If an agency such as a Town Board, Planning Board, or a Board of Zoning Appeals finds that an application before it may cause a substantial adverse impact on the environment, it is required by the State Environmental Quality Review Act (“SEQRA”) to adopt a positive declaration, and require preparation of a Draft Environmental Impact Statement (“DEIS”) before it may determine the merits of the application. The immediate impact of such a determination on an applicant is that a final ruling on an application will be substantially delayed, and a great deal of money will be spent to prepare the DEIS. Prior to 2003, the lower courts fairly uniformly held that the applicant cannot challenge a SEQRA positive declaration in a CPLR Article 78 Petition because the SEQRA determination of significance was but the initial step in the decision-making process, and therefore did not give rise to a justiciable controversy.
In 2003, the Court of Appeals, New York’s highest court, permitted an Article 78 challenge to a SEQRA positive declaration. In Matter of Gordon v. Rush, 100 N.Y.2d 236 (2003), the Court established a two-part test to determine when a case is far enough along (“ripe”) to permit a court to resolve the controversy. The Court held that a SEQRA positive declaration is ripe for judicial review when two requirements are satisfied. First, “the action must ‘impose an obligation, deny a right or fix some legal relationship as a consummation of the administrative process’” and second, “there must 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 v. Rush, a Town Board requested that the Department of Environmental Conservation serve as SEQRA lead agency, and the DEC did so. The DEC adopted a SEQRA negative declaration (meaning that the application would not have any significant adverse impact on the environment) and approved a wetlands permit requested by a property owner. The Town Board then declared itself lead agency, and issued a SEQRA positive declaration, requiring the property owner to prepare a DEIS before it would consider the request for a Town coastal erosion permit. The property owner challenged the positive declaration, and the Court of Appeals upheld its right to do so. The Court concluded that, pursuant to SEQRA’s regulations, when a SEQRA lead agency after coordinated review makes a SEQRA determination of significance, it is binding on all other involved agencies that also have approval authority over the project. For that reason, the Town Board was without authority to require preparation of a DEIS.
Subsequent to Gordon v. Rush, there was some confusion amongst the lower courts. Some held that the case was limited to its unique facts, and continued to hold that a SEQRA positive declaration could not be challenged in an Article 78. Others, applying the two-part test in Gordon v. Rush, found that a SEQRA positive declaration could be challenged. These courts found that the requirement that a DEIS be prepared “imposed an obligation,” and that the significant delay and costs which could not be recovered could not be prevented by further administrative action or steps by the applicant. Thus the two-part Gordon v. Rush test was met.
On March 31, 2016, in Ranco Sand and Stone Corp. v. Vecchio, the Court of Appeals clarified what was intended by its decision in Gordon v. Rush. There, the property owner leased a parcel of land to a private school bus company that used it as a bus yard and trucking station. Although the parcel at all times was zoned residential, the Town had not enforced residential zoning requirements on Ranco. Nevertheless, in 2002, Ranco applied to rezone this parcel from residential to heavy industrial use so that the use would be made lawful. The Town Board concluded that a SEQRA positive declaration was appropriate, and that a SEQRA DEIS must be prepared.
The lower courts concluded that the case was not ripe for adjudication because future actions by the Town Board could ameliorate harm to the property owner. The Court of Appeals agreed with the property owner that the obligation to prepare a DEIS imposed by the positive declaration satisfied the first part of the two-part test established by Gordon v. Rush, but the property owner’s complaint about delay and costs that could not be recovered was insufficient to satisfy the second part of the test. Such impacts arise every time there is a requirement that a DEIS be prepared, and to find them sufficient to satisfy the second part of the Gordon v. Rush test would render the second part of the test meaningless, the Court of Appeals ruled.
The Court of Appeals made clear that Gordon v. Rush did not “disrupt the understanding of appellate courts that a positive declaration imposing a DEIS requirement is usually not a final agency action, and is instead an initial step in the SEQRA process.” Rather, Gordon v. Rush “stands for the proposition where the positive declaration appears unauthorized, it may be ripe for judicial review,” such as where the action is not subject to SEQRA in the first instance (because it is a Type II action), or, as in Gordon v. Rush, a prior negative declaration by a lead agency following coordinated review is binding on other involved agencies.
It is established that an agency may not deny an application based solely on community opposition. The Court of Appeals decision in Ranco Sand and Stone Corp. v. Vecchio was fully supported by the facts – a report had been prepared by the Planning Director which in great detail set out all the adverse impacts from the precedent of legalizing the industrial use in the residentially zoned area of the Town. Unfortunately, one unintended outcome of the decision may be that lead agencies, such as Town Boards consisting of elected officials, may conclude that enormous public opposition to a project is best addressed by issuing a SEQRA positive declaration, hoping that the delay and cost of preparing a DEIS will cause the application to go away before a determination on the merits must be made. Should it be apparent that this is the result of the Court of Appeals decision in Ranco Sand and Stone Corp. v. Vecchio, the Court may have to revisit its ruling. Until then, unless a lead agency acts without authority, a mere abuse of discretion that requires an applicant to prepare a DEIS will be beyond review by the courts.