Regulatory Certainty over Speculation: DEC may finalize a complete SPDES renewal without reopening for an unripe compliance project; permittee‑initiated modification and compliance schedules are the proper vehicles

Introduction

In Matter of County of Rockland v. New York State Department of Environmental Conservation, 2025 NY Slip Op 06231 (App Div, 3d Dept, Nov. 13, 2025), the Third Department affirmed the Department of Environmental Conservation’s (DEC) discretion to finalize a renewal State Pollutant Discharge Elimination System (SPDES) permit—imposing more stringent water quality-based effluent limits—without rescinding its prior “complete application” determination to accommodate a speculative future compliance project (a proposed outfall diffuser, sometimes spelled “diffusor”). The case arises from Rockland County Sewer District #1’s efforts to renew the Orangeburg Wastewater Treatment Plant’s SPDES permit and to have a contemplated diffuser project integrated into the renewed permit.

The key issues were:

Whether DEC was required to rescind its 2018 completeness determination and restart review (including SEQRA) to incorporate a proposed diffuser project that remained technically unripe; and
Whether DEC could condition inclusion of the diffuser on the filing of a permittee-initiated modification request and, when that request was never filed, proceed to issue the final permit with a compliance schedule.

The Appellate Division upheld DEC’s actions and the denial of an adjudicatory hearing, emphasizing agency expertise, rational decision-making grounded in the record, and the appropriate use of compliance schedules to balance regulatory certainty with a permittee’s ongoing planning.

Summary of the Opinion

Applying the arbitrary-and-capricious standard under CPLR 7803(3), the court held that:

DEC rationally declined the District’s request to rescind its 2018 determination of application completeness and to restart the review to fold in a proposed diffuser project—particularly given the passage of nearly eight years since the prior permit expired and the District’s failure to submit a formal permittee-initiated modification request despite DEC’s explicit direction and extended deadlines.
DEC permissibly proceeded to issue the renewed SPDES permit (effective March 2021) with more stringent effluent limits for ammonia and total residual chlorine, while providing an “enforceable, yet generous” three-year compliance schedule to allow the District to develop plans to meet those limits.
DEC’s post-completeness requests for technical information did not “reopen” the application; by regulation, DEC may request additional information “at any time” (6 NYCRR 621.14[b]).
Petitioner’s SEQRA-based argument that DEC had to act under 6 NYCRR 617.7(f)(1) was unpreserved and, in any event, inapplicable given the District’s failure to supply required project documentation.
Petitioner’s equitable estoppel theory (to invalidate the ammonia effluent limits) was unpreserved and in any event inapt because estoppel against the government requires exceptional circumstances not present here.
A facial challenge to 6 NYCRR 624.4(c)(7) (the hearing regulation) was not properly before the court because it was not set forth in the petition.

The judgment dismissing the Article 78 petition was affirmed without costs.

Analysis

1) Precedents Cited and Their Influence

Matter of Lake George Assn. v NYS Adirondack Park Agency, 228 AD3d 52 (3d Dept 2024), lv denied 42 NY3d 908 (2024), and Matter of Sierra Club v DEC, 227 AD3d 722 (2d Dept 2024): These decisions underscore judicial deference to agency expertise, particularly where determinations are supported by the record and involve technical judgments. The court applied the same deference here to DEC’s permit processing choices, effluent-limit setting, and selection of a compliance schedule.
Matter of Beer v DEC, 189 AD3d 1916 (3d Dept 2020): Cited both for the arbitrary-and-capricious standard and, substantively, for DEC’s latitude in managing permit conditions and the hearing process. Beer supports DEC’s ability to proceed when the record shows a rational path—here, finalizing the permit and employing a compliance schedule instead of indefinitely delaying for a possible future project.
Matter of Riverkeeper, Inc. v DEC, 152 AD3d 1016 (3d Dept 2018): Reinforces that DEC may condition and structure permits in a way that advances environmental protection while accommodating implementation realities—again, consistent with using compliance schedules rather than leaving permits unresolved.
Matter of Citizens for Hudson Valley v Siting Board, 281 AD2d 89 (3d Dept 2001): Illustrates judicial acceptance of agency-designed compliance mechanisms when balancing regulatory objectives and project execution timelines.
Matter of Clean Air Action Network of Glens Falls, Inc. v Town of Moreau Planning Bd., 235 AD3d 1124 (3d Dept 2025): Recites the arbitrary-and-capricious standard: actions lacking a sound basis in reason or regard to the facts are invalid. By contrast, DEC’s path here had a clear factual and procedural basis.
Preservation and estoppel authorities—State of New York v Konikov, 182 AD3d 750 (3d Dept 2020), lv denied 36 NY3d 906 (2021); Matter of Held v WCB, 103 AD3d 1063 (3d Dept 2013); Matter of Stasack v DEC, 176 AD3d 1456 (3d Dept 2019); Matter of Washington v OCFS, 55 AD3d 1117 (3d Dept 2008); Matter of Bano [Commissioner of Labor], 233 AD3d 1287 (3d Dept 2024); Matter of Wustrau v Accord Fire Dist., 200 AD3d 1395 (3d Dept 2021), lv denied 38 NY3d 912 (2022): Collectively they reinforce that arguments must be preserved at the administrative and Supreme Court levels and that equitable estoppel against the government is extraordinary and rarely available—both of which undercut petitioner’s litigation posture.
Pleading requirements—Matter of Vaughan v DOT, 223 AD3d 1010 (3d Dept 2024), lv dismissed & denied 42 NY3d 945 (2024); Matter of Serrano v Danforth, 221 AD3d 1148 (3d Dept 2023): To mount a facial regulatory challenge, the issue must be pled in the petition. Petitioner’s attack on 6 NYCRR 624.4(c)(7) failed on that threshold.

