In a Loper Bright Landscape, North Dakota District Court Rejects CEQ’s Attempt to Issue Binding Legislative Rules

Congress created the Council on Environmental Quality to serve as an advisory body that makes recommendations to the President on what environmental policy should be. But CEQ has long claimed power to issue binding regulations—also known as “legislative rules”—implementing the National Environmental Policy Act. The source of CEQ’s claimed power: not a duly enacted statute but an Executive Order issued by President Carter purported to confer rulemaking authority on CEQ. This makes no sense. After all, as the Supreme Court has explained, “[a]n agency . . . ‘literally has no power to act’ . . . unless and until Congress authorizes it to do so by statute.” Nonetheless, for many years, as a general matter courts uncritically accepted that CEQ has this power without pausing to examine its underlying source.

In 2024, pursuant to its claimed rulemaking power, CEQ issued NEPA regulations radically reimagining this procedural statute and recasting it as a substantive value-laden law.  Iowa and a number of other States sued, challenging these new NEPA regulations as beyond CEQ’S statutory authority. Last month, in Iowa v. Council on Environmental Quality, citing the Supreme Court’s landmark decision in Loper Bright Enterprises v. Raimondo, a North Dakota district court rejected CEQ’s claimed power to issue binding government-wide NEPA regulations at all.  

Loper Bright overruled Chevron v. NRDC—which required courts to defer to federal agencies’ views on what the law is under certain circumstances—and held that “[c]ourts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority” and may no longer “defer to an agency interpretation of the law simply because a statute is ambiguous.”

Key Loper Bright Analysis

A couple aspects of the district court’s Loper Bright analysis are interesting.

First, in rejecting the CEQ and its intervenors’ multiple arguments that there was no need to decide whether CEQ has the underlying authority to issue binding regulations at all, the district court observed in a footnote: “Plaintiff States have claimed the 2024 Rule exceeds CEQ authority. This necessarily means the Court must determine what CEQ’s authority is to analyze if CEQ exceeded it.” Citing Loper Bright, the district court continued: “This process is a step in the Court’s required analysis and not an issue that needs to be presented or forfeited.” (emphasis added). Independently interpreting the statute, the district court concluded: “NEPA is not ambiguous. The plain text of the statute does not give CEQ authority to issue binding regulations. NEPA only authorizes CEQ to make recommendations to the President. Therefore, the Court finds that CEQ does not have authority under NEPA to issue regulations.” (Late last year, a D.C. Circuit panel reached a similar conclusion in Marine Audubon Society v. FAA.)

Second, the district court cited Loper Bright in rejecting CEQ’s alternate request for deference to its interpretation of NEPA under Andrus v. Sierra Club, a 1979 pre-Chevron case in which the Supreme Court remarked in dicta that “CEQ’s interpretation of NEPA is entitled to substantial deference.” The district court explained: “Andrus was a precursor to Chevron and followed much of the same process and reasoning. Whatever deference the Supreme Court assigned to CEQ in Andrus is subject to the same standard of review outlined in Loper Bright” and thus “[t]he Court is not required to give deference to CEQ interpretations.” Quoting Loper Bright, the district court also noted that “‘[E]very statute’s meaning is fixed at the time of enactment.’” In other words, the meaning of a statute can’t evolve or change over time, as CEQ’s 2024 regulation would have it.

Iowa v. CEQ is an interesting case from a broader separation of powers perspective and well illustrates the limits of a President’s ability to conjure regulatory authority by Executive Order. For that matter, President Trump has issued an Executive Order revoking President Carter’s Executive Order purporting to grant CEQ authority to issue binding NEPA regulations, and CEQ is now in the process of rescinding its prior NEPA regulations.