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A recent ruling by the New York Court of Appeals strictly limits a developer’s right to appeal a positive declaration under the State Environmental Quality Review Act (“SEQRA”).  A “positive declaration” triggers the need for a draft environmental impact statement (“DEIS”) because there is a finding that the project has the potential to result in one or more significant adverse environmental impacts.

On March 31, 2016, the New York Court of Appeals issued its decision in Matter of Ranco Sand and Stone Corp. v. Vecchio2016 N.Y. Slip Op. 02477 (March 31, 2016).  In Ranco, the Court clarified its 2003 ruling in Matter of Gordon v. Rush, 100 N.Y.2d 236 (2003), which permitted an aggrieved developer to immediately challenge a town board’s positive declaration under SEQRA without first having to prepare a DEIS and complete the SEQRA environmental review process.

The Gordon decision caused some confusion among the lower courts, prompting the Court of Appeals to revisit the issue in Ranco and clarify its prior ruling.  As explained in Ranco, a positive declaration cannot be immediately challenged in an Article 78 proceeding unless the developer can establish at least one of the following:

1) that a positive declaration appears to be unauthorized;

2) the agency issuing the positive declaration is unauthorized; or

3) the action is not subject to SEQRA.

The Ranco decision is discussed in greater detail in my May 25, 2016 NYLJ article entitled Court Limits Judicial Review of SEQRA Positive Declaration.

The Ranco Facts

The Ranco case arose after Ranco Sand and Stone Corp. applied to the Smithtown Town Board to rezone, from residential to heavy industrial use, one of two contiguous parcels Ranco owns.  After the Town’s Planning Board and Planning Department recommended approval of the application, the Town Board, acting as lead agency under SEQRA, adopted a resolution issuing a positive declaration that rezoning the parcel “may have a significant effect on the environment”, which required Ranco to prepare a DEIS.  Rather than endure the time and expense of preparing a DEIS – estimated to cost between $75,000 and $150,000 – Ranco promptly commenced an Article 78 proceeding against the Town Board.  Ranco sought to annul the positive declaration as “arbitrary, capricious, and unauthorized” and requested an order directing the Town Board to process the rezoning application without a DEIS.

The Town Board moved to dismiss the petition for failure to state a cause of action.  The Supreme Court, Suffolk County, granted the motion, finding that the matter was not ripe for judicial review.  The Appellate Division, Second Department, affirmed.  It concluded that the positive declaration was the initial step in the decision-making process rather than a final administrative determination and, therefore, did not give rise to a justiciable controversy.  The Court of Appeals granted leave to appeal.

Two Requirements for Judicial Review

In referencing Gordon, the Court found that immediate judicial review of a determination was warranted when two requirements were satisfied:

1)  The town board’s action had to “impose an obligation, deny a right or fix some legal relationship as a consummation of the administrative process.” This threshold requirement consisted of “a pragmatic evaluation . . . of whether the decisionmaker has arrived at a definitive position on the issue that inflicts an actual, concrete injury.”

2) The apparent harm inflicted by the action “may not be prevented or significantly ameliorated by further administrative action or by steps available to the complaining party.”

The Court concluded in Gordon that the Board’s action was ripe for judicial review because both the above requirements were met.  The Town’s positive declaration imposed an obligation on the developer to prepare and submit a DEIS after they had already been through the coordinated review process and a negative declaration had been issued by the DEC as lead agency.  Moreover, it found that further proceedings would not remedy the injury caused by the unnecessary and unauthorized expenditures associated with conducting a DEIS.

In Ranco, the Court agreed that the Town Board’s positive declaration imposed an obligation on Ranco that satisfied the first requirement of the ripeness-for-review analysis.  The Court failed, however, to find that the second requirement was met notwithstanding that the Court acknowledged Ranco could not recoup the costs and time incurred in preparing a DEIS, even if its application is ultimately successful.

In apparent recognition of its seemingly inconsistent application of the two-part test, the Court stated that when a positive declaration appears to be unauthorized, such as when a proposed action is not subject to SEQRA or when an administrative agency is not empowered to serve as lead agency, it might be ripe for judicial review.  The Court concluded that because Ranco did not claim the positive declaration was unauthorized or that the action was not subject to SEQRA, and because it had not presented any other basis to find that the Town Board had acted outside the scope of its authority, its petition for judicial review was denied as being not ripe for judicial review.

In the Ranco decision, the Court of Appeals referenced its ruling in Gordon, wherein it found that a positive declaration was ripe for judicial review when two requirements were satisfied. First, the agency’s action had to “impose an obligation, deny a right or fix some legal relationship as a consummation of the administrative process.” This threshold requirement, the Gordon Court said, consisted of “a pragmatic evaluation . . . of whether the decisionmaker has arrived at a definitive position on the issue that inflicts an actual, concrete injury.”  To satisfy the second requirement, there had to be a finding that the apparent harm inflicted by the action “may not be prevented or significantly ameliorated by further administrative action or by steps available to the complaining party.”