2) The Court’s Legal Reasoning

The decision turns on the well-settled arbitrary-and-capricious standard and deference to agency expertise. The record showed that:

DEC deemed the District’s SPDES renewal application complete in June 2018 and issued a draft permit with stricter WQBELs for ammonia and residual chlorine (see 6 NYCRR 750-1.11[a][5][i]).
After extended discussions, the District advised it was contemplating a diffuser to meet the limits. DEC set a path: if specified technical documentation was timely provided and met DEC’s approval, DEC would notice a revised draft permit reflecting the diffuser and adjusted effluent limits (see 6 NYCRR 750-1.10[c][1]).
DEC later added a further requirement: the District must file a permittee-initiated modification request by a date certain (see 6 NYCRR 621.11[a], [b]). DEC afforded extensions.
The District submitted some materials (including a design and, later, a constructability analysis, the latter belatedly) but never filed the formal permittee-initiated modification request. Instead, it asked DEC to rescind the 2018 completeness determination and restart the process, including environmental review, to encompass the diffuser proposal.
DEC declined, citing the significant time since the prior permit’s expiration (nearly eight years) and uncertainty around the diffuser’s timeline. DEC elected to finalize the permit as noticed and include an enforceable three-year compliance schedule to allow the District to develop plans to comply with the new limits.

The court held that this decision path was rational. DEC balanced:

Regulatory certainty and environmental protection (by issuing the renewed permit with updated WQBELs); and
Operational feasibility (by providing a generous compliance schedule that allows the District to continue developing its compliance approach, including, if appropriate, pursuing the diffuser through the proper permit modification channels).

The court also clarified several ancillary legal points:

Requesting technical information after an application is deemed complete does not “reopen” the application; DEC may request additional information “at any time” (6 NYCRR 621.14[b]).
Petitioner’s reliance on SEQRA’s rescission framework (6 NYCRR 617.7[f][1]) was both unpreserved and, given the incomplete diffuser record, inapposite.
The appropriate pathway to inject a new or evolving compliance design into a pending permit proceeding was a permittee-initiated modification request—underscored by footnote 2’s reminder that DEC’s modification authority turns on “newly discovered material information” since the permit’s issuance (6 NYCRR 621.13[a][4]; see also 6 NYCRR 750-1.18[b][1]-[7]).
Hearing rights are cabined by the Part 624 standards; the ALJ’s conclusion that no adjudicable issue was raised (with respect to permit conditions, ammonia limits, or process irregularities) was sustained. The Commissioner’s affirmance and the Supreme Court’s judgment were likewise upheld.
Equitable estoppel—asserted to invalidate the ammonia limit—was not preserved at the administrative stage and, irrespective of preservation, fails on the merits absent fraud, misrepresentation, or similar affirmative misconduct by the agency.
A facial challenge to 6 NYCRR 624.4(c)(7) was not properly presented because it was not pleaded in the petition.

3) Impact and Forward-Looking Consequences

This opinion reinforces a set of practical and doctrinal guideposts that will influence SPDES permitting and, by analogy, other New York environmental permitting regimes:

No duty to reopen for speculative compliance projects. Once DEC has determined an application complete and has properly noticed a draft permit, the agency retains discretion to proceed to final action rather than pause for an unripe, evolving design proposal—especially where the permittee has not taken the required procedural step of filing a formal modification request.
Compliance schedules as a bridge. DEC can issue a final permit with updated WQBELs while using enforceable compliance schedules to allow time for project development. This decision affirms that approach as a rational means of achieving both environmental protection and implementation feasibility.
Clear channeling of project changes through permittee‑initiated modifications. When permittees wish to incorporate new engineering solutions midstream, a formal modification request—supported by adequate technical documentation—is the correct route. Failure to file such a request undermines later claims that the agency acted arbitrarily by proceeding to final issuance.
Post-completeness information requests do not “reopen” the application. DEC’s authority to seek additional information at any time (6 NYCRR 621.14[b]) means productive technical exchanges do not reset the procedural clock or compel rescission of completeness.
SEQRA rescission claims must be preserved and supported. Attempts to leverage 6 NYCRR 617.7(f)(1) require both timely preservation and a sufficiently developed record demonstrating new substantive information; otherwise, the argument will fail.
Hearing thresholds remain high. Under Part 624, only substantive and significant issues warrant adjudication. Generalized disagreements with agency judgment, absent a showing that permit conditions would change or that the permit is defective, will not trigger an evidentiary hearing.
Limited estoppel against the government. Parties should not expect to estop DEC from applying lawful standards based on informal communications. Only exceptional circumstances (fraud, misrepresentation) can support such a claim, and it must be preserved.

