The Court of Appeals’ October Session: Arguments of Interest for October 19, 2017

The Court of Appeals’ October Session continues on October 19, 2016. Of the cases on the argument schedule (the Court’s case summaries can be found here), two are of particular interest:

No. 179           Matter of Entergy Nuclear Operations, Inc. v New York State Department of State

In Entergy Nuclear Operations, the owner of the Indian Point Nuclear Plant in Westchester County brought a declaratory judgment action against the Department of State, arguing that its application to renew the plant’s operating licenses is exempt from consistency review under the State’s Coastal Management Program (CMP), which would require the Plant to establish that its operating are consistent with the federal Coastal Zone Management Act (CZMA).  Importantly, under the CMP, an exemption from consistency review exists for projects for which a Final Environmental Impact Statement (FEIS) was prepared prior to the CMP’s establishment and for those projects that are grandfathered pursuant to the State Environmental Quality Review Act.  Indian Point’s FEISes were prepared pursuant to the National Environmental Policy Act (NEPA) when it was granted 40-year operating licenses in 1973 and 1975, before the CMP was established in 1982.  The Department of State, however, concluded that Indian Point’s renewal applications were not exempt.

After Supreme Court confirmed the Department’s determination, because Indian Point’s operations have never been subject to review under the CZMA, the Appellate Division, Third Department reversed. To the contrary, the Third Department held that the exemption from consistency review does apply because Indian Point’s FEISes were prepared prior to the 1982 effective date of the CMP.  The Court rejected the Department’s argument that the FEISes did not qualify for the exemption because they were prepared under NEPA, not SEQRA.  The Court of Appeals will thus be asked to determine whether Indian Point’s renewal application is exempt from consistency review, or whether the relicensing of a nuclear reactor should be treated as a new proceeding requiring a new consistency review.

A copy of the Appellate Division, Third Department’s decision below can be found here.

No. 180           Rasheed Al Rushaid v Pictet & Cie

New York’s long-arm statute returns to the Court of Appeals’ docket in Rasheed Al Rushaid.  In this case, a Saudi Arabian businessman and his businesses seek to recover against a private Swiss bank based in Geneva and its officers, alleging that the Bank aided and abetted three rogue employees of the businessman to launder money from a Middle East oil drilling bribery and kickback scheme through a New York bank account to accounts the employees had set up at the Bank in Geneva.  The question the Court of Appeals faces is a straightforward one: is the use of the correspondent bank account in New York to give the New York courts long-arm jurisdiction over the Swiss Bank?

Supreme Court decided that the passive routing of money through the New York account to Geneva was insufficient to show that the Swiss Bank purposefully availed itself of the benefits of conducting business in New York. The Court also held that the plaintiffs’ injuries stemmed not from the routing of the money through the New York account, but from the fraudulent scheme itself, and that the routing of the money through New York was “merely coincidental.”  The Appellate Division, First Department agreed.  Distinguishing the Court of Appeals precedent in Licci v Lebanese Can. Bank, SAL (20 NY3d 327 [2012]), the First Department noted that the Swiss Bank was directed by the rogue employees to wire the money through the New York correspondent account and were, thus, merely carrying out its clients’ wishes, not purposefully conducting business in New York.  Thus, the Court held, long-arm jurisdiction was lacking.

The Appellate Division, First Department’s decision below can be found here.

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