June 10, 2025
| TO: Indian Gaming Association Member Tribes & Partners FROM: Ernest L. Stevens Jr., Chairman Jason Giles, Executive Director RE: Major NEPA Supreme Court Decision Clarifies Agency Deference Date: June 5, 2025 |
| I. Introduction In the midst of widespread federal agency review of National Environmental Policy Act (“NEPA”) regulations following the DC Circuit Court’s decision in Marin Audubon Society v. FAA striking down CEQ’s rulemaking authority and notwithstanding its own decision in Loper Bright eviscerating the Chevron Doctrine, the Supreme Court has restored agency deference at least in the context of NEPA review. On May 29, 2025, the Court unanimously ruled in favor of the Surface Transportation Board’s (“STB”) approval of a railway line that would serve to connect an oil production region with the national freight rail network in Seven County Infrastructure Coalition v. Eagle County (No. 23-975). Justice Kavanaugh, speaking for the Court, found that (1) federal agencies are to be granted “substantial judicial deference” in evaluating decisions pursuant to NEPA, and (2) that agencies are not required to consider the environmental effects of separate projects. While this decision will no doubt be of deep concern to the environmental community since it appears to relax certain analytical requirements, it may benefit the trust acquisition process by expediting the NEPA review process. II. Background In 2020, seven Utah counties, known as the Seven County Coalition, applied to the STB to approve an 88-mile railroad line in northeastern Utah that would connect the Uinta Basin, an oil-rich region, with the interstate freight rail network. Pursuant to NEPA procedures, the STB prepared and presented a draft Environmental Impact Statement (“EIS”) for the public notice and comment period in October 2021. In August 2021, the STB published the final EIS, which contained over 3,600 pages and identified a number of significant and adverse impacts that could occur as a result of the proposed project. Four months later, the STB approved the project with the understanding that the transportation and economic benefits of the railway construction outweighed the negative environmental impacts. Following the STB’s final approval of the project Colorado’s Eagle County and multiple environmental organizations filed suit in the U.S. Court of Appeals for the D.C. Circuit. The D.C. Circuit found that the STB failed to take a “hard look” at all of the project’s potential environmental impacts by failing to consider the upstream and downstream impacts, including the oil drilling that would occur in the Uinta Basin and the oil refining that would occur at the oil refineries that the crude oil would reach. Because of this the Circuit Court vacated the EIS and the STB’s approval. The Seven County Coalition and the Uinta Basin Railway then sought review with the Supreme Court, which was granted. The Supreme Court then reversed and remanded the Circuit Court’s decision on the following grounds. III. Legal Analysis a. NEPA Requires Substantial Judicial Deference for Federal Agency Decisions. The Court begins its analysis by explaining that “when determining whether an agency’s EIS complied with NEPA, a court should afford substantial deference to the agency.” While this would seem to contrast with the Court’s recent overturning of Chevron deference in Loper Bright Enterprises v. Raimondo, 603 U. S. 369 (2024), the Court rationalizes that questions of law, such as the meaning of “detailed” are to be decided by the courts, but questions such as those involving exactly what details must be included in an environmental review are to be decided by the lead agency. The Court explains that this case involved the latter and therefore required deference to the STB. The Court also clarifies that scoping questions, including the range of indirect effects to be considered or the analysis of environmental effects from separate projects are to be left to the agency’s discretion and are not to be “micromanage[d]” by the courts. Instead, these decisions must be held to a broad standard that would merely require that the agency acted reasonably in its consideration of the undertaking. In looking to the facts of Seven County, it would appear that the preparation of an EIS and the consideration of the research therein would likely constitute a “reasonable” review under the eyes of the Court. The Court goes on to opine that NEPA, which was intended to be a procedural statute, has been weaponized by project opponents seeking to delay projects under the guise of environmental concern. According to the Court, the continuous “consideration of attenuated effects, [] exploration of alternatives to proposed agency action, [] speculation and consultation and estimation and litigation” creates unnecessary delays and expenses that could otherwise be avoided. In its attempt at solving this issue, the Court differentiates the review of an EIS from the final agency approval. The Court explains that if a court finds that an EIS was deficient, it does not mean that the agency’s final approval must also be vacated unless there is reason to believe that adding more to the EIS would lead the agency to disapprove the project. In applying this logic to a trust acquisition, the Bureau of Indian Affairs (“BIA”) would enjoy significant deference in making trust decisions. Further, threats of litigation or stalling during the NEPA process would be minimized by the Court’s differentiation of the EIS review and the final agency decision. By reducing the impacts of outside interference, the trust acquisition process has the potential to run more efficiently and have beneficial effects on Indian country in expediting the process by which greater economic development may commence. b. NEPA Does Not Require Agencies to Consider the Upstream and Downstream Projects that are Separate in Time of Place from the Undertaking. The Court’s holding also limited the scope of NEPA reviews to the proposed undertaking before the agency. In the context of Seven County, the Circuit Court erred in requiring the STB to consider downstream and upstream projects that would have fallen under the purview of another federal agency. The Court reasoned that the chain of proximate causation between the environmental impacts elsewhere and the project before the agency is broken by the existence of a separate project. While agencies will still be expected to consider indirect effects that do fall within the bounds of NEPA, such as run-off or certain emissions, they will not be required to consider the environmental impacts of a separate project that would be made more feasible by the existence of the project at hand. In this discussion of scoping, the Court briefly explains that it is relevant that the STB would not have had regulatory authority over the upstream and downstream projects considered by the Circuit Court. The Court cites Department of Transportation v. Public Citizen, 541 U. S. 752, 770 (2004) in stating “where an agency has no ability to prevent a certain effect due to its limited statutory authority over the relevant actions, the agency cannot be considered a legally relevant ‘cause’ of the effect.” This rationale narrows the agency’s review further to projects over which the agency has regulatory authority, so as to reduce overly-speculative review. While it is not always likely that the BIA would be required to consider completely separate projects in the context of a trust acquisition, the Court’s holding on the scope of review still has the potential to benefit tribal entities seeking to take land into trust for purposes of economic development. By narrowing the scope of environmental review, agencies may consider fewer speculative impacts that would rely upon “but-for causation” or “mere foreseeability” and would unnecessarily expand environmental review. In turn, this creates a more efficient scoping process and a stronger defense if litigation arises. Justice Kavanaugh delivered the opinion of the Court. Justices Sotomayor, Kagan, and Jackson concurred. Justice Gorsuch did not take part in the decision. The Seven County decision may be found at: https://www.supremecourt.gov/opinions/24pdf/23-975_m648.pdf. Please contact Danielle Her Many Horses at dhermanyhorses@indiangaming.org with any questions or concerns regarding this Alert |