Deference Is King, Downstream Effects Are Dead Post-Seven County

The US Supreme Court’s decision in Seven County Infrastructure Coalition v. Eagle County reversed the D.C. Circuit’s decision vacating a federal agency’s approval of a Utah railroad line. We break down the decision’s ripple effects for infrastructure projects subject to review under the National Environmental Policy Act.

Deference to Agencies Is King, At Least For NEPA

NEPA requires the government to prepare an environmental impact statement for infrastructure projects identifying reasonably foreseeable significant environmental effects and alternatives that are technically and economically feasible. Courts, in response to suits from environmentalist and Not In My Backyard groups, had been using NEPA as an excuse to impose increasingly stringent requirements on agencies’ decision-making processes—forcing agencies to spend more and more time writing longer and longer EISs to justify project approvals.

Writing for the majority, Justice Brett Kavanaugh slammed this “Kafkaesque” process, which, in the court’s view, resulted from undue judicial “micromanaging.” No longer.

The court held that NEPA requires “substantial judicial deference” to agencies on the likely impacts of the project, whether those likely impacts are significant, what alternatives to consider, and whether those alternatives are feasible. The court reiterated its call for deference no less than 18 times.

That emphasis on deference might be a head-scratcher for some, given the court’s recent decision to eliminate Chevron deference. But, as we’ve written before, Loper Bright explained that although agencies aren’t afforded deference on the interpretation of a statute, courts defer to agencies’ fact finding. And these NEPA-analysis questions, the court held, are factual ones.

The upshot is that NEPA challenges will be harder to win than ever before. But whether and how the court will step in if the courts of appeals continue to throw NEPA roadblocks in front of projects remains to be seen. Although the Supreme Court frequently summarily reverses lower court decisions that fail to apply appropriately deferential standards of review in other areas of law—most notably, qualified immunity—NEPA hasn’t historically been on that list.

That may change going forward if lower courts don’t change how they do business.

Downstream and Upstream Effect Analyses Are Largely Done For

To satisfy increasing judicial demands, agencies also considered a wider swath of effects—including a project’s consequences both before and after the authorized action: so-called upstream and downstream impacts. Those questions are maddeningly difficult—in our interconnected economy, any one action can have innumerable upstream and downstream effects.

But agencies can pull back on that kind of analysis moving forward: The court made clear that agencies deserve substantial deference in determining the scope of the project’s environmental effects, and how to draw those lines.

Nor are agencies required to consider the effects of other projects. Seven County involved a railroad track designed to transport oil. The US Court of Appeals for the D.C. Circuit held the agency needed to consider the potential upstream effects of increased drilling to produce the oil the railroad would carry and the downstream effects of refining the crude oil post-delivery. The Supreme Court rejected that argument and made clear agencies need look no further than “the project at hand.”

Expect a Renewed Focus on the Agency’s Substantive Statutory Authority

Agencies inclined to be overachievers should also think twice. As Kavanaugh warned, agencies don’t “necessarily earn bonus points for studying more than NEPA demand[s].” That’s in part because agencies often lack regulatory authority to consider issues beyond the project in question. In Seven County, the agency had authority over railroads, but not oil-and-gas projects.

Courts are unlikely to reverse agencies that consider environmental effects beyond their authority and approve the project anyway. But litigants should be on the lookout for situations where an agency denies or conditions a project approval based on environmental considerations beyond its governing statute.

This will likely be fertile ground for suits going forward, particularly as the court recently pulled back on the scope of agency authority more broadly by eliminating Chevron deference for agency interpretations of ambiguous statutes and has signaled a renewed interest in a more robust non-delegation doctrine. Challengers to projects are likely to recast what used to be NEPA challenges as challenges to an agency’s ultimate decision, such as whether a natural-gas pipeline is in the public convenience and necessity given its environmental effects.

Environmental Review Will Be Shorter and Hopefully Faster

A side effect of courts failing to afford adequate deference and requiring consideration of potential downstream and upstream environmental effects was that agencies took more time and space to do their NEPA analysis in the hopes of surviving increased judicial scrutiny.

Indeed, the EIS in Seven County was 3,600 pages. After that EIS was prepared, Congress amended NEPA in 2023 to limit statements to 150 pages (or 300 pages for projects of “extraordinary complexity”), and require them to be completed in less than two years.

This amendment, the court explained, “strongly reinforces” the deference to agencies NEPA already required but courts had “too often overlooked.” The court urged agencies to exercise more discretion in preparing EISs, and reminded courts that “brevity should not be mistaken for lack of detail.”

Combined with the renewed emphasis on deference, agencies can prepare much shorter EISs—and hopefully on faster timelines.

Harmlessness Is Huge

The court also provided a strong statement on the appropriate outcome in NEPA cases: Even if an EIS falls short in some way, the reviewing court shouldn’t throw out the entire project approval—at least absent a reason to think the agency would have disapproved the project had it engaged in more analysis.

That could be read as a robust formulation of the general harmless-error rule, under which courts don’t require agencies to fix mistakes that didn’t prejudice the ultimate decision.

It could also be read as an implicit endorsement of the “remand without vacatur” remedy employed by lower courts—when the court remands to the agency to conduct further analysis but doesn’t vacate the project approval in the interim—a practice never passed upon by the Supreme Court.

Whether construed as harmless error or endorsing remand without vacatur, Seven County means more projects will likely be allowed to proceed even if a court finds error after all the layers of deference. And that is a big win for industry.

The case is Seven County Infrastructure Coalition v. Eagle County, Colo., US, No. 23-975, 5/29/25.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Sean Marotta is partner at Hogan Lovells and has argued at the Supreme Court and in state and federal courts across the country.

Danielle Desaulniers Stempel and Dana A. Raphael are senior associates in Hogan Lovells’ Supreme Court and Appellate practice group, where they regularly litigate administrative-procedure cases.

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