Sepa: a Proposed Standard for Judicial Review of Agency Decisions Not to Require Preparation of a Supplemental Environmental Impact Statement

• Publication year: 1992
• Citation: Vol. 15 No. 03

UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 15, No. 3SPRING 1992

SEPA: A Proposed Standard for Judicial Review of Agency Decisions Not to Require Preparation of a Supplemental Environmental Impact Statement

Lori Ann Terry (fn*)

I. Introduction(fn1)

The Washington State Environmental Policy Act(fn2) ("SEPA") provides the basic framework for review of all major development proposals(fn3) having a probable significant impact(fn4) upon the quality of the environment.(fn5) SEPA requires both public and private projects to comply with its provisions.(fn6) Compliance with SEPA may significantly impact the economic feasibility of completing a project if the project proponent is required, by the appropriate government agency, to prepare an Environmental Impact Statement ("EIS")(fn7) because the preparation of an EIS causes additional costs and delays to the project.(fn8)

The costs of complying with SEPA may extend past completion of an EIS. If new information arises after preparation of the EIS, but before completion or upon modification of the project, the new information must also be evaluated by the agency.(fn9) After evaluating this new information, the agency may require a Supplemental Environmental Impact Statement ("SEIS"),(fn10) and this requirement adds further costs to the project in terms of delay and money.

An SEIS must be prepared if substantial changes in the proposal are made or if new information indicates probable significant adverse economic impacts that were not adequately covered in the EIS.(fn11) On the other hand, the agency may decide that an SEIS is not required because the underlying EIS is adequate in light of this new information. The agency determination not to require the project proponent to prepare an SEIS is essentially the same as a so-called "negative threshold determination" where an agency finds no significant adverse impacts and does not require preparation of an EIS.

Similar to the decision of whether an EIS must be prepared, an agency decision of whether to require preparation of an SEIS has important economic consequences for the project. The success or failure of a project depends, among other things, on the proponent's ability to forecast the project's cost. An agency's decision to require preparation of an SEIS increases the project cost, and therefore, predictability of an agency's decision whether to require an SEIS is a crucial element of a proponent's economic forecast.

Unfortunately, a project proponent's ability to forecast costs is undercut by the unpredictable results of judicial review of agency decisions not to require preparation of an SEIS under Washington law. Under Washington law, judicial review of an agency decision not requiring preparation of a SEIS may produce unpredictable results because different standards of judicial review are applied to EIS adequacy and to the negative threshold determinations.(fn12) The uncertainty surrounding the standard of judicial review imposes economic costs on the project in terms of increased project cost and delay. Additionally, the uncertain standard increases the risk that a project opponent will bring litigation solely for the purposes of delaying the project and, accordingly, imposes on the project proponent risks associated with defending the litigation.

To enable citizens opposing projects and proponents defending projects to predict more accurately the results of litigation and to discourage spurious litigation, a more definitive standard of judicial review is necessary. This Article proposes a standard of judicial review that encompasses components of both the adequacy and negative threshold standards of judicial review. The proposed standard of review discourages lawsuits that are brought merely for purposes of delay while ensuring that the agency acted reasonably in making its determination.

Before this new standard can be considered, the context in which it will operate must be reviewed. Part II of this Article discusses the statutory scheme of SEPA. Part III discusses the statutory mandate that requires courts to accord agency decisions substantial weight and discusses three different standards of judicial review that have developed from case law. Next, Part IV proposes the new standard of review. Finally, Part V compares this proposed standard with the holding of the recent Washington Court of Appeals case of West 514, Inc. v. County of Spokane(fn13) to substantiate the validity of the proposed standard.

II. SEPA Statutory Scheme

Broadly stated, SEPA requires state and local governmental agencies to evaluate proposed projects in order to maintain and improve environmental quality.(fn14) The principle mechanism for implementing SEPA policy is the EIS. Although SEPA procedure centers around the EIS,(fn15) the threshold determination is whether an EIS must be prepared.

During the threshold determination process, the government agency(fn16) or the lead agency(fn17) must determine whether or not the project is likely to have probable, significant adverse impacts on the environment.(fn18) To make this determination, the lead agency must designate a responsible official to be specifically accountable for complying with SEPA procedural requirements.(fn19) The responsible official within the lead agency then documents the threshold determination by either a Determination of Significance, a Determination of Non-Significance,(fn20) or a Mitigated Determination of Non-Significance.(fn21)

A Determination of Significance indicates that the agency found significant adverse impacts (a positive threshold determination), and the project proponent must prepare an EIS(fn22). A Determination of Non-Significance indicates that the agency found no significant adverse impacts (negative threshold determination), and the project proponent is not required to prepare an EIS.(fn23) A Mitigated Determination of Non-Significance indicates that the agency found environmentally significant impacts but will allow the project to be modified to avoid a Determination of Significance.(fn24)

If the agency requires an EIS, the project proponent must prepare a draft EIS,(fn25) which the agency makes available to the public and sends to agencies with jurisdiction.(fn26) Any person or agency may review and comment on a draft EIS within thirty days from the date of issuance.(fn27) After review and evaluation of any comments, the project proponent prepares a Final Environmental Impact Statement, which is distributed by the lead agency.(fn28)

After the project proponent prepares the final EIS, the agency may determine that substantial change in a project or new information about adverse environmental impacts requires the project proponent to prepare a Supplemental Environmental Impact Statement ("SEIS").(fn29) This agency determination is essentially a new threshold determination, but involves essentially the same process as the EIS.(fn30)

III. Standards of Judicial Review

A. SEPA Standards of Judicial Review

SEPA, as originally enacted in 1971, contained no standards of judicial review.(fn31) In 1973, however, the Washington State Legislature amended SEPA to limit judicial scrutiny of SEPA compliance by directing courts to accord "substantial weight" to agency threshold decisions and EIS adequacy determinations.(fn32) In 1983, the legislature reaffirmed this deference by amending SEPA to require that the court accord substantial deference to SEPA rules in the interpretation of SEPA.(fn33) The legislative history of the 1983 amendment to SEPA indicates that the legislature adopted this second amendment because it was concerned about whether the courts adequately reviewed and considered the state SEPA administrative rules before interpreting SEPA.(fn34) To remedy this concern, the legislature determined that it was "extremely important that the courts should first turn to the administrative rules to see if they interpret a provision involved and should give substantial weight to such interpretation."(fn35)

B. Case Law Standards of Judicial Review

An agency decision not to require a project proponent to prepare a SEIS always involves an underlying EIS. Therefore, on appeal, the reviewing court could consider both the adequacy of the underlying EIS and the negative threshold determination in evaluating the agency decision. The correctness of threshold determinations(fn36) and the adequacy of impact statements(fn37) are the two most frequently litigated issues under SEP A; however, these issues are subject to different standards of judicial review.(fn38)

Although the court reviews EIS adequacy under a de novo standard,(fn39) generally negative threshold determinations are reviewed under either the arbitrary or capricious, or clearly erroneous standard.(fn40) The de novo standard of review is, by definition, the most intrusive review and accords the least deference to the agency. The arbitrary or capricious standard is the least intrusive review and accords the most deference to the agency. The clearly erroneous standard falls somewhere between the de novo and the arbitrary or capricious standards. In practice, however, the courts scrutinize EIS threshold determinations more closely than they examine EIS adequacy.(fn41)

Because the agency decision not to require a SEIS could be reviewed under either of three standards and because each standard allows...