Federal courts could drastically reshape how federal agencies analyze the environmental impacts of their actions and the rules they have to follow in doing so, as two major National Environmental Policy Act cases make their way through the legal process.
One case now before the Supreme Court could narrow the scope of reviews under NEPA, a law that requires federal agencies to analyze the environmental impacts of proposed projects. The court heard arguments last month on the question of whether the law requires a review of impacts "beyond the proximate effects of the action over which the agency has regulatory authority."
Meanwhile, a decision from the federal appeals court in Washington, D.C., in November concluded that the White House Council on Environmental Quality does not have authority to issue implementing regulations.
The Supreme Court is currently pondering how broad of a review the Surface Transportation Board, a rail regulator, needs to conduct of a proposed 88-mile rail line in Utah. The D.C. Circuit Court of Appeals ruled that its environmental impact statement erred by not studying the environmental impacts of the oil that would be shipped along the rail line.
Essentially, the D.C. Circuit decision would require the STB to consider impacts of refineries in Louisiana or other “far-flung places,” despite the rail line being only in Utah, said Fred Wagner, a lawyer representing the Seven County Infrastructure Coalition and Uinta Basin Railway.
Fred Wagner“It would not just apply to the STB,” Wagner told Agri-Pulse of the potential outcome of the case, noting that it could affect the scope of other NEPA reviews. “In theory, it could have implications for federal agencies across the government."
NEPA requires agencies to review environmental impacts of "major" decisions. Generally, agencies use three different processes when reviewing actions under NEPA, said Jonathan Wood, vice president of law and policy at the Property and Environment Research Center.
The first is categorical exclusion, a written analysis justifying why a project can be exempt from NEPA. Another is an environmental assessment, which usually is tens to hundreds of pages long and typically done for a project that does not have significant environmental impacts.
The third option is an EIS, which Wood said often runs to “hundreds to thousands of pages of analysis trying to exhaustively look at everything that might occur as a result of the project, especially with an eye to litigation.”
Arguing before the Supreme Court last month, former Solicitor General Paul Clement, also representing the Seven County Infrastructure Coalition, said NEPA "is designed to inform government decision-making, not paralyze it." He defended the thoroughness of the agency's review and said requiring it to consider "proximate effects" like emissions from refineries thousands of miles away "is a recipe for turning a procedural statute into a substantive roadblock."
Clement suggested the court create a test to allow agencies to exclude impacts "remote in time and space" and in the jurisdiction of another agency. This argument drew skepticism from Justice Sonia Sotomayor, who said Clement wants "absolute rules that make no sense."
Government lawyers backed away somewhat from Clement's suggestion for a test limiting the scope of reviews. Deputy Solicitor General Edwin Kneedler told the court, "I think it's not really right to say there should be absolute rules," though he did suggest courts should better consider distance and an agency's jurisdiction when considering the "reasonableness" of a NEPA review.
Justice Brett Kavanaugh, questioning Kneedler, said courts have increasingly demanded longer and more in-depth reviews. "By the courts taking an overly aggressive role, it's in turn created an incentive for the agencies to do 3,000-page ... environmental impact statements," he said.
In briefs filed before the court, lawyers for the Center for Biological Diversity and four other environmental groups, who filed the original suit in the D.C. Circuit, argued the STB knew the railway would significantly increase crude oil production and which refineries were likely to receive the oil, and also had access to the information needed to analyze those effects.
NEPA's "reasonable foreseeability" test "serves [the law's] goals," the environmental groups said in their brief. "The environmental impact statement requirement ensures that agencies look at environmental effects before they leap into action and it is too late to address them."
In a brief, Solicitor General Elizabeth Prelogar, representing the government's position, defended the STB process, saying it made a “reasonable, context-specific determination that it did not need to provide additional analysis of the upstream and downstream effects of oil and gas development and refining" in its EIS.
Prelogar pushed back against the environmental groups' assertion that an agency must consider every environmental consequence that is reasonably foreseeable, noting that Supreme Court precedents “make clear that NEPA permits agencies to limit their environmental analyses based on whether and to what extent the proposed federal action is the ‘legally relevant cause’ of the effects.” But she also argued the petitioners went too far in asking the court to adopt a standard of “proximate cause” that requires “a reasonably close causal relationship … between the environmental effect and the alleged cause.”
Eight former Council on Environmental Quality members and general counsels, who collectively served in every administration from 1974 to 2007, submitted an amicus brief urging the Supreme Court to uphold the appellate court ruling.
"Contentions that agencies need only consider effects within their own authority is starkly incompatible with NEPA," they argued. They added that the “rule of reason,” a concept they described as “a mandate to administer and interpret NEPA sensibly” does not give agencies or courts authority to “impose limitations that contravene the statute.”
Ranchers seek federal permits for a number of activities — whether grazing on public lands or building a crossing on a protected waterway — and these permits often require NEPA reviews and can result in litigation. But judges' decisions on the scope of review can differ in different jurisdictions, since cases can be weighed in both the D.C. Circuit or the court nearest the action in question, said Wyoming-based lawyer Karen Budd-Falen, who submitted an amicus brief on behalf of Utah-based TN Ranching Company and the Wyoming Stock Growers Association.
Budd-Falen's brief urged the Supreme Court to settle conflicting circuit court opinions on whether “indirect effects” can be considered in NEPA reviews, which drive litigators to "race" to file in the court most favorable to them.
Karen Budd-Falen "It ends up really being a race to the courthouse — you know, who sues first," Budd-Falen told Agri-Pulse. "That's really not acceptable in my view."A separate case is likely to reshape NEPA. In November the D.C. Circuit Court of Appeals ruled 2-1 in Marin Audubon Society v. Federal Aviation Administration that the White House Council on Environmental Quality (CEQ) lacks authority to issue binding regulations for implementing NEPA.
While agencies have for decades followed CEQ's rules when conducting NEPA reviews, Judge A. Raymond Randolph noted in the ruling that that authority did not come from legislation but rather from an executive order by former President Jimmy Carter.
“No statutory language states or suggests that Congress empowered CEQ to issue rules binding on other agencies — that is, to act as a regulatory agency rather than as an advisory agency,” he wrote. “NEPA contains nothing close to the sort of clear language Congress typically uses to confer rulemaking authority.”
Deborah Sivas, a professor of environmental law at Stanford University, told Agri-Pulse the ruling throws a “monkey wrench” into the system agencies have used for the last 50 years to guide NEPA review processes, creating confusion about the procedures they should follow moving forward. Agencies will face the question of whether they must enact their own rulemakings laying out NEPA processes. Lawyers and courts, meanwhile, will need to choose how to pursue or evaluate NEPA cases, since CEQ regulations historically are cited heavily in past litigation.
“If those regulations are no longer in effect, what does it do to that 50 years of jurisprudence?” Sivas asked. “I think that’s another huge open question that we don’t know the answer to."
Last month, lawyers for Earthjustice and Public Employees for Environmental Responsibility, environmental groups involved in the case, petitioned for an en banc rehearing, or a review by all the active judges on the circuit. They said such a review is necessitated by an “unusual panel decision,” noting that rendering the CEQ rules invalid “‘leaves so many questions unanswered about how agencies should proceed and how courts should evaluate their decisions.”
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