"Little NEPA's" in the Courts: Washington and Montana Environmental Policy Acts are Alive and Well

On July 22, 1976, two state supreme courts handed down significant decisions interpreting the requirements of state statutes modeled on the National Environmental Policy Act. One of the rulings dealt with judicial review of an agency threshold determination not to file an environmental impact statement; the other concerned the adequacy of a particular environmental impact statement. And one followed a series of judicial opinions construing the state's statute while the other represented the court's first look at its state environmental policy act. Both opinions, however, signal judicial recognition of the spirit behind the letter of the statutes, whose operative language is identical to that of NEPA, and reflect a deep judicial commitment to full implementation of their basic policy objectives.

Washington

In Swift v. Island County,¹ the Washington Supreme Court was faced with a citizen suit challenging the legality of a county planning director's determination that no impact statement was required under the Washington Environmental Policy Act² in conjunction with the approval of two shoreline subdivision plats. The development is to be located on a spit of land between Puget Sound and Crockett Lake, which is an important habitat area for migratory waterfowl and shorebirds. The site is also near two parks and two areas of historic interest.

After reviewing the administrative record compiled in response to an earlier remand, the court found the planning director's determination that the project would not significantly affect the environment to be "clearly erroneous." In applying this standard, the court noted it calls for broader review than does the "arbitrary and capricious" standard because it mandates a review of the entire record rather than just a search for substantial evidence to support the administrative determination. The "clearly erroneous" standard also was found to require consideration of the public policy contained in the state Environmental Policy Act, pursuant to which the director's determination was made. In view of the general statutory policy that agencies must fully consider environmental values, the court interpreted "significantly affecting the environment" to mean existence of a reasonable probability that an action will have more than a moderate effect on environmental quality.

The planning director's determination that the subdivisions in question do not present such a probability, the court said, must then be tested against the whole administrative record. Undertaking this evaluation, the court pointed to a number of assertions in federal and state agency comments on the environmental impact statement that the development would have major impacts on wildlife currently using the lake, and on the aesthetic quality of the area, especially in the context of the nearby parks and the present visual setting of the historic sites. These expressions of concern came from the U.S. Department of the Interior's Fish and Wildlife Service, the state Departments of Game and of Ecology, and the state Parks and Recreation Commission. They convinced the court that defendant had clearly erred in concluding that the subdivision would not significantly affect environmental quality. The trial court's dismissal of plaintiffs' challenge to the legality of the determination was therefore reversed.

Swift v. Island County was not the Washington Supreme Court's first encounter with the Washington Environmental Policy Act. In four opinions³ issued in 1973 and 1974, the court developed an impressive and coherent corpus of decisional law interpreting the Act's scope, its application to ongoing projects, its effect on existing agency authority, and its requirements for EIS preparation. In addition, the Washington courts, like the courts of other states with statutes modeled on NEPA (perhaps most notably California), have not been loathe to turn to seminal federal court NEPA decisions for guidance.⁴ Swift adds to this body of precedent a definitive standard by which to measure the legality of negative agency threshold determinations.

Montana

The Montana Supreme Court, on the other hand, was faced in Montana Wilderness Association v. Board of Health and Environmental Sciences⁵ with several questions of first impression under the Montana Environmental Policy Act (MEPA).⁶ In an unexpectedly strong [6 ELR 10217] opinion, which covers a wider range of issues than did the Washington court's ruling in Swift and which Montana environmentalists consider a major victory, the court affirmed trial court holdings that nonprofit environmental organizations have standing to sue to enforce NEPA, that the environmental impact statement for a proposed residential and commercial subdivision was inadequate, and that injunctive relief against state agencies and private permit applicants is available in MEPA cases. The court thereby clearly indicated that it will assume an active role in supervising implementation of MEPA, which has generally lain dormant since its passage in 1971.

