Shellfish company countersues Oyster Bay in battle over underwater lease

A judge recently rejected Oyster Bay's attempt to cut short its 30-year underwater lease with shellfishing company Frank M. Flower & Sons, before the vendor fired back last week with a lawsuit counterclaim seeking financial damages and a lease renewal.

State Supreme Court Justice Dawn Marie Jimenez on May 22 denied the town’s request for a preliminary injunction in connection with Oyster Bay's June 2023 lawsuit against the vendor. It had asked the court to prohibit the company from fishing on the more than 1,400-acre lease area it will control until Sept. 30.

Jimenez said in court papers the town failed to prove it would face irreparable harm if the company continued to harvest shellfish on the leased grounds. The underwater lease grants Frank M. Flower & Sons lots where they have exclusive rights to plant, cultivate and harvest clams and oysters. 

Oyster Bay Supervisor Joseph Saladino said in a statement that town officials were “disappointed that the courts will allow the company to continue depleting local waters of shellfish while not restoring the population.” The statement didn't address the company's counterclaims.

The town alleged in a June 2023 complaint that the company violated its lease with the town for underwater land use starting about four years ago for alleged contract breaches that included failing to plant clam seeds in Oyster Bay Harbor and Cold Spring Harbor. The town claims the shellfish company didn't supply a minimum of one million clam seedlings annually, as required under its lease.

But in an August response, Frank M. Flower & Sons denied violating its lease, saying it began making payments to the municipality in 2021 instead of providing one million clam seedlings for annual planting. The company ceased hatchery operations in 2019 when it became unclear whether the lease that expires in September would be renewed, Newsday previously reported.

The town in December announced plans to build a new municipal hatchery capable of putting 100 million oysters and clams into the bay — with construction estimated to begin in 2025.

On June 11, Frank M. Flower & Sons attorney James Cammarata filed a counterclaim with the court seeking damages from the town and demanding a renewal of the company's underwater lease.

The court papers allege that since 2018, town officials had assured Frank M. Flower & Sons “not to worry” and that “the Town will renew the lease.”

Oyster Bay allegedly breached the current agreement for reasons including that the town failed to negotiate for a lease extension, according to the company's court filing. 

Cammarata said in a statement that the town’s “failure to negotiate in good faith, as well as having breached the lease now exposes” the municipality “to potentially millions of dollars in damages.” 

The latest filing contains eight counterclaims, five of which seek an unspecified amount of monetary damages, including for attorney fees. 

One of the eight claims asks the judge to declare the town’s attempt to nullify the lease a violation of town code and another claim asks for a judgment that the town’s “refusal to renew” the lease is improper. 

An additional claim asks for a permanent injunction barring Oyster Bay from awarding the lease to any other company and compelling town officials to renew with Frank M. Flower & Sons for another 30-year term.

The two sides are due in court on July 18.

By Joseph Ostapiuk

joseph.ostapiuk@newsday.com@OstapiukJ