SCOTUS reverses DC Circuit; clarifies deferential standard of review

Since its enactment in 1970, the National Environmental Policy Act (NEPA) has become a favored tool for opponents seeking to defeat or delay new infrastructure and construction projects. The Supreme Court’s decision in Seven County Infrastructure Coalition v. Eagle County, Colorado, which reverses the DC Circuit’s disapproval of an order permitting construction of an 88-mile railroad line in northeastern Utah, seeks to change that. In so doing, it relies heavily on decisions issued shortly after NEPA’s enactment—most notably Vermont Yankee v. NRDC (1978) and Kleppe v. Sierra Club (1976)—and calls for a return to “statutory text and common sense.”

The decision, which was issued on May 29, 2025 in an opinion written by Justice Kavanaugh and joined by four others, laments that NEPA has grown from “a 1970 legislative acorn . . . into a judicial oak that has hindered infrastructure development.” As the opinion explains, the statute as enacted is “purely procedural,” and it requires nothing more of an agency than preparation of an environmental report to inform the agency’s decision making. By wrongly permitting the statute to be used as “a substantive roadblock,” lower courts have “paralyze[d]” agency approval processes, resulting in “fewer and more expensive railroads, airports, wind turbines, transmission lines, dams, housing developments, highways, bridges, subways, stadiums, arenas, data centers and the like.”

Seven County endeavors to correct course in three fundamental respects. First, it emphasizes that “the central principle of judicial review [of agency actions] in NEPA cases” must be “deference.” As the decision explains (citing the Court’s blockbuster 2024 decision in Loper Bright Enterprises v. Raimondo), “when an agency interprets a statute, judicial review of the agency’s interpretation is de novo.” By contrast, when an agency prepares a report under NEPA, it is not interpreting law, but instead exercising statutorily-conferred discretion to address fact-laden questions such as “whether a particular report is detailed enough,” what constitutes a “significant environmental impact” requiring assessment, and what other possible projects could constitute a “feasible alternative[]” to the one being reviewed. Answering such questions, Seven County explains, requires “speculative assessments” and “predictive or scientific judgments” that lie squarely within agency (and outside judicial) expertise.

The Court’s second holding may be more impactful than the first, even though it is to some degree just an application of it. In rejecting the US Surface Transportation Board’s approval of the railroad project in question, the DC Circuit’s decision faulted the Board for failing to assess possible indirect environmental effects such as potential impacts from increased upstream oil drilling or downstream oil refining that might (or might not) occur as a result of the railroad line’s construction and operation. But the Court held that such considerations lie beyond NEPA’s scope, again referencing a series of earlier NEPA opinions including Vermont Yankee and Department of Transportation v. Public Citizen (2004).

A NEPA report, the Court explained, need analyze only the environmental effects of the “proposed action”—here, the railroad line—and is not required to consider effects associated with separate projects that might be built or used more as a result of the project triggering NEPA review. As the Court explained, “a court may not invoke but-for causation or mere foreseeability to order agency analysis of the effects of every project that might somehow or someday follow from the current project.” Instead, as long as the agency’s determination of what effects to analyze is “reasonable,” any reviewing court must “defer” to it.

Seven County’s third holding is perhaps more subtle, but it may turn out to be the decision’s most devastating aspect for future NEPA challenges. In emphasizing the statute’s procedural focus, the Court makes clear that in NEPA appeals, “the ultimate question is not whether the [environmental report] in and of itself is inadequate, but whether the agency’s final decision was reasonable and reasonably explained.” Thus, an agency approval can be affirmed so long as the agency's ultimate decision was not arbitrary and capricious under the operative APA standard, even if the agency’s environmental report “falls short in some respects.” The DC Circuit thus erred not only in finding fault with the Surface Transportation Board’s report, but also in deeming dispositive the faults it found.

While one likely effect of Seven County will be to make it more difficult for opponents to stop or slow down projects, there is reason to believe that a net decrease in the number of challenges to infrastructure projects in coming years is unlikely. Instead, project opponents may pivot away from NEPA litigation and focus on challenging the statutory authorizations and permits that trigger the NEPA process in the first instance.

A series of recent Supreme Court cases has made such challenges easier to launch. Under Loper, agency interpretations of statutes—even ambiguous ones—are no longer entitled to deference from reviewing courts. And under Christopher v. SmithKline (2012) and Kisor v. Wilkie (2019), agencies’ leeway to interpret their own regulations has also been significantly curtailed. Loper, Christopher, and Kisor offer opponents new angles for challenging agencies’ substantive decisions and may have reduced NEPA’s importance even if Seven County had never been decided.

Special thanks to summer associate Akram Abbadi for assisting in the preparation of this article.