DC Circuit Issues Landmark Ruling Holding CEQ Lacks Authority to Issue NEPA Regulations

The two-judge majority opinion in Marin Audubon Society v. Federal Aviation Administration effectively invalidates the White House Council on Environmental Quality’s (CEQ’s) longstanding regulations implementing the National Environmental Policy Act (NEPA) and throws into question the ambit of NEPA requirements.

Under NEPA, federal agencies are required to evaluate the potential environmental impacts of their proposed actions. Specifically, federal agencies are required to prepare a detailed statement assessing environmental impacts of all major federal actions that significantly affect the quality of the human environment; the environmental impact of the proposed action; any unavoidable adverse environmental effects; and potential alternatives.

The foundational regulations that provide the framework for what those detailed statements should include—and which form the basis for NEPA regulations issued by other federal agencies—were issued by the CEQ, which was created by NEPA and initially tasked with issuing guidelines for the detailed statements required by NEPA under an executive order issued in 1970.

CASE OVERVIEW

Marin Audubon Society v. Federal Aviation Administration arises from a challenge to an Air Tour Management Plan (the Plan) governing tourist flights over four national parks near San Francisco, California, that was developed by the Federal Aviation Administration and the National Park Service (together, the Agencies). Because the Agencies determined that the Plan would ultimately be beneficial to the environment as compared to current conditions in light of included mitigation measures, the Agencies did not complete an environmental assessment or environmental impact statement under NEPA.

Petitioners challenged the Plan, arguing that the Agencies had not complied with the CEQ’s NEPA regulations by failing to complete an analysis of environmental impacts. Neither party challenged the validity of CEQ’s rules or the ability of the CEQ to promulgate binding federal regulations.

All three members of the three-judge panel agreed that the Agencies acted arbitrarily and capriciously in “treat[ing] the existing air tours in the Parks as the status quo for purposes of conducting their NEPA analysis.” However, before reaching that conclusion, the majority analyzed whether the CEQ regulations the Agencies followed in adopting the plan were valid, an argument not raised by any of the parties. The majority held, sua sponte, that because there is no statute stating or suggesting that US Congress has empowered the CEQ to issue rules binding on other agencies, the CEQ has no lawful authority to promulgate such regulations.

With respect to remedy, the majority also acted of its own accord, vacating the Plan rather than remanding it to the Agencies for a NEPA review despite both parties indicating that vacatur would be “unjust” and would only result in an increase in the environmental effects of air tours.

In his partial dissent, Chief DC Circuit Judge Sri Srinivasan agreed that the Agencies acted arbitrarily and capriciously in conducting their NEPA analysis, but stated that because no party challenged the CEQ’s regulations, and because no party sought for the challenged action to be vacated, the court should have adhered to its previous practice of declining to address issues that no party raised and should have remanded the Plan without vacatur.

IMPACT

Although this decision does not explicitly vacate any action taken by the CEQ, it does establish a precedent that CEQ rules lack statutory authorization, and therefore that other agency actions taken under the CEQ framework are at risk of being vacated. If this decision is not overturned by the full appellate court sitting en banc or by the US Supreme Court, it has the potential to completely change the landscape of NEPA review.

This case illustrates the import of the level of deference that federal agencies may receive in practice following the Supreme Court’s ruling in Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024). Although the CEQ’s regulations have been viewed as binding in the more than five decades since NEPA was passed, Senior Circuit Judge Randolph cites previous DC Circuit and Supreme Court decisions from the 1970s that frame the CEQ’s NEPA regulations as guidelines entitled to “great respect” and heightened deference, and notes that in light of the Loper Bright ruling overturning Chevron deference such statements cannot be credited.

Additionally, federal agencies will be receiving new heads in 2025 following the transition from the Biden-Harris administration to the Trump-Vance administration. With that change in agency leadership will come an opportunity for federal agencies to reassess their NEPA rules through this new lens as to the nature of the CEQ’s regulations. Given that members of the incoming administration have made multiple statements regarding deregulation as a priority, this decision could provide a path towards a significant shift in how federal agencies implement NEPA and what NEPA review looks like in the years to come.