White House's Power to Regulate Questioned in Permitting Case

A legal challenge over the Biden administration’s approach to environmental permitting has shifted to questions over whether the White House even had authority to issue the rule, following a decision in an appeals court last week.

A coalition of states in May challenged a White House Council on Environmental Quality rule making changes to the environmental permitting process, arguing it illegally changes the National Environmental Policy Act’s procedures to achieve broad and vague policy goals.

Ahead of Wednesday arguments in the case at the US District Court for the District of North Dakota, the 21 state attorneys general who brought the suit and the Department of Justice defending the rule submitted updated briefs responding to the separate recent decision in Marin Audubon Society v. FAA that found CEQ didn’t have authority to issue rules under NEPA.

“On the merits, the Court should adopt Marin’s reasoning,” the states argued in their Tuesday brief, citing the US Court of Appeals for the District of Columbia Circuit’s ruling that "'[n]o statute confers rulemaking authority on CEQ.’”

“As the D.C. Circuit explained, CEQ may only wield authority that is conferred by statute, absent which courts ‘shall . . . hold unlawful and set aside’ CEQ’s actions as ‘promulgated without valid statutory authority.’”

Following the D.C. Circuit’s ruling, much of Judge Daniel Traynor’s questioning during oral arguments on Wednesday centered on the Marin decision, changing the case from a dispute over detailed regulatory language into a far more fundamental probe of what the 55-year old CEQ is allowed to do.

“The question of CEQ’s authority was not part of this case to begin with, and everybody needs to be heard on this issue before we resolve it on those grounds,” said Jan Hasselman, an Earthjustice senior attorney who attended Wednesday’s arguments.

Original Challenge

Initially, the case was about CEQ’s May final rule that, among other things, required agencies to think about climate change and environmental justice when they analyze projects under NEPA.

The coalition of mostly red states challenging the rule argue that it gives preferential treatment to politically favored projects, delays and potentially stops disfavored projects, and prioritizes “atextual” climate change and environmental justice considerations that guarantee regulatory uncertainty and litigation for any controversial project.

Another part of the states’ complaint asserts that the rule creates confusion by requiring that Indigenous knowledge be given equal weight to other sources of scientific expertise.

Now, however, those arguments may not even be considered in the court’s decision.

The states did not make the same complaints at issue in Marin, but argued in their Tuesday brief for taking that ruling into consideration.

Even though the states “did not challenge CEQ’s general rulemaking authority in their briefing, Plaintiff States’ complaint and summary judgment briefing do challenge CEQ’s 2024 Final Rule as ultra vires and dependent on non-binding Executive Orders and guidance,” they wrote.

“Plaintiff States also contrasted CEQ’s inherently advisory role under NEPA to individual agencies implementing NEPA for their proposed major federal actions,” the states argued. “And those are the same grounds that the D.C. Circuit invoked to defeat CEQ’s general rulemaking authority.”

The Department of Justice, representing CEQ, argued in its brief filed Wednesday that “the procedural context of this case, as well as longstanding legal context and administrative practice, weigh strongly against this Court reaching out to consider a broad legal proposition on the basis of a notice of supplemental authority concerning an out-of-circuit decision regarding an issue never previously raised in this Court.”

“That is especially so given the exceedingly short time the Parties had for filing supplemental briefs.”

The parties now have until Dec. 13 to submit new briefs.

Outlook for Rulemaking

If CEQ’s rule is nixed because of the Marin decision, it could still survive in the form of guidance, said Hasselman. But the incoming Trump administration could quickly and easily revoke the guidance without having to go through notice and comment rulemaking.

“Nobody benefits when there are no rules,” Hasselman said. “Agencies don’t know what the standard is, project proponents have zero certainty, and courts are on their own to figure out the standards on a case by case basis.”

The CEQ rule also gives agencies a way to borrow decisions made by other agencies for projects deemed not to have a significant effect on the environment. That approach is meant to speed up permitting processes that could otherwise drag on for years.

The plaintiffs include Alaska, Arkansas, Florida, Georgia, Idaho, Iowa, Kansas, Kentucky, Louisiana, Missouri, Montana, Nebraska, North Dakota, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia, Wyoming, and Virginia.

The case is Iowa v. Council on Envtl. Quality, D.N.D., No. 1:24-cv-00089, arguments heard 11/20/24.