Category: Behind The Black

In what could be a major legal ruling [pdf], a two-judge decision this week in the DC Circuit Court ruled that the White House Council on Environmental Quality (CEQ), which has for years imposed environmental rules on other federal agencies based on the National Environmental Policy Act (NEPA), does not have the statutory authority to do so, thus invalidating every regulation so imposed.

All three members of the three-judge panel agreed that the Agencies acted arbitrarily and capriciously in [in this particular case]. However, before reaching that conclusion, the majority analyzed whether the CEQ regulations the Agencies followed in adopting the plan were valid, an argument not raised by any of the parties. The majority held, sua sponte, that because there is no statute stating or suggesting that US Congress has empowered the CEQ to issue rules binding on other agencies, the CEQ has no lawful authority to promulgate such regulations.

…Although this decision does not explicitly vacate any action taken by the CEQ, it does establish a precedent that CEQ rules lack statutory authorization, and therefore that other agency actions taken under the CEQ framework are at risk of being vacated. If this decision is not overturned by the full appellate court sitting en banc or by the US Supreme Court, it has the potential to completely change the landscape of NEPA review.

The case is complicated, partly because the Byzantine nature of the federal bureaucracy and the many agencies involved. (It is almost as if these agencies created that complexity to confuse and protect themselves.)

The heart of the decision is that CEQ was apparently first created as an “advisory” body to help other federal agencies follow the intent of NEPA in their own rule-making, but instead soon became a “regulatory” body whose rulings other agencies were required to follow. As that authority was never given it by Congress, CEQ exceeded its authority by making its rulings mandatory.

This court decision will likely leave many agencies on their own in establishing environmental regulations, based on NEPA. However, even that regulatory ability faces limitations, based on the Supreme Court’s recent Chevron decision, which said that government agencies do not have right to promulgate new regulations that are not specifically described in congressional law.

In other words, Chevron says that the bureaucracy cannot make things up, based on its own vague opinions.

The trend of all these court rulings appears aimed at limiting the power of the federal bureaucracy. It will however take some time to determine how much that power is limited, as lawsuits begin to percolate through the courts. If there are lot of lawsuits (which does appear to be happening) we should therefore expect that power to be limited significanly.