Death by Sepa: Substantive Denials Under Washington's State Environmental Policy Act

• Publication year: 1990

UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 14, No. 1FALL 1990

Death by SEPA: Substantive Denials Under Washington's State Environmental Policy Act

Roger Pearce(fn*)

1. Introduction

The State Environmental Policy Act of 1971(fn1) is the State of Washington's most pervasive environmental law. In fact, a strong case can be made that SEPA is Washington's most pervasive law of any kind(fn2) because SEPA authority overlays and supplements all other state statutory authority.(fn3) SEPA establishes broad environmental purposes and policies for the State of Washington(fn4) and requires all policies, regulations, and laws of the State to be interpreted in accordance with the policies of SEPA.(fn5) In its earliest SEPA decisions, the Washington Supreme Court recognized SEPA as "a legislative mandate of the ecological ethic"(fn6) and has generally given SEPA a broad and liberal interpretation. Thus, SEPA potentially affects virtually everything done by local governments and other agencies of state government.

Procedurally, SEPA requires government agencies to determine and analyze a proposal's probable significant environmental impacts.(fn7) The term "agency" means almost every unit of state or local government that makes decisions or takes actions that might significantly affect the environment.(fn8) This includes, but is not limited to, such diverse agencies as sewer districts, school districts, city and county councils, boundary review boards, and hearing examiners. "Proposals" include not only actions that the agency itself plans to undertake, but also any actions proposed by applicants seeking agency approvals.(fn9) Building permit applications and subdivision plat applications are typical of this latter type of proposal. When the probable impacts of a proposal cross the threshold of environmental significance, SEPA requires the agency to prepare an Environmental Impact Statement(fn10) to inform agency action on the proposal.(fn11)

The first few judicial decisions under SEPA tended to focus on whether SEPA even applied to the matter in question.(fn12) Most of the later decisions were concerned with whether an EIS was required(fn13) or whether a prepared EIS was adequate.(fn14) As the law has become more settled, litigation over procedural compliance with SEPA has become less frequent. This is largely the result of new statutory amendments enacted in 1977 and 1983(fn15) and the SEPA Rules adopted in 1984.(fn16) Accordingly, in recent years, judicial attention has increasingly turned to challenges of agency substantive SEPA authority.(fn17)

SEPA is an integral part of the substantive decision-making of agencies and, as such, interjects an element of environmental discretion into the substance of agency decisions.(fn18) SEPA specifically authorizes agencies to impose conditions upon or, more dramatically, to deny a proposal completely on the basis of that proposal's adverse environmental impacts.(fn19) Under current law, an agency may impose reasonable, feasible conditions upon a proposal only to mitigate specific adverse environmental impacts identified in an environmental document.(fn20) An agency may deny a proposal only if that proposal will result in significant adverse environmental impacts identified in an EIS and if reasonable mitigation measures will not mitigate the identified impacts.(fn21) Both conditions and denials must be based on policies formally adopted by the agency as a basis for exercising substantive SEPA authority.(fn22) Two recent Washington decisions have raised the question of what constitutes a proper substantive SEPA denial of an otherwise conforming building permit or plat application and have helped to draw the line between proper and improper denials under substantive SEPA.(fn23)

West Main Assocs. v. Bellevue(fn24) (hereinafter "West Main II") concerned the Bellevue City Council's denial of a proposal to construct a large residential, retail and office complex. The proposal was permissible under the applicable zoning, but the Council denied building permit approval under its SEPA authority. Division One of the Washington Court of Appeals upheld the Council's denial.(fn25)

The second case, Cougar Mountain Assocs. v. King County,(fn26) concerned the King County Council's SEPA-based denial of a subdivision plat application. Here again, the proposal conformed to all applicable plat regulations,(fn27) but the county denied the application under its substantive SEPA authority. However, in Cougar Mountain, the Washington Supreme Court overturned the Council's denial.(fn28)

This Comment seeks to answer the question raised by West Main II and Cougar Mountain of what procedural processes and substantive policies may be used in SEPA-based denials. After examining the nature of substantive SEPA authority and the relationship between substantive SEPA and Washington's vested rights doctrine, the Comment will discuss West Main II and Cougar Mountain and will argue that the two cases are consistent. It will then provide an informative assessment of the current limits of substantive SEPA authority. The Comment concludes by suggesting the following legislative or judicial changes in SEPA law: earlier vesting of SEPA policies, greater incorporation of environmental concerns into regulatory codes, and restrictions on the content of agency SEPA policies. These changes would create more certainty for property owners, but at the same time, would retain sufficient flexibility for local governments using SEPA to control the environmental impacts of land use decisions.

II. The Nature of Substantive SEPA Authority

The Environmental Impact Statement is the heart of SEPA's procedural mandate to provide agency decision-makers with full environmental information.(fn29) The EIS is also the basis for agency denials of proposals under substantive SEPA authority.(fn30) SEPA requires preparation of an EIS only for proposed non-exempt(fn31) major actions(fn32) that would significantly affect the environment.(fn33) An action significantly affects the environment whenever a greater than moderate effect on the quality of the environment is a reasonably probable result of the action.(fn34)

Having recognized a clear legislative intent that all agencies of state government undertake full consideration of environmental values and consequences, the courts have set this threshold requirement rather low and given SEPA a broad and vigorous construction.(fn35) In keeping with this policy, no particular quantum of evidence is required to support the finding of an adverse impact,(fn36) and a wide variety of impacts to both the natural environment and the built environment may be considered.(fn37) Thus, SEPA undertakes to insure full disclosure and consideration of environmental values, without mandating a particular substantive result.(fn38)

There was some debate after SEPA was first enacted(fn39) about the extent to which agencies could make substantive decisions based upon the environmental information disclosed by the EIS.(fn40) The Washington Supreme Court foreclosed this debate and unequivocally recognized substantive SEPA authority in the 1978 decision of Polygon Corp. v. Seattle.(fn41) In Polygon, the City of Seattle denied on SEPA grounds a developer's permit application to construct an apartment building. The proposal conformed to the city zoning code and the permit would have been granted as of right prior to the enactment of SEPA. The court held that SEPA validly delegates a discretionary power that overlays even the purely ministerial function of permit issuance.(fn42)

Under the current SEPA statute and rules, denials must be based on local agency SEPA policies that are adopted by the agency and incorporated in regulations, plans, or codes.(fn43) These policies must be formally designated by the agency as possible bases for the exercise of SEPA authority(fn44) and must be in effect when the DNS or DEIS is issued.(fn45) The statute and rules, however, give no guidance as to the content of local agency SEPA policies, and thus far, the courts have given agencies broad discretion to determine the substance of their SEPA policies.

When an agency exercises its substantive SEPA authority to deny a proposal, it must make written findings that state the decision and specify the SEPA policy bases for the denial.(fn46) These findings must show (1) that the proposal would result in significant adverse impacts identified in the EIS, and (2) that reasonable mitigation measures would be insufficient to avoid the identified impacts.(fn47) These requirements have helped to regularize and give structure to the SEPA denial process, but important questions remain. These questions include the extent of specificity in the agency's written findings; the detail required in the discussion of mitigation measures; whether limitations exist on the types of policies that may permissibly be adopted as agency SEPA policies; whether SEPA policies may be so broad as to be unconstitutionally vague; whether an agency may be allowed to adopt SEPA policies which are contradictory; and whether substantive due process imposes fairness limits on the denial process.

These questions are especially important in the area of private land development regulation because one of substantive SEPA's most important and most controversial uses has been the condition and denial of subdivision and plat applications...