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Anticipating Significant Slowdowns in Public Projects, Twenty States Sue to Block Regulatory Changes to National Environmental Policy Act

As part of the Fiscal Responsibility Act (the latest debt ceiling bill), Congress made the most significant revisions to the National Environmental Policy Act (NEPA) since its enactment in 1970. The Council on Environmental Quality (CEQ) has since made further changes to NEPA regulations, and those latest changes have been met with a legal challenge from 20 States’ Attorneys General.

The principal argument of the states is that since its enactment, courts have uniformly held that NEPA is a purely procedural statute, requiring agencies “to take a hard look” at environmental consequences of proposed major federal actions significantly affecting the quality of the human environment and to disseminate relevant environmental information to the public. It has additionally been argued that now, with the modifications promulgated in the Final Rule – published in the Federal Register on May 1, 2024, and set to become effective on July 1, 2024 – the modifications would transform NEPA’s  procedures for environmental reviews of proposed federal agency actions into a substantive set of requirements that would “add complexities and significantly exacerbate delays in the NEPA process” and thereby slow federally funded public projects. Note: The Final Rule removes the self-classification of being a procedural statute under § 1502.1.

The states focus especially on the broad language requiring that an agency identify and analyze alternatives to any proposed agency actions to arrive at “the environmentally preferable alternative” that results in “maximizing environmental benefits.” And the requirement that states use “high-quality information” (as opposed to “best available science”), which must include “Indigenous knowledge” (which is not defined by the regulation), and further require that “Indigenous knowledge” be given equal weight to “other sources of scientific expertise.”

The lead states cite various airport, bridge, water system, and other projects that they expect to be slowed because the Final Rule would apply retroactively to projects that have already been approved and those that are already ongoing. Furthermore, they warn of the predictable increase in litigation surrounding any controversial or disfavored project due to the combination of the increased burden on/duty of states and the greater ambiguity in what NEPA requires.

We are closely monitoring State of Iowa et al. v. Council on Environmental Quality and Brenda Mallory, Case: 1:24-cv-00089-CRH, United States District Court For The District of North Dakota, Bismark Division. A copy of the Complaint filed on May 21, 2024, in which the states seek to vacate the Final Rule, remand it to the Council, enjoin the Council from enforcing the Final Rule, and thereby reinstate the 2020 rule, can be found here.

The full rule can be found here.