In Seven County Infrastructure Coalition v. Eagle County, Colorado, the Supreme Court unanimously determined 8-0 that the D.C. Circuit failed to afford the Surface Transportation Board (STB) the substantial judicial deference required under the National Environmental Policy Act (NEPA). The D.C. Circuit had interpreted NEPA as requiring the STB to consider environmental effects beyond its regulatory purview—specifically, the potential impacts of upstream oil extraction and downstream refining—before approving the construction of a railway.
As reported in Dykema's January 2025 issue, the case centers on the STB's approval of a petition by the Seven County Infrastructure Coalition and Uinta Basin Railway, LLC to construct an 88-mile rail line in Utah's Uinta Basin. The railway is intended to facilitate crude oil transport. In compliance with NEPA, the STB prepared a comprehensive 3,600-page Environmental Impact Statement (EIS), analyzing a wide range of potential environmental effects. However, it did not evaluate the potential consequences of increased oil production or refining activities that might be indirectly spurred by the project—an omission that became the focal point of the dispute.
Justice Kavanaugh, writing for the Court and joined by Chief Justice Roberts and Justices Thomas, Alito, and Barrett, emphasized that NEPA is a procedural statute. It does not impose substantive environmental mandates but rather requires agencies to consider environmental impacts as part of their decision-making process. "The goal of the law is to inform agency decisionmaking, not to paralyze it," Justice Kavanaugh wrote. Accordingly, the STB was not required to analyze the environmental effects of potential future activities—such as upstream drilling or downstream refining—over which it has no regulatory control.
The Court clarified that while NEPA can encompass environmental effects that occur outside a project's immediate geographic area or that manifest over time, it does not require agencies to evaluate impacts stemming from speculative or independent future projects. Where the chain of causation becomes too attenuated, NEPA's scope ends. The Court concluded that the D.C. Circuit erred by failing to apply the deferential standard of review required by the Administrative Procedure Act (APA). Under the APA, courts must uphold agency decisions that are reasonable—even if the reviewing court would have reached a different conclusion. The level of detail included in an EIS, the Court reiterated, is a matter of agency judgment, not judicial second-guessing.
Justice Sotomayor, joined by Justices Kagan and Jackson, concurred in the judgment. She agreed that the STB lacked authority to deny the railway application based on harms caused by third parties using the approved infrastructure. Citing precedent, the concurrence underscored that NEPA does not compel agencies to consider impacts that are too causally remote. Justice Gorsuch recused himself from participation in the case because a former client filed an amicus brief and stood to potentially benefit from the case's outcome.
The Chevron Differential: Procedural vs. Interpretive Deference
For the better part of four decades, the judge-made doctrine known as Chevron deference guided federal courts' review of an agency's legal interpretation of an ambiguous statute that the agency is tasked to administer. But that all changed last year when the Supreme Court overruled the Chevron doctrine in the twin cases of Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce, holding that, under the APA, courts must exercise independent judgment when interpreting a statute, even when the statute is ambiguous, and cannot simply defer to an agency's interpretation unless Congress explicitly delegated authority to the agency to interpret specific statutory terms or to fill-in details of a statutory scheme through regulations. In contrast, the Eagle County case is about deference to agency fact-finding and procedural compliance under the APA's "arbitrary and capricious" standard—which is not the same as an agency's legal interpretation of a statute. Courts still must defer to reasonable agency decisions on factual and procedural matters, like the scope of an EIS. Loper Bright did not alter the standard for reviewing agency factual findings or technical interpretations of procedure under the APA, which may be overturned only if they are "unsupported by substantial evidence"—a very deferential standard.
Takeaways
This decision clarifies the judiciary's obligation to respect agency expertise and defer to agency decisions under NEPA and the APA. It signals a shift away from the judicial blinders that Loper Bright imposed on courts when it came to reviewing agency actions, drawing the distinction between an agency's undelegated interpretation of a statute it is charged to administer (no judicial deference owed) and an agency's reasonable factual findings or reasonable interpretation of procedural requirements (judicial deference owed). Possible implications include:
- Accelerated Infrastructure Approvals: Agencies may face fewer judicial roadblocks when evaluating environmental impacts within their regulatory domain.
- Greater Business Certainty: Regulated entities can rely more confidently on agency factual and procedural determinations, provided procedures are properly followed.
- Reduced Litigation Exposure: Courts are reminded to apply the "arbitrary and capricious" standard of review rather than substituting their own policy judgments.
This ruling strengthens the foundation for agency discretion and limits the extent to which courts can second-guess an agency's factual or procedural determinations within the environmental review process.
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