On May 29, 2025, the U.S. Supreme Court reversed the U.S. Court of Appeals for the D.C. Circuit's decision that vacated the Surface Transportation Board's ("the Board") environmental impact statement ("EIS") and approval of an 88-mile rail line to bring crude oil from Utah to the Gulf Coast. Seven County Infrastructure Coalition v. Eagle County, Colorado, No. 23-975 (2025). In doing so, the Supreme Court clarified that courts should afford "substantial deference" to agencies when determining compliance with the National Environmental Policy Act ("NEPA" or "the Act"). Additionally, the Court narrowed the scope of an agency's NEPA review by mandating assessment of only the proposed project at issue, rather than future or geographically separate projects, and limiting the agency's review to merely those effects of the project over which it is exercising regulatory authority.
Background
In 2020, an infrastructure coalition applied to the Board for approval of an 88-mile rail line connecting Utah to the national rail network to aid in the delivery of crude oil to refineries on the Gulf Coast. As part of its required NEPA review, the Board prepared an EIS that addressed several "significant and adverse impacts that could occur as a result of the railroad line's construction and operation." The EIS also mentioned, without in-depth review, the potential environmental effects of increased upstream oil drilling in Utah and increased downstream refining resulting from the rail line project. However, the Board did not thoroughly examine these effects, explaining that they "would arise from other projects (upstream oil drilling, downstream oil refining, and the like) that are separate from the current project and regulated by other agencies." In 2021, the Board approved the construction and operation of the rail line, concluding that its benefits outweighed the environmental impacts that the EIS identified.
Thereafter, a Colorado county and several environmental groups filed petitions for review of the Board's approval in the D.C. Circuit. The D.C. Circuit found "numerous NEPA violations arising from the EIS" and held that the Board improperly constrained its analysis of the upstream and downstream effects. The D.C. Circuit reasoned that these effects were "reasonably foreseeable impacts" that the EIS should have fully analyzed. As such, the D.C. Circuit vacated the Board's EIS and final approval order. The infrastructure coalition sought review of that judgment.
The Supreme Court's Decision
The Supreme Court reversed the D.C. Circuit's decision, holding that it (1) failed to afford the Board the substantial judicial deference required in NEPA cases, and (2) incorrectly interpreted NEPA to require the Board to consider the environmental effects of upstream and downstream projects that are separate in time and place from the proposed rail line.
The Supreme Court first took issue with the fact that some lower courts, including the D.C. Circuit in this case, have taken an "aggressive role" in reviewing NEPA cases, which the Court explained is in contrast to the NEPA statutory text and precedent that demand "substantial deference" to the agency in these cases. Accordingly, the Court noted that "a course correction of sorts is appropriate to bring judicial review under NEPA back in line with the statutory text and common sense." The Court emphasized that NEPA is a purely procedural statute that "does not mandate any particular results, but simply prescribes the necessary process for an agency's environmental review of a project." Thus, "[w]hen assessing significant environmental effects and feasible alternatives for NEPA purposes, an agency will invariably make a series of fact-dependent, context-specific, and policy-laden choices about the depth and breadth of its inquiry[,]" and "[c]ourts should afford substantial deference and should not micromanage those agency choices so long as they fall within a broad zone of reasonableness." In sum, the Court stressed, "The bedrock principle of judicial review in NEPA cases can be stated in a word: Deference."
Next, the Supreme Court held that, contrary to the D.C. Circuit's opinion, the Act only requires assessment of the "proposed action," rather than potential future or geographically separate projects. The Court did note that "the environmental effects of the project at issue may fall within NEPA even if those effects are outside the geographical territory of the proposed project or might materialize later in time—for example, due to emissions or run off from the project carried elsewhere by air or water." However, if the project at issue "might lead to the construction or increased use of a separate project—for example, a housing development that might someday be built near a highway—the agency need not consider the environmental effects of that separate project." This is because the separate project "breaks the chain of proximate causation between the project at hand and the environmental effects of the separate project." Additionally, the Court held that agencies "are not required to analyze the effects of projects over which they do not exercise regulatory authority." Thus, because the Board does not regulate oil drilling, oil wells, or oil refineries, the Court held that it did not have to consider the environmental effects of those activities.
Key Takeaways
The Supreme Court's decision may have effects at both the federal and state level. At the federal level, the Court's decision is the most recent action addressing NEPA, which is in addition to other federal courts' and the Trump administration's recent actions reeling in Biden-era NEPA rulemakings and executive orders that required agency assessment of "cumulative effects," including climate change and environmental justice.
Also, although NEPA is a federal statute, its interpretation and enforcement can influence state-level environmental policies as well. In Louisiana, the Public Trust Doctrine, which is enshrined in Louisiana's Constitution, requires that the State ensure environmental protection "insofar as possible and consistent with the health, safety, and welfare of the people." In the seminal case Save Ourselves, Inc. v. La. Env'tl Control Com'n, 452 So. 2d 1152, 1156 (La. 1984), the Louisiana Supreme Court observed that this is a "rule of reasonableness" that requires an agency, before granting approval of a proposed action affecting the environment, to determine that adverse environmental impacts have been minimized or avoided as much as possible consistent with the public welfare (widely referred to as "the IT analysis" because it related to a facility proposed by IT Corporation).
Louisiana's IT analysis is a state-specific legal framework, but it is analogous, in part, to NEPA. Indeed, the Louisiana Supreme Court in Save Ourselves noted that federal cases interpreting NEPA may provide guidance in applying Louisiana's legal framework. Thus, the Supreme Court's decision could have an effect on the scope of the IT analysis under Louisiana state law. Stay tuned for further updates.
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