Has administrative law taken a “neoclassical” turn? Articulated by Professor Jeffrey Pojanowski in a 2020 Harvard Law Review article, neoclassical administrative law refers to a framework that tries to “find[] a place for both legislative supremacy and the rule of law within the administrative state.” It seeks to do so while rejecting the legal realist foundations of other approaches, instead urging “a more formalist, classical understanding of law and its supremacy.” Last term, in Seven County Infrastructure Coalition v. Eagle County—a case brought under the National Environmental Policy Act (NEPA)—the Supreme Court held first that “the D.C. Circuit did not afford the [U.S. Surface Transportation] Board the substantial judicial deference required in NEPA cases,” and second that the D.C. Circuit incorrectly interpreted NEPA as requiring the Board to consider the environmental effects of wholly separate projects. Immediately striking about this decision is the Court’s emphasis on deferential judicial review, which initially seems hard to square with the anti-deference posture embraced in Loper Bright Enterprises v. Raimondo. The way Seven County reconciles this apparent tension—including by insisting on a bright line between legal interpretations on the one hand and determinations of fact and policy on the other—illustrates that modern administrative law may be developing along neoclassical lines. But although the ascent of neoclassicism may be normatively appealing to some, it underscores the need for neoclassicists to grapple with certain unresolved difficulties going forward.
In 2020, a group of seven Utah counties known as the Seven County Infrastructure Coalition sought to build an 88-mile railway in northeastern Utah. The Coalition wanted to connect the Uinta Basin, which contains large reserves of crude oil, to the interstate freight rail network so that oil producers could more efficiently transport their oil to refineries. But under federal law, that railway—like all new railroad construction—required the approval of the U.S. Surface Transportation Board. So, the Coalition petitioned the Board for approval. As part of its decisionmaking process, the Board conducted an environmental review to comply with the requirements set forth in NEPA. Under NEPA, federal actions “significantly affecting the quality of the human environment” require the preparation of an environmental impact statement, or EIS. That EIS “must address the significant environmental effects of a proposed project and identify feasible alternatives that could mitigate those effects.” To that end, the Board prepared an EIS, spanning hundreds of pages, that analyzed the railway’s “significant and adverse impacts,” such as “disruptions to local wetlands, land use, and recreation.” The EIS also “noted, but did not fully analyze, the potential effects of increased upstream oil drilling in the Uinta Basin and increased downstream refining of crude oil carried by the railroad.” Those upstream and downstream effects, the Board explained, were outside the scope of its authority to regulate and, in any event, too “‘speculative’ and attenuated from the project at hand” to merit an in-depth analysis. Shortly after issuing its EIS, the Board approved the Coalition’s proposed railway.
Eagle County (a Colorado county through which the railway would run), along with a number of environmental groups, challenged the Board’s approval by petitioning for review in the U.S. Court of Appeals for the D.C. Circuit. They argued that “the Board failed to take a hard look at the Railway’s environmental impacts in violation of NEPA.” They faulted the Board’s EIS for “ignor[ing] certain upstream and downstream impacts of the Railway.” The D.C. Circuit agreed. Writing for a unanimous panel, Judge Wilkins explained that the Board’s EIS failed to adequately analyze certain “reasonably foreseeable impacts,” including those that would flow from increased oil drilling in the Uinta Basin and increased oil refining along the Gulf Coast. It did not matter, as the Board argued, that those environmental effects would arise from other projects separate from the proposed railway. Finding the EIS deficient under NEPA, the D.C. Circuit vacated the EIS and the Board’s final approval of the project.
The Supreme Court reversed and remanded. Writing for the Court, Justice Kavanaugh identified two main errors committed by the D.C. Circuit. First, the D.C. Circuit failed to “afford the Board the substantial judicial deference required in NEPA cases.” In this regard, the Court emphasized that NEPA cases are reviewed “under the Administrative Procedure Act’s deferential arbitrary-and-capricious standard” and that, because “NEPA is a purely procedural statute,” it requires only a reasonable explanation for a final decision rather than a particular substantive outcome. The Court then identified “several forms” that the “substantial deference” to agencies in NEPA cases can take in practice. For example, the Court pointed to NEPA’s command that an EIS be “detailed.” Although “the meaning of ‘detailed’ is a question of law to be decided by a court,” whether that standard is met “involves primarily issues of fact” that should be left to the institutionally better-equipped agency. The idea is that a reviewing court should not “substitute its judgment for that of the agency” when it comes to the “fact-dependent, context-specific, and policy-laden choices” required in a NEPA analysis. Underscoring the substantial heft of this deference, the Court then admonished lower courts that have “engaged in overly intrusive (and unpredictable) review,” explaining that such an approach has transformed NEPA from “a modest procedural requirement” into a “Kafkaesque” burden that has resulted in “[f]ewer projects mak[ing] it to the finish line.” What was “a 1970 legislative acorn” was never meant to become “a judicial oak that has hindered infrastructure development ‘under the guise’ of just a little more process.” The Court forcefully concluded its description of the judiciary’s role by declaring that the “bedrock principle of judicial review in NEPA cases can be stated in a word: Deference.”
The Court next addressed the D.C. Circuit’s second mistake, which was that the panel “incorrectly interpreted NEPA to require the Board to consider the environmental effects of upstream and downstream projects that are separate in time or place from the Uinta Basin Railway.” The Court clarified that, because NEPA’s “textually mandated focus” is on the “proposed action,” agencies need only consider the environmental effects of “the project at hand—not other future or geographically separate projects.” Important for the Court was the distinction between the effects of the project at hand and the effects of separate projects altogether. Even “indirect effects” of the project at hand, such as certain geographically or temporally attenuated effects, may need to be analyzed under NEPA. Different, however, would be the case of a wholly distinct project, such as “a housing development that might someday be built near a highway.” That separate project “breaks the chain of proximate causation,” relieving the agency of the duty to consider that project’s environmental effects. The Court also identified an overlapping consideration: the agency’s power to prevent certain impacts. On this point, “agencies are not required to analyze the effects of projects over which they do not exercise regulatory authority.” Applying these principles to the case before it, the Court concluded that the Board needed only to analyze the environmental impacts of the proposed Uinta Basin railway, and that the EIS “comprehensively” did so. The Board did not need to consider the effects of future upstream oil production or downstream oil refining, because those effects would flow from separate projects and because the Board would lack authority over those projects. The D.C. Circuit was thus wrong to demand otherwise.
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