We recently came across an interesting decision from a federal appeals court involving a town’s rescission of a 25-year-old negative declaration issued under the New York State Environmental Quality Review Act (SEQRA). A “negative declaration” is a written determination by a lead agency that a proposed action will not result in significant adverse environmental impacts. Because of the convoluted history of the matter as it wound its way through both state and federal courts, we think you may find it interesting as well.
In Leonard, et al, v. Planning Board of the Town of Union Vale, __F.3d __ (2d Cir. September 2, 2016), the Second Circuit Court of Appeals ruled that the 2012 rescission of a 1987 negative declaration was not a final determination, requiring the applicant to complete the SEQRA review process before resorting to court. Here’s the history.
The Planning Board Decision
In 1986, plaintiffs applied to have their 950-acre property, located in the Town of Union Vale in Dutchess County, designated as an “open development area” under Town Law § 280-a(4). The application was granted by the Town, which permitted the site to be subdivided into private lots with private roads. In 1987, the Planning Board of the Town of Union Vale (Planning Board) issued a negative declaration with respect to the entire project. The first section of the project was approved in 1987 and was developed with large single-family homes. In 2009, plaintiffs applied for a subdivision of the next section. Changes to the layout required by the Planning Board for this second phase would cause significantly more ground being disturbed than was initially planned. In 2012, the Planning Board determined that the application was incomplete and decided a new SEQRA review was required because the 1987 negative declaration did not apply to the current application.
Plaintiffs Challenge The Planning Board’s Determination
Plaintiffs sued the Planning Board in state court in 2012, challenging the incompleteness determination. The state trial and appellate courts determined that the 2012 Planning Board incompleteness resolution was improper and annulled it. The courts further ruled that the Planning Board must consider the 2012 application on the basis of the 1987 negative declaration unless the Planning Board determines that the 1987 negative declaration should be amended or rescinded. The Planning Board held a public hearing in June 2013. It thereafter adopted a resolution rescinding the 1987 negative declaration on the grounds that the project, and the applicable regulations, had undergone substantial changes since 1987; and the project may result in significant adverse environmental impacts. According to plaintiffs, no specifics about any such impacts were contained in the resolution.
Not surprisingly, plaintiffs sued again. In 2013, plaintiffs commenced another action in state court, alleging federal due process violations and state law violations. The defendants removed the case to the federal district court, which remanded the state claims back to the state court and dismissed the federal due process claims on the grounds that plaintiffs did not have a property right in the negative declaration. See Leonard et al., v. The Planning Board of the Town of Union Vale, 154 F.Supp.3d 59, 67-68 (SDNY 2016).
Plaintiffs appealed the federal district court’s dismissal of the federal due process claims. Following the United States Supreme Court ruling in Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, 473 US 172 (1985), and the Second Circuit’s prior rulings in Southview Associates, Ltd., v. Bongartz, 980 F.2d 84 (2d Cir. 1992) and Kurtz v. Verizon New York, Inc., 758 F.3d 506 (2d Cir. 2014), the Second Circuit ruled that before plaintiffs can bring a federal due process challenge to a local land-use claim, the local agency must render a “final decision.”
The Second Circuit found the negative declaration rescission was not a final decision because plaintiffs’ application was still pending before the Planning Board, and the Town still needed to complete the project’s SEQRA review. The Second Circuit noted that in rare exceptional cases, the finality requirement can be excused. This requires a showing that the Planning Board already made up its mind and that further proceedings before the Planning Board were futile or that the board used unfair tactics to delay the approval process. In this case, the Second Circuit found these futility criteria missing. It also noted that the mere fact that plaintiffs would incur expenses to go through the SEQRA process was not a basis for finding futility. See Leonard, et al, v. Planning Board of the Town of Union Vale, __F.3d __ (2d Cir. September 2, 2016).
In October 2015, the state court dismissed the remanded state claims, finding that the Planning Board’s rescission was not arbitrary or capricious and did not violate law. That decision is on appeal to the state appellate court.
Plaintiffs incurred a lot of legal fees and spent more than three years challenging the 2012 rescission in both federal and state courts and wound up back where they started – before the Planning Board going through the SEQRA process.