Trump's Proposed NEPA Regulations Likely To Face Legal Challenge

The Trump Administration recently proposed amendments to the regulations implementing the National Environmental Policy Act (NEPA)—the most significant of which are likely to face legal challenge. The proposed regulations aim to "modernize and clarify" the current regulations "to facilitate more efficient, effective, and timely NEPA reviews by federal agencies in connection with proposals for agency action."1 NEPA regulatory reform has been a topic of discussion for several decades, and calls for reform have come from Congress, multiple presidential administrations and affected industries. The proposed regulations, which would be the first comprehensive update to the NEPA regulations since 1978, incorporate a mixture of responses to case law, executive orders, previous administrative guidance and agency practices. Much has already been written detailing the proposed changes and their potential impacts. This alert focuses on an under-explored issue: how and why the proposed regulations might be delayed, stayed or overturned by the courts. We have identified three specific grounds on which the regulations could face legal challenge: the elimination of cumulative effects analysis, the revised definition of "major federal action" and the expanded role of project proponents in the NEPA process. We analyze whether those provisions are consistent with existing case law and offer recommendations for project proponents to minimize the risk of project delay or denial of necessary permits as a result of potential legal challenges to those provisions.

1. Background

   On January 10, 2020, the Council on Environmental Quality (CEQ) issued a notice of proposed rulemaking for revised NEPA regulations. CEQ is accepting public comments on the proposed regulations until March 10, 2020.2 At the close of the comment period, CEQ will revise the proposed regulations to the extent necessary to incorporate the rulemaking record, including pertinent data, expert opinions and public comments. CEQ will then publish the final rule in the Federal Register, which would go into effect 60 days later. Federal agencies would then have up to one year to revise their own NEPA regulations to correspond with the new CEQ rules. The agency-specific regulations may not impose additional procedures or requirements beyond those proposed by CEQ. 85 Fed. Reg. 1684, 1693.

   Because NEPA reform is one of President Trump's priorities, we expect the Administration to complete rulemaking before the end of the term. Regardless of when it is finalized, however, the final rule will likely be subject to both facial and as-applied legal challenges, especially lawsuits brought by environmental organizations and possibly by some states. Challengers would likely seek to enjoin the final rule from going into effect while the litigation is pending, which may delay implementation of the final rule. And, because CEQ is an administrative branch of the White House, challenges to its rules are not automatically heard in the US Court of Appeals for the District of Columbia Circuit. This means that lawsuits challenging the new rule, and future NEPA reviews based on the revised policies, could be filed in district courts across the country, ultimately creating a patchwork of conflicting rulings. Additionally, congressional Democrats have already expressed their intention to utilize the Congressional Review Act to bar implementation of the final...