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Pipeline Ruling Bolsters Environmental Standard Trump Erased

Feb. 2, 2021, 11:00 AM

A federal court ruling on the Dakota Access pipeline boosts an environmental review standard that could be wielded against all kinds of other projects—if Trump-era regulatory moves don’t get in the way.

The U.S. Court of Appeals for the District of Columbia Circuit last week ruled the federal government should have done an in-depth environmental review for Dakota Access in light of disputes over the oil pipeline’s impacts.

Longtime National Environmental Policy Act regulations require agencies to conduct a broad environmental impact statement, or EIS, when a proposal’s on-the-ground effects are “highly controversial"—meaning, disputed by experts. The D.C. Circuit said the government fell short when it skipped such an impact statement despite tribal experts’ unresolved technical concerns about the pipeline, which crosses near the Standing Rock Indian Reservation in North Dakota.

Last week’s ruling, together with a 2019 decision, bolsters a NEPA standard that could serve as powerful ammunition in other environmental cases that push the government to pay more attention to the impacts of its decisions. A Bloomberg Law docket analysis shows more than 100 pending cases involving the standard.

“It’s very strong,” Earthjustice lawyer Jan Hasselman, who represents the Standing Rock Sioux Tribe against Dakota Access, said of last week’s ruling. “This is a really strong precedent on the importance of careful analysis of expert input.”

Only one problem: The Trump administration knocked out the NEPA standard’s regulatory underpinnings.

The White House Council on Environmental Quality last year ditched the longstanding NEPA regulations that enshrined the “highly controversial” standard the D.C. Circuit applied, dampening the court decision’s long-term influence unless the old rules are restored. Advocates are pressing President Joe Biden to reinstate them.

Tribal Experts’ Criticism

NEPA is a bedrock environmental statute of 1969 that requires agencies to do an EIS, as opposed to a more streamlined environmental assessment, whenever a project’s impacts are likely to be significant.

NEPA regulations in place at the time of Dakota Access’s approval lay out “intensity” factors to help determine whether potential impacts rise to that level. One of the factors is whether a project’s effects are likely to be “highly controversial.” The standard focuses not on public controversy over a project but on scientific or technical disputes about its impacts.

The D.C. Circuit and a lower court invoked the standard when they determined the Army Corps of Engineers should have done an EIS for Dakota Access in light of tribal experts’ critiques of the agency’s analysis of oil spill risks and impacts.

“The Tribes’ unique role and their government-to-government relationship with the United States demand that their criticisms be treated with appropriate solicitude,” the ruling said, rebuffing an argument Dakota Access made during November oral argument that the tribes were simply “not-in-my-backyard neighbors.”

The ruling builds upon a similar 2019 decision in which the D.C. Circuit required an EIS for an electric transmission line across the James River in Virginia, in light of criticism from other agencies and groups about the Army Corps’ route analysis for the project.

Language Erased

Together, the decisions mark a watershed moment for NEPA law, cementing a broad application of the “highly controversial” standard within the D.C. Circuit—which hears NEPA cases often but hadn’t previously grappled with that particular issue.

Southern Methodist University energy law professor James Coleman said the Dakota Access ruling is particularly significant because it establishes that American Indian tribes’ objections, alone, may be enough to require an EIS.

The fact that the Trump administration eliminated the “highly controversial” provision from NEPA regulations in a broader effort to speed up and narrow federal reviews could diminish the broader impact of the ruling, UCLA law professor Sean Hecht said, noting that a lot of NEPA precedent is based on the text of the old rule.

“It seems kind of crazy that all that case law would just be thrown out, but a lot of case law does rely on the specific language of the old regulations,” he said. “I could imagine a world in which courts look at it and say, well, none of that old case law applies at all.”

But environmental advocates who hope to use the D.C. Circuit’s precedent as ammunition to push for added review in other cases seem confident about their prospects of seeing the old rule restored and making the most of favorable legal precedent.

“We feel pretty strongly that we will be back to the old regulations one way or another,” said Southern Environmental Law Center lawyer Kym Hunter, who’s challenging the Trump administration’s rule in court. “There’s a very good chance the courts could just throw the whole Trump rule out.”

Dozens of Cases

Hunter added that the precedent is already relevant to pending NEPA litigation because federal actions currently under review would fall under the old regulation.

A Bloomberg Law docket review shows more than 100 active NEPA cases involving the “highly controversial” standard across the federal court system. D.C. Circuit precedent is binding only within that circuit, but it’s considered highly persuasive in others.

The Biden administration hasn’t made any formal moves on the NEPA regulation yet, but the president has scrapped separate executive orders that aimed to fast-track some reviews. A spokeswoman didn’t immediately respond to questions about the White House’s next steps on NEPA.

The D.C. Circuit’s rulings are powerful even without a NEPA reset because judges will still value the “highly controversial” standard as a way to assess a project’s significance under the law, said William S. Eubanks II, who litigated the 2019 James River transmission line case.

“It is a big deal either way since courts can still look to the ‘highly controversial’ reasoning even if it is not explicitly in CEQ’s regulations,” said Eubanks, of Eubanks & Associates LLC. “But obviously it has even greater importance if the Biden administration reinstates the longstanding CEQ provision that guides the determination of ‘significance’ for purposes of analyzing the need for an EIS.”

To contact the reporter on this story: Ellen M. Gilmer in Washington at egilmer@bloomberglaw.com

To contact the editor responsible for this story: Anna Yukhananov at ayukhananov@bloombergindustry.com

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