ND case could strip federal environmental agency’s authority

There’s a lot more on the line for a powerful federal environmental agency than anyone anticipated when 21 states filed a legal case in U.S. District Court in Bismarck earlier this year. The lawsuit brought by GOP-led states nominally challenges another of the Biden administration’s far-reaching regulations imposed by the Council on Environmental Quality, as Forum explains.

A coalition of 21 Republican-led states, including North Dakota, seeks to overturn a new regulation adopted by the council that took effect in July. The states argue that the rule introduces unreasonable requirements that will slow or even sink important infrastructure including new highways, airports, bridges and water systems, and unlawfully over-emphasizes climate change and environmental justice in the environmental review process.

In a lawsuit filed in May, the states asked the court to strike down the rule, direct the council to adopt regulations consistent with federal law, and reinstate a weaker version the agency enacted during President Donald Trump’s administration in 2020.

But since then, an extraordinary decision by the D.C. Court of Appeals has raised the stakes enormously. The appeals court ruling calls into question whether the Council on Environmental Quality has authority to issue rules and regulations at all, given Congress evidently never explicitly granted it. Now it’s up to the judge overseeing the case in Bismarck to apply the appeals court finding in a decision that could set a precedent nationwide.

In a hearing earlier this month, U.S. District Court Judge Daniel Traynor said the Council on Environmental Quality’s entire regulatory regime may be unlawful.

The U.S. Court of Appeals for the D.C. Circuit found in a November order that the agency does not have rulemaking authority because Congress never explicitly granted it the power to implement the National Environmental Policy Act. The appellate court did not strike down any of the council’s regulations, leaving it up to other courts to decide whether the rules should stand.

Traynor questioned how he could leave the regulations intact given the D.C. court’s findings. He said if he were to apply the court’s reasoning to the North Dakota case, he may conclude that all National Environmental Policy Act regulations passed by the council are void. The council issued its first rule implementing the act in 1978.

“If they have no authority, they have no authority,” Traynor said of the council. “It is a paper tiger.”

Some thirteen states joined the beleaguered agency in defending the regulations that first sparked the lawsuit. They also pushed back against the potential impact of a broader ruling on the Council’s potential lack of authority.

An attorney representing the Council on Environmental Quality, Gregory Cumming, rebuffed during the hearing the notion that the agency is operating without approval from Congress. The council keeps Congress apprised of its work with annual reports, he noted. If the assembly did not want the agency to pass rules, it could have passed legislation clarifying that stance, Cumming said.

Jan Hasselman — an attorney representing several advocacy groups that joined the case as defendants — said there’s a reason the council’s rulemaking authority has gone unquestioned for almost five decades.

“Nobody benefits when there’s no rules,” he told the judge. “It’s just sort of a mutually assured destruction.”

But the court appeared nonplussed about the effect of a far-reaching ruling against the agency’s authority.

Traynor voiced skepticism that such a decision would create disarray. Even if the council’s rules disappear, other local and federal regulations would still be intact, he reasoned.

“It’s not like it becomes the Wild West,” he said.

Both sides asked the court for a summary judgment decision that would preempt going to trial. There’s no indication of when the court will issue a ruling.