In Marin Audubon Society v. Federal Aviation Administration, No. 23-1067, a majority of a three judge-panel of the U.S. Court of Appeals for the DC Circuit held that the Council on Environmental Quality (CEQ) lacks authority to enact regulations that bind other federal agencies. In an opinion written by Judge Randolph and joined by Judge Henderson, the court held CEQ's regulations at 40 C.F.R. part 1500 implementing the National Environmental Policy Act (NEPA) to be ultra vires. The decision upends more than 40 years of federal agency practice and creates considerable uncertainty for proponents of projects requiring federal permits.
The case involved a challenge to an air tour management plan issued by the National Park Service (NPS) and the Federal Aviation Administration (FAA) governing tourist flights over four national parks near San Francisco, California. The agencies did not prepare an environmental impact statement or environmental assessment prior to approving the plan; instead, they relied on a categorical exclusion in the NPS's regulations as allowed by the CEQ regulations. Citizen groups challenged the plan.
None of the parties questioned the validity of the CEQ regulations implementing NEPA, some version of which has been in effect since 1978. Nonetheless, Judge Randolph sua sponte decided to evaluate the validity of these regulations. The court determined that CEQ lacked authority to issue regulations that bind federal agencies because neither NEPA nor another statute conferred such authority. The court further dismissed as "stray remarks" statements by the Supreme Court that CEQ has the power to issue regulations and that such regulations are entitled to "substantial deference." The court instead found that CEQ had "no lawful authority" to promulgate its regulations.
Further, the court found that the Department of the Interior (DOI) and Department of Transportation (DOT) regulations implementing NEPA did not independently incorporate or adopt the CEQ regulations. The court observed that DOI's regulations are intended to be used "for compliance with" and only "in conjunction with" the CEQ regulations; similarly, the court observed that DOT's rules are "not a substitute for" and merely "supplement[]" the CEQ regulations. Accordingly, the court held that the DOI and DOT regulations were not a permissible exercise of rulemaking authority to implement NEPA.
Notably, Chief Judge Srinivasan dissented from this holding.
Having found the CEQ regulations to be ultra vires, the court vacated the air tour management plan. The court advised that the agencies would "need to take a completely different tack to complete their NEPA review"—but offered no direction on what such tack would be. The court also acknowledged that the parties may move for a stay of its mandate.
By invalidating regulations that had been in place for more than 45 years, in some form or fashion, this decision is an earthquake in NEPA law. The effects of the decision are not fully known, and aftershocks still may come. In the short term, the decision creates considerable uncertainty for federal agencies and project proponents, with multiple questions to be resolved over the coming months:
- Will the DC Circuit affirm the decision after the inevitable en banc review? Will any party seek review by the Supreme Court?
- How will agencies that do not have their own independent NEPA regulations comply with NEPA in the coming months? Will agencies stall decision-making as a result of Marin Audubon? If not, are such decisions vulnerable to legal challenge?
- How will the decision impact midnight agency actions by the outgoing Biden Administration, if at all?
- Will agencies in either the outgoing Biden Administration or incoming Trump Administration promulgate temporary rules as stop-gap measures to allow approvals to continue?
- Will the incoming Trump Administration see an opportunity to revamp NEPA regulations?
- Even if ultra vires, what influence will the CEQ regulations continue to have on agencies or the courts?
Given these uncertainties, project proponents should coordinate with agencies regarding any effect of Marin Audubon on their projects. And, project proponents should stay tuned as to what lies ahead.
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