Readers of this blog will recall our recent discussion concerning the U.S. Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, in which the Court overruled the long-standing doctrine of Chevron U.S.A. Inc. v. Natural Resources Defense Counsel.
Under Chevron, courts had been required to defer to “permissible” agency interpretations of ambiguous statutes even where a reviewing court might have read the statute differently from the agency.
Instead, the Court held in Loper Bright that the Administrative Procedure Act requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous. As the Court put it, “Chevron’s presumption is misguided because agencies have no special competence in resolving statutory ambiguities. Courts do.”
Yesterday, in a significant environmental case, Seven County Infrastructure Coalition v. Eagle County, the Court provided a gloss on Loper Bright, now describing an issue of administrative law where a court must defer to the judgment of an agency.
The case arose when the Seven County Infrastructure Coalition applied to the U.S. Surface Transportation Board (“the Board”), the agency empowered by federal law with authority over new railroad construction and operation, to approve construction of an 88-mile railroad line connecting the oil-rich Uinta Basin with Gulf Coast refineries. The Board, consistent with the National Environmental Policy Act (NEPA), held six public hearings, received more than 1,900 public comments, and then issued a 3,600-page Environmental Impact Statement (EIS) that addressed various environmental effects of the railway’s construction and operation.
However, the EIS noted, but did not fully analyze, the potential effects of increased upstream oil drilling in the Uinta Basin and increased downstream refining of crude oil. The Board ultimately approved the railroad line through a cost-benefit analysis. However, the U.S. Court of Appeals for the District of Columbia Circuit held that the Board impermissibly limited its analysis by failing to link it to consideration of the ancillary effects related to the project. The Supreme Court reversed, holding that the D.C. Circuit failed to afford the Board “the substantial judicial deference required in NEPA cases and incorrectly interpreted NEPA to require the Board to consider the environmental effects of upstream and downstream projects that are separate in time or place from the Uinta Basin Railway.”
Wait a second: You might say that Loper Bright says “no deference,” and Seven County mandates a lot of it. What gives?
The answer is that the two cases are not about the same thing.
Loper Bright is about the interpretation of an ambiguous statute, a matter of law that is the province of the judiciary, not an agency. On the other hand, there is no asserted ambiguity in NEPA’s dictates. Instead, it is a matter of compliance based on the consideration of facts and their application to predictive scientific determinations that are matters for agency experts, not judges. In such cases, a reviewing court is “most deferential” to agency determinations.
Interestingly, no Justice dissented from yesterday’s ruling. The operative, majority opinion of the Court was written by Justice Kavanaugh, who as I’ve written previously, has succeeded retired Justice Breyer as the Court’s leader on administrative law matters. Kavanaugh was joined by the Chief Justice and Justices Thomas, Alito, and Barrett. Justice Sotomayor, joined by Justices Kagan and Jackson, wrote separately, concurring in the judgment based on statutory language and case precedent that the Board lacked authority to reject the construction application on account of the harms that third parties would suffer with respect to products that the railway would transport. They criticize the majority for relying too much on policy matters instead of text and caselaw. Justice Gorsuch recused. Thus, no Justice would have ruled against the Board.
Strict adherence to the majority decision might help the reader make wise litigation choices, recognizing that a court provides the relevant frame of inquiry as to the resolution of jurisdictional arguments where statutes are ambiguous. That is why, for example, without any reference to Chevron, the Court ruled against the government in another environmental case, West Virginia v. Environmental Protection Agency. But agencies are going to get great deference with respect to judgments in their areas of scientific or other expertise. In such a case, it might be wise to focus on trying to demonstrate that agency action is “arbitrary and capricious” in what it actually did or failed to do in a manner consistent with eroding presumption.
Yesterday’s decision suggests that arguments about whether a particular report is detailed enough are matters of agency discretion that should not be second-guessed by a court. So, arguments premised on length, or the lack of it, are going to fail. The same thing goes for time. Expeditiousness is now favored as to NEPA determinations; the fact that consideration wasn’t lengthy is unlikely to be disqualifying. Moreover, because an agency’s predictive and scientific judgments as to relevant impacts and potential alternative actions are presumptively valid, their validity, as Justice Kavanaugh notes, is going to come down to “common sense.”
In the case at bar, “the Board’s determination that its EIS need not evaluate possible environmental effects from upstream and downstream projects separate from the Uinta Basin Railway complied with NEPA’s procedural requirements, particularly NEPA’s textually mandated focus on the ‘proposed action’ under agency review. While indirect environmental effects of the project itself may fall within NEPA’s scope even if they might extend outside the geographical territory of the project or materialize later in time, the fact that the project might foreseeably lead to the construction or increased use of a separate project does not mean the agency must consider that separate project’s environmental effects.”
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