Supreme Court Clarifies NEPA Scope in Seven County Decision, Distinguishes Sabal Trail
In a significant decision issued on May 29, 2025, the U.S. Supreme Court found that the Surface Transportation Board (the Board) was entitled to substantial deference under the National Environmental Policy Act (NEPA) and that NEPA only requires agencies to focus on the environmental effects of the project at issue and not projects that are separate in time or place. In so doing, the Court reversed the D.C. Circuit Court’s ruling in Seven County Infrastructure Coalition v. Eagle County, Colorado (Seven County), finding that the Board erred in failing to consider potential upstream and downstream environmental effects of a proposed rail line in an Environmental Impact Statement (EIS). The decision marks a notable shift in the scope of NEPA obligations, particularly in contrast to the D.C. Circuit’s earlier reliance on Council on Environmental Quality (CEQ) regulations and Sierra Club v. FERC (Sabal Trail), which held that an agency conducting NEPA review must consider greenhouse gas emissions that may occur downstream of an authorized project if those emissions are “reasonably foreseeable” when such emissions are an indirect environmental effect of the approval.
In Seven County, a group of Utah counties applied to the Board for approval of an 88-mile railroad line to facilitate the transportation of crude oil to refineries in other states. The Board prepared an EIS and, based on the conclusion that the project’s transportation and economic benefits outweighed its environmental effects, approved the railroad line. Eagle County, Colorado, and several environmental groups challenged the EIS in the D.C. Circuit arguing that the EIS should have considered the environmental impacts from upstream oil drilling in the Uinta Basin and downstream oil refining projects in the U.S. Gulf Coast. Relying on Sabal Trail, the D.C. Circuit agreed and found that the Board had wrongfully limited its analysis of the environmental effects of the railroad line project. The Seven County Infrastructure Coalition then appealed to the Supreme Court, which granted certiorari to review the D.C. Circuit’s findings.
NEPA Is a Procedural Cross Check and Not a Substantive Roadblock to Agency Decision-Making
Justice Kavanaugh, writing for the majority, characterized NEPA a “procedural crosscheck and not a substantive roadblock.” The Court was highly critical of litigants using NEPA to delay or block infrastructure projects based on downstream environmental effects over which a permitting agency had no legal authority. It stated that as long as an EIS addresses environmental effects of the project at hand, courts should defer to the lead agency’s decision regarding the scope of review. This includes in the extent to consider its indirect environmental impacts, and whether to analyze environmental effects from other projects that were separate in time or place, or subject to a different regulatory scheme. It repeatedly emphasized its holding in Department of Transportation v. Public Citizen, a 2004 decision finding that an agency’s NEPA analysis need not consider effects for which it is not the proximate cause. In other words, simply because “the effects from a separate project may be factually foreseeable,” this “does not mean that those effects are relevant to the agency’s decision-making process or that it is reasonable to hold the agency responsible for those effects.”
The Court espoused a “rule of reason,” noting that courts should not substitute their judgement for that of the agency. Finally, the Court found that the D.C. Circuit erroneously had required the Board to consider environmental impacts of projects that were separate in time and place from the rail project that the counties were proposing to construct, were outside the Board’s jurisdiction and if they were to move forward in the future would be undertaken by third parties.
In a separate opinion concurring in the judgment, Justice Sotomayor (joined by Justices Kagan and Jackson) agreed that the D.C. Circuit had required too much of the Board under NEPA. But they reached that conclusion simply because the Board indisputably lacked authority to deny approval of the railroad line based on the environmental concerns at issue.
Potential Impacts of Decision
Seven County is the latest action to restrict project opponents’ use of the NEPA process to defeat infrastructure projects. Indeed, the opinion observes that NEPA challenges not only prevent projects from crossing the “finish line,” but discourages some from approaching the “starting line.” The Court’s interpretation of NEPA, and its differentiation between effects that are factually foreseeable versus legally relevant, is at odds with the NEPA regulations implemented last year under President Biden, which had emphasized consideration of downstream impacts from greenhouse gas emissions, as explained by Akin in an earlier alert. While CEQ used an interim final rule to remove those regulations in February of this year, the Seven County decision is likely to blunt future challenges to the NEPA regulatory scheme, as we anticipate changes will be made in response to forthcoming CEQ guidance and congressional NEPA reform efforts. The decision also follows a November 2024 D.C. Circuit decision, Marin Audubon Society v. Federal Aviation Administration (Marin Audubon), that held CEQ lacked statutory authority to issue any regulations, further weakening the NEPA regulatory scheme.
The Court’s focus on agency deference and clarification that agencies are not required to consider upstream and downstream impacts of a project may further expedite NEPA reviews and streamline permitting by lessening the types of legal challenges to agency decision-making. The Court also emphasized the importance of clarity and predictability in cases involving the American economy, which may signal a shift to jurisprudence that champions economic opportunities over environmental considerations. It remains to be seen how this may impact ongoing debates in Congress on permitting reform and changes to the NEPA statute, including how it may affect discussions underway regarding a potential provision that would allow project sponsors to pay for expedited NEPA review in favor of agency deference.