At issue in Montana Wilderness Association was the state Department of Health and Environmental Sciences' impact statement for certification of the water supply, sewage and solid waste disposal facilities for a proposed subdivision called Beaver Creek South, to be located in Gallatin Canyon, a scenic mountainous area north of Yellowstone National Park that is presently used as wildlife habitat and grazing land for livestock.In deciding that plaintiffs had standing to challenge the impact statement's adequacy, the court reviewed federal decisions establishing liberal standing requirements under the Administrative Procedure Act,⁷ but ultimately based its decision on a 1972 Montana Constitution provision giving Montanans an "inalienable … right to a clean and healthful environment."⁸

From a number of Montana taxpayer and elector suits, the court extracted the following specific standing criteria: (1) the complaining party must allege past, present or threatened injury to a property or civil right; (2) the alleged injury must be distinguishable from the injury to the public generally; (3) the issue must represent a "case" or "controversy." Plaintiffs had alleged a threatened injury to their constitutionally recognized civil right "to a clean and healthful environment," and had distinguished this injury from the prospective injury to the general public by asserting that their members make substantial recreational use of the public lands adjacent to Beaver Creek South. The court also noted that unlawful environmental degradation clearly presents a justiciable issue, and that to deny plaintiffs access to the courts would render the constitutional provision and MEPA "useless verbiage, stating rights without remedies…."

Effect of MEPA on Existing Agency Authority

Both the Department and Beaver Creek South (as intervenor) argued that the Department's obligations under MEPA were circumscribed in this instance by the state Sanitation in Subdivision Act,⁹ and the state Subdivision and Platting Act.¹⁰ The first statute lists specific environmental factors which the Department must consider (water supply, sewage and solid waste disposal facilities); the second requires environmental assessments by local agencies. The Department argued that, while it had to consider the full range of environmental concerns listed in MEPA, its limited statutory authority and the local responsibility for considering environmental impacts should be given more weight in deciding whether its statement was adequate under a standard of reasonableness.

The court, in rejecting this argument, offered an enlightened interpretation of MEPA and the philosophy it embodies. Noting that the Act "does more than express lofty policies which want for any means of legislative or agency implementation," the court cited the D.C. Circuit's Calvert Cliffs decision¹¹ as support for the proposition that MEPA mandates state agencies to take full account of all environmental values.

In explicitly rejecting the argument that other statutes limit or eliminate the Department's responsibilities under MEPA the court adopted a position identical to that recently taken by the California Court of Appeals in Natural Resources Defense Council, Inc. v. Arcata National Corp.¹² In the California case the court rejected an argument that preparation of an environmental impact report under the California Environmental Quality Act of 1970 (CEQA)¹³ was not required in connection with the state forester's review of a timber harvesting plan since the state Forest Practices Act,¹⁴ a specific statute passed after CEQA (a general statute) indicated a legislative intent to exempt harvesting plan review from CEQA's requirements. The California court found instead that the two statutes complemented one another.

In Beaver Creek, the Montana court likewise found a complementary statutory scheme between MEPA and the Subdivision and Platting Act. In the court's view, the local environmental effects of a proposed subdivision are to be considered by local agencies, and the regional or statewide environmental consequences are to be considered by the Department. The reasoning of both courts stands in marked contrast to the U.S. Supreme Court's position in Flint Ridge Development Co. v. Scenic Rivers Association of Oklahoma¹⁵ that NEPA's requirement conflicted irreconcilably with procedures specified in the Interstate Land Sales Full Disclosure Act¹⁶ and were, therefore, inapplicable to federal acceptance of privately prepared property reports under that statute.¹⁷

The Montana court's decision also implies that substantive [6 ELR 10218] review of agency decisions may be available under MEPA. The Department had adopted the position that its statutory authority to deny certification to the development was limited to those considerations specified in the Sanitation in Subdivision Act, and that MEPA did not give it legal authority to deny certification of a subdivision on order environmental grounds, such as an unacceptable adverse impact on wildlife.

