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December 3, 1976

Virginia DALSIS and David Wisner, Plaintiffs,
Carla A. HILLS, Secretary of Department of Housing and Urban Development, et al., Defendants

The opinion of the court was delivered by: ELFVIN


A store proprietor and a non-resident property owner seek to enjoin construction already in progress of an enclosed shopping mall in the City of Olean, New York at its presently contemplated size. They allege that the Department of Housing and Urban Development ("HUD") failed to comply with the requirements of the National Environmental Policy Act ("NEPA"), 42 U.S.C. §§ 4331 et seq., in that (1) an environmental impact statement ("e. i. § .") was not prepared and (2) HUD's determination that no adverse environmental impact would result from the mall's construction did not take into account increased traffic congestion and possible urban decay and deterioration in downtown Olean. It is further alleged that HUD did not consider alternatives to the enclosed mall, such as refurbishing the existing business edifices. The case is presently here on plaintiffs' motion for a preliminary injunction.

 It is well settled that the decision on whether to grant preliminary injunctive relief falls within the sound discretion of the court. Doran v. Salem Inn, Inc., 422 U.S. 922, 95 S. Ct. 2561, 45 L. Ed. 2d 648 (1975). A court's discretion in this area is fettered, however, and a preliminary injunction should issue only upon a clear showing of either

" * * * (1) probable success on the merits and possible irreparable injury or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly toward the party requesting the preliminary relief." Sonesta Int'l Hotels Corp. v. Wellington Associates, 483 F.2d 247, 250 (2d Cir. 1973).

 It should be noted that these standards are disjunctive and that, if plaintiffs satisfy either, preliminary relief would be appropriate. Each test has two component parts, both of which must be met by plaintiffs before a preliminary injunction may issue. In addition, in order to satisfy the balancing of hardships test, a party seeking preliminary relief must also make an affirmative showing of irreparable harm. Triebwasser & Katz v. American Tel. & Tel. Co., 535 F.2d 1356, 1359 (2d Cir. 1976). A review of the allegations and issues which will affect the ultimate disposition of the instant case provides a basis upon which to determine whether such standards have been satisfied.

 Defendants allege that plaintiffs lack standing to bring this action because they seek merely to protect themselves from economic competition. In order to establish standing to bring an action pursuant to NEPA, plaintiffs must satisfy a two-pronged test. They must allege that they have suffered or will suffer an injury in fact and that they seek to protect an interest tenably within the zone of interests protected by NEPA. Barlow v. Collins, 397 U.S. 159, 90 S. Ct. 832, 25 L. Ed. 2d 192 (1970); Association of Data Processing Service Organizations v. Camp, 397 U.S. 150, 90 S. Ct. 827, 25 L. Ed. 2d 184 (1970). In addition to protecting their economic self-interest, plaintiffs are allegedly seeking to avert blight and deterioration of the central business district in Olean which might be a subsequent consequence of their and others' economic misfortunes. This interest arguably falls under the protective umbrella of NEPA and plaintiffs thus appear to have standing to bring this action. Trinity Episcopal School Corp. v. Romney, 523 F.2d 88, 93 (2d Cir. 1975). Defendants' reliance on Clinton Community Hospital Corp. v. Southern Maryland Medical Center, 374 F.Supp. 450 (D.Md.1974), aff'd per curiam, 510 F.2d 1037 (4th Cir. 1975), cert. denied, 422 U.S. 1048, 95 S. Ct. 2666, 45 L. Ed. 2d 700 (1975), and the cases cited therein is misplaced. In the instant action, plaintiffs are not attempting solely to shield themselves from economic competition and their interest in preventing the environmental degradation of the central business corridor is not remote, speculative or conjectural. The distinct possibility that competition from stores in the proposed mall would encroach upon established businesses in Olean was expressly considered by HUD in its special environmental clearance.

 The urban renewal project culminating in the development of the mall is a "major federal action" within the meaning of NEPA. 42 U.S.C. § 4332. A major federal action includes a decision of a federal agency which permits action to be undertaken by private parties which will affect the quality of the environment. Scientists' Institute for Public Information, Inc. v. Atomic Energy Commission, 156 U.S.App.D.C. 395, 481 F.2d 1079, 1088 (1973). In the case at hand, HUD gave its approval with knowledge that a private developer would build the mall. This decision, together with the funding of the initial demolition of substandard buildings, was sufficient to satisfy NEPA's "major federal action" prerequisite. Defendants' citation of San Francisco Tomorrow v. Romney, 472 F.2d 1021 (9th Cir. 1973) is unavailing. That case held merely that HUD's amendatory grant of funds in order to provide for the rising costs of land acquisition and relocation of displaced residents and its contractual right to monitor the project as it developed in order to assure compliance with statutory and contractual requirements did not constitute major federal action. Whether HUD's initial approval for federal financing constituted the requisite federal action was not at issue. The instant action deals with HUD's funding of the demolition of substandard structures and its initial approval of the mall project pursuant to a special environmental clearance and not merely subsequent amending actions or any right to monitor. HUD's initial funding of the demolition in Olean to facilitate urban renewal and its subsequent approval of the mall indubitably constituted major federal action as contemplated by NEPA.

