Court Says Permit System is Legal - March 7, 2012

Accepting legal arguments raised by attorneys for the Sacandaga Protection Committee and the Hudson River-Black River Regulating District, the U.S. Court of Appeals for the Second Circuit issued a decision affirming a federal district court’s dismissal of Niagara Mohawk Power Corporation’s challenge to the Great Sacandaga Lake Permit System.  The Second Circuit’s detailed 43-page decision in the matter of Niagara Mohawk Power Corporation v. Hudson River-Black River Regulating District was issued on March 7, 2012 following oral argument in New York City on December 2, 2011.

In the case, Niagara Mohawk also sought a refund of more than $5 million in assessments paid to the regulating district plus interest.  Niagara Mohawk had also argued that the Federal Power Act preempts virtually all of the regulating district’s activities, including operation of the Great Sacandaga Lake Permit System, maintenance of the watershed, and even flood control.  In the underlying district court case, the U.S. District Court for the Northern District of New York (Hon. Norman A. Mordue) dismissed Niagara Mohawk’s claims.

On appeal, the Second Circuit again rejected Niagara Mohawk’s preemption claims which would have affected the permit system.  Adopting arguments from the Sacandaga Protection Committee’s legal briefs and oral argument, the Second Circuit described Niagara Mohawk’s interpretation of the Federal Power Act as “misguided” and strongly criticized Niagara Mohawk for “misapplying the preemption test” and “again and again . . . mischaracterizing the holdings” of case law interpreting the Federal Power Act.  As the power company no longer produces power in the area and merely owns vacant land, the Federal Power Act does not apply by its express terms.  Therefore, the Second Circuit affirmed dismissal of the federal preemption claims.  Without expressing an opinion on the merits, the court remanded claims concerning the amount of the assessment back to the district court for further consideration.

The Sacandaga Protection Committee is an all-volunteer, not-for-profit corporation formed in May 2009 to develop strategies to protect the environmental, economic, and legal interests of the entire lake community.  It is composed of community leaders, lake users, permit holders and area property taxpayers.  The Sacandaga Protection Committee is represented by attorneys from Hodgson Russ LLP with Benjamin K. Ahlstrom briefing and arguing the appeal as well as Daniel A. Spitzer.


Read the Leader-Herald article of March 8, 2012 regarding this issue here.


Comments from our readers - 

This is a heartfelt thanks and gratitude to those in the SPC, who have worked so tirelessly to see these, so very positive outcomes from this decision finally favor our side.

The upholding of the legal covenant attached to our Permit system is a monumental judgment which was both sought and necessary for the continuance of our system around the lake.

Many thanks to Dick, Joe, Travis and all of the Board who serve us all.... as well as the leading attorneys of Hodgson Russ who plead our case.

Peter Blaauboer


We want to thank you very much for all your volunteer work and the amount of time that you extend on behalf of the home owners and permit holders on Great Sacandaga Lake.
This is wonderful news.


Peter and Linda Meenan