Complex Concepts Simplified

SPDES permit (State Pollutant Discharge Elimination System): New York’s program (aligned with the federal Clean Water Act) regulating discharges of pollutants (like treated wastewater effluent) to surface waters. Permits set effluent limits, monitoring, and compliance conditions.
WQBELs (Water Quality-Based Effluent Limits): Limits tailored to ensure receiving waters meet water quality standards. They can be more stringent than technology-based limits. Here, DEC imposed stricter WQBELs for ammonia and total residual chlorine.
Diffuser (diffusor): An engineered outfall that disperses effluent through multiple ports to promote mixing, reducing near-field pollutant concentrations. It is often evaluated to help meet WQBELs but requires detailed design and feasibility documentation.
Completeness determination: DEC’s finding that an application contains sufficient information to commence formal processing and public notice. It does not bar DEC from asking for additional information later.
Permittee-initiated modification: A formal request by the permit holder to modify an existing or pending permit, typically supported by new material information (e.g., final designs, analyses) and subject to applicable regulatory criteria (see 6 NYCRR 621.11; 621.13; 750-1.18).
Compliance schedule: An enforceable timeline built into a permit that phases in compliance with new or more stringent limits, providing time for design, financing, and construction while ensuring eventual attainment of standards.
SEQRA (State Environmental Quality Review Act): Requires agencies to consider environmental impacts in discretionary decisions. 6 NYCRR 617.7(f)(1) allows rescission of a negative declaration if new substantive information arises, but the doctrine must be timely invoked and factually supported.
Arbitrary and capricious standard: Under CPLR 7803(3), a court asks whether the agency acted without a rational basis or ignored relevant facts. Technical determinations within agency expertise are given substantial deference.
Adjudicatory hearing thresholds (Part 624): To merit a hearing, a challenger must show a “substantive and significant” issue—one that could lead to denial of the permit or a major change in permit conditions. Mere disagreement is insufficient.
Preservation: Parties must raise arguments during the administrative process and in Supreme Court; new theories cannot be introduced on appeal. Facial regulatory challenges must be pleaded in the Article 78 petition.
Equitable estoppel against a government agency: Rarely granted; requires proof of fraud, misrepresentation, or similar misconduct and reasonable reliance, and must be properly preserved.

Practical Guidance for Practitioners and Permittees

When contemplating a new compliance project (like a diffuser), file a timely, formal permittee-initiated modification request and submit complete technical documentation. Do not rely on informal exchanges to carry the day.
Expect DEC to proceed to final issuance if the record is not ready; seek a compliance schedule as an interim path while the project is developed.
Preserve all legal arguments at the administrative hearing stage and in Supreme Court, including any SEQRA-based contentions and challenges to DEC regulations.
To argue for a SEQRA rescission, assemble a robust record of new, substantive environmental information that was not available earlier; mere contemplation of a project is not enough.
In seeking an adjudicatory hearing, identify specific, substantive, and significant issues that could alter permit terms, supported by expert affidavits and concrete analyses.

Conclusion

The Third Department’s decision in County of Rockland v DEC crystallizes an important operational rule for environmental permitting in New York: DEC is not obliged to rescind a completeness determination or delay final action on a SPDES renewal to accommodate a speculative, underdeveloped compliance project. Where a permittee has not filed a formal modification request and the technical record is incomplete, DEC may rationally finalize a permit with strengthened WQBELs and deploy a compliance schedule to bridge implementation.

The opinion reinforces core administrative law principles—deference to agency expertise, rigorous preservation requirements, high thresholds for adjudicatory hearings, and the exceptional nature of estoppel against the government. As a practical matter, it signals to permittees and counsel that project integration into permit terms turns on procedural discipline and a complete technical record, not on informal assurances or open-ended deliberations. In short, regulatory certainty and environmental protection will not be held in abeyance for speculation; the proper vehicle is a permittee-initiated modification supported by the kind of “newly discovered material information” contemplated by DEC’s regulations.

Case: Matter of County of Rockland v New York State Dept. of Envtl. Conservation, 2025 NY Slip Op 06231 (3d Dept, Nov. 13, 2025). Court affirmed Supreme Court’s dismissal of Article 78 petition; ALJ and Commissioner determinations sustained; judgment affirmed without costs.