In Incorporated Village of Lindenhurst v. One World Recycling, LLC, et al., the Second Department reversed the lower court’s denial of permanent injunctive relief, in large part based on the existence of prior agreements between the parties.  The appellant, Incorporated Village of Lindenhurst (the “Village”), sought to prohibit One World Recycling, LLC (“One World”) from exceeding waste processing limits previously agreed to between the Village and One World’s predecessor in interest.

In 2008, the New York State Department of Environmental Conservation (the “DEC”), authorized One World’s predecessor to process up to 370 tons of waste per day, for no more than a combined weekly average of 2,200 tons.  After Hurricane Sandy hit the area in late-October of 2012, the DEC granted One World’s predecessor a temporary emergency authorization to increase its daily waste processing limits to 1,100 tons.  Prior to the expiration of that authorization, One World acquired the facility and applied to the DEC to permanently keep the limits at 1,100 tons per day.

During the pendency of that application, the Village brought an action against One World for, inter alia, breach of contract and injunctive relief.  In particular, the Village alleged that One World’s application to permanently increase its waste processing limits to 1,100 tons per day violated terms of prior agreements between the Village and One World’s predecessor.  Accordingly, the Village sought to preliminarily enjoin One World from processing more than 500 tons of waste per day, and to permanently enjoin One World from exceeding the limits set forth in the 2008 permit.

However, before the Court ruled on the preliminary injunction, the DEC issued a renewal permit allowing One World to process an annual average of 500 tons of waste per day, but to never exceed 600 tons in any single day.  As a result of this renewal permit, the Court denied the Village’s requests for preliminary and permanent injunctive relief.

Upon appeal, the Second Department effectively reversed.  Although the renewal permit changed the status quo, eliminating the prospect of any preliminary injunctive relief, it did not preclude the Court from considering the merits of the Village’s action.  The Second Department held that if the Village could ultimately prove its various claims, such as One World’s breach of a prior agreement due to the increased processing limits, it may then be entitled to its requested permanent injunctive relief, even despite the DEC renewal permit allowing such increase.

Takeaway:  Foresight is incredibly important for any individual or entity entering into a contract.  What one binds itself to now may well limit or even prohibit it from taking otherwise permitted action in the future.  This is true for any legal agreement, and a contract with a municipality is no exception.