Supreme Court Limits Judicial Review in NEPA Cases
June 3, 2025
In a case involving the environmental review process for a railroad line in Utah, the US Supreme Court reiterated, in an 8-0 decision, that courts must afford “substantial judicial deference” to agency reviews under the National Environmental Policy Act (“NEPA”). Seven County Infrastructure Coalition v. Eagle County Colorado, No. 23-975 (May 29, 2025). The Supreme Court also reinforced its prior rulings that an agency may decline to evaluate the environmental effects of projects that may be related to, but are separate from, the one before the agency. In general, NEPA requires that federal agencies evaluate the potential environmental impacts of their proposed major actions, typically by preparing an Environmental Assessment (“EA”) or more detailed Environmental Impact Statement (“EIS”).
In Seven County, the Supreme Court reversed the holding of the DC Circuit vacating the US Surface Transportation Board’s (“STB”) EIS for, and approval of, an 88-mile railroad line. The DC Circuit concluded that the STB violated NEPA by not adequately considering the environmental effects from increased oil drilling in the Uinta Basin and increased oil refining in Louisiana and Texas that could result from the new pipeline. The Supreme Court found two significant faults with the DC Circuit’s analysis: first, the DC Circuit did not afford the STB the substantial judicial deference required in NEPA cases; and second, the STB was only required to consider the environmental effects of the proposed 88-mile railroad line’s construction and operation.
Deference. Noting the “continued confusion and disagreement” in the Courts of Appeal, the Court stressed that the “central principle” in NEPA cases is deference. The Court further held that, under NEPA, federal agencies exercise “substantial” discretion and that courts should not “micromanage” agency decisions that fall within a “broad zone of reasonableness.” The Court explained that agency discretion and associated judicial deference can take several forms. For example: (i) whether an EIS satisfies NEPA’s requirement for a “detailed” report, (ii) the identification of significant environmental impacts and feasible alternatives, and (iii) the scope of environmental effects to be addressed all require agency discretion. With respect to scope in particular, the Court stated that, so long as the EIS addresses environmental effects from the project at issue, a court should defer to the agency’s decisions about how far to go in considering indirect environmental effects of the proposed project and whether to analyze environmental effects from other projects separate in time or place from the proposed project.
The Court also distinguished the deference due to agencies in NEPA challenges from the Court’s recent decision overruling the Chevron doctrine of deference to agencies in statutory interpretation. Loper Bright Enterprises v. Raimondo, 603 US 369, 400 (2024). Citing Loper, the Court explained that, as a general matter, when an agency interprets a statute, judicial review of the agency’s interpretation is de novo. However, when an agency exercises discretion granted by statute, judicial review is typically conducted under the Administrative Procedure Act’s deferential arbitrary and capricious standard. In the case of NEPA, a federal agency must make predictive and scientific judgments in assessing relative impacts and alternatives. The agency also is in the best position to assess what facts are relevant to its decision-making. The Court explained that a court must be at its “most deferential” when reviewing these types of judgments.
Separate projects. The Court ruled that, even apart from the deference owed the STB, the DC Circuit erred in finding that the STB was required to address the impacts of potential future upstream and downstream development. The Court explained that, when evaluating a proposed project, NEPA does not require an agency to evaluate the effects of a separate project even if such project is reasonably foreseeable. Noting that future upstream or downstream development would be outside the STB’s authority, the Court further ruled that agencies are not required to analyze the effects of projects over which they do not exercise regulatory authority.
The Court’s ruling will likely have a number of impacts, the most significant of which likely will be to discourage NEPA challenges seeking to expand the scope of EISs to include evaluation of indirect impacts of a project (such as climate impacts). The ruling may also discourage NEPA challenges by limiting the courts’ role and therefore the likelihood of success of any challenge. The Court stated that it was “reiterat[ing] and clarify[ing] the fundamental principles” of judicial review in NEPA cases but noted that some courts have assumed an “aggressive” role in NEPA cases beyond that authorized by the statute. Now that the Supreme Court has unanimously reinforced the concept of judicial deference to agencies in NEPA cases, lower courts will be less likely to get into the weeds of NEPA challenges, reducing the likelihood of success and potentially speeding up project approvals.
This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. John Rousakis, an O’Melveny partner licensed to practice law in New York and John D. Renneisen, an O’Melveny senior counsel licensed to practice law in the District of Columbia, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.
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