On May 29, 2025, the Supreme Court decided Seven County Infrastructure Coalition v. Eagle County, reversing the D.C. Circuit’s determination that the Environmental Impact Statement (“EIS”) issued by the U.S. Surface Transportation Board (the “Board”) in connection with an approximately 88-mile railroad line in northeastern Utah violated the National Environmental Policy Act (“NEPA”).  Justice Kavanaugh, writing for the Court, concluded the NEPA question presented “is not close” and the Board was “absolutely correct” in declining to evaluate “environmental effects from separate projects upstream or downstream from the project at issue” in the EIS.   

Every new railroad construction project must be approved by the Board, and, for those projects that constitute major Federal actions affecting the environment, NEPA requires an EIS addressing the environmental impacts of the proposed project.  In this case, Seven County Infrastructure Coalition applied to the Board for approval of an 88-mile railroad line to connect the Uinta Basin—which contains significant amounts of crude oil and other fossil fuels—with the national railroad network. The Board issued its final EIS and approved the project at the close of 2021.  Shortly thereafter, Eagle County and several environmental groups sought review in the D.C. Circuit, alleging, among other things, that the EIS was deficient. 

The D.C. Circuit determined that the Board had wrongfully limited the scope of the EIS by turning a blind eye to “reasonably foreseeable” environmental impacts of building the railroad line, including the impact of upstream oil drilling and downstream oil refining that would be facilitated by the project.  Based on these errors, it vacated the EIS and the Board’s final approval order for the railroad line. 

In its opinion, the Supreme Court found two main faults with the D.C. Circuit’s analysis.  First, the D.C. Circuit failed to give appropriate deference to the Board—“substantial judicial deference” is required in NEPA cases.  Second, the Court found the D.C. Circuit wrongfully interpreted NEPA to require consideration of “environmental effects of upstream and downstream projects that are separate in time and place” from the project at issue. 

On the first issue, the Court announced that the “bedrock principle of judicial review in NEPA cases can be stated in a word: Deference.”  Citing Loper Bright, the court contrasted the judicial deference in statutory interpretation (none) with the deference owed to agencies when they exercise the discretion granted to them under a statute, which must be reviewed under the Administrative Procedure Act’s arbitrary and capricious standard.  In the context of NEPA, this means “the adequacy of the EIS is relevant only to the question of whether the agency’s final decision (here, to approve the railroad) was reasonably explained.”  In the EIS, the agency must address the direct environmental effects of the “proposed action” or the project at issue, as it is required by the statute.  See 42 U.S.C. § 4332(2)(C).  However, courts must defer to agency’s decisions on how far to go in consideration of the project at issue’s indirect impacts and whether to consider other projects separate in time and place.  In those areas, agencies “must have broad latitude to draw a ‘manageable line.’”

In articulating this principle, the Court noted that some “courts have strayed and not applied NEPA with this level of deference demanded by the statutory text” causing them to engage “in overly intrusive (and unpredictable) review in NEPA cases.”  As a consequence, NEPA had become a “blunt and haphazard tool employed by project opponents” to cause delay, with judges allowing its use to discourage new infrastructure and construction projects.  The Court noted that returning to the appropriate level of deference should alleviate these consequences.  Indeed, the Court stated that “in deciding cases involving the American economy, courts should strive, wherever possible, for clarity and predictability” and employing a straightforward judicial approach to NEPA cases would realize that objective. 

With respect to the second issue, the Court again emphasized “the textually mandated focus of NEPA,” is the “proposed action.”  Here, that proposed action is the 88-mile railroad line and the EIS must consider the direct (and sometimes the indirect) effects of building of that railroad line.  It is error to find that NEPA requires consideration of any of the effects of future or geographically separate projects; the Court determined that the separate project “breaks the chain of proximate causation between the project at hand and the environmental effects of the separate project.”  Additionally, agencies are not required to analyze the effects of projects over which they have no regulatory authority.  Thus, when the Board recognized it had no power to regulate oil drilling or refining, it was not required to consider the effects of increased upstream drilling in the Uinta Basin or downstream oil refining along the Gulf Coast.  Those are both separate projects and outside of its regulatory jurisdiction, and the EIS drew a “manageable line” by not taking those effects into account. 

The Court’s decision emphasizes that courts should not use NEPA as a tool to interject themselves into areas of agency discretion, instead deferring to agency expertise in consideration of the environmental effects of a proposed project.  The Court recognized that by exercising appropriate deference, courts will facilitate predictability and efficiency for important infrastructure projects. 

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