Key Takeaways
- The Supreme Court reversed the D.C. Circuit Court of Appeals' decision invalidating the Surface Transportation Board's environmental analysis and approval of a new rail line connecting Utah's remote Uinta Basin to a rail network that could carry waxy crude oil from the basin to Gulf Coast refineries.
- The Court concluded that NEPA did not require the Board to study environmental impacts from "upstream or downstream [oil drilling and refining] projects separate in time or place from the 88-mile railroad line's construction and operation."
- The Court's ruling was based on (1) the fact that courts must accord APA deference to an agency's decision-making under NEPA and (2) NEPA's textual focus on "the proposed action."
- The decision reaffirms the Court's holding in Department of Transportation v. Public Citizen, 541 U.S. 752 (2004) that NEPA does not require a federal agency to analyze effects of a proposed action it has no authority to prevent.
- The Court recognized that a NEPA violation requiring remand to the agency for further analysis does not always require interim vacatur of the challenged decision.
The Supreme Court of the United States' opinion, issued May 29, 2025, in Seven County Infrastructure Coalition v. Eagle County, Colorado, reaffirms the Court's earlier, seminal decisions expounding judicial review under the National Environmental Policy Act (NEPA). Stressing the "purely procedural" nature of NEPA (and noting that Congress may not even have intended for NEPA documents to be judicially reviewable, slip op. n.2), the Court explained that NEPA is a "procedural cross-check, not a substantive roadblock" that should "inform agency decisionmaking, not ... paralyze it." In particular, the decision cements the Court's earlier holdings in Kleppe v. Sierra Club, 427 U.S. 390, 410 (1976) that an agency's determination of the scope of impacts to analyze under NEPA is entitled to deference, and in Public Citizen v. NHTSA, 541 U.S. 752 (2004) that an agency is not required to analyze impacts it has no jurisdiction or ability to prevent. As a variant of the second holding, the Court explained that NEPA did not require the agency to consider effects "of upstream and downstream projects that are separate in time or place from" the project for which the permit was sought (the Uinta Basin Railway). Although the Seven County decision breaks little new ground, it will prove useful as a recent, 8-0 affirmation of the Court's earlier precedents circumscribing the scope of a court's review of NEPA decisions.
Justice Brett Kavanaugh delivered the opinion of the Court and was joined by four other justices. Justice Sonia Sotomayor, in an opinion joined by Justices Elena Kagan and Ketanji Brown Jackson, filed a separate opinion concurring in the judgment. Justice Neil Gorsuch was recused from the decision.
Background
A coalition of Utah counties proposed an 88-mile railway project into Utah's relatively isolated Uinta Basin. The railway would connect the Uinta Basin to the national rail network and carry primarily waxy crude oil destined for refinery markets along the Gulf Coast. The Surface Transportation Board (STB or Board) approved Seven County's proposal in 2021 following an "expedited" Environmental Impact Statement (EIS) (that was nonetheless 637 pages long with 3,000 pages of appendices). Eagle County, Colorado, and the Center for Biological Diversity sued in the U.S. Court of Appeals for the District of Columbia Circuit, challenging the decision. The challengers argued that the STB should have considered potential "upstream" effects on increased oil drilling in Utah and Colorado and "downstream" oil refining activities more than 1,000 miles away along the Gulf Coast. The D.C. Circuit held that, because the Board could prevent alleged environmental effects related to the proposed railway by denying Seven County's application, it should have analyzed increased air emissions at Gulf Coast refineries. Eagle Cnty., Colo. v. Surface Transp. Bd., 82 F.4th 1152, 1180 (D.C. Cir. 2023). It cited another D.C. Circuit precedent, Sierra Club v. FERC (the Sabal Trail case), 867 F.3d 1357,1373 (D.C. Cir. 2017), in support of its holding. The Sabal Trail gas pipeline case has been frequently criticized as inconsistent with the Supreme Court's holding in Department of Transportation v. Public Citizen, 541 U.S. 752 (2004).
In briefing the issues to the Supreme Court, the petitioners (Seven County) had urged the Court to reverse the decision because, under Public Citizen, an agency need not consider effects that are "remote in time and space" and outside the agency's jurisdiction. Counsel for the government had argued for reversal on the narrower ground that the D.C. Circuit had not accorded appropriate deference to the agency's determination of the scope of effects NEPA required it to analyze. The Court reversed the decision on both grounds—deference and proximate cause.
Reasoning
Situating its review in the post-Loper Bright context as an instance of congressionally delegated discretion, the Court explained that the "central principle of judicial review in NEPA cases is deference." Slip Op. 8. It explained that the Administrative Procedure Act's (APA) arbitrary and capricious standard of review for decisions within an agency's discretion signifies that "[t]he agency is better equipped to assess what facts are relevant to the agency's own decision than a court is." Id. 10. The Court cited recent amendments to NEPA limiting the timing and length of NEPA documents to reinforce the principle that agency explanations need not be excessively detailed. Id. n.3. The touchpoint for the agency's review under the statute's terms, the Court explained, is the "proposed action." Id. 11 (citing 42 U.S.C. § 4332(2)(C) (2018)). The Court explained:
"So long as the EIS addresses environmental effects from the project at issue, courts should defer to agencies' decisions about where to draw the line—including (i) how far to go in considering indirect environmental effects from the project at hand and (ii) whether to analyze environmental effects from other projects separate in time or place from the project at hand."
