Does the Council on Environmental Quality Have the Authority to Issue Binding Regulations Implementing NEPA?

A judge's concurring opinion suggests that CEQ might not have the authority that some think it does.

On Tuesday, in Food & Water Watch v. USDA, the U.S. Court of Appeals for the District of Columbia dismissed a lawsuit by Food & Water Watch challenging a USDA loan guarantee for a chicken farm on the grounds that it violated the National Environmental Policy Act (NEPA). According to the plaintiffs, USDA violated NEPA by failing to conduct an Environmental Impact Statement before providing the loan guarantee.  In an opinion by Judge Neomi Rao, the court concluded that the plaintiffs lacked standing because they failed to show how their claims were redressable because it was speculative whether the farm would still seek a loan guarantee or address the environmental impacts of its operations in order to obtain such a guarantee.

USDA regulations presumed that loan guarantees of the sort at issue here were "major Federal actions" subject to NEPA's requirements. Subsequent to the bringing of this suit, however, the Council on Environmental Quality revised its NEPA regulations that narrowed the definition of actions covered by NEPA so as to exclude loan guarantees of the sort at issue here. Had the court not ruled on standing, these revised regulations may have rendered the case moot, assuming that CEQ has the authority to issue regulations implementing NEPA that bind other federal agencies.

In a separate concurring opinion, Judge Raymond Randolph raised the question of CEQ's authority. Although CEQ was created by NEPA, and has long played the central role in administering and ensuring compliance with the law, Judge Randolph raises questions about whether Congress ever gave CEQ the authority to issue binding regulations (which would also affect whether CEQ's interpretations of NEPA are eligible for Chevron deference).

Judge Randolph wrote:

Although I entirely agree with the court's opinion, I write to flag an issue lurking in this appeal, an issue the parties neglected to address and one that may recur.

Then-Judge Kavanaugh stated for our court: "whether an executive or independent agency has statutory authority from Congress to issue a particular regulation" is a separation of powers question "that arises again and again in this Court[.]" Mexichem Fluor, Inc. v. EPA, 866 F.3d 451, 453 (D.C. Cir. 2017). The related problem presented in this case was not whether a particular "administrative agency" had Congressional authority to issue some "particular regulation." The problem instead was whether the Council on Environmental Quality — CEQ — had Congressional authority to issue any regulations.

Our case revolved around CEQ's "new regulations."

CEQ is not an independent agency. It is part of the Executive Office of the President, created for the purpose of advising the President on environmental matters. See 42 U.S.C. §§ 4342, 4344(1). No statute grants CEQ the authority to issue binding regulations. See City of Alexandria v. Slater, 198 F.3d 862, 866 n.3 (D.C. Cir. 1999); see generally Scott C. Whitney, The Role of the President's Council on Environmental Quality in the 1990's and Beyond, 6 J. Env't L. & Litig. 81 (1991). Instead, CEQ's recent "regulations," 85 Fed. Reg. 43,304, 43,307 (July 16, 2020), identify its authority to issue regulations as Executive Order No. 11,991, 42 Fed. Reg. 26,967 (May 24, 1977).FN1

[FN1 Executive Order No. 11,991 amended Executive Order No. 1 11,514, 35 Fed. Reg. 4,247 (Mar. 5, 1970), to direct CEQ to "[i]ssue regulations to Federal agencies for the implementation of the procedural provisions of the [National Environmental Policy] Act."]

As a supposed federal "agency" issuing regulations binding on other federal agencies, it is rather unique. Unique because in judicial review cases it appears only on the sidelines. While the Supreme Court has accorded some of CEQ's regulations "substantial deference," Andrus v. Sierra Club, 442 U.S. 347, 358 (1979), it has never addressed the question of CEQ's regulatory authority. In this court we have questioned whether CEQ could issue binding regulations. Nevada v. Dep't of Energy, 457 F.3d 78, 87 n.5 (D.C. Cir. 2006); TOMAC v. Norton, 433 F.3d 852, 861 (D.C. Cir. 2006); Slater, 198 F.3d at 866 n.3. Perhaps CEQ's regulations represent a directive from the President to his subordinates. But that is a far cry from saying, as the regulations do, that CEQ could supplant properly issued regulations of other agencies. See 40 C.F.R. § 1507.3(a)("Where existing agency NEPA procedures are inconsistent with the regulations in this subchapter, the regulations in this subchapter shall apply . . ..").

If CEQ's regulations are binding, several concerns would need to be addressed. What, if any, mechanism is there for judicial review of CEQ's regulations? Do CEQ's regulations bind executive and independent agencies alike? Can the President override the requirement (and safeguard) of notice-and-comment rulemaking? And can other executive offices assert this authority as well?

"[W]here there is so much smoke, there must be a fair amount of fire, and we would do well to analyze the causes[.]" Henry J. Friendly, A Look at the Federal Administrative Agencies, 60 Colum. L. Rev. 429, 432 (1960). Nevertheless, since we decide this case on standing grounds, these questions and related ones cannot be answered now.

One benefit of CEQ regulations implementing NEPA is that it creates one set of rules that can apply to the entire federal government. The question, however, is whether CEQ actually has that authority.

As a practical matter, the President could require federal agencies to conform with CEQ regulations on NEPA, much as the White House requires agencies to comply with various regulatory review requirements promulgated in various Executive Orders. This would not ensure consistent NEPA application in all cases, however. First, it remains unclear whether such instructions would apply to independent agencies, some of which are quite important for environmental policy (e.g. FERC). Second, while the President could direct agencies to revise and update their respective NEPA regulations to conform with administration policy, such revisions take time and, in the meantime, agencies would be obligated to comply with whatever pre-existing NEPA regulations they had adopted.

This is an interesting question, and it is frankly amazing that it has not been definitively resolved in the half-century since NEPA was adopted.