In Gordon, the Court concluded that the Board’s action was ripe for judicial review.  The Town’s SEQRA declaration imposed an obligation on the petitioners to prepare and submit a DEIS after they “had already been through the coordinated review process and a negative declaration had been issued by the DEC as lead agency.”  No apparent further proceedings would remedy the injury caused by the unnecessary and unauthorized expenditures associated with conducting a DEIS.

The Ranco Court Clarifies and Limits its Prior Ruling

The Court in Ranco agreed that the Town Board’s positive declaration imposed an obligation on Ranco that satisfied the first requirement of the ripeness-for-review analysis.  It failed, however, to find that the second requirement was met, despite the fact that the Court acknowledged that Ranco could not recoup the costs incurred and time spent on preparing a DEIS, even if its application is ultimately successful.

In apparent recognition of its seemingly inconsistent decisions and to avoid any further confusion, the Court specifically limited Gordon.  It held that Gordon stands for the proposition that an immediate challenge to a positive declaration may be ripe for judicial review only where the positive declaration appears unauthorized, such as when the administrative agency is not empowered to serve as lead agency or a prior negative declaration obviates the need for a DEIS, or when the proposed action is not subject to SEQRA.  The Ranco Court concluded that because Ranco did not claim the positive declaration was unauthorized or that the action was not subject to SEQRA, and because it had not presented any other basis to find that the Town Board had acted outside the scope of its authority, its petition was deemed not ripe for judicial review.

The Chilling Effects of Ranco

The Ranco decision significantly limits the situations in which an aggrieved party can commence an immediate challenge to the issuance of a positive declaration.  Given the large financial expense and the considerable amount of work and time involved in preparing a DEIS, the Court’s ruling is likely to mean, in many instances, that a positive declaration will be the death knell of a project.

Perhaps more disturbing is the fact that aggrieved developers who believe their projects have been wrongly made the subject of a positive declaration must first pay tens or even hundreds of thousands of dollars for the right to bring an Article 78 challenge and will not have the ability to recoup those costs, even if they ultimately prevail in their claim.

Without any financial accountability for their actions, decision-makers who are critical of a development project can now use a positive declaration to advance an anti-development agenda under the guise that they are merely being diligent stewards of the environment.

downloadIn Matter of Ranco Sand & Stone Corp. v. Vecchio, 124 A.D.3d 73 (2nd Dept. 2014), the Appellate Division, Second Department, recently held that the issuance of a positive declaration under the New York State Environmental Quality Review Act (“SEQRA”) did not constitute a matter ripe for judicial review, but rather was merely a preliminary step in the decision-making process.  This decision appears to conflict with the Court of Appeals’ decision in Matter of Gordon v. Rush, 100 N.Y.2d 236 (2003), which held that a lead agency’s issuance of a positive declaration requiring a property owner to  prepare and submit a draft environmental impact statement (“DEIS”) can immediately be challenged in court as arbitrary or capricious before a final determination on the underlying application is made.

In Rush, the Court ruled that an Article 78 proceeding challenging a lead agency’s issuance of a positive declaration was ripe for judicial consideration because that determination represented the agency’s “definitive position on the issue” that inflicted “an actual, concrete injury.” The Court added that a ripeness determination also required a finding that the apparent harm inflicted by the action could not be “prevented or significantly ameliorated by further administrative action or by steps available to the complaining party.”

Applying this test, the Court of Appeals found that the issuance of a positive declaration was ripe for judicial review because that determination imposed an obligation on the property owner to prepare and submit a DEIS, which was deemed to be an “actual, concrete injury” because the preparation of a DEIS is likely to cause the petitioner to incur “considerable time and expense.”  Moreover, the Court found that this injury could not be prevented or ameliorated by further administrative action.

In Ranco, the Appellate Division made the very same findings, but concluded that neither was determinative.  Instead, the Court highlighted a number of factors that it found distinguished this case from Rush, such as that Ranco had not already been subject to a coordinated SEQRA review process and a negative declaration indicating that a DEIS is not warranted had not previously been issued.  In light of these distinguishing factors, the Court concluded that the issue of whether a positive declaration is a final determination that is ripe for review must be determined on a case-by-case basis.

Despite the Appellate Division’s attempts to distinguish the two cases, the Ranco decision seems to fly in the face of the Court of Appeals’ rationale in Rush.  Moreover, unless the Second Department itself, or the Court of Appeals, ultimately rejects Ranco, it places applicants who believe that the issuance of a positive declaration is unwarranted in the unfortunate position of having to first incur the cost of preparing a DEIS, which can cost $100,000 or more, before they can challenge the positive declaration itself.  The practical effect of Ranco is that due process to challenge certain SEQRA wrongs may now come with a significant price tag.

