Today the D.C. Circuit held that the Council of Environmental Quality (CEQ) lacks statutory authority to issue rules under the National Environmental Protection Act (NEPA). In Marin Audubon Society v. Federal Aviation Authority, the court declined to consider arguments about whether FAA complied with CEQ’s NEPA rules because it found those rules to be ultra vires, or beyond CEQ’s legal authority.

This holding upends almost 5 decades of administrative practice, as CEQ has been issuing regulations since the 1970s. In doing so, CEQ was acting under Executive Order 11,991 (p.391 of PDF), which was signed by President Jimmy Carter in May 1977. EO 11,991 directed CEQ to issue NEPA regulations and directed agencies to comply with those regulations unless prohibited by law. The executive order grounded the action in president’s constitutional and statutory power (citing NEPA, the Environmental Quality Improvement Act, and the Clean Air Act), and “in furtherance of the purpose and policy” of NEPA.

The problem is that NEPA does not provide express rulemaking authority, and the court did not find it to be implied, either (slip. op. at 16). The court looked beyond NEPA to the other statutes listed in EO 11,991, which refer to CEQ but do not confer rulemaking authority beyond those rules “related to a fund used to finance the Office’s projects and research studies” (slip. op. at 17).

The unusual provenance — some might say non-existence — of CEQ’s rulemaking authority has not been a secret. But in 1979 the Supreme Court handed down Andrus v. Sierra Club, which referred to the executive order origins of the CEQ regulations and did not bat an eye, instead finding that “CEQ’s interpretation of NEPA is entitled to substantial deference.” Andrus, 442 U.S. 247, 357. The D.C. Circuit brushed aside this and other Supreme Court “pronouncements,” writing that “we are not bound by every stray remark on an issue the parties neither raised nor discussed in any meaningful way” (slip. op. at 17). Well then!

The court also dismissed the idea that the Take Care Clause could be the sole source of authority for CEQ to issue regulations. The court explains that EOs “focused solely on the internal management of the Executive Branch create no private rights and are not judicially reviewable” (slip. op. at 18). NEPA and CEQs rules bound agencies, not the public, same with EO 11,991, so it is fair to say they are all related to the internal management of the agencies. But it is my impression (and please do correct me if I’m wrong) that when President Carter directed CEQ to issue rules, it was to help bring coherence to NEPA compliance and enforcement after several bumpy years of litigation — in other words to use CEQ to direct agency compliance upstream from judicial review. And the fact that EOs are not judicially reviewable does not stop agency compliance with CEQ’s rules from being judicially reviewable. Perhaps I am missing something in the court’s opinion but this part of it doesn’t hang together for me.

The court also discusses remedies involving vacatur, another entry in the evolving discussion, but I’ll leave commentary about that to others.

Writing in partial dissent, Chief Judge Srinivasan takes issue with the court’s willingness to conclude that CEQ lacks authority to issue rules, since that issue was not raised by the parties before it (i.e., the “principle of party presentation”). One wonders if this willingness to “venture out to decide” (as Srinivasan, C.J. describes it) will repeat itself in Seven County Infrastructure Coalition v. Eagle County, a NEPA case set to be argued before the Supreme Court on December 10, 2024. In Seven County, the parties have not raised issues about CEQ’s authority to issue rules, but Prof. Richard Epstein, Prof. James Coleman, and Mario Loyola have raised it as amici (p.26 et seq.).

When a panel of judges on the D.C. Circuit says the rulemaking authority your agency has been relying on for almost 50 years does not exist, it’s a rough day. If CEQ’s rulemaking authority comes up at oral argument on Dec. 10, 2024, it’ll be even rougher.