With argument looming at the Supreme Court December 10 on Seven County Infrastructure Coalition v. Eagle County, the D.C. Circuit’s November 12 decision in Marin Audubon Society v. F.A.A. opens the door to much wider changes in administration of the National Environmental Policy Act (NEPA).

The petitioners in Seven County seek to establish a principle that NEPA does not require an agency to study environmental impacts beyond the proximate effects of the action over which the agency has regulatory authority. They rely on the Supreme Court’s 2004 Public Citizen decision, which held that an agency need not analyze effects that the agency cannot prevent due to its “limited statutory authority over the relevant actions.” Under the decision sought by petitioners, the consequences of a federal permit for a small portion of a project would be substantially narrowed. For example, a transmission line that requires a special-use permit for a mile-long crossing of a National Forest would no longer be subject to full NEPA analysis of the entire line, but only to the portion within the Forest Service’s jurisdiction.

Although the Supreme Court appears poised to narrow the scope of NEPA (and potentially other similar environmental laws), the D.C. Circuit has thrown out the rulebook. On Tuesday, the D.C. Circuit held in Marin Audubon that the Council of Environmental Quality (CEQ) lacks statutory authority to issue regulations under NEPA. The CEQ regulations have been in place with few changes since 1978 and have built up a body of caselaw across the federal courts. The regulations explicitly bind all federal agencies. Although some changes in the regulations were made by the Trump Administration, with some reversals under the Biden Administration, many of the principles under the regulations remain unchanged.

Marin Audubon involves the FAA and National Parks Service’s Air Tour Management Plan that govern flights over four national parks in the Bay Area in California. The plan did not include an environmental analysis under NEPA because the agencies believed it would have “minimal additional or no environmental impact” compared to existing air tours.

The court found by treating interim operating authority as the baseline, the agencies effectively maintained the status quo without adequately assessing the environmental impacts of the existing flights. This approach “tilted the scales” in a way that obscured the true environmental effects of the plan, since there had been no prior NEPA analysis of the interim operating authority. Thus, the court determined that the agencies had improperly applied a CEQ regulation regarding actions categorically excluded from NEPA requirements.

On its own initiative, the court addressed the question of whether the underlying CEQ regulation was valid. NEPA does not explicitly grant rulemaking authority, but courts and agencies have historically relied on a 1977 Executive Order issued by President Carter, which granted CEQ the authority to issue regulations to “federal agencies for the implementation of the procedural provisions of NEPA.” The panel noted that “NEPA contains nothing close to the sort of clear language Congress typically uses to confer rulemaking authority.”

Consequently, the D.C. Circuit vacated the plan but withheld the mandate, which allowed the current plan to remain in place while the agencies undertake a new NEPA review. The panel majority marked more new ground here, holding that the Administrative Procedure Act (APA), because it says courts “shall” set aside unlawful agency action, gives no discretion to remand without setting the matter aside.

The implications of this decision are highly uncertain. Many of the CEQ regulations have been legislatively adopted either in particular statutes or in 2023 amendments to NEPA in connection with the Fiscal Responsibility Act. Thus, there is a plausible argument that regardless of whether the CEQ regulations were lawful in the first instance, they may have been ratified by Congress. Furthermore, since so much caselaw has grown on the structure of the CEQ regulations, it is conceivable that little will change in the courts; instead they could conceivably treat the regulations as invalid but the principles as unchanging.

Of most concern to the regulated community, the posture of Marin Audubon invalidates the agency’s use of a categorical exclusion from NEPA and questions the premise that CEQ may establish such exclusions. A categorical exclusion is a way to comply with NEPA in the most streamlined and efficient way for actions that do not significantly affect the environment. Throwing out the bathwater of the CEQ regulations may dispose of valuable provisions.

While further proceedings in Marin continue, the Supreme Court may be tempted to step in. The question presented in Seven County is fairly narrow but not incompatible with broader guidance on what NEPA requires. Thus, Marin may provide the high court a blank slate on which to reimagine NEPA.

A decision in Seven County is expected in early 2025.

This article summarizes aspects of the law. This article does not constitute legal advice. For legal advice for your situation, you should contact an attorney.