Blog

Posted by: Robert S. Rosborough, Thomas J. Ruane, and Cassandra Basile

On April 8, 2026, in Business Council of New York State Inc. v New York State Department of Environmental Conservation, the New York State Supreme Court issued a significant decision annulling the New York State Department of Environmental Conservation’s (DEC) revised freshwater wetlands regulations under Part 664 that went into effect on January 1, 2025. The ruling is a significant win for all New Yorkers, especially for developers and property owners across New York, but introduces near-term uncertainty for those currently navigating permitting and project planning in or near regulated wetlands. 

A copy of the decision can be found here. 

Background and Legal Challenges

The regulations at issue, Part 664, were DEC’s recent revision to the State’s long-standing freshwater wetlands regulations. Under the revised regulations, DEC significantly expanded its jurisdiction over freshwater wetlands, including broader classification and updated mapping criteria, and imposed onerous classifications on many categories of the newly regulated areas that has inhibited necessary development across the state. 

Since 1975, the Freshwater Wetlands Act (the “Act”) has administered the protection of New York’s wetlands. Originally, DEC was required to map all freshwater wetlands that would then be subject to regulation. The Act was amended, however, through provisions in the 2022-2023 state budget (the “2022 Amendments”). Among other things, the 2022 Amendments removed the requirement that DEC map all wetlands, meaning now DEC wetland maps are “merely informational and not necessarily determinative of regulatory jurisdiction.” To codify the 2022 Amendments, DEC was instructed to promulgate new Part 664 regulations.

The April 8, 2026 ruling stems from four distinct hybrid Article 78 proceedings and declaratory judgment actions, two of which were brought by firm clients represented by Robert Rosborough, Michael Sterthous, and Terresa Bakner: (1) The Business Council of New York State, Inc., New York State Economic Development Council, New York State Builders Association, New York Construction Materials Association, National Federation of Independent Business in New York, National Waste and Recycling Association, Associated General Contractors, New York State Association of Realtors, and real estate developers and property owners; and (2) the Village of Kiryas Joel and Town of Palm Tree. 

Petitioners raised multiple procedural and substantive challenges to the Part 664 regulations. The Court ultimately held the regulations are annulled in their entirety due to DEC’s failure to comply with the New York State Environmental Quality Review Act (SEQRA) when adopting the revised Part 664. 

The Decision

The Court held that although SEQRA does not apply to legislative mandates, a SEQRA Lead Agency must still comply with its environmental review obligations if it makes its own regulatory decisions that are not legislatively mandated. Specifically, the Court rejected DEC’s argument that it was not obligated to analyze the impact of its own discretionary decisions in implementing the 2022 Amendments because “the record shows that DEC exercised substantial judgment and discretion in implementing significant aspects of the 2022 Amendments through the new Part 664 regulations, and those discretionary policy judgments and choices are subject to SEQRA review.” For example, the Court noted, 

DEC classified all wetlands in urban areas as Class II, for which permits may issue only in very limited circumstances . . . To be sure, the 2022 Amendments required DEC to regulate wetlands ‘located within or adjacent to an urban area’ (ECL § 24-0107 [9] [b]), but the Legislature did not require DEC to impose a blanket Class II designation on all urban wetlands without regard to individual characteristics.

The Court further noted, DEC also

chose to mandate a fixed 100-foot buffer zone around all regulated wetlands. But the statute itself, unchanged by the 2022 Amendments, provides that activities within 100 feet of wetlands are subject to regulation if they ‘impinge upon or otherwise substantially affect the wetlands’ (ECL § 24-0701 [2]). Rather than requiring an individualized assessment of whether adjacent activities would impinge upon or otherwise adversely affect the wetlands, as contemplated by the statute, DEC made the policy choice of establishing a categorical 100-foot buffer around all freshwater wetlands.

These policy choices, the Court held, remain subject to SEQRA review.

Turning to DEC’s substantive SEQRA obligations, the Court held that DEC’s truncated, two-sentence SEQRA review was inadequate, because it artificially cabined the environmental review to the benefits of wetlands protections and failed to identify or take a hard look at any other potential adverse environmental impacts and failed to provide a reasoned elaboration for the agency’s decision. 

First, the Court notes there were various areas of environmental concern pointed out in public comments that DEC failed to identify as areas of concern warranting a “hard look,” including the prospect of urban sprawl, growth inducing impacts, impacts on urban communities, and impacts to aquatic ecosystems, algae blooms, and invasive species, among others. Rather, DEC’s analysis improperly focused entirely on the beneficial impact that the new Part 664 regulations would have on wetlands. The Court held, although an agency need not identify every area of concern, DEC had a duty to identify and examine the foreseeable consequences of its discretionary choices and could not confine its analysis to only the intended benefits of a contemplated action. The court also disagreed with DEC that such impacts could be reviewed on a project-by-project basis, stating that such could not “assess the cumulative effects of the new regulatory framework on development patterns, land-use intensity and community character throughout the State.” Indeed, the Court implies that a generic environmental impact statement (GEIS) may have been the appropriate procedure to be followed here. And the standard for preparation of positive declaration and an environmental impact statement is relatively low, the Court held, “whereas the standard for a negative declaration . . . is relatively high, requiring the lead agency to determine either that there will be no adverse environmental impacts or that the identified adverse environmental impacts will not be significant.”  Thus, the Court held, DEC failed to satisfy that burden.

Second, the Court held DEC failed to provide any reasoned elaboration of its decision of non-significance. DEC’s two-sentence justification, the Court held, 

does not address any potential adverse impacts, reference any supporting documents, acknowledge the concerns raised in public comments or analyze the concerns that were identified. There simply is no reasoned elaboration as to how the imposition of new environmental regulations governing millions of acres of wetlands across the State, viewed in light of the scale and context of the proposed action, would have no potential for significant adverse impacts to the environment. DEC’s significance analysis, to the extent it is discernable, was confined to a single dimension: the protection of wetlands. And while DEC ultimately maybe correct that only positive environmental benefits will accrue from enhanced wetlands protection, the agency has not articulated the reasoning it relied upon to rule out the potential for adverse impacts.

What Happens Next?

This decision leaves several potential paths forward:

• Appeal: DEC may appeal the ruling, which would automatically stay the regulations pending outcome of the appeal. 

• Revised Rulemaking: DEC could initiate a new rulemaking to address the deficiencies identified by the Court. 

• Legislative Action: The New York State Legislature may consider clarifying or expanding statutory authority in response to the decision or extending the deadlines for issuance of the new wetlands regulations. 

Immediate Impact and Implications

The DEC’s Part 664 regulatory framework has been invalidated and is no longer enforceable. The Department has 30 days to appeal the Supreme Court decision, which would stay the annulment and keep the regulations in place until the appeal has been fully decided. 

Whiteman Osterman and Hanna (WOH) is monitoring these developments closely, as additional changes in the regulatory landscape may occur on short notice. Those with pending or completed land use projects that desire a consultation regarding the potential impact of this decision on their particular matters should contact a member of WOH’s Environmental & Land Use Practice Group.