Speaking of Jimmy Carter, whom before his death many people described not as proof that the righteous walked among us but that the self-righteous looked down on us, and whom historian Steven Hayward described not only as a bad president but as our worst ex-president to boot—well, you get the idea: Jimmy Carter was a man of many political sins.
Condolences to his family still, and great respect for the office the people allowed him to serve in for four years. He deserved the honors of his funeral and burial.
Still, there were those political sins, and one of them was a doozy of an attack on property rights that he launched under the authority of the National Environmental Protection Act (NEPA). It sometimes gets lost in the shuffle among his many other malaises and messes, but this was one of his finest hours in providing for excessive government overreach.
Congress had passed, and President Richard Nixon had signed, NEPA in 1969 and 1970, respectively. The law requires all federal agencies to prepare detailed statements assessing the environmental impact of and alternatives to major federal actions significantly affecting the environment.
Essentially, this was the birth of the now legendary Environmental Impact Statement (EIS). The law also created the President’s Council on Environmental Quality (CEQ) to oversee NEPA implementation; it operates out of the president’s executive office.
Well, things chugged along without very much damage until government did what large-D government—namely, Jimmy Carter—always does and that is to predictably use the law’s inch to take a regulatory mile. In 1977, with executive order 11991, Jimmy Carter granted the CEQ the power to issue binding regulations. Never mind that he had no constitutional power to do any such thing, and—thank you big-government Republicans for letting it stand—that’s exactly what the CEQ has been doing ever since.
Only now there is Trouble in River City. Trouble with a Capital T. Trouble in the form of several lawsuits that inconveniently challenge the executive order’s validity and could end that power for good.
It should. Let’s take a look.
Seven County Infrastructure Coalition v. Eagle County, Colorado
In this U.S. Supreme Court case, the question is whether NEPA requires an agency to study environmental impacts beyond the proximate effects of the action over which the agency has regulatory authority.
The appellants point to an already decided 2004 Supreme Court case, Department of Transportation v. Public Citizen, in which the justices determined that when an agency cannot prevent an environmental effect “due to its limited statutory authority over the relevant actions,” NEPA does not require it to study that effect.
But, the appellants observe, the federal appeals courts have been divided over what that ruling really means. Some say it means that agency review can stop where its regulatory authority stops—right at the water’s edge, so to speak—while other courts say the agency must still review impacts that can be called reasonably foreseeable. In Seven County, the D.C. Circuit Court of Appeals adopted the latter, more expansive reading, and the decision was taken to the high court.
One of the situations in the appeal, to illustrate the question—this is a consolidation of two separate but similar cases—involves a carrier rail line that would link an isolated part of Utah to a national rail network.
“They sought and received the Surface Transportation Board’s approval to do so,” the appellants state. “But when opponents of petitioners’ project challenged it in the D.C. Circuit, they said nothing about the proximate effects of the 88-mile line that the board had approved. Instead, they argued that the board should have done more to study the distant effects of the main commodity that the rail line would carry—waxy crude oil. In approving the rail line, the board had explained that it lacked ‘authority or jurisdiction over development of oil and gas’ and could not ‘control or mitigate’ the impacts of any such development.”
Thus, the appellants argued, the board correctly reasoned that those impacts were not within NEPA’s reach, but the D.C. circuit court held otherwise: “The Board cannot avoid its responsibility under NEPA to identify and describe the environmental effects of increased oil drilling and refining on the ground that it lacks authority to prevent, control, or mitigate those developments.”
And so, the appellants contested the ruling, saying it required the board to consider not only the effects of the new rail line it was permitting in Utah, but also the hypothetical, localized effects of processing the oil carried on the line at separately regulated Gulf Coast refineries a thousand miles away.
“By requiring an agency to consider any environmental effect that it has the power to prevent, no matter the limits of its regulatory authority, the D.C. Circuit’s rule turns each agency into a ‘de facto environmental-policy czar,’” their appeal asserts.
The Menu Doesn’t Matter If You Have No Kitchen
So that decision—where does NEPA’s requirement for regulatory review stop?—is a weighty one in and of itself, but the case has significant implications beyond that because it opens the door for the high court to look at another and indeed underlying question, whether the CEQ has any power to regulate anything at all, much less compel agencies to conduct global EISs.
