In a landmark ruling issued May 29, 2025, the U.S. Supreme Court unanimously reversed the D.C. Circuit in Seven County Infrastructure Coalition v. Eagle County, Colorado, sharply limiting the scope of environmental review under the National Environmental Policy Act (NEPA). This ruling represents a significant judicial recalibration, restoring deference to federal agencies and clarifying that NEPA does not require consideration of remote or indirect environmental effects beyond an agency’s jurisdiction or regulatory authority.
Case Background
The case arose from the Surface Transportation Board (STB)’s approval of an 88-mile rail line in Utah designed to transport crude oil from the Uinta Basin. Environmental groups and local governments challenged the project, arguing the STB failed to analyze the environmental effects of upstream oil extraction and downstream refining. The D.C. Circuit sided with the challengers, but the Supreme Court reversed, holding that NEPA does not extend to environmental impacts too attenuated from the core agency action.
Key Points
- Agency deference reaffirmed: The Court emphasized that agencies are owed “substantial deference” when determining the appropriate scope of NEPA analysis, so long as their decisions fall within a “zone of reasonableness.”
- Narrower causality standard: The Court held that indirect environmental impacts — such as those from increased oil drilling or refining — are not subject to NEPA review unless they have a “reasonably close causal relationship” to the proposed federal action.
- No analysis required for unregulated impacts: Because the STB lacked authority to regulate upstream drilling or downstream refining, the agency was not required to analyze those effects in its Environmental Impact Statement (EIS) for the Uinta Basin Railway project.
- Unanimous decision with separate concurrence: Justice Kavanaugh authored the majority opinion for an 8-0 Court (Justice Gorsuch recused). A concurring opinion by Justice Sotomayor, joined by Justices Kagan and Jackson, agreed in judgment but emphasized that STB’s statutory limitations made analysis of certain effects legally unnecessary.
Implications
- For project developers: This decision paves the way for a faster, more streamlined NEPA review process. Agencies may limit the scope of review to direct, causally connected effects, potentially reducing permitting delays.
- For federal agencies: Agencies now have clearer guardrails on how to scope their environmental reviews and are less vulnerable to litigation alleging failure to consider indirect or speculative impacts.
- For environmental advocates: The ruling may curtail opportunities to challenge projects based on remote consequences like induced development, carbon emissions, or market-driven behavior.
- Potential legislative impact: The decision may add momentum to congressional efforts to reform federal permitting laws, particularly as it relates to infrastructure and clean energy deployment.
Next Steps for Industry
- Evaluate existing projects: Review pending or anticipated NEPA analyses in light of this decision. Consider narrowing the scope of indirect effects discussed if they lack a close causal nexus to the project.
- Consult legal counsel: Engage counsel early in the NEPA process to ensure defensible scoping and documentation strategies that align with Seven County.
- Prepare for evolving standards: Stay alert to how lower courts and agencies interpret the ruling, especially regarding the “reasonably close causal relationship” and “zone of reasonableness” doctrines.
Conclusion
The Seven County decision marks a pivotal shift in environmental law, offering greater clarity and predictability for infrastructure projects subject to NEPA. While the ruling strengthens agency authority, it also demands precise legal strategy to ensure compliance and avoid judicial scrutiny. Stakeholders across the energy, transportation, and real estate sectors should consider how this new precedent may influence their project timelines and litigation risks.
