In a November 12, 2024, opinion, for Marin Audubon Society v. Federal Aviation Administration, No. 23-1067 (D.C. Cir. 2024), the D.C. Circuit Court of Appeals held, of its own initiative, that the White House Council on Environmental Quality (CEQ) lacks the authority to issue binding regulations implementing the National Environmental Policy Act (NEPA).
CEQ, established in 1969 within the Executive Office of the President as a part of NEPA (see 42 U.S.C. § 4321 et seq.), issued the first set of NEPA Implementing Regulations in 1978 upon direction by executive order (see 40 C.F.R § 1500 et seq.). NEPA Regulations expound on the statute and serve as the basis for agency-and-department-specific NEPA guidelines. For many decades, federal courts at all levels have consistently based rulings on agency use and court interpretation of the Regulations.
In the course of deciding whether the Federal Aviation Administration (FAA) and National Park Service (NPS) conducted adequate environmental review under NEPA for an Air Management Tour Plan governing flight tours over national parks near San Francisco (ultimately unanimously deciding that FAA and NPS were arbitrary and capricious in their review), the court took it upon itself, without any party to the litigation having raised the issue, to hold that “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.” Per the court, because the environmental baseline used for NEPA review was arbitrary and capricious, and because it relied on regulations that CEQ apparently had no authority to issue, FAA and NPS would have to “take a completely different tack to complete their NEPA review.” A partial dissent disagreed with the majority’s holding on the issue, mostly criticizing it for violating the principle that courts ought only rule on issues that have been presented and argued before them.
While the court’s ruling does not expressly invalidate CEQ Regulations or vacate court decisions based on the regulations, nor is it binding on other circuits, it is the first case to establish some precedent that CEQ Regulations may not be legally enforceable. This novel ruling comes on the heels of Loper Bright Enterprises v. Raimondo, where the Supreme Court overruled the Chevron Doctrine thereby eliminating the decades-long practice of deferring to agency interpretations where statutes are silent or ambiguous. The court here precedentially relied on Loper Bright in forgoing deference to CEQ Regulations.
It is unknown how this ruling could affect cases in the same or different circuits, or whether it may influence a case scheduled to be argued before the U.S. Supreme Court in early December—Seven County Infrastructure Coalition v. Eagle County Colorado. The Seven County Infrastructure Coalition is sponsoring the development of a rail line in Utah, which required approval and NEPA review from the federal Surface Transportation Board (STB). STB approved the action, challenged thereafter by Eagle County, Colorado, in the D.C. Circuit, asserting inadequate NEPA analysis failed to consider the environmental effects of oil wells and refineries served by the rail line. The D.C. Circuit agreed with Eagle County, and the Supreme Court granted review to resolve a split among federal courts of appeals over whether NEPA requires an agency to study environmental impacts beyond the immediate effects of an action over which the agency has regulatory authority.
It is also unknown what action, if any, the Biden Administration might take in its short remaining tenure in response to this ruling that will surely leave federal agencies and project proponents scratching their heads about what rules and guidance apply when preparing the myriad of NEPA documents that are in process or being considered throughout the country. Even if the Biden Administration were to seek an en banc review from the D.C. Circuit, or review by the Supreme Court, the incoming Trump Administration would have to take up the cause, which seems unlikely given the sweeping changes to the CEQ Regulations undertaken by the previous Trump Administration that the Biden Administration had been trying to unwind.
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