Indeed, it’s a new Biden-era CEQ regulation that serves as the regulatory basis for environmentalists demanding broad reviews of extant environmental effects. Turns out, the CEQ sets the standards for regulatory review under NEPA, and, under new environmentally-friendly regulations, it restored an earlier, broader geographic scope that was pared back under the Trump administration, which only required agencies to consider the effects in the local area for a site specific action.
In other words, the CEQ’s regulatory scheme embraces the expansive reading of the 2004 court decision, which in practical terms means speculating about far-flung climate change potentials.
But if that new rule has reopened the debate on the scope of EIS review, it also shines a big spotlight on CEQ authority in the first place. That latter question has surfaced in multiple briefs supporting the appellants, including a joint brief from Americans for Prosperity (AFP) and the Competitive Enterprise Institute (CEI), which proclaims that “the Emperor has no clothes: The CEQ has no rulemaking authority.”
Their brief contends that the court should reject any suggestion that CEQ’s views about the proper scope of environmental studies that agencies must conduct under NEPA are binding on other agencies.
“CEQ is a creature of statute, which possesses only those powers Congress chooses to confer upon it,” the brief states. “And CEQ bears the burden to establish statutory authorization for its actions.”
Indeed, the organizations assert, CEQ cannot change or expand NEPA’s text to add NEPA ‘compliance’ obligations beyond what Congress thought appropriate. And, as a matter of fact, CEI and AFP contend, Congress did not assign CEQ any authority to issue regulations that bind other agencies.
“Instead, the scope of its statutorily authorized duties is much more limited,” they wrote, quoting case law. “CEQ, ‘created in Title II of NEPA, was intended to act primarily in an advisory capacity.’ Its charge is ‘to formulate and recommend national policies to promote the improvement of the quality of the environment.’ ‘It is part of the Executive Office of the President, created for the purpose of advising the President on environmental matters.’ And its ‘duties and functions are confined’ to gathering information, conducting studies, and advising the president.”
Bottom line, AFP and CEI argue, CEQ has no authority to prescribe regulations governing compliance with NEPA. The organizations remind the court that its regulatory authority derives from Carter’s executive order 11991, after which, in 1978, CEQ issued so-called “regulations” that purported to implement NEPA’s provisions and then claimed they were binding on other agencies.
“In so doing, CEQ mistakenly conflated Congress’s Article I legislative power with the president’s powers under Article II,” the brief asserts. “That was error. To be sure, the president has a duty to ensure that the laws are faithfully executed. In furtherance of that duty, he has the power to control individual agencies’ NEPA implementation through his appointment and removal authority under Article II, and he is free to direct his appointees to adopt NEPA policies, to the extent those policies are otherwise lawful.”
However, he may not do so in a way that conflicts with the statute, and courts may not give binding effect to CEQ rules when they conflict with the statute, the brief concludes.
“Because Congress did not assign CEQ substantive rulemaking authority, CEQ’s interpretation of NEPA cannot set a ‘floor’ that binds courts or the general public,” the brief states. “Instead, CEQ’s interpretation of NEPA is simply a direction from the president to agencies.”
That means that each agency must comply with NEPA in a manner that is both consistent with NEPA’s statutory text and appropriately tailored to each agency’s mission and circumscribed by the statutes that agency administers, the organizations argue.
“In other words, NEPA was never meant to be a one-size-fits-all statute,” the brief states. “As NEPA’s statutory structure makes clear, Congress tasked individual agencies—not CEQ—with implementing NEPA in a manner that best fits within each agency’s individual mission and organic statutes, subject to limits on each agency’s jurisdiction and mission.”
Thus, NEPA is not a green Magna Carta but a statute that merely requires agencies to submit reports under certain circumstances, AFP and CEI assert.
“But over the past 50 years some lower courts have transmogrified NEPA into a substantive, outcome-oriented environmental statute that allows project opponents to block projects that do not align with their policy preferences,” the brief states. “This decades-long accretion has layered onto the statute an expansive and elaborate body of compliance requirements going far beyond what the text requires and has led to the creation of, in essence, a NEPA industrial complex.”
Simply put, that complex, under Biden, wants to force every 88-mile stretch of rail, and every other project with localized impacts, to be shoehorned into a grand consideration of world climate change, and to be bogged down and delayed into oblivion by environment lawsuits and costly irrelevant assessments.
