Felicia Ellsworth: Welcome to In the Public Interest, a podcast from WilmerHale. My name is Felicia Ellsworth, and I'm a partner at WilmerHale, an international law firm that works at the intersection of government, technology, and business. Today's episode is the latest installment of our Supreme Court miniseries, where we dive into the most hotly contested decisions coming out of the Supreme Court this term and discuss the implications of the court's rulings going forward. In this episode, we'll discuss the court's decision in Seven County Infrastructure Coalition v. Eagle County, Colorado. This is a case about how federal regulators assess and approve highways, pipelines, and other projects under the National Environmental Policy Act, or NEPA. Joining us to discuss the case is Tommy Beaudreau, former Deputy Secretary of the Interior and a partner in WilmerHale's Washington DC office, where he specializes in large-scale infrastructure projects, as well as environmental regulatory litigation and enforcement. Tommy sat down with my WilmerHale colleague and fellow appellate litigator, Daniel Volchok, to discuss this fascinating case.
Daniel Volchok: Tommy, thank you for joining us on this episode of our Supreme Court miniseries.
Tommy Beaudreau: Thanks, Daniel. It's great to join you.
Daniel Volchok: Okay, let's dive right in. Let's first talk briefly about how this lawsuit got started. What was the underlying dispute?
Tommy Beaudreau: The underlying facts of the case and the project at issue actually provided a kind of perfect test case for the types of issues that the Supreme Court wanted to address in terms of where NEPA is going and what the scope is and what the agency's obligations are. The project at issue is a 88-mile-long railway approved by the United States Surface Transportation Board to provide access and connection to a very remote part of Utah in the Uinta Basin. And the purpose of that type of access was to enable oil and gas production to connect with the national railway network so that production from the Uinta Basin could be shipped down to refining facilities, including in the U.S. Gulf Coast. And so that teed up in a very specific way a number of the issues that have been shaping NEPA jurisprudence over the last several decades, including where to draw lines around indirect effects of federal agency action and improving a project like a rail line, and what is the scope of the review that agencies are required to undertake. And so it brought to a head this kind of causation concept. By approving a rail line, what are the reasonably foreseeable effects of that approval, all within a climate context of upstream oil and gas production being brought online, and then downstream effects from processing and consuming those fossil fuels, including greenhouse gas emissions. And so it really, in a way that must have been very attractive to the court in granting cert, brought to a head these issues in a pretty crystalline fashion.
Daniel Volchok: Okay, so you mentioned NEPA a couple of times, but for our listeners who are not familiar with NEPA, can you give us a little bit of background on the statute?
Tommy Beaudreau: NEPA originated in the 1970s, and the fundamental legislative direction from Congress was to provide federal decision-makers, as they're issuing permits or making other significant federal actions, to understand the consequences of those actions from an environmental standpoint. And in Justice Kavanaugh's words, to provide a procedural cross-check so that agency decision-makers are informed about the consequences of their decisions as opposed to being substantive. And so that's a recurring theme that you see throughout the majority opinion in Seven County, that NEPA was intended to be procedural and the agency obligations to prepare a good report to inform those decisions. I will say, as I read through the opinion, it did bring me back to some of my previous roles when I was in government as one of these agency decision-makers. And there was some resonance with Justice Kavanaugh's discussion taking back the original purpose of NEPA, which was to inform decision-making. I joined the Interior Department during the Gulf of Mexico oil spill in 2010 and became director of an offshore agency post-Deepwater Horizon. And we were going through this process of new permitting in the Gulf of Mexico. And I knew enough about NEPA as a lawyer to know the doctrine says I'm supposed to have these documents inform my decisions, and so I remember asking the solicitor's office and the agency folks, give me the EIS, I need to read it. And he sort of looked at me, befuddled. They're like, yeah, nobody's ever asked that before. And so again, a little resonance with what Justice Kavanaugh was talking about of, what was the original purpose of NEPA and where has it gone in the intervening 50 years.
Daniel Volchok: Let's get back to the Seven County lawsuit. And you mentioned Justice Kavanaugh's majority opinion, which of course I want to get to, but just to lay a little groundwork, what happened in the lower court and as a result, what issues exactly were presented to the Supreme Court to decide?
Tommy Beaudreau: To use a metaphor from Justice Kavanaugh, he talked about the legislative acorn that had grown into a judicial oak. Even though the Surface Transportation Board had prepared an environmental impact statement that was several hundred pages long, including an appendix that was many thousands of additional pages of analysis, the DC Circuit ruled that a little more analysis was needed, both with respect to the upstream impact of opening up the Uinta Basin to new oil and gas and fossil fuel projects and production, and the downstream effects of GHG emissions emanating from the refined product. And so the DC Circuit remanded to the Surface Transportation Board to do supplemental analysis to further expand on its existing analysis with respect to both upstream and downstream effects.
Daniel Volchok: Okay, so the DC Circuit remands, but before any remand proceedings, the Supreme Court agrees to hear the case. It decided the case back on May 29th, and what did it decide?
