In Marin Audubon Society v. Federal Aviation Administration, No. 23-1067 (D.C. Cir. Nov. 12, 2024), the United States Court of Appeals for the District of Columbia Circuit unexpectedly held that, despite nearly fifty years of precedent, the White House’s Council on Environmental Quality (“CEQ”) lacks the authority to promulgate binding regulations for the purpose of implementing the National Environmental Policy Act (“NEPA”).

NEPA generally requires an environmental assessment of any “major Federal actions significantly affecting the quality of the human environment.” 42 U.S.C. § 4332(2)(C). If the environmental assessment determines that “the action will have significant environmental impacts,” then the agency must prepare an environmental impact statement, which analyzes the environmental impact of the proposed action, any unavoidable adverse effects, and potential alternatives. CEQ has historically promulgated rules to carry out these provisions of NEPA. In particular, CEQ regulations state that agencies may forgo preparing an environmental impact statement or environmental assessment if the proposed action is “categorically excluded,” because it “normally does not have significant effects” on the environment. 40 C.F.R. § 1501.3(a)(1).

Marin Audubon Society specifically involved NEPA’s permeation into the National Parks Air Tour Management Act of 2000, which requires the National Park Service and Federal Aviation Administration (“the Agencies”) to jointly develop air tour management plans to regulate flights over national parks throughout the United States. All air tour management plans must comply with NEPA.  At issue was the Agencies promulgation of an Air Tour Management Plan (“the Plan”) for four national parks (“the Parks”) in California without conducting an environmental assessment or environmental impact statement on the basis that CEQ’s categorical exclusion applied. Using the average number of existing air tours that took place from 2017–2019 under the interim operating authority across the Parks as the baseline for assessing the environmental impacts of the Plan, the Agencies rationalized that maintaining the “existing” number of air tours would result in no significant effect on the environment. Petitioners argued that doing so was arbitrary and capricious in that the Agencies created an artificially high baseline with which to compare the environmental effects of the final Plan.

None of the parties challenged, argued, or briefed the scope of CEQ’s rulemaking authority. Nevertheless, the Court exercised “its independent power to identify and apply the proper construction of governing law” to hold that CEQ lacked authority to create the categorical exclusion—or binding regulations at all—under its delegated authority. The Court acknowledged that Congress created CEQ within the Executive Office of the President to “review and appraise agencies’ compliance with NEPA; to make recommendations to the President with respect thereto; and to develop and recommend to the President national policies to foster and promote the improvement of environmental quality.” However, the Court found that Executive Orders issued first by President Nixon and then by President Carter in 1977 requiring all agencies to “comply with the regulations issued by” CEQ for the implementation of NEPA exceeded the powers granted to CEQ by Congress.

Despite the Federal government’s acquiescence with the framework created by the Executive Orders, the Court found itself positioned to correct an issue that “has remained largely undetected and undecided for so many years in so many cases.” The Court stated that in accordance with the separation of powers doctrine, “[f]ederal agencies . . . are creatures of statute and as such ‘literally have no power to act’ except to the extent Congress authorized them.” Thus, in finding that “no statutory language,” in NEPA or otherwise, “states or suggest that Congress empowered CEQ to issue rules binding on other agencies,” the Court vacated CEQ’s regulations on the basis that they were “unlawful” pursuant to Section 706(2) of the Administrative Procedure Act. Moreover, the Court cited Youngstown Tube Co. v. Sawyer, 343 U.S. 579 (1952) to hold that President Carter’s Executive Order impermissibly usurped the law-making power of Congress.

The Court went on to analyze whether the Agencies acted arbitrarily in finalizing the Plan, which was promulgated in accordance with CEQ’s regulations. The Court indeed held that the Agencies acted arbitrarily by using the average air tour information during the interim plan period as the baseline for their assertion that a categorical exclusion excepted them from NEPA’s requirements. The Court found that while the interim operating authority that was exercised by two flight companies between 2017–2019 was permissible under the National Parks Air Tour Management Act of 2000, it was a temporary “stopgap measure” in the overall process aimed toward implementing a detailed air tour management plan. As such, the Court held that treating the interim authority as the status quo “effectively transform[ed] a stopgap into a permanent part of a Plan” thereby “tilting the scales in a way that obscures the true environmental effects of a Plan.”

As a result of this holding, CEQ’s NEPA regulations can no longer be considered binding. The Biden Administration has asked the D.C. Circuit Court of Appeals for an en banc review of the ruling but in the absence of the Court granting such a rehearing or the Supreme Court’s granting of a writ of certiorari, this decision will likely have sweeping effects. Indeed, it is unclear if the incoming Trump administration will pursue the same legal strategy as the current administration given its stated desire to reduce environmental regulatory burdens. Thus, where agencies have not adopted existing CEQ regulations through rulemaking processes, there is likely to be considerable uncertainty in the near future about the scope of agencies’ NEPA obligations.

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