On January 10, 2020, The Council on Environmental Quality (CEQ) issued a proposed rule to significantly revise its regulations implementing the National Environmental Policy Act (NEPA). These regulations have not been comprehensively revised since they were promulgated in 1978. Over the more than four decades since then, federal agencies have undertaken thousands of NEPA environmental reviews, resulting in hundreds of court decisions, including 17 Supreme Court decisions. As a result, NEPA has become increasingly complex. The proposed rule seeks to reverse this trend and reduce the time and complexity of NEPA reviews and potentially narrow judicial review. These regulations, if finalized, are likely to draw significant litigation. There are at least five proposed provisions that are likely to attract the most controversy.

Elimination of the Terms “Direct,” “Indirect” and “Cumulative Effects”

Current NEPA regulations require agencies to analyze the “direct,” “indirect” and “cumulative” effects of a proposed project. However, these terms are not in the NEPA statute, are difficult to precisely define and lead to frequent litigation. Under the proposed rulemaking, federal agencies need only consider the “reasonably foreseeable” environmental effects with a “reasonably close causal relationship” to the proposed action or its alternatives (i.e., similar to proximate causation under tort law). These are effects “sufficiently likely to occur such that a person of ordinary prudence would take it into account in reaching a decision.” The revised definition of “effects” would also exclude those environmental effects that an agency “has no authority to prevent or would happen even without agency action.”

Narrowing Alternatives

The proposed rule seeks to better define the “purpose and need” section of environmental reviews so they are concise and based “on the applicant’s goals and the agency’s statutory authority.” All project alternatives analyzed under an environmental review must be within the lead agency’s jurisdiction and, where the project proponent is a nonfederal entity, the alternatives must be technically and economically feasible. CEQ is also requesting comment on whether it should establish a presumptive maximum number of alternatives for analysis.

Page and Time Limits

The proposed rules create “presumptive” time limits between the scoping process and completion of the environmental review: one year for environmental assessments (EAs) and two years for environmental impact statements (EISs). Senior agency officials may also approve longer time periods if necessary.

The proposed rule also establishes presumptive page limits of 75 pages for EAs, which are prepared to determine whether a federal action has the potential to cause significant environmental effects, and 300 pages for EISs, which evaluate major federal actions that cause significant environmental effects. This is not a new concept as current regulations limit a “normal” EIS to no more than 150 pages and up to 300 pages for unusually complex projects. In addition, CEQ’s Forty Questions guidance document recommended that EAs should be between 10 and 15 pages. These limitations, however, are not enforced, and many EAs and EISs exceed these limits. The proposed regulations would require a “senior agency official” to approve an exceedance of the page limits.

Using Contractors

The proposed rule would allow agencies to rely on contractors funded by applicants to prepare environmental analyses. Some agencies do not currently permit this. The lead agency will supervise the contractors and must independently evaluate their work, take reasonable steps to ensure the reliability of information used and ultimately take responsibility for the environmental reviews.

Narrowing Judicial Review

The proposed rule has taken some steps to reduce the scope of judicial review and limit instances where relatively minor NEPA violations enjoin projects from going forward.

First, the lead agency must provide a certification that it has reviewed all alternatives, information and analyses submitted by public commenters and summarized that information in the final environmental review. Once certified, courts should provide a “conclusive presumption that the agency has considered such information” if a party challenges the environmental review. Anyone who submitted comments may file an objection to the certification or summary within 30 days.

Second, the proposed rule would provide that minor, nonsubstantive errors would not be grounds for invalidating a NEPA review. The proposed rule, however, does not explain what would constitute a minor, nonsubstantive error or how this would be different from current practices where courts typically refrain from “flyspecking” NEPA reviews.

Third, the proposed regulations assert that courts should not presume that a NEPA violation is the basis for injunctive relief or a finding of irreparable harm. Instead, challengers would have the burden of demonstrating that the violation will cause them an irreparable harm that cannot be remedied by complying with NEPA on remand.

Finally, the proposed rule asserts that claims challenging an environmental review should be “raised as soon as practicable.” It is not clear, however, how this will be implemented or enforced. CEQ acknowledged that NEPA does not create an independent cause of action and that challenges must be brought under the Administrative Procedure Act, which has a six-year statute of limitations. Further, there are several other laws imposing separate statutes of limitations for challenges to particular types of projects.

Litigation

It is a near certainty that certain environmental groups and some states would challenge the proposed rule, if finalized. Such challenges would be filed under the Administrative Procedure Act (APA) in U.S. District Court and it is likely that challenges would be filed in multiple districts, leading potentially to conflicting rulings and eventual appeals. An important part of the defense to such challenges would include procedural challenges to standing, ripeness, and finality unless and until the final rule would be applied to specific projects. If the recent APA litigation over the “Waters of the United States” rule provides any preview of the legal battles to come, we might expect many years of litigation.