Supreme Court Issues First Major NEPA Ruling in Two Decades
Requires Courts to Give Substantial Deference to Federal Agencies’ NEPA Reviews
On May 29, 2025, the U.S. Supreme Court issued an 8-0 opinion that clarifies the scope of environmental effects analysis under the National Environmental Policy Act (NEPA) and requires substantial judicial deference to federal agencies in NEPA cases. This decision has broad implications for public agencies and Tribal Nations involved in infrastructure and economic development projects, natural resources management, water supply project operations and other matters where there is a federal nexus.
Overview
The decision in Seven County Infrastructure Coalition et al. v. Eagle County marks the Supreme Court’s first major NEPA ruling in two decades. NEPA requires federal agencies to prepare an Environmental Impact Statement (EIS)—a comprehensive technical report analyzing the effects of a proposed federal action and a reasonable range of alternatives, including a no-action alternative—when significant environmental impacts are anticipated.
Seven County concerned a proposed 88-mile railroad line in northeastern Utah. Under federal law, the U.S. Surface Transportation Board (Board) is responsible for approving new rail line construction. The project aims to connect an oil-rich area in Utah to the national rail network, enabling the transport of crude oil to refineries along the Gulf Coast. The Board prepared a 3,600-page EIS analyzing the effects of a range of alternatives.
The U.S. Court of Appeals for the D.C. Circuit vacated the EIS, finding it deficient for failing to analyze reasonably foreseeable impacts, including increased oil drilling in Utah and expanded refining activity along the Gulf Coast. According to the D.C. Circuit Court, these upstream and downstream impacts fell within NEPA’s scope and required review.
Outcome
The U.S. Supreme Court disagreed. It held that the Board was not obligated to analyze the environmental effects of oil drilling or refining, as those activities would come from separate projects that fall outside the agency’s statutory authority. The Court reaffirmed its earlier decision in Department of Transportation v. Public Citizen (2004), where it held that an agency is not a legally relevant “cause” of an environmental effect if it lacks the power to prevent that effect.
Because the Board lacks authority over separate projects for oil and gas development or refining, the Court reasoned, it need not evaluate the consequences of those projects in its EIS for the rail line. The Court stated that while some indirect effects may still fall within NEPA, “when the effects of an agency action arise from a separate project—for example, a possible future project or one that is geographically distinct from the project at hand—NEPA does not require the agency to evaluate the effects of that separate project.”
The opinion went on to emphasize that NEPA decisions are entitled to “substantial judicial deference”— not only regarding which environmental effects are analyzed but also on which alternatives are considered in the EIS and, importantly, on agency determinations of feasibility. In a key footnote, the Court stated that the judiciary has “only a limited role” in reviewing agency compliance with NEPA.
Implications
For local communities, water agencies, and Tribal Nations with projects that depend on the NEPA process, this ruling offers a couple of key takeaways. The first is straightforward. The scope of environmental effects analyzed in an EIS will continue to be limited by the authority of the federal agency . In practical terms, this result helps to limit “analysis paralysis” that agencies might otherwise experience.
A more complex implication relates to judicial deference—particularly deference to a federal agency’s choice of alternatives and its feasibility analysis. While NEPA is described by the Court as “purely procedural,” NEPA reports are routinely used by federal agencies to compare options and inform substantive decisions, including long-term plans for water supply project operations. Under this ruling, courts are unlikely to second-guess a federal agency’s selection of alternatives or scrutinize determinations on the feasibility of those alternatives.
Broad judicial deference in NEPA cases places greater importance on the administrative process itself. For non-federal partners involved in federal supply water projects, consistent and proactive engagement in the agency-led NEPA process—particularly in the development of alternatives leading up to the Draft EIS—will be more critical than ever.
BBK Insight
Best, Best & Krieger LLP (BBK) attorneys will continue to monitor judicial and regulatory developments that impact public infrastructure, natural resources, and water project operations. For questions about this case or related matters, please contact members of BBK’s Environmental Law & Natural Resources practice group.
Disclaimer: BBK Legal Alerts are not intended as legal advice. Additional facts, facts specific to your situation, or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information herein.
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