New York Law Review

Tag: Dredging

  • Town of Oyster Bay v. Commander Oil Corp., 96 N.Y.2d 566 (2001): Riparian Owner’s Right to Dredge

    96 N.Y.2d 566 (2001)

    A riparian owner has the right to conduct maintenance dredging of public underwater lands if it is necessary to preserve reasonable access to navigable water and does not unreasonably interfere with the rights of the underwater owner.

    Summary

    This case addresses the conflict between a riparian owner’s right to access navigable waters and a town’s ownership of underwater lands. Commander Oil, a riparian owner, sought to dredge the area near its pier to maintain barge access. The Town of Oyster Bay, the underwater landowner, sought to prevent the dredging. The Court of Appeals held that a riparian owner may dredge if it is necessary to preserve reasonable access and does not unreasonably interfere with the town’s rights. The court reversed the lower court’s injunction and remitted the case for further proceedings applying this standard.

    Facts

    Commander Oil has operated a petroleum storage facility adjacent to Oyster Bay Harbor since 1929. A pier extends from Commander’s land into the harbor, where barges dock to unload oil. The Town of Oyster Bay owns the underwater land in the harbor. Silt accumulation made the basins near the pier shallower. Commander had previously dredged the basins with the Town’s permission under a lease that expired in 1985. In 1995, Commander sought to dredge again, obtaining permits from state agencies but not seeking the Town’s permission. The Town then sought to enjoin Commander from dredging.

    Procedural History

    The Town initially challenged the state permits in Article 78 proceedings, which were dismissed. The Town then sued Commander to enjoin the dredging. Supreme Court initially denied a preliminary injunction, but the Appellate Division reversed. Supreme Court then denied a permanent injunction after finding dredging was necessary to restore the basins. The Appellate Division again reversed, granting a permanent injunction, holding that the upland owner has no riparian right to dredge public underwater lands without the public owner’s permission. The Court of Appeals reversed the Appellate Division’s order.

    Issue(s)

    Whether a riparian owner has the right to conduct maintenance dredging of public underwater lands.

    Holding

    Yes, because a riparian owner may dredge if dredging is necessary to preserve reasonable access to navigable water and does not unreasonably interfere with the rights of the underwater owner.

    Court’s Reasoning

    The Court of Appeals acknowledged Commander’s rights as a riparian owner, including the right of access to navigable water. It also recognized the Town’s ownership of the underwater land held in trust for the public good. The court emphasized that neither party’s rights are absolute and must be balanced. The court distinguished this case from Hedges v. West Shore R. R. Co., 150 N.Y. 150 (1896), clarifying that Hedges does not prohibit dredging altogether, but prevents riparian owners from expanding access in a way that seriously impairs the rights of the underwater landowner. The court also noted that the Town’s own stormwater runoff contributed to the silt accumulation. The Court stated, “[N]either the riparian owner nor the underwater landowner has an unfettered veto over reasonable land uses necessary to the other’s acknowledged rights, and where the rights conflict the courts must strike the correct balance.” The court concluded that the riparian owner’s right is to enjoy reasonable access to navigable water, not to maintain the foreshore in any fixed condition. The Court emphasized the importance of balancing the riparian owner’s right to reasonable access with the public owner’s duty to consider the diverse interests of users of the foreshore. The court remanded the case to the Supreme Court to strike the appropriate balance between the parties’ rights, instructing the lower court to consider whether the dredging was necessary for reasonable access and whether it would unreasonably interfere with the Town’s rights.

  • Matter of Atlantic Gulf & Pacific Co. v. State Tax Commission, 40 N.Y.2d 77 (1976): Tax Exemption for Vessels in Interstate Commerce Requires Primary Engagement

    Matter of Atlantic Gulf & Pacific Co. v. State Tax Commission, 40 N.Y.2d 77 (1976)

    A commercial vessel is only exempt from state sales and use tax if it is primarily engaged in interstate or foreign commerce; localized activities, even if facilitating interstate commerce, do not qualify for the exemption.

    Summary

    Atlantic Gulf & Pacific Co., a dredging company, challenged a New York State Tax Commission assessment of sales and use tax on its vessels and supplies. The company argued its vessels were exempt under Tax Law § 1115(a)(8) as commercial vessels primarily engaged in interstate or foreign commerce. The Tax Commission denied the exemption, finding that dredging operations were primarily local activities. The Court of Appeals reversed the Appellate Division’s ruling in favor of the company, holding that the dredging activities, though performed on interstate waterways, were primarily local in nature and therefore not exempt from state sales and use tax.

    Facts

    Atlantic Gulf & Pacific Co. conducted dredging operations in various locations within New York State. The company owned and used dredges, cranes, drillboats, tugboats, and scows for these operations. While some tugboats and scows crossed state lines to dispose of dredged materials, the core dredging work was performed with the equipment anchored in place. The State Tax Commission assessed sales and use taxes on these vessels and related supplies.

    Procedural History

    The State Tax Commission assessed sales and use taxes against Atlantic Gulf & Pacific Co. The Appellate Division annulled the Tax Commission’s determination, concluding that dredging the waterways of interstate travel constituted interstate commerce. The State Tax Commission appealed to the New York Court of Appeals.

    Issue(s)

    Whether the petitioner’s dredging vessels and related supplies are exempt from state sales and use tax under Tax Law § 1115(a)(8) as commercial vessels primarily engaged in interstate or foreign commerce.

    Holding

    No, because the dredging operations, although conducted on interstate waterways, are primarily localized activities and do not qualify as being “primarily engaged in interstate commerce” for the purposes of the tax exemption.

    Court’s Reasoning

    The Court of Appeals emphasized that tax exemptions must be narrowly construed, and the party claiming the exemption must clearly demonstrate entitlement to it. Citing Matter of Young v Bragalini, 3 NY2d 602, 605-606, the court stated, “‘it must clearly appear, and the party claiming it must be able to point to some provision of law plainly giving the exemption’”. The court found that dredging, being confined to a specific area for constructing or repairing waterways, is a localized activity. The court reasoned that while vessels are mobile and movable across state lines, such movement is merely incidental to the localized dredging activity. The court distinguished this case from situations where vessels are directly involved in transporting goods or passengers across state lines. The court also cited Matter of Niagara Junc. Ry. Co. v Creagh, 2 AD2d 299, affirming that even activities related to interstate commerce can be subject to local taxes if the activities themselves are primarily local events. The Court stated, “That the work was performed upon interstate waterways is not a dispositive factor.”. The court concluded that the company failed to meet its burden of proving that the vessels were “primarily engaged in interstate commerce,” thus upholding the Tax Commission’s determination. The Court also noted the absence of any constitutional issue of burdening interstate commerce by multiple taxation, as there was no evidence that any other jurisdiction had imposed a similar tax. The court deferred to the expertise of the Tax Commission, stating, “If there are any facts or reasonable inferences from the facts to sustain it, the court must confirm the Tax Commission’s determination.”.