In Seven County Infrastructure Coalition v. Eagle County, Colorado, the challenge before the Court is whether the National Environmental Policy Act (NEPA) mandates a federal agency to study environmental impacts beyond those within its regulatory authority.

More than two decades ago, in Department of Transportation v. Public Citizen, 541 U.S. 752, 770 (2004), the Supreme Court held that when an agency cannot prevent an environmental effect “due to its limited statutory authority over the relevant actions,” NEPA does not require it to study that effect. This holding has divided the courts of appeals. Five circuits read Public Citizen to mean that an agency’s environmental review can stop where its statutory authority ends. In other words, these circuits typically analyze only those effects proximately caused by the actions over which they have regulatory responsibility. Contrastingly, two circuits, including the D.C. Circuit, disagree and permit agency review of any impact that can be called reasonably foreseeable, even if the effect is remote and thus arguably outside the scope of the authority Congress granted to the agency.

The case before the Court arises from the Surface Transportation Board’s (STB) granting of the Seven County Infrastructure Coalition’s and Uinta Basin Railway, LLC’s petition to construct an 88-mile railway in Utah’s Uinta Basin, intended to transport crude oil. The STB conducted an environmental review of the project and issued an Environmental Impact Statement (EIS) as required by NEPA. The STB did not, however, analyze other related effects over which it did not have authority based on its interpretation of its environmental review obligations under Public Citizen and NEPA.

Eagle County appealed the STB’s decision to the D.C. Circuit, which rejected the STB’s approach, ruling that the STB “cannot avoid” environmental review “on the ground that it lacks authority to prevent, control, or mitigate” distant environmental effects. As a result, it vacated the order of the STB, vacated parts of the Project’s EIS, and remanded the matter to the STB. On remand, it ordered the STB to study the local effects of oil wells and refineries that lie outside the STB’s regulatory authority. This conflict is the result of dueling White House interpretations of how heavily the NEPA rules should rely on Public Citizen to limit the scope of environmental review. Because administrations continue to change course as to the extent of agencies’ responsibilities when conducting such reviews, the Supreme Court’s intervention was welcomed. The Justices decided to hear the case, with the federal government filing briefs in support of the petitioners, arguing that the D.C. Circuit’s decision should be reversed because NEPA did not require the STB to undertake additional analysis of the upstream and downstream consequences.

During oral argument on December 10, 2024, Justices Thomas and Kagan questioned what criteria agencies should use to determine whether an agency complies with NEPA.  They grappled with the phrase “remote in time and space” and queried how narrowly agencies should interpret remoteness, including whether the STB should have limited its EIS to the 88-mile length of railway, or considered direct, proximate effects, or considered indirect effects exceeding temporal or physical boundaries. Chief Justice Roberts seemed to favor a more thorough, comprehensive review to avoid failing to comply with NEPA. Justices Sotomayor and Kavanaugh questioned how much deference the Court should give agencies when reviewing a procedural issue and how that affects the arbitrary and capricious standard, with Justice Kavanaugh noting that “there’s an important distinction… between what an agency can do or maybe should do… and what the role of the courts is in reviewing what the agencies do.” It boiled down to the Court’s exploring what factors an agency should reasonably consider when conducting its review and whether proposing a clear test would facilitate or complicate matters moving forward.

In the aftermath of the Court’s decision last term to end Chevron judicial deference to administrative agencies, the Supreme Court’s decision to provide a rigid test to narrow the agency’s responsibility under NEPA or extend more deference to the lower courts will reveal the limitations on administrative agency authority. While courts determine questions of law, administrative agencies, under the Administrative Procedure Act, have been entrusted to use their judgment to make technical and policy determinations within their purview. By determining whether an agency’s jurisdiction and expertise is sufficient to override a court of law’s dissent, the Court stands to change the speed and risk with which infrastructure projects are pursued.

A decision is expected by the end of the term. Stay tuned for Dykema’s post discussing the Court’s forthcoming opinion.

For more information, please contact Chantel Febus, James Azadian, Mark Magyar, or Monika Harris.