Tommy Beaudreau: So there are two primary issues that the Supreme Court decided in Seven County, but the overall tone of the decision from the majority written by Justice Kavanaugh was very much a get back to basics with NEPA and a course correction. And so he sets the stage of the opinion by saying that the decision is meant to get NEPA back in line with the statutory text and common sense, emphasizing that NEPA is a procedural cross-check, not a substantive roadblock, and that the goal of the law is to inform agency decision-making, not paralyze it. And so setting this tone that, frankly, is very much in line with the public zeitgeist these days, that America has a hard time building things, and we can't get out of our own way, and that environmental statutes are a roadblock to new infrastructure. And so he taps into that. And the first issue that the court tackles is this issue of the scope of an analysis that is required underneath, but with respect to these indirect effects. And where the court came out on that is narrowing what is required of the agencies. And this is the part of the opinion that the justices agreed with, hence the unanimous decision that essentially NEPA requires a federal agency to review the effects that it has regulatory authority over. And so in the context of this rail line, the Surface Transportation Board statutory authority tells it you're not to consider what freight is being carried by the line, you're to consider the impacts of the line itself. And then the second part had to do with judicial deference post-Loper Bright. The majority in Justice Kavanaugh recognized that this line drawing that has to happen is not always straightforward. So what is the scope of indirect effects? Are there connected actions that flow from the approval that's before a particular agency? And how do you draw those lines? That segued into the second major feature of the Seven County decision, which is the appropriate level of deference from the courts and where agencies decide to draw those lines.
Daniel Volchok: How do you think this decision will affect the permitting landscape going forward?
Tommy Beaudreau: We're starting to see it play out a little bit already. This is happening in the context of congressional attention around permitting reform, which is actually a bipartisan issue. Permitting reform was a big issue during the Biden administration. It's still a big issue in the second Trump administration. And all of those permitting reform proposals, many have to do with narrowing the scope of NEPA. And so the Seven County decision I actually think will be the most significant permitting reform that we see in the foreseeable future here. And the lower courts, we're starting to see already how Seven County is playing out. The DC Circuit issued a decision and recall the DC Circuit was the lower court that was overruled in Seven County. DC Circuit issued a decision in the FERC case that bonding completely with Seven County and emphasized, including on the deference point, that when it comes to NEPA issues, the courts are at their most deferential. And so there's a lot of nooks and crannies in there that are going to be probed, but so far the lower courts seem to be taking it to heart.
Daniel Volchok: As is often the case, I am sure we will see the ramifications of the Supreme Court's decision unfold slowly in the coming months and years. Tommy, thank you so much for joining us. Before we wrap up, I will share one piece of Supreme Court inside baseball, as it were. You mentioned the decision was unanimous. It was actually 8-0 because Justice Gorsuch recused himself. Now, there was a letter that came out from the clerk to all the parties simply stating that Justice Gorsuch would no longer participate in the case. The decision to recuse was made after the Supreme Court agreed to hear the case. Now, that's relevant. Obviously, his recusal didn't affect the bottom line outcome. At most, it could have been 8-1 instead of 8-0, but we don't know what the vote was to hear the case in the first place. It takes four votes to grant cert, and the Supreme Court does not usually disclose until many years after the fact what the vote was on any petition. So it is at least possible that Justice Gorsuch was the fourth vote, the deciding vote, as it were, to have the Supreme Court hear the case. And I'm not aware of any circumstance in which, if that happened, the recusal would somehow undo the cert grant. So Justice Gorsuch would, in effect, and again, we don't know that this is what happened, but it's certainly possible that Justice Gorsuch was the deciding vote to bring the case to the Supreme Court. And had he recused earlier, the case would not have been brought to the Supreme Court, the lower court's decision would stand. And that's not to suggest that Justice Gorsuch did anything improper. We don't know why he recused, but all indications are the need to recuse first came to his attention after his vote to grant cert, but it's an interesting insight into the way the Supreme Court's cert process works. In any event, Tommy, thank you very much for speaking with us today about this case, this important topic, and how it affects the future of infrastructure project permitting.
Tommy Beaudreau: Thanks, Daniel.
Felicia Ellsworth: And thank you to our listeners for tuning in to this episode of In the Public Interest. We hope you'll join us for our next episode. If you enjoy this podcast, please take a minute to share with a friend and subscribe, rate, and review us wherever you listen to your podcasts. If you have any questions regarding this episode, please e-mail them to us at [email protected]. For all of our WilmerHale alumni in the audience, thank you for listening. We are really proud of our extended community, including alumni in the government, the nonprofit space, academia, other firms, and in leadership positions and corporations around the world. If you haven't already, please join our alumni center at alumni.wilmerhale.com so we can stay better connected. Special thank you to the producers of this episode, Jake Brownell and Zachary Mollendor. Sound engineering and editing by Bryan Benenati. Marketing by Andy Basford and his team, all under the leadership of executive producers Kaylene Khosla and Matt O'Malley. See you next time on In the Public Interest.
