Chapter 14 - § 14.10 • CHALLENGES TO AN AGENCY'S NEPA COMPLIANCE

• Jurisdiction: Colorado

§ 14.10 • CHALLENGES TO AN AGENCY'S NEPA COMPLIANCE

NEPA is one of the principal federal environmental statutes that is used to challenge federal decisions affecting the environment. A challenge to an agency's NEPA compliance may be asserted in two forms: an administrative challenge, or litigation in federal court.

§ 14.10.1—Administrative Challenges

Federal agency decisions issued after preparation of a categorical exclusion, EA, or EIS may be subject to administrative appeal within the agency.²⁶² The agency's compliance with NEPA may be challenged — or defended — in that forum. If the administrative appeal procedures meet the Supreme Court's requirements for mandatory exhaustion of administrative remedies, the failure to seek an administrative appeal within the time provided may preclude subsequent litigation concerning the NEPA process.²⁶³

§ 14.10.2—Judicial Review Of Agency's NEPA Compliance

NEPA has given rise to significant litigation in federal court.

Judicial Review of Final Agency Action Under APA

NEPA does not provide for an independent right ofjudicial review. At the point final agency action occurs — usually when the agency issues a decision based on a NEPA document — and after exhaustion of mandatory administrative remedies, the agency's compliance with NEPA is subject to judicial review in U.S. district court under the Administrative Procedure Act (APA).²⁶⁴ A plaintiff who believes that an agency violated NEPA may institute a civil action for judicial review under the APA by filing a complaint against the agency in federal court. The APA directs the reviewing court to "hold unlawful and set aside" final agency action "found to be" "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;" "contrary to constitutional right, power, privilege, or immunity;" "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right;" or "without observance of procedure required by law"²⁶⁵ based upon "the full administrative record that was before the [agency] at the time [it] made [its] decision."²⁶⁶

Statute of Limitations

Subject to limited statutory exceptions for specific types of actions, the statute of limitations for challenging a federal agency's compliance with NEPA is the general six-year limitations period applicable to suits under the APA.²⁶⁷ Although there is little NEPA case law on point, a cause of action likely accrues on the date of final agency action.²⁶⁸ Congress has provided 180-day limitations periods for judicial review of an agency's NEPA compliance for certain transportation projects,²⁶⁹ and a two-year limitations period for "covered projects" subject to the federal permitting improvement provisions of the 2015 FAST Act.²⁷⁰

NEPA Standing

A NEPA plaintiff must establish prudential standing under the zone of interests test of the APA, and standing under the case or controversy clause of Article III of the United States Constitution.

Standing Under the APA Zone of Interests Test

The APA provides that a plaintiff seeking judicial review of agency action must be "adversely affected or aggrieved by agency action within the meaning of a relevant statute."²⁷¹ The Supreme Court has interpreted this to require a plaintiff challenging agency action to assert an interest "arguably within the zone of interests to be protected or regulated by the statute . . . in question."²⁷² Entities that allege interests in the environment, the protection of natural resources, natural aesthetics, and recreation are universally recognized to have prudential standing under the APA to challenge an agency's NEPA compliance.²⁷³ However, some federal courts outside the Tenth Circuit have ruled that entities with "solely economic" interests do not fall within NEPA's environmental zone of interests, and thus do not have prudential standing under the APA in a NEPA case.²⁷⁴ The Tenth Circuit has not adopted that principle,²⁷⁵ and the Eighth Circuit has affirmatively rejected it.²⁷⁶

Standing Under Article III of the Constitution

To establish Article III standing, a NEPA plaintiff must show: (1) an injury in fact, (2) that is caused by or is fairly traceable to the challenged action, and (3) that will likely be redressed by the relief requested.²⁷⁷ As is the case with federal court litigation seeking to enforce a federal agency's procedural obligations, a NEPA plaintiff's obligation to establish redressability is relaxed. A "plaintiff need not establish that the ultimate agency decision would change upon National Environmental Policy Act compliance."²⁷⁸

Standard of Review

Judicial review of an agency's compliance with NEPA is subject to the arbitrary and capricious standard of the APA and the deference that entails.²⁷⁹ Courts review an EIS or EA — and the record as a whole — to determine whether the agency took the requisite "hard look" at the reasonably foreseeable direct, indirect, and cumulative effects of the proposed action and the alternatives.²⁸⁰ As with any case for judicial review under the APA, the court generally reviews the agency's action based on the "whole record"²⁸¹ developed by the agency, rather than a new record made by the litigants in court.²⁸² Courts may allow litigants to supplement the administrative record in NEPA litigation to establish...