The CEQ regulations are its spark plug, but the door is open to shut it down.
Marin Audubon Society v FAA
That said, before everyone gets their hopes up about ending not just an expansive NEPA regulatory regime but any NEPA regulatory regime at all, the Supreme Court is not likely to make a broad ruling addressing its underlying rule-making authority. In Seven County, it doesn’t have to. Instead, expect it to stick to the narrow question of where the obligation for environmental review stops.
But even if it did, and it tossed the entire CEQ scheme out the window, where would that leave NEPA and all its past regulations, not to mention all those court rulings?
Good question, and no one really knows. But there’s another case out there that might ultimately make the Supreme Court tackle it: Marin Audubon Society v FAA.
That’s because, in a shock ruling in November, the D.C Circuit Court actually did rule that, as a matter of fact, the CEQ has no authority to issue any regulations, expansive or otherwise. And the court wondered why it took everyone so long to address the fact that, to use the language of AFP and CEI, the Emperor has no clothes: “What is quite remarkable is that this issue has remained largely undetected and undecided for so many years in so many cases.”
Indeed, but better late than never.
“As the parties argue the case, it centers on whether the agencies complied with regulations of the Council on Environmental Quality, an entity within the Executive Office of the President,” the Marin decision stated. “We will not address these arguments. The CEQ regulations, which purport to govern how all federal agencies must comply with the National Environmental Policy Act, are ultra vires.”
That is, they are beyond the powers of the CEQ to issue. After everyone picked themselves up off the floor—metaphorically speaking—the court explained its reasoning.
“No statute confers rulemaking authority on CEQ,” the decision simply states. “President Carter’s Executive Order cited section 309 of the Clean Air Act. Under this provision, the administrator of the Environmental Protection Agency reviews the environmental impact of other federal agencies’ proposed actions. If the EPA administrator finds that the proposed action is ‘unsatisfactory’ from an environmental-quality standpoint, he must ‘publish his determination’ and refer the matter to CEQ.”
That provision is consistent with CEQ’s advisory role, the court explains:
“It says nothing about CEQ’s rulemaking authority. The executive order also cites the Environmental Quality Improvement Act of 1970, which established an Office of Environmental Quality headed by the chairman of CEQ. Even as the director of that Office, however, CEQ’s chairman only has the authority to ‘assist’ other federal agencies. The chairman may ‘promulgate regulations’ but only related to a fund used to finance the office’s projects and research studies.”
––D.C. Circuit Court
Even the Supreme Court’s pronouncements in this area cannot rescue CEQ’s regulations, the court declared.
“The [Supreme Court] once wrote that CEQ’s regulations under NEPA are ‘entitled to substantial deference,’” the decision states. “But that Chevron-like statement did not result from an examination of CEQ’s authority to issue judicially enforceable regulations and cannot be credited in light of the Supreme Court’s ruling in Loper Bright Enterprises v. Raimondo [which ended Chevron deference] (2024).”
In another case, the D.C. court continued, the Supreme Court stated that CEQ was “established by NEPA with authority to issue regulations interpreting it.”
“The statement appeared without any accompanying legal analysis,” the decision states. “We must obey ‘carefully considered language of the Supreme Court, even if technically dictum.’ But we are not bound by every stray remark on an issue the parties neither raised nor discussed in any meaningful way.”
The CEQ regulations are by no means a mere delegation of the president’s authority under the Take Care Clause, the D.C. court asserted: “Executive Orders focused solely on the internal management of the Executive Branch create no private rights and are not judicially reviewable.”
NEPA, however, “imposes statutory obligations that agencies must execute consistent with the requirements of the APA,” and affects private parties who may seek judicial review of agencies’ compliance, the D. C. court observed.
“If all federal agencies are bound by the CEQ regulations and must follow them in carrying out their obligations under NEPA, and if the regulations are enforceable by courts, then those regulations cannot be justified solely as an exercise in a president’s oversight of his administration,” the D.C. court concluded.
CEQ therefore had no lawful authority to promulgate regulations, the court concluded.
The court went on to discuss the fact that many agencies adopt their own NEPA regulations. Whether they could do so under their own rulemaking authority was another good question, the court observed, yet not relevant because both sides in the Marin case “took for granted CEQ’s authority to issue binding NEPA regulations.”