30b8f7d055a9be9d4bf8c358cf5ed8a8In its recent decision in Troy Sand & Gravel Co., Inc. v. Town of Nassau, 125 A.D.3d 1170, __N.Y.S2d__, 2015 WL 685968 (3d Dept. 2015) the Appellate Division, Third Department held that the Town of Nassau, having zoning authority with respect to a special permit and site plan review over a proposed mining operation could not gather additional information regarding the environmental impacts of a proposed quarry.  The critical facts leading to the Court’s holding were that the New York State Department of Environmental Conservation (“DEC”) had already conducted a complete environmental review pursuant to the State Environmental Quality Review Act (“SEQRA”) in connection with its review of a mining permit for the same applicant, and the Town had participated in the SEQRA review as an “involved agency.”[1]

The Court’s determination in Troy Sand & Gravel Co., Inc. clarifies the language of its earlier decision in 2012 wherein it stated that although the Town is bound by DEC’s SEQRA findings and it may not repeat the SEQRA process, it nevertheless retains the authority to make an independent review of the plaintiff’s application for a special permit in accordance with the criteria and standards set forth in the zoning code.  See, Troy Sand & Gravel Co., Inc. v. Town of Nassau, 101 A.D.3d 1505, 1508, 957 N.Y.S.2d 444 (3d Dept. 2012).  The Town relied upon the 2012 decision to rescind its prior determination that the permit application was complete so that it could consider whether the SEQRA record was adequate to allow for the Town’s own review under the environmental standards of its zoning law and whether additional environmental review was needed.

In the 2015 decision, the Court rejected the Town’s attempt at a second bite at environmental review, holding that any further gathering of information on environmental factors would be outside the existing SEQRA record and that such review would “vitiate the efficiency and coordination goals of SEQRA.”  2015 WL 685968 at *3.  In sum, as an involved agency in the prior SEQRA review conducted by the DEC, the Town must rely on the fully developed SEQRA record, in which the Town had “extensive involvement.”  Id.  And while the Town maintains its jurisdiction over zoning determinations, it must rely on the final environmental impact as its basis for review of environmental impacts, rather than conduct its own further environmental review.

[1] For SEQRA purposes, an involved agency is one that has jurisdiction by law to fund, approve or directly undertake an action.  See, 6 NYCRR 617.2(s).  Normally an agency becomes aware of its involvement when it receives an application or is contacted by another involved agency as part of a coordinated review.  From “The SEQR Handbook: Third Edition,” 2010.

In July 2012, the New York State Department of Environmental Conservation (“NYSDEC”)  proposed significant amendments to the regulations that implement the State Environmental Quality Review Act (“SEQRA”).[1]  The proposed changes will mandate certain steps that are currently optional, will lower threshold triggers for SEQRA review and will reclassify certain actions to change the level of SEQRA review.

Scoping, a process aimed at focusing environmental impact statements (“EIS”) on potentially significant adverse impacts and eliminating consideration of irrelevant or insignificant impacts, is currently optional.  The proposed amendments mandate scoping for every EIS. In addition, the proposed amendments place greater emphasis on using the environmental assessment form (“EAF”)[2] early in the scoping process.

Certain criteria for Type I actions, which are presumed to have significant adverse impacts and  require the preparation of an EIS, are proposed to be lowered.  For example, these actions would be classified as Type I under the proposed regulations: (i) residential developments with 500 or more parking spaces in communities with a population of 150,000 or less; and (2) residential developments with 1,000 or more parking spaces in communities with a population of 150,000 people or more.  The proposed amendments  would change certain Unlisted actions into Type I actions if they exceed certain criteria and are located wholly or partially within or substantially contiguous to an historic resource.

The NYSDEC is also proposing to broaden the list of actions that will not require review under SEQRA (so-called “Type II actions”).  These include: (1) certain minor subdivisions involving 10 acres or less and certain subdivisions of four or fewer lots; (2) replacement, rehabilitation, or reconstruction of  certain structures or facilities  that use green infrastructure techniques; (3)  installation of rooftop solar energy arrays on an existing structure, provided it is not listed on the National or State Register of Historic Places; (4)  installation of less than 25 megawatts of solar energy arrays on closed sanitary landfills; (5) installation of cellular antennas or repeaters on an existing structure that is not listed on the National or State Register of Historic Places; and (6) sites that are the subject of a NYSDEC Brownfield Clean-up Program agreement.

The NYSDEC is proposing to revise the timeline applicable to the completion of a final EIS.  Currently, a final EIS is supposed to be prepared within 45 days after the close of any hearing or within 60 days of the filing of the draft EIS. These deadlines are rarely met.  The proposed amendments provide that if a final EIS is not prepared and filed within 180 calendar days after the lead agency’s acceptance of the draft EIS, the EIS shall be deemed complete on the basis of the draft EIS, public comment, and the response to comments prepared and submitted by the project sponsor to the lead agency.

Whether these proposed changes, if enacted, will streamline the SEQRA process remains to be seen.


[1] http://www.dec.ny.gov/docs/permits_ej_operations_pdf/drftscope617.pdf

[2] http://www.dec.ny.gov/docs/permits_ej_operations_pdf/longeaf.pdf