Id. 11. Without citing specific cases, the Court faulted lower courts that have "engaged in overly intrusive (and unpredictable) review in NEPA cases," which has "slowed down or blocked many projects and, in turn, caused litigation-averse agencies to take ever more time and to prepare ever longer EISs." Id. 12. The result, lamented Justice Kavanaugh, is "fewer and more expensive railroads, airports, wind turbines, transmission lines, dams, housing developments, highways, bridges, subways, stadiums, arenas, data centers, and the like." Id. 13. The Court concluded that "[a] course correction of sorts is appropriate." Id.
Applying the appropriate level of deference, the Court rejected the lower court's holding that NEPA required the STB to include effects of potential future projects and geographically separate projects that "f[e]ll outside the Board's authority and would be initiated, if at all, by third parties." Id. 15. Instead, the Court found that it was reasonable for the agency to conclude that those projects were not part of the proposed action and did not need to be evaluated further in the EIS. Id. Although NEPA requires an agency to consider the indirect effects of proposed projects, it does not require them to analyze the effects of separate projects—even if those effects are factually foreseeable—because those projects "break[] the chain of proximate causation." Id. 17. The Court stressed the jurisdictional limits of agency decision-making:
"[T]he Board here possesses no regulatory authority over those separate projects. The Board does not regulate oil drilling, oil wells, oil and gas leases, or oil refineries. The Board approves railroad lines. See 49 U. S. C. §§ 10101, 10901. Other agencies possess authority to regulate those separate projects and their environmental effects. As this Court stated in one of the more important sentences in the NEPA canon, "where an agency has no ability to prevent a certain effect due to its limited statutory authority over the relevant actions, the agency cannot be considered a legally relevant 'cause' of the effect." Public Citizen, 541 U.S. at 770.
Id. 17. In the case before it, "nothing in NEPA required the Board to go further and study environmental impacts from upstream or downstream projects separate in time or place from the 88-mile railroad line's construction and operation," even if the approval were a but-for cause of those projects. Id. 18.
In a footnote, the majority noted that the STB's organic statute prohibited it from approving rail lines based on the product or commodity at issue. Id. n.6. Because upstream and downstream impacts of oil drilling and refining would not have been a legitimate basis to deny the application, they did not need to be considered. This rationale was the sole basis of decision for the concurring justices. Concurring op. 9 ("If the organic statute precludes consideration of a particular issue, the agency may set it aside for purposes of its NEPA review as well.") (citing Public Citizen). In a footnote, the concurring justices addressed the finding of the D.C. Circuit that the statute's requirement that the STB license construction of projects only if they address "public convenience and necessity" enlarged the scope of effects the agency needed to consider. Id. n.5. The concurring justices noted that the isolated phrase "must be read 'with a view to [its] place in the overall statutory scheme.'" Id. (quoting Davis v. Michigan Dep't of Treasury, 489 U.S. 803, 809 (1989)). This holding is likely to arise in many NEPA cases because many statutes and regulations instruct the authorizing agency to make some type of catch-all finding that the action is in the "public interest." Cf. 43 U.S.C. § 1716(a) (requiring secretary of interior to make a "public interest" finding before approving land exchanges); 33 C.F.R. §§ 320.1(c), 320.4(a)(1) (prescribing "public interest review" for certain Corps of Engineers Clean Water Act permits).
Citing the APA's harmless error provision, the Court also offered thoughts on APA remedies for NEPA violations, noting that an approval need not be vacated while NEPA is redone, even if there is a NEPA violation. Slip op. 14. So "in a case like this one, even if the EIS drew the line on the effects of separate upstream or downstream projects too narrowly, that mistake would not necessarily require a court to vacate the agency's approval of the railroad project." Id.
Takeaways
Although some expected a landmark decision that could substantially restrict environmental review, the decision reaffirms long-standing precedent on deference to agencies and the appropriate scope of environmental review. The Court also declined to weigh in on high-profile, recently litigated questions surrounding the authority of the Council of Environmental Quality (CEQ), an agency established under NEPA. Indeed, the opinion does not once mention the Council. Regardless, the recent rescission of CEQ's NEPA regulations may have a more dramatic impact on infrastructure developers and other NEPA participants by opening the door to a greater range of interpretations regarding NEPA's requirements. Interested parties should closely track agencies' efforts to update and standardize NEPA procedures and consider providing comments that make those regulations more consistent with the Supreme Court's "course-correcting" decision in Seven County.
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