Although explicitly limiting its holding to procedural issues, the court emphasized that the Department must provide "a sufficiently detailed consideration and balancing of environmental factors which will give effect to the policies of MEPA…." Having held that the Sanitation in Subdivision Act does not limit MEPA's role in the Department's subdivision approval process, the court acknowledged that under its interpretation of MEPA, the Department might veto a local subdivision approval "solely on the basis of its EIS." Although obviously dictum, this portion of the decision serves notice on state executive agencies that the court believes proper implementation of MEPA to require impact statements to be used substantively in the decision-making process, and that denial of a project or permit application on the basis of adverse environmental impacts is legally justifiable.

Impact Statement Adequacy

The court found the Beaver Creek South impact statement inadequate in three important respects: failure to include an economic cost/benefit analysis, lack of discussion of aesthetic impacts, and less than full consideration of the subdivision's effect on wildlife.

The court's holding that a cost/benefit analysis is required was based on a 1974 House Joint Resolution¹⁸ of the Montana legislature calling for detailed analysis of costs and benefits in impact statements. Although not legally binding, this Resolution is, according to the court, indicative of a legislative intent that impact statements must seriously address economic issues, and the Department's argument that such a cost/benefit analysis is performed by the local agency, making an analysis at the state level unnecessary, is nothing more than an "attempt to circumvent the intent of MEPA…."

The Department sought to justify its very limited discussion of the proposed subdivision's effect on aesthetics by arguing that visual impact can only be a matter of speculation, since economists have not yet successfully quantified such "intangibles." Noting that MEPA requires "appropriate consideration" of such impacts, the court rejected this justification as betraying a "fundamental weakness of the Department's approach to MEPA." In the court's view, the impact statement must discuss the compatability of the planned architecture with the surrounding landscape, the potential obstruction of views and possible impacts on open spaces.

In finding the impact statement deficient in its consideration of the proposed subdivision's impact on wildlife, the court heavily criticized the Department's failure to adequately consider numerous comments on this issue. The comments, which included lengthy critiques by the state Fish and Game Department and the Gallatin Sportsman's Association (one of the plaintiffs), all indicated that the effect would be adverse. The Department's action in simply reproducing these comments in the revised EIS or mentioning that they were submitted was insufficient under MEPA. The court placed special emphasis on the Department's failure to address adequately the critical comments offered by the Fish and Game Department, the agency with the greatest expertise on the subject of wildlife.

The Fish and Game Department has taken a more aggressive role than any other state agency in commenting on impact statements under MEPA, and has concentrated especially on those for proposed subdivisions. Not suprisingly, the comments are almost always critical and some have even recommended that the Department of Health deny certification. Although the court did not precisely define the role to be played by the "expert agency" (or, for that matter, the "expert" individual or private organization) in the commenting process, the Beaver Creek decision suggests that Fish and Game's views must be accorded substantial weight in the decision-making processes of other state agencies.

Finding that plaintiffs had sufficiently demonstrated irreparable injury and made a clear showing that the EIS is illegal, the court had little difficulty determining that injunctive relief was in order, and affirmed the trial court's injunction against further development pending compliance with MEPA. This holding prompted a partial dissent which argued that the injunction is unfair to the developer because he had no control over preparation of the impact statement.

Conclusion

The decision in Montana Wilderness Association promises to breathe life into the Montana Environmental Policy Act. As the Department of Health prepares the bulk of all impact statements under MEPA,¹⁹ the ruling will have an immediate impact on the agency most concerned with the Act's implementation. The reach of the dicta relating to substantive review under MEPA is unclear, although all state agencies, including the Department, apparently must now fully integrate MEPA's policies and requirements into their existing programs, including permitting procedures and criteria.

The Montana Supreme Court's opinion is an enlightened and vigorous first impression interpretation of a state environmental policy act modeled on NEPA. The Washington court's decision in Swift, while it followed a number of earlier cases construing the Washington statute, sets a comparably strict standard for review of negative agency threshold determinations under the act and thereby further expands that body of precedent.

[6 ELR 10219]

Together, these rulings serve as a demonstration that state "little NEPA's" are alive and well in many parts of the nation, and that these laws continue to develop judicially in ways that parallel, although not exactly, the growth of NEPA itself through judicial interpretation.²⁰

1. 6 ELR 20684 (Wash. Sup. Ct. July 22, 1976).

2. R.C.W. § 43.21C (1971).

3. Stempel v. Dept. of Water Resources, 508 P.2d 166, 3 ELR 20685 (Wash. 1973); Eastlake Community Council v. Roanoke Associates, 513 P.2d 36, 3 ELR 20867 (Wash. 1973); Loveless v. Yantis, 513 P.2d 1023 (Wash. 1973); Byers v. Board of Clallam County Commissioners, 529 P.2d 823 (Wash. 1974). See also Juanita Bay Valley Community Ass'n v. City of Kirkland, 510 P.2d 1140 (Wash. Ct. App. 1973).

4. Eastlake Community Council v. Roanoke Associates, 513 P.2d 36, 44-45, 3 ELR 20867, 20870-72 (Wash. 1973). See also Friends of Mammoth v. Mono County, 502 P.2d 1049, 1057-58, 2 ELR 20673, 20676 (Cal. 1972); Wisconsin's Environmental Decade, Inc. v. Public Service Commission, 230 N.W.2d 243, 248, 6 ELR 20192 (Wis. 1975); Secretary of Environmental Affairs v. Massachusetts Port Authority, 323 N.E.2d 329, 339, 5 ELR 20200, 20203-04 (Mass. 1975); Minnesota Public Interest Research Group v. Minnesota Environmental Quality Council, 237 N.W.2d 375, 380-81 (Minn. 1975).

5. 6 ELR 20695 (Mont. Sup. Ct. July 22, 1976).

6. R.C.M. § 69-6501 et seq. (1947).

7. Sierra Club v. Morton, 405 U.S. 727, 2 ELR 20192 (1972); United States v. SCRAP, 412 U.S. 669, 3 ELR 20536 (1973).

8. Mont. Const. art. II, § 3. For an analysis of the various state constitutional provisions relating to environmental protection, see Frye, Environmental Provisions in State Constitutions, 5 ELR 50028 (1975).

9. R.C.M. § 69-5001 (1947).

10. R.C.M. § 11-3859 et seq. (1947).

11. Calvert Cliffs Coordinating Committee v. AEC. 449 F.2d 1109, 1 ELR 20346 (D.C. Cir. 1971).

12. 6 ELR 20623 (Cal. Ct. App. 1st Dist. July 8, 1976).

13. Cal. Pub. Res. Code § 21000 et seq.

14. Cal. Pub. Res. Code § 4511 et seq.

15. __ U.S. __, 6 ELR 20528 (U.S. June 24, 1976).

16. 15 U.S.C. § 1701 et seq.

17. Under the Act, a Report becomes effective 30 days after filing unless the Secretary of the Department of Housing and Urban Development suspends it for inadequate disclosure. The Court found that the Secretary could not extend the time limit to allow for preparation of an environmental impact statement, since to do so would contravene the statutory policy of protecting developers from costly delays.

18. House Joint Resolution No. 73 (Mar. 16, 1974).

19. The state Highway Department prepares a large number of impact statements and negative determinations, but because most of its projects receive federal funding, the Department operates under NEPA and the Council on Environmental Quality's Guidelines in the first instance, and considers its NEPA actions to satisfy the requirements of MEPA as well.

20. This point is perhaps particularly noteworthy in view of the recent decrease in innovative federal court decisions in the NEPA area, which culminated in the last year with the Supreme Court's less than enthusiastic reaction to the Act in Aberdeen & Rockfish R. Co. v. SCRAP, 422 U.S. 289, 5 ELR 20418 (June 24, 1975), and Kleppe v. Sierra Club, __ U.S. __, 6 ELR 20545 (June 28, 1976).