Still, and despite the parties’ acquiescence in CEQ’s regulatory authority, the court declared that that did not stop it from assessing whether any of it was legally binding.
“There are good reasons, indeed there are compelling reasons, for us to determine the validity of the CEQ regulations once and for all,” the court declared. “Over many years, our court has expressed serious concerns about whether CEQ’s regulations had any ‘binding effect’ because it was ‘far from clear’ that CEQ had any ‘regulatory authority under [NEPA].’ It is time for our court’s long-standing misgivings to be put to the test: ‘where there is so much smoke, there must be a fair amount of fire, and we would do well to analyze the causes.’”
The implications of this decision are unclear. The court did decide the particular regulatory issues at hand using the Administrative Procedures Act, and the court did not vacate any regulations decided using CEQ authority. Indeed, in a dissent, the district court’s chief judge, Sri Srinivasan, argued that the declaration of invalidity wasn’t even part of the official decision, just so much opining:
“First and foremost, no party challenges the CEQ’s regulations,” Srinivasan wrote. “In nonetheless reaching out to address the issue, the court contravenes our established ‘principle of party presentation.’ That principle embodies the idea ‘that appellate courts do not sit as self-directed boards of legal inquiry and research, but essentially as arbiters of legal questions presented and argued by the parties before them.’”
After all, Srinivasan continued, “[o]ur adversary system is designed around the premise that the parties know what is best for them, and are responsible for advancing the facts and arguments entitling them to relief.”
So the court’s decision rendering CEQ regulatory authority invalid might not even be binding on the courts within the D.C. circuit, and it is certainly not binding on any of the other federal district and appellate courts.
Then, too, how agencies themselves react is another question, but the incoming Trump administration can be expected to reinstate the language it installed during Trump’s first term, though attorneys Zachary Reno and Jacob Aronson speculate that, given the ruling, the administration might instead rescind CEQ’s NEPA regulations without adopting any replacement regulations.
In any event, the core issue has been raised, and it demands an answer from the Supreme Court, given dueling retaliatory schemes between Trump and Biden and Trump, plus split decisions in the courts. And sooner rather than later.
Asking The Wrong Question
There is one other case that could provide that opportunity, if justices choose not to tackle it in Seven County. It’s a lawsuit in front of a North Dakota federal district court filed by 20 Republican-led states, also challenging the new Biden-era CEQ regulation. On the other side are the CEQ itself and 13 states, including Wisconsin, that contend that the new rule should be left in place.
“As courts have uniformly held since its enactment more than fifty years ago, NEPA is a purely procedural statute, requiring agencies to take a ‘hard look’ at environmental consequences of proposed ‘major Federal actions significantly affecting the quality of the human environment,’ and to disseminate relevant environmental information to the public,” the states’ petition asserts.
“NEPA does not mandate substantive results, including the adoption or rejection of proposed actions based on their anticipated environmental impacts.”
Nonetheless, the states argue, as petitioners do in Marin and in Seven County, that the Biden final rule illegally seeks to transform NEPA’s well-developed and carefully delineated procedures for environmental reviews of proposed federal agency actions into a substantive set of requirements to achieve broad and vague policy goals, and that it inserts many arbitrary mandates into the environmental review system, including race-based environmental justice and other environmental considerations.
But there is a flaw in this lawsuit that echoes the problem Srinivasan brought up in his dissent: The lawsuit does not challenge CEQ’s ultimate regulatory authority, only the Biden rule. It asks that that rule be withdrawn and the Trump rule reinstated.
Here again, the lawsuit asked the wrong question, or at least failed to add the correct one. Still, in arguments before the court, federal judge Daniel Traynor raised the D.C. court’s ruling of CEQ invalidity and wonders how he could leave either regulation in place: “If they have no authority, they have no authority,” Traynor was reported to have said. “It is a paper tiger.”
Traynor asked both sides to prepare legal briefs on the question, but, again, it’s hard to see a challenge to the CEQ’s authority sustained through the process if no party to a case challenges it. It’s been done before, but, at this stage of the game, the CEQ’s authority lives, though it is begging for a party to a case to finally ask the right question.
May it happen soon.
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