 [2019] ; Matter of National Energy Marketers Assn. v. New York State Pub. Serv. Commn., 167 A.D.3d 88, 95, 88 N.Y.S.3d 259 [3d Dept. 2018] ; Matter of National Fuel Gas Distrib. Corp. v. Public Serv. Commn. of State of N.Y., 71 A.D.3d 62, 66, 893 N.Y.S.2d 652 [3d Dept. 2009], affd 16 N.Y.3d 360, 922 N.Y.S.2d 224, 947 N.E.2d 115 [2011] ).

NYPA met its prima facie burden of demonstrating that plaintiffs’ causes of action are untimely. As NYPA points out, plaintiffs acknowledge in the complaint that NYPA's last rate-making process occurred in 2011, and the complaint makes no claim that NYPA did anything to change the preference hydropower rate since that time. Having thus shown that accrual of plaintiffs’ claims occurred in 2011, NYPA further established that plaintiffs failed to contest the 2011 rate-making within the...