 Defendants argue that the private redeveloper, L'Alcove Castle, Inc. ("L'Alcove"), is not subject to the comprehensive reach of NEPA because it is a non-federal entity and did not directly receive any federal funding for its redevelopment project. Acceptance of this contention would render NEPA a "paper tiger".

 It is well settled that a non-federal entity, such as a private redeveloper, may be enjoined where it has entered into a partnership or joint venture with HUD or has been the recipient of federal funds. Biderman v. Morton, 497 F.2d 1141, 1147 (2d Cir. 1974); Silva v. Romney, 473 F.2d 287, 289-90 (1st Cir. 1973). The partnership or joint venture need not exist in a formal sense and the funds need not be directly received. Rather, a factual analysis must be undertaken to determine if a sufficient interrelationship exists which would make it not unfair to enjoin the private developer in order to effectuate the policies and purposes of NEPA. Proetta v. Dent, 484 F.2d 1146 (2d Cir. 1973). In the present case, the nexus between L'Alcove and HUD is sufficient to warrant enjoining such developer if HUD has failed to comply with the statutory requirements of NEPA.

 In addition, L'Alcove could not lawfully have started the redevelopment project without HUD's approval. HUD initially directed the Olean Urban Renewal Agency ("OURA") to stop any further progress on the development of the mall until it had completed its environmental clearance study. Upon HUD's subsequent authorization, OURA transferred the land in question and gave its approval for the mall project to L'Alcove. Because HUD's approval was required to begin the project, L'Alcove may be enjoined even though it is a non-federal entity and had commenced construction pursuant to HUD's authorization if it evolved that HUD had improperly determined that an e. i. § . was not necessary. Biderman v. Morton, supra, at 1147; Greene County Planning Board v. Federal Power Commission, 455 F.2d 412 (2d Cir. 1972), cert. denied, 409 U.S. 849, 93 S. Ct. 56, 34 L. Ed. 2d 90 (1972).

 Laches is available as a defense in actions brought by private parties to enforce compliance with NEPA. Lathan v. Volpe, 455 F.2d 1111 (9th Cir. 1971). This equitable doctrine focuses on whether plaintiffs should be permitted to proceed with their claims notwithstanding that their delay in bringing suit induced a change in defendants' position. Concerned About Trident v. Schlesinger, 400 F.Supp. 454, 478 (D.D.C.1975). The defense of laches is bottomed on the principle that equity aids the vigilant, not those who sleep on their rights. Powell v. Zuckert, 125 U.S.App.D.C. 55, 366 F.2d 634, 636 (1966). A determination of laches vel non depends upon the particular facts and circumstances of each case and is primarily addressed to the sound discretion of the Court. Burnett v. New York Central R. Co., 380 U.S. 424, 435, 85 S. Ct. 1050, 13 L. Ed. 2d 941 (1965).

 Three independent criteria must be satisfied before laches can be found. Defendants must show that plaintiffs delayed in asserting their rights or claims, that such delay was not excusable and that there resultantly was undue prejudice to the defendants. Ecology Center of Louisiana, Inc. v. Coleman, 515 F.2d 860, 867 (5th Cir. 1975). Laches involves questions both of timeliness and diligence. There is no fixed or prescribed time frame within which plaintiffs must institute suit. The reasonableness of delay varies with the facts and circumstances of each case. Clark v. Volpe, 342 F.Supp. 1324 (E.D.La.1972), aff'd per curiam, 461 F.2d 1266 (5th Cir. 1972).

 Because this matter is presently before this Court solely on plaintiffs' motion to enjoin preliminarily further construction of the proposed mall, an evidentiary hearing on the defense of laches is unnecessary at this time. Sufficient undisputed facts have been alleged and documented by the parties to enable me to assess the effect of this defense on the probability of plaintiffs' succeeding on the merits of their case and on the other tests which must be satisfied for preliminary relief.

 By letter dated February 22, 1974, HUD advised OURA that an analysis of the environmental impact of the proposed mall had been completed and that a mall of approximately 250,000 leasable square feet would have no adverse environmental impact on the quality of the human environment. *fn1" On March 21, 1974, OURA approved the site plan submitted by L'Alcove and authorized the construction of a mall not to exceed 250,000 leasable square feet. On March 26, 1974 OURA deeded 8.79 acres, the land which was subject to HUD's clearance, to L'Alcove. These events were well publicized in the Olean area by the news media. Thus, plaintiffs' delay in bringing the instant action perhaps is appropriately measured from March 1974 at which time HUD issued its environmental clearance and OURA authorized L'Alcove to proceed with construction of the mall with the specified size limitation. Defendants' contention that plaintiffs' delay should be measured from the time OURA applied for funds to demolish substandard buildings in January of 1970 is unpersuasive. A suit filed prior to HUD's determination of the proposed mall's environmental impact would have been premature. ...

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