The U.S. Supreme Court on Dec. 10 heard oral arguments in a case centering on the halted Uinta Basin Railway project in northeastern Utah and challenging the scope of the National Environmental Policy Act.
The project’s backers, the Seven County Infrastructure Coalition, in March petitioned SCOTUS to review the U.S. Court of Appeals for the District of Columbia Circuit’s 2023 decision that granted in part the consolidated petitions of line opponents Eagle County, Colo., and the Center for Biological Diversity, and struck down the Surface Transportation Board’s (STB) final exemption order. The appeals court called STB’s approval of construction and operation of the 88-mile Uinta Basin Railway “arbitrary and capricious.”
In June, SCOTUS decided to review one aspect of that lower court ruling—that the STB erred in failing to analyze the project’s “upstream” drilling impacts on wildlife and vegetation and “downstream” refining impacts on Gulf Coast communities.
The Seven County Infrastructure Coalition, an “independent political subdivision” of the state of Utah, sought STB approval for the Uinta Basin Railway, which would primarily haul shale-extracted crude oil and connect to the broader rail network. The Coalition joined forces with Drexel Hamilton Infrastructure Partners to raise private capital for the build. AECOM was chosen to lead the design, and the Skanska-Clyde Joint Venture and Obayashi Corporation would help with construction.
In a March U.S. Supreme Court filing, the Coalition “claims the D.C. appeals court decision took too broad a view of the National Environmental Policy Act review required of the rail project,” according to Colorado Newsline reporting at that time.
On Dec. 10, Coalition attorney Paul Clement reiterated this, telling “the [high] court that the Surface Transportation Board’s focus when it approved the project didn’t need to take into account the environmental impacts of the oil and gas development in Utah’s Uinta Basin that would generate traffic on the rail line. Nor did it need to consider things such as impacts along rail lines in western Colorado or to Gulf Coast communities where the oil would be taken to be refined, he said,” according to a report by The Daily Sentinel. “But he warned about what it can lead to when losing sight of the project the board was in charge of deciding on. ‘Then it takes you way outside the lane of this agency and you make them consider things that are not their job at all,’ Clement told the high court.”
According to The Washington Post, Clement “urged the justices to adopt a narrow reading of what impacts agencies must consider under the National Environmental Policy Act (NEPA), the landmark law that has set the standard for environmental reviews for half a century. He said an agency should only have to consider effects close in time and proximity to a project and those that fall within its regulatory purview. He pointed out that the federal review of the rail line project was 3,600 pages and called for 91 mitigating measures. ‘It is designed to inform government decision-making, not paralyze it,’ Clement said of NEPA. ‘Nonetheless, it has become the single most litigated environmental statute.’”
The environmental groups, however, “argue that NEPA calls for a more holistic review, saying the rail project could have devastating impacts on local habitats, could lead to oil spills in the Colorado River and would quintuple oil production, worsening climate change and pollution near refineries in the South,” The Post said.
“The impacts at issue here are reasonably foreseeable consequences of this $2.7 billion railway project whose entire rationale is to transport crude oil,” said attorney William McGinley Jay, who represents Eagle County, The Post reported. “Reasonable foreseeability is the test … that has been in NEPA since the beginning.”
According to The Post, SCOTUS “appeared inclined to overturn the lower court ruling Tuesday [Dec. 10], but the justices sharply questioned both sides, indicating that they might be grasping for a standard that falls between the positions of each.”
Justice Sonia Sotomayor told Clement, “You want absolute rules that make no sense,” according to the newspaper, and Justice Elena Kagan “told Jay during another exchange that what he envisioned NEPA calling for ‘seems to go beyond what I thought the statute was all about.’”
Justice Ketanji Brown Jackson told Clement, “What I worry … is that you’re suggesting that the agency [STB] can’t even look at the effects of the project outside of the very piece that it has sole responsibility for, and I don’t know that NEPA actually was designed to be that narrow,” according to The Sentinel.
The Sentinel also reported that the justices “grappled with the fact that the Surface Transportation Board’s authority doesn’t extend to deciding what products can be carried on tracks.” According to the newspaper, William McGinley Jay “said NEPA requires that the board consider the reasonably foreseeable consequences of what the trains would be carrying even if it doesn’t regulate that and can’t mitigate for that, and such analysis provides a springboard for public commenting. Some western Colorado communities are concerned about potential impacts such as wildfires and oil spills into the Colorado River from increased local oil traffic.”
Dorsey & Whitney environmental attorney Michael Drysdale, “who has litigated cases involving federal agencies, said in a statement to media Tuesday [Dec. 10] that the high court seems likely to overturn the D.C. Circuit decision in the case and provide additional guidance restricting the scope of reviews under NEPA,” according to The Sentinel. “‘There seemed to be a consensus among the justices that D.C. Circuit had gone too far, and the reasonable foreseeability of effects, standing alone, is insufficient to require an agency to study such indirect impacts,’ Drysdale said. ‘There was much less apparent consensus on how to clarify the standard.’”
According to the newspaper, he added, “[g]iven that the (Surface Transportation Board) has limited authority under common carrier law to discriminate based on the type of cargo, the court’s liberal justices asked what value analysis of cargo and disposition of oil cargo through refining should have if the agency could do nothing about it.”
The Sentinel reported that the U.S. Department of Justice “supports reversing the part of the appeals court ruling under appeal, arguing the Surface Transportation Board reasonably determined the upstream and downstream impacts to be too speculative and immaterial to warrant further consideration. But an attorney for the department told the court Tuesday [Dec. 10] there are situations in which indirect impacts of projects should be considered.”
According to The Washington Post, SCOTUS’s “conservative majority has been highly skeptical of government regulation in recent terms, particularly on the environmental front.” It noted that the “court has curtailed the authority of the Environmental Protection Agency to regulate the nation’s wetlands, greenhouse gases from power plants and air pollution that drifts across state lines.” Additionally, SCOTUS in June “struck down a 40-year-old precedent that was a cornerstone of regulatory authority,” according to the newspaper. “It required courts to give significant latitude to how agencies implement laws in areas where Congress has not given clear guidance.”
It’s anticipated that SCOTUS will issue a decision in the Uinta Basin Railway case “by this summer,” The Post reported.
Railway Age Capitol Hill Contributing Editor Frank N. Wilner, who was a White House-appointed chief of staff at the STB, commented that “This STB hasn’t participated in an oral argument before the Supreme Court since Nov. 1, 1994, when its predecessor, Interstate Commerce Commission, successfully argued that it had injunctive relief authority in ICC v. Transcon Lines (513 U.S. 138). Assisting the Deputy Solicitor General in that case were ICC General Counsel Henri F. Rush and ICC attorneys Ellen D. Hanson and Evelyn G. Kitay. Although 1980 motor carrier deregulation permitted truckers to discount their tariff rates, attorneys for many bankrupt trucking companies (unable to compete in a deregulated environment) sought inbankruptcy proceedings to collect from shippers the difference between the discounted rate charged and the rate originally on file with the ICC.
“The dispute was known as the Filed Rate Doctrine, which precipitated a feeding frenzy among motor carrier bankruptcy attorneys and enshrined itself as a final embarrassment for outdated economic regulation that once provided an artificial floor for rates in a fiercely competitive motor-freight transportation market. The following year, Congress abolished the ICC (ICC Termination Act, which created the STB) and remaining trucking regulations, including the requirement